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                                                                    EXHIBIT 10.1


                        LICENSE AND SUBLICENSE AGREEMENT

     THIS AGREEMENT (the "Agreement"), is made and effective this 18th day of
January, 2001, by and between Quantech, Ltd., a Minnesota Corporation having its
principal office at 815 Northwest Parkway, Suite 100 Eagan, Minnesota, the
United States of America ("QUANTECH") and Mitsubishi Chemical Corporation, a
Japanese corporation having its principal office at 5-2, Marunouchi 2-chome,
Chiyoda-ku, Tokyo, Japan ("MCC").

                                    RECITALS

     WHEREAS, QUANTECH owns or has exclusively licensed or sublicensed from The
Serono Companies, Quantech Patents (defined in Paragraph 1.20) with the right to
grant sublicenses and QUANTECH wishes to license, or sublicense, as the case may
be, the Quantech Patents to MCC for the Medical Diagnostics Field (defined in
Paragraph 1.11) in Japan and MCC wishes to obtain an exclusive license or
sublicense to the Quantech Patents for the Medical Diagnostic Field in Japan;

     WHEREAS, QUANTECH is developing Quantech Products (defined in Paragraph
1.21) and if Quantech Products are successfully developed, QUANTECH wishes to
have MCC exclusively distribute Quantech Products in Japan and MCC wishes to
exclusively distribute Quantech Products in Japan under the reasonable terms and
conditions to be mutually agreed upon between the parties in the separate
distribution agreement ("Distribution Agreement");

     WHEREAS, MCC will develop MCC Technology (defined in Paragraph 1.9) and MCC
Improvement (defined in Paragraph 1.10) and MCC wishes to non-exclusively
license or sublicense, as the case may be, MCC Technology and non-exclusively
license MCC Improvements to QUANTECH in Non-Pacific Rim Territories (defined in
Paragraph 1.17) and QUANTECH wishes to obtain such licenses or sublicenses; and

     WHEREAS, MCC may develop MCC Products (defined in Paragraph 1.8) and MCC
wishes to have QUANTECH exclusively distribute MCC Products in Non-Pacific Rim
Territories and QUANTECH desires to exclusively distribute MCC products in
Non-Pacific Rim Territories under the reasonable terms and conditions to be
mutually agreed upon between the parties in a separate agreement ("MCC Products
Distribution Agreement");

     NOW, THEREFORE, in consideration of these premises, and the mutual
covenants and agreements hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:

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1. DEFINITIONS

     For the purposes of interpreting this Agreement, the following definitions
will apply and whenever appropriate, terms used in the singular will also
include the plural and vice versa:

     1.1  Cartridge means an assembly that holds reagents and other chemistries,
          receives a human sample (i.e. blood, urine etc.) and delivers and/or
          mixes, such sample and/or reagents and/or chemistries, to, or in an
          area that, allows the Instrument to read a human diagnostic test,
          which cartridge may contain a Flow Cell.

     1.2  Effective Date means January 18, 2001.

     1.3  Earned Royalty means the royalty payable on the Net Sales from
          Products.

     1.4  Flow Cell means a device which allows liquids to flow through it and
          comprises a base piece which contains a grating pursuant to the
          Grating SPR Technology, is coated with a conductive surface and has an
          optically clear cover slip which is attached to the base piece by a
          means that allows for fluid flow.

     1.5  Grating SPR Technology means the use of thin conductive films on a
          surface or surfaces of a grating or other diffracting substrate to
          conduct chemical analysis.

     1.6  Instrument means a device that reads the events that occur in a
          Cartridge or Flow Cell and may contain one or more Ports for use in
          the Field of Medical Diagnostics using Grating SPR Technology covered
          by one or more Valid Claim of the Quantech Patents.

     1.7  Human Diagnostics means testing or detection of human biological
          conditions.

     1.8  MCC Products means Instruments, Cartridges, Flow Cells and Peripheral
          Equipment for Human Diagnostics to be developed by MCC using Grating
          SPR Technology covered by one or more valid claims of the Quantech
          Patents.

     1.9  MCC Technology means any technology owned or controlled by MCC's
          diagnostic R&D sector as of the effective date of this Agreement and
          to be developed by MCC's diagnostic R&D sector during the term of this
          Agreement that (i) will, subject to MCC's reasonable judgement, be
          useful for the development of MCC Products and/or Quantech Products
          for the Medical Diagnostics Field and (ii) MCC is not restricted from
          licensing or

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          sublicensing the technology by an agreement MCC may have with a third
          party.

