EXHIBIT 10.2






Proposal (Confidential)

PN 3224
(QTECH101596)








Quantech Ltd.
St. Paul, MN









SPR STAT System Instrument Development









October 15, 1996


<PAGE>


Quantech Ltd.
SPR STAT System Instrument Development

PN 3224/(QTECH101596)



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.

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 SPR System
The first  generation  Quantech system,  the SPR STAT System,  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.

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.

Customer research has indicated the following Customer  Requirements which shall
serve as the basis for development of the system:

Disposable
-     Disposal in standard biohazardous waste vs. sharps waste
-     Specific  test must be easy to identify;  color code  disposable  for each
      different  test 
-     Safe to handle  under high  stress  conditions;  no sharps hazard
-     Minimum space required for standby  storage
-     Patient ID label area
-     Specimen collection method must be easy and simple; familiar device(s) and
      technique
-     Non-breakable and no sample spillage
-     Easily handled shape; wet, gloved hands 
-     Easy to distinguish  sample from unit; color
-     Easy,  foolproof interface  with  sample  tube
-     User does not have to  transfer  blood  from sample tube to disposable

Instrument
-     Easily readable,  illuminated readout; recognize output at a distance from
      the bench
-     Minimal manual steps;  easy to operate
-     Easy and foolproof to put disposable into instrument  
-     Easy  to  maintain   reliable   operation
-     Liquid/debris resistant membrane switches

<PAGE>

Quantech Ltd.
SPR STAT System Instrument Development

PN 3224/(QTECH101596)



-     Fit on the  existing ER  countertops
-     Easy to wipe clean;  look clean (not dark) 
-     Appearance of a professional, high quality instrument
-     Display  viewing angle  adjustable  to reduce  screen glare;  readable for
      5th-95th %-tile standing users 
-     High reliability and durability 
-     "Walk-away" level of test  automation and patient ID
-     Provide  standby  storage to hold new test  disposables 
-     Rounded,  smooth edges to avoid cuts and  abrasions
-     Easy to visually locate under crowded, high stress conditions (color/form)
-     Display  and  controls  built  into  instrument
-     Weigh  enough  to  not be accidentally knocked off counter, or be easily 
      walked away with

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
selected  sub-systems  of  the  instrument.  These  sub-systems  consist  of the
following  items at the initiation of this program,  and will be further defined
as development proceeds.

1.   Enclosure, EMI/RFI shielding and electronic components support "chassis".
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
5.   Temperature control components

Note:    It is assumed that the following specifications will be provided by 
         Quantech:
         a.  sample temperature/tolerance
         b.  disposable positioning tolerances
         c.  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.


<PAGE>

Quantech Ltd.
SPR STAT System Instrument Development

PN 3224/(QTECH101596)



Work Program

  Phase I     Instrument Concept Optimization
              Deliverables:    - Functional Sub-System Pro-E 3-D Solids Model
                               - 3-D Form Factor Mockup
                               - Pro-E Appearance Renderings
                               - Preliminary Costing Data
                               - Operator Interface Demonstration Mock-Up

  Phase II    Clinical Prototype Instrument Development
              Deliverables:    - Instrument Pro-E CAD Database and Detailed
                                 Engineering Documentation/Specifications
                               - Instrument FEA Modeling and Analysis
                               - Material and Process Specifications
                               - Preliminary Cost Roll-up


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.


<PAGE>


Phase I - Instrument Concept Optimization



Deliverables

-     Functional Sub-System Pro-E 3-D Solids Model
-     3-D Form Factor Mockup
-     Pro-E Appearance Renderings
-     Preliminary Costing Data
-     Operator Interface Demonstration Mock-Up


Activities

1.1      Product Requirements Review/Development Support

         RC+A/PDC will review the  following  project/product  requirements  and
         specifications for the instrument system with Program Management:
         -     Customer/Product Requirements
         -     Business/Technology/Product Plan
         -     Patent Strategy
         -     Regulatory/Safety Strategy
         -     Functional Specification

         The results of this review will  provide the basis on which the balance
         of this program will proceed.  RC+A/PDC will support  Functional/Design
         Specification  development by providing Program  Management with system
         specifications at appropriate points in the program. This activity will
         continue over the course of the entire program.