     1.10 MCC Improvement means any technology that is an improvement of the
          Quantech Technology (defined in Paragraph 1.21) obtained by MCC during
          the term of this Agreement that (i) is useful for the Medical
          Diagnostics Field and (ii) MCC is not restricted from licensing or
          sublicensing the technology by an agreement MCC may have with a third
          party.

     1.11 Medical Diagnostics Field means those fields, the applications and
          products which under current laws and regulations of the United States
          would require approval of the United States Food and Drug
          Administration if the application or product incorporating the
          application were sold for clinical use in the United States.

     1.12 Net Sales means the total amount invoiced by MCC or any sublicensee
          for sales of MCC Products to third Parties after a deduction of any:
          (i) sales, use or excise taxes; (ii) freight or shipping charges;
          (iii) duty or insurance included therein, (iv) credits or prepayments
          due to rejections; (v) defects or returns; (vi) amounts for trade and
          quantity discounts actually allowed and taken; and (vii) packaging
          costs.

     1.13 Pacific Rim Territory means the countries of Japan, China, Taiwan,
          Korea, Australia, New Zealand, Indonesia, Singapore and Thailand.

     1.14 Peripheral Equipment means those devices that are sold in conjunction
          with the Instrument and/or Cartridges, including, but not limited to,
          wireless communication devices that are able to transfer information
          between the Instrument and the communication devices.

     1.15 Port means an entry point for a Cartridge in an Instrument that holds
          a Cartridge.

     1.16 SPR means surface plasmon resonance.

     1.17 Non-Pacific Rim Territories shall mean the U.S.A., Canada, Mexico and
          all other countries of the world that are not in the Pacific Rim
          Territory as defined in Paragraph 1.13.

     1.18 Quantech Licensed Patents means those patents that QUANTECH has
          exclusively licensed or sublicensed from The Serono Companies, with
          right to sublicense, and are listed in Schedule A of this Agreement.

     1.19 Quantech Owned Patents means those patents in which all, right, title
          and interest has been assigned exclusively to QUANTECH and which are
          listed in Schedule A of this Agreement.

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     1.20 Quantech Patents means QUANTECH Owned and QUATECH Licensed Patents.
          Those patents to be granted on the Quantech Technology (defined in
          Paragraph 1.22) shall be added in Schedule A of this Agreement and
          shall be included in the Quantech Patents.

     1.21 Quantech Products means Instruments, Cartridges, Flow Cells and
          Peripheral Equipment for Human Diagnostics developed or to be
          developed by QUANTECH using Grating SPR Technology covered by one or
          more valid claims of the Quantech Patents. Quantech Products existing
          as of the effective date of this Agreement are listed in Schedule C.

     1.22 Quantech Technology means any technology owned by QUANTECH as of the
          effective date of this Agreement and to be developed during the term
          of this Agreement that (i) subject to QUANTECH's reasonable judgement
          will be useful for the development of MCC Products and/or Quantech
          Products for the Medical Diagnostics Field and (ii) QUANTECH is not
          restricted from licensing or sublicensing the technology by an
          agreement QUANTECH may have with a third party. The Grating SPR
          Technology shall be included in the Quantech Technology.

     1.23 The Parties means both QUANTECH and MCC.

     1.24 The Serono Companies means APPLIED RESEARCH SYSTEMS ARS HOLDING N.V.,
          a Netherlands Antilles Corporation and Serono Diagnostic S.A., both
          affiliated corporations of Ares-Serono S.A.

     1.25 Valid Claim means an issued claim of a Quantech Patents, or a patents
          to be granted on the MCC Technology or MCC Improvement, that has not
          been expired nor has been held invalid or unenforceable by final
          decision of a court of competent jurisdiction from which no appeal has
          or can be taken.

     1.26 Wholly Owned Subsidiary of a party means a corporation, company or
          other entity of which 100% of the voting stock is directly or
          indirectly owned or controlled by QUANTECH or MCC as the case may be.

2.   LICENSE GRANTS FROM QUANTECH TO MCC

     2.1  License Grant from QUANTECH to MCC. QUANTECH hereby grants to MCC the
          sole and exclusive license and sublicense under the Quantech Patents
          and Quantech Technology to develop, manufacture, have manufactured,
          sell or have sold, MCC Products for the Medical Diagnostics Field in
          Japan, provided, however, that MCC shall not develop, manufacture or
          have manufactured products which are covered by one or more valid
          claims of the Quantech Patents and for which there is a Quantech
          Product commercially available from QUANTECH for distribution by MCC
          under reasonable supply and purchase conditions of the Distribution
          Agreement.

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     2.2  Sublicense by MCC. MCC shall not sublicense the rights granted by
          QUANTECH in Paragraph 2.1 except that MCC may sublicense the rights
          granted in Paragraph 2.1 only to Yuka Medias Co. Ltd. ("Yuka"), a
          Wholly Owned Subsidiary of MCC, and/or to another MCC Wholly Owned
          Subsidiary for the Medical Diagnostics Field in Japan.

     2.3  Grant-back from MCC to QUANTECH. MCC hereby grants to QUANTECH an
          exclusive license to develop, manufacture, have manufactured, sell or
          have sold the Quantech Products incorporating MCC Improvement in
          Non-Pacific Rim Territories for the Medical Diagnostics Field.

3.   ROYALTIES, PAYMENTS AND REPORTS

     3.1  Initial Payment. In consideration of the license and sublicense
          granted to MCC pursuant to Paragraph 2.1, MCC shall pay QUANTECH an
          initial payment of one million US Dollars (US$1,000,000-) within
          forty-five (45) days from the effective date of this Agreement.

     3.2  Royalties on Account of Net Sales by MCC. Subject to the terms of this
          Agreement, in consideration of the license and sublicense granted to
          MCC pursuant to Paragraph 2.1, MCC agrees to pay to QUANTECH an Earned
          Royalty of 7% of annual Net Sales of MCC Products, provided, however,
          that no royalty shall be paid on Quantech Products purchased by MCC
          from QUANTECH and resold by MCC under the Distribution Agreement. In
          the event that MCC Products require payment of royalties to a third
          party for technology other than that provided from QUANTECH under this
          Agreement, the Parties agree to discuss a reduction of the royalty
          rate stated in this Paragraph 3.2 to reflect the portion of each
          technology provided in the MCC Product so as to address the issue of
          royalty stacking.

     3.3  Royalties on Account of Net Sales by QUANTECH. Subject to the terms of
          this Agreement, in consideration of the license granted to QUANTECH
          pursuant to Paragraph 2.3, QUANTECH agrees to pay MCC an Earned
          Royalty of 7% of annual Net Sales of Quantech Products covered by one
          or more Valid Claim of a patent to be granted on the MCC Improvement
          in a country where the Quantech Product is sold and such a patent is
          in force, provided, however, that no royalty shall be paid on MCC
          Products purchased by QUANTECH from MCC and resold by QUANTECH under
          the MCC Products Distribution Agreement.

     3.4  Quarterly Royalty Payments. All Earned Royalties due by either party
          to the other party hereunder shall be payable on a calendar quarterly
          basis. Within sixty (60) days after the end of each Calendar Quarter
          during the term of this Agreement, each party owing an Earned Royalty
          under Paragraphs 3.2 or 3.3 shall pay the Earned Royalty owed to the
          other party through the end of the



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          preceding Calendar Quarter and shall furnish the other party with a
          written statement setting forth the number of its own Products sold
          and the Net Sales invoiced during such Calendar Quarter, and the
          resulting amount of the royalty due under Paragraphs 3.2 and 3.3.

     3.5  Late Payment. A party owing a payment to the other party under any of
          Paragraphs 3.2 and 3.3 shall pay a late payment fee to the owed party
          when payment is not made within the times set forth in Paragraphs 3.4.
          The late payment fee shall be calculated at a variable rate of one
          percent (1%) over the "3 Month T-Bill" as reported in "The Wall Street
          Journal" on the date the payment is due (the "Interest Rate"), on any
          and all amounts that are at any time overdue and payable under this
          Agreement, such interest being calculated on each such overdue amount
          from the date when such amount became due to the date of actual
          payment thereof. Such late payment fee shall be in addition to and not
          in lieu of any and all other rights or remedies that QUANTECH may have
          under this Agreement or law relating to a default by the owing party
          under this Agreement.

     3.6  Records. During the term of this Agreement and for three (3) years
          after termination of this Agreement the Parties shall at all times
          maintain accurate and up-to-date records containing complete data from
          which amounts due to the other party under this Agreement may be
          readily calculated. Further, the Parties shall preserve and permit
          examination of such records by independent auditors appointed by the
          other party and accepted by itself at reasonable intervals and under
          reasonable conditions during the term of this Agreement and for three
          (3) years thereafter and, upon request, shall supply to the
          independent auditors all information reasonably requested that is
          useful in making a proper audit and verification of the other party's
          performance of its obligations under this Agreement and of any of the
          Parties' sublicensee(s) performance in accordance with the terms of
          this Agreement.