1.2      Instrument Concept Improvements

         RC+A/PDC  will perform the  following  activities to update and improve
         the current instrument concept based on on-going marketing requirements
         investigation and R&D results.

         1.2.1  Engineering Configuration Modeling

         System  performance   specifications  will  be  reviewed  with  Program
         Management.  This review will establish  requirements for materials and
         processes research, DFM/DFA research and packaging, shipping, disposal,
         and environmental criteria determination.

         RC+A/PDC  will develop a functional  sub-system  Pro-E 3-D solids model
         which will define the  physical and spacial  relationships  of the core
         functional  components in a electronic  database.  This model will also
         serve to define the overall enclosure  configuration  (form factors) of
         the   instrument,   and  provide  a  technical  basis  for  engineering
         development in Phase II.

         1.2.2  Industrial Design Concept

         Usability and human factors  requirements will be reviewed based on the
         current Customer Requirements.  Based on this review operator interface
         design  studies  will be  conducted  and a 3-D  mockup of the  critical
         interface  tasks will be constructed  and evaluated.  A 3-D form factor
         mockup will then be developed to confirm overall instrument geometry.


<PAGE>

Phase I - Instrument Concept Optimization



         The aesthetic options for the instrument  enclosure will be depicted in
         a series of Pro-E appearance renderings, based on the 3-D solids model.

1.3      Design Review

         RC+A/PDC will conduct a review of the proposed  instrument  engineering
         and  industrial  design  concepts  with Program  Management.  A concept
         direction will be selected for finalization.

1.4      Concept/Component Integration

         1.4.1  Pro-E Configuration Model

         The  functional  sub-system  Pro-E 3-D solids model will be updated and
         revised as required to reflect the design direction selected by Program
         Management.

         1.4.2  Pro-E Appearance Renderings

         The 3-D form factor mockup and the Pro-E appearance renderings, will be
         updated  and  revised  based on the 3-D  solids  model  and the  design
         direction selected by Program Management.

1.5      Design/Cost Review

         RC+A/PDC   will   conduct   a  review   of  the   revised   engineering
         documentation,   3-D  form  factor  mockup  and  the  Pro-E  appearance
         renderings  with  Project  Management.  The results of this review will
         determine  the  requirements  for  the  detailed  design  phase  of the
         program.

1.6      Demonstration Mock-Up Development/Evaluation

         RC+A/PDC will develop a set of design control drawings and fabricate an
         operator  interface  simulation  mockup  of  the  instrument.  Selected
         functional  components will be purchased and integrated into the mockup
         as required to demonstrate the critical operator tasks.

         The  mockup  will  serve to  verify  the  human  factors  and  workflow
         characteristics  of  the  instrument  design  by  conducting   informal
         hands-on evaluations of the instrument interface.

1.7      Program/Design Review

         A detailed  design review of the design  documentation  and  evaluation
         information,  specifications, schedule and costs will be conducted with
         Program  Management  and  selected  production  vendor(s)   candidates.
         Updates and revisions to the program plan will be made as required.



<PAGE>


Phase II - Clinical Prototype Instrument Development


Deliverables

-     Instrument Pro-E CAD Database and Detailed Engineering Documentation/
      Specifications
-     Instrument FEA Modeling and Analysis
-     Material and Process Specifications
-     Preliminary Cost Roll-up

Activities

2.1      Performance Specification Development

         RC+A/PDC will conduct a review session with Program  Management and the
         Program Team to confirm the functional,  DFM/DFA,  regulatory,  safety,
         and patent requirements and specifications for the instrument.

         The  requirements and  specifications  identified and developed in this
         phase of activity will be documented and provided to Program Management
         as part of the on-going system specification support.

         Quantech  will supply  RC+A/PDC  with  specifications,  sources  and/or
         samples of all purchased parts