     3.7  Underpayment. If one party determines by audit and inspection of the
          other party's books and records that the other party has failed to pay
          all royalties due under Paragraph 3.2 or 3.3, the other party shall
          pay the party owed one hundred ten percent (110%) of such additional
          royalties as may be due in addition to the interest as provided for in
          Paragraph 3.5. If the amount of underpayment exceeds 5% of the
          royalties due under Paragraph 4.2, then the owed party shall, in
          addition to any other remedies available to it, recover from the other
          party the reasonable costs incurred in making any such audit and
          inspection pursuant to Paragraph 3.8 hereof which revealed such
          shortfall.

     3.8  Payment Currency. All payments by one party to the other party under
          this Agreement shall be made in U.S. Currency. The U.S. currency
          payments hereunder shall be determined on the basis of the telegraphic
          transfer selling



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          (TTS) rate of exchange as reported by Tokyo Mitsubishi Bank in effect
          on the date such payments are due. All payments due shall be made
          without deduction for taxes, assessments, or other charges of any kind
          that may be imposed on a party by any government other than that of
          the United States or Japan. Provided, however, either party may deduct
          from each payment due hereunder withholding income tax to be levied on
          such payment in the U.S.A. or Japan according to the Treaty between US
          and Japan for Avoidance of Double Taxation and shall furnish the other
          party appropriate tax certificate issued by the tax authority in the
          U.S.A. or Japan.

4.   LICENSE GRANTS FROM MCC TO QUANTECH

     4.1  License Grant from MCC to QUANTECH under MCC Technology. If and when
          MCC developed and commercially manufacture and sell the MCC Products
          which incorporated the MCC Technology, then MCC shall promptly notify
          QUANTECH of such fact with sufficient information, data and sample
          thereof for evaluation of such MCC Technology. Upon request from
          QUANTECH, MCC and QUANTECH shall discuss, in good faith, reasonable
          terms and conditions of license of the MCC Technology and enter into
          the license agreement which includes, but not limited to, the
          following basic conditions;

       (1)    MCC grants to QUANTECH the non-exclusive license to develop,
              manufacture, sell and have sold the Quantech Products
              incorporating MCC Technology in Non-Pacific Rim Territories for
              the Medical Diagnostics Field.

       (2)    In consideration of the license granted to QUANTECH pursuant to
              Paragraph 4.1, QUANTECH agrees to pay MCC an Earned Royalty of 7%
              of annual Net Sales of Quantech Products covered by one or more
              Valid Claim of a patent to be granted on the MCC Technology or MCC
              Improvement in a country where the Quantech Product is sold and
              such a patent is in force, provided, however, that no royalty
              shall be paid on MCC Products purchased by QUANTECH from MCC and
              resold by QUANTECH under the MCC Products Distribution Agreement.
              In the event, to incorporate the MCC Technology into the Quantech
              Products, QUANTECH is required to pay royalties to a third party
              for technology other than that provided from MCC under this
              Agreement, the Parties agree to discuss a reduction of the royalty
              rate stated in this Subparagraph (2) to reflect the portion of
              each technology provided in the Quantech Product so as to address
              the issue of royalty stacking. In the event that MCC may provide a
              lower royalty rate than provided for in this Subparagraph (2) when
              MCC grants a license to a third party to manufacture, use and sell
              a product directly competing with Quantech Products in a
              particular country, the Earned Royalty rate for Net Sales by
              QUANTECH of Quantech Products in that country shall be reduced to
              equal the lower royalty rate.



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       (3)    The non-exclusive rights granted to QUANTECH to the MCC Technology
              shall expire upon the expiration of the last of the patents of MCC
              Technology to expire; provided, however, the license shall be
              terminated if QUANTECH has not begun developing, commercializing
              or selling the Quantech Products incorporating MCC Technology
              within one (1) year after MCC notifies QUANTECH of any such MCC
              Technology. Beginning six (6) months after MCC notifies QUANTECH
              of any such MCC Technology and continuing every six (6) months,
              QUANTECH shall provide a statement to MCC stating that it is
              continuing to develop, commercialize or sell Quantech Products
              incorporating MCC Technology or that the MCC Technology is being
              abandoned.

5.   TERM AND TERMINATION

     5.1  Term of Agreement. This Agreement shall commence on the Effective Date
          and shall expire, unless earlier terminated pursuant to Paragraphs
          5.3, 5.4 or 5.5 of this Agreement, upon the expiration of the last of
          the Quantech Patents. After the expiration of this Agreement, MCC
          shall have the non-exclusive, royalty-free right (with the right to
          grant sublicense) to use the Quantech Technology.

     5.2  Termination of License Grant to QUANTECH Under MCC Improvement.
          Notwithstanding the foregoing Paragraph 5.1, the exclusive license
          granted to QUANTECH to MCC Improvement under Paragraph 2.3 and
          obligation to pay Earned Royalty under Paragraph 3.3 of this
          Agreement shall survive after the expiration of this Agreement and
          shall expire upon the expiration of the last of the patents of MCC
          Improvement to expire; provided, however, the license shall be
          terminated if QUANTECH has not begun developing, commercializing or
          selling the QUANTECH Products incorporating MCC Improvement within one
          (1) year from the time when MCC notifies QUANTECH of any such MCC
          Improvement. Beginning six (6) months after such notification and
          continuing every six (6) months, QUANTECH shall provide a statement to
          MCC stating that it is continuing to develop, commercialize or sell
          the Quantech Products incorporating MCC Improvement or that the MCC
          Improvement is being abandoned.


     5.3  Termination by QUANTECH. If MCC is in material default of any of its
          obligations under this Agreement, QUANTECH shall have the right to
          terminate this Agreement by giving thirty (30) days' written notice of
          termination specifying the reason for termination, provided that such
          notice will be of no effect and termination will not occur if the
          specified default is cured prior to the expiration of said thirty (30)
          day notice period. In the event of any such termination, QUANTECH
          shall at its sole discretion retain rights to use MCC Improvement
          granted to it by MCC under Paragraph 2.3, unless earlier terminated as
          provided in Paragraph 5.2. In the event that QUANTECH retains the
          rights under Paragraph 2.3 or 4.1, QUANTECH


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          shall continue paying to MCC any Earned Royalty as provided under
          Paragraph 3.3 or 4.1, as the case may be.

     5.4  Termination by MCC. If QUANTECH is in material default of any of its
          obligations under this Agreement, MCC shall have the right to
          terminate this Agreement by giving thirty (30) days' written notice of
          termination specifying the reason for termination, provided that such
          notice will be of no effect and termination will not occur if the
          specified default is cured prior to the expiration of said thirty (30)
          day notice period. In the event of any such termination, MCC shall at
          its sole discretion retain rights to use the Quantech Patents and
          Quantech Technology granted to it by QUANTECH under Paragraph 2.1. In
          the event that MCC retains the rights under Paragraph 2.1, MCC shall
          continue paying to QUANTECH any Earned Royalty as provided under
          Paragraph 3.2.

     5.5  MCC 90 days Termination. MCC may terminate all or a portion of this
          Agreement at any time at will, with or without cause, by giving at
          least ninety (90) days' prior written notice to QUANTECH.

     5.6  Refunds. Termination of this Agreement at any time will not entitle
          either party to a refund of payments of any type made prior to
          termination.

     5.7  Termination Resulting from Government Action. Either party may,
          immediately upon notice, terminate this Agreement in its entirety or
          with respect to any patent license granted under the Agreement if: (1)
          such termination is necessary to comply with an order or official
          request of the government of the terminating party; or (2) normal
          conduct of the business of the other party as a private enterprise
          ceases or is substantially altered as a consequence of action taken by
          governmental or other authority.

     5.8  Continued Obligations. Termination shall not relieve or release either
          party from its obligations to make any payment which may be owing to
          the other party under the terms of this Agreement or from any other
          liability which either party may have to the other arising out of the
          terms of this Agreement.

6.   INTELLECTUAL PROPERTY

     6.1  Patent Procurement and Costs. QUANTECH shall be respectively and
          solely responsible for directing prosecution and paying all patent
          costs and expenses (including reasonable attorneys' fees) incurred
          during the term of this Agreement in obtaining, prosecuting, and
          maintaining any of the Quantech Patents issued or to be issued under
          the law of any country or jurisdiction identified in Schedule A,
          including filing, prosecution, working and maintenance costs and
          taxes.



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     6.2  Patent Enforcement.

       (1)    In the event that MCC becomes aware of activity on the part of any
              third party which may constitute infringement of Quantech Patents
              in Japan, MCC shall give QUANTECH written notice thereof. Subject
              to the License Agreement between QUANTECH and Ares Serono,
              QUANTECH shall, at its sole discretion and expense, have the first
              exclusive right to initiate and thereafter maintain reasonable
              efforts to prevent and abate such infringement, including the
              initiation of an appropriate action for infringement and the
              taking of such other action as it may determine to be necessary or
              appropriate to enforce the Quantech Patents. In such event, (i)
              MCC will execute all pleadings, documents and other papers
              necessary or appropriate in conjunction therewith, and (ii)
              QUANTECH shall receive the full benefits of any action it takes
              pursuant to this Paragraph, including retaining all sums recovered
              in any such suit or in settlement thereof.

       (2)    In the event that QUANTECH fails or refuses to take or cause to
              be taken any such measures against any third party in Japan after
              six (6) months from the date of receipt of written notice to
              QUANTECH by MCC of such infringement, MCC may take such legal
              action in its own name or in the name of QUANTECH (if needed) and
              at its own expense upon giving fourteen (14) days advance, written
              notice of its intention to do so. In this case, MCC shall received
              the full benefits of any action it takes pursuant to this
              Paragraph 6.2, including retaining all sums recovered in any such
              suit or in settlement thereof.

       (3)    If either party litigates under this Paragraph 6.2, the other
              party may, at its option and its cost and expense, participate in
              meetings with the litigating party and/or its counsel and receive
              all pleadings, documents and other related papers useful for the
              purpose of keeping the other party informed of the status of any
              proceedings commenced by the litigating party.

     6.3  Joint Inventions. Each party shall have an equal, undivided interest
          in any invention in the Medical Diagnostics Field, and any patent
          thereon, that is jointly made by employees of both Parties. The
          Parties agree to cooperate in obtaining and maintaining patents on
          such jointly owned invention and to share equally the expense thereof.
          Neither party shall grant a license under the jointly owned patent
          without the prior written consent of the other party.

     6.4  Marking. If requested by a party, the other party shall mark the
          product(s) it sells, offers to sell or distributes with a notice to
          the effect that such product(s) is licensed under the applicable
          Patents.

7.   CONFIDENTIALITY

     7.1  Confidentiality. The Parties acknowledge that patent applications
          listed in Schedule A attached hereto, the inventions claimed therein,
          and all trade

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          secrets and know-how which may be disclosed by the Parties in
          performance of this Agreement constitute "Confidential Information" of
          the Parties, subject to the exceptions set forth in Paragraph 7.2.
          Each party agrees not to disclose or use any of the other party's
          Confidential Information except as expressly permitted in connection
          with the exercise of its rights hereunder for five (5) years after
          respective termination of license granted under this Agreement.

     7.2  The Parties shall not disclose the other party's Confidential
          Information to any employee or consultant unless such employee or
          consultant is obligated under a confidentiality agreement to maintain
          such other party's Confidential Information in strict confidence, and
          not to use such information other than, in accordance with the terms
          of this Agreement. Each party agrees to hold the other party's
          Confidential Information in strict confidence and treat it with not
          less than the same degree of care to avoid disclosure as such party
          employs with respect to its own information of like importance.

     7.3  Confidential Information shall mean all information provided to a
          party (the "receiving party") by a party (the "disclosing party") or
          its employees, agents or consultants, excluding any information which:


       (a)    is or becomes publicly available through no fault of the receiving
              party; or

       (b)    can be reasonably demonstrated to have been known to the
              receiving party independently of any disclosure of "Confidential
              Information" by the disclosing party or its employees, agents or
              consultants; or

       (c)    is disclosed to the receiving party by a third party who, to the
              best of the receiving party's knowledge, is lawfully in possession
              of the same and has the right to make such disclosure; or

       (d)    has been independently developed by the receiving party without
              reference to the information disclosed to the receiving party by
              the disclosing party or its employees, agents or consultants.

8.   INDEMNIFICATION

     8.1  Indemnification by QUANTECH. QUANTECH shall defend, indemnify and hold
          MCC and its shareholders, directors, officers, agents,
          representatives, successors and assigns harmless from and against any
          and all claims, damages, costs (including reasonable attorneys' fees),
          judgments, fines, penalties, losses, diminution in value and
          liabilities of and kind or nature: (a) arising out of the breach by
          QUANTECH of any of its warranties, representations and covenants under
          this Agreement.


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9.   REPRESENTATIONS AND WARRANTIES

     9.1  QUANTECH hereby warrants and represents to MCC as follows:

       (a)    QUANTECH is a corporation duly organized, validly existing and in
              good standing under the laws of the State of Minnesota.

       (b)    This Agreement has been duly authorized, executed and delivered by
              QUANTECH and constitutes a valid and binding obligation of
              QUANTECH, enforceable in accordance with its terms, except as
              rights to indemnification thereunder may be limited by applicable
              law and except as and to the extent that the enforcement thereof
              may be limited by bankruptcy, insolvency, reorganization,
              moratorium or other similar laws relating to or affecting
              creditors' rights generally or by general equitable principles.
              The execution, delivery and performance of this Agreement and the
              consummation of the transactions contemplated thereby have been
              authorized by all necessary corporate action and do not and will
              not conflict with or result in any material breach of any of the
              provisions of, or constitute a material default under, or result
              in a material violation of, or require any authorization, consent
              or approval, under the provisions of any organizational charter,
              articles, bylaw, member control, operating or other agreement,
              contract or instrument to which QUANTECH is bound or affected, or
              any law, statute, rule, regulation, judgment order or decree to
              which QUANTECH is subject.

       (c)    QUANTECH is the sole and exclusive licensee, sublicensee, or
              owner, as the case may be, of all the rights of Quantech Patents
              listed in Schedule A and has full right, power and authority to
              grant the rights under this Agreement.

       (d)    All Quantech Patents listed in Schedule A are in force having paid
              all necessary maintenance fees. QUANTECH has no knowledge of
              information that would render any of the listed patents invalid or
              unenforceable.

       (e)    QUANTECH has good and marketable title to the Quantech Patents
              free and clear of any and all liens, pledges, claims, licenses,
              assignments, conditional sales contracts, agreements or
              encumbrances of any kind that would impair QUANTECH's ability to
              grant the licenses under this Agreement.

       (f)    The use of the Quantech Technology granted hereunder and use or
              sale of the Quantech Products to be distributed under the
              Distribution Agreement shall be free from and clear of
              infringement of any intellectual property rights owned by third
              parties.

                                       12


<PAGE>   13
     9.2  MCC hereby warrants and represents to QUANTECH as follows:

       (a)    MCC is a corporation duly organized, validly existing and in good
              standing under the laws of Japan.

       (b)    This Agreement has been duly authorized executed and delivered by
              MCC and constitutes a valid and binding obligation of MCC,
              enforceable in accordance with its terms, except as rights to
              indemnification thereunder may be limited by applicable law and
              except as the enforcement thereof may be limited by bankruptcy,
              insolvency, reorganization, moratorium or other similar laws
              relating to or affecting creditors' rights generally or by general
              equitable principles. The execution, delivery and performance of
              this Agreement and the consummation of the transactions
              contemplated thereby do not and will not conflict with or result
              in any material breach of any of the provisions of, or constitute
              a material default under, or result in a material violation of, or
              require any authorization, consent or approval, under the
              provisions of the Laws of Japan or Bylaws or other agreement,
              contract or instrument to which MCC is bound or affected, or any
              law, statute, rule, regulation, judgment order or decree to which
              MCC is subject.

10.  MISCELLANEOUS

     10.1 Assignment. Either party may assign or otherwise transfer its rights
          and obligations under this Agreement to any successor in interest (by
          merger, share exchange, combination or consolidation of any type,
          operation of Law, purchase or otherwise), provided that such assignee
          or successor agrees to be bound by the terms hereof.

     10.2 Entire Agreement. This Agreement, together with the Schedule, and the
          SSA constitutes the entire agreement of the Parties with respect to
          the subject matter hereof and supersedes all previous proposals or
          agreements, oral or written, and all negotiations, conversations or
          discussions heretofore had between the Parties related to the subject
          matter of this Agreement. No modification of this Agreement or waiver
          of any of its terms shall be binding upon the Parties unless said
          modification or waiver is in writing, signed by both Parties, and
          states that it is an amendment to this Agreement.

     10.3 Survival. Sections 1, 4, 8, 9 and 10 shall survive termination or
          expiration of this Agreement for any reason and continue thereafter in
          full force and effect.

     10.4 Discharge. This Agreement may not be released, discharged, abandoned,
          changed or modified in any manner, except by an instrument in writing
          signed on behalf of each of the Parties to this Agreement by their
          duly authorized representatives.

                                       13

<PAGE>   14

     10.5 Waiver. The failure of either party to enforce at any time any of the
          provisions of this Agreement shall in no way be construed to be a
          waiver of any such provision, nor in any way to affect the validity of
          this Agreement or any part of it or the right of either party after
          any such failure to enforce each and every such provision. No waiver
          of any breach of this Agreement shall be held to be a waiver of any
          other or subsequent breach.

     10.6 Force Majeure. Neither party shall be responsible for any delay or
          failure in the performance of any obligation hereunder due to strikes,
          lockouts, fires, floods, acts of God, embargoes, wars, riots, or act
          or order of any government or governmental agency.

     10.7 Execution in Counterparts. This Agreement may be executed in one or
          more counterparts, all of which shall be considered one and the same
          agreement, and shall become a binding agreement when one or more
          counterparts have been signed by each party and delivered to the other
          party.

     10.8 Titles and Headings. The titles and headings to Sections herein are
          inserted for the convenience of reference only and are not intended
          to be a part of or to affect the meaning or interpretation of this
          Agreement.

     10.9 Construction. The Parties agree that the restrictions, covenants,
          agreements and obligations contained in this Agreement are reasonable
          and necessary to protect the legitimate interests of the Parties. This
          Agreement shall be construed without regard to any presumption or
          other rule requiring construction hereof against the party causing
          this Agreement to be drafted.

    10.10 Benefit. Nothing in this Agreement, expressed or implied, is intended
          to confer on any person other than the Parties to this Agreement or
          their respective permitted successors or assigns, any rights,
          remedies, obligations or liabilities under or by reason of this
          Agreement.

    10.11 Notices. All notices, statements, reports, requests or other
          communications to a party required or permitted hereunder shall be in
          writing and shall be deemed effective and properly given when sent by
          registered or certified mail, or by confirmed facsimile transmission
          to the person as indicated below or such other person as may be
          designated by MCC or QUANTECH by such notice;

          if to MCC, to:

          Mitsubishi Chemical Corporation.
          5-2, Marunouchi 2-chome,
          Chiyoda-ku, Tokyo 100-0005 Japan
          Attention: General Manager, Life Science Business
                     Initiatives Department
          Facsimile number: (03) 3283-5809




                                       14

<PAGE>   15

         and, if to QUANTECH, to:

         Quantech Ltd.,
         815 Northwest Parkway, Suite 100
         Eagan, Minnesota 55121 U.S.A.
         Attention: President
         Facsimile number: (651) 647-6370

         MCC and QUANTECH may change their respective above-specified recipient
         and/or mailing address by notice to the other party given in the manner
         herein prescribed. All notices shall be deemed given on the day when
         actually delivered as provided above (if delivered by facsimile) or on
         the day shown on the return receipt (if delivered by mail).

   10.12 Severability. If any provision of this Agreement is held invalid by a
         court of competent jurisdiction, the remaining provisions shall
         nonetheless be enforceable according to their terms. Further, if any
         provision is held to be overbroad as written, such provision shall be
         deemed amended to narrow its application to the extent necessary to
         make the provision enforceable according to applicable Law and shall
         be enforced as amended.

   10.13 Governing Law. This Agreement shall be construed in accordance with
         the laws of the State of New York, excluding its choice of law
         provisions. The Parties further agree to submit themselves to the
         non-exclusive jurisdiction of the state and federal courts of the
         State of New York in the event that any dispute arises under this
         Agreement.









                                       15


<PAGE>   16

     IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed in the manner appropriate to each as of the day and year first above
written.


                               MITSUBISHI CHEMICAL CORPORATION


                               /s/  Kiyoshi Nakayama
                               -------------------------------------------------
                               By:  Kiyoshi Nakayama
                               Its: General Manager,
                                    Life Science Business Initiatives Department

                               QUANTECH LTD.


                               /s/ Robert Case
                               -------------------------------------------------
                               By:  Robert Case
                               Its: Chief Executive Officer






                                       16
<PAGE>   17
                                   SCHEDULE A


                    QUANTECH LICENSED OR SUBLICENSED PATENTS

<TABLE>
<CAPTION>
    PATENT NO.                          TITLE                        JAPANESE PATENT NO.
----------------------------------------------------------------------------------------
<S>                      <C>                                         <C>
  US 4,931,384           Optical Assay Technique (Merlin I)             JP 1903195
  US 5,118,608           Optical Assay Technique (Merlin I)             JP 2502222
  US 4,882,288           Assay Technique and Equipment                  JP 1928364
                         (Merlin II)
  US 4,992,385           Polymer-Coated Optical Structures              JP 2528134
                         and Methods of Making and Using                JP 2592588
                         the Same (Cellulose Nitrate Films)

  US 4,828,387           Film Measuring Device and Method               JP 2511057
                         with Internal Calibration to
                         Minimize the Effect of Sample
                         Movement (Calibration Notches)
  US 5,310,686           Polymer-Coated Optical Structures              JP 2710243
                         (Sensor Using Photoresist)
  CA 1,302,875           (Waveguide Sensor)                             JP 2572829
  US 6,093,536           (Enhanced SPR Assay)                           JP 2073383
</TABLE>



                             QUANTECH OWNED PATENTS

<TABLE>
<CAPTION>
        U.S.
     SERIAL NO.                                     TITLE
----------------------------------------------------------------------------------------------
<S>                              <C>
  09/564,140                     Method and Devices for Signal Position Analysis
  09/680,702                     Methods and Devices for Assays Using Analyte-Binding Partners
</TABLE>













                                       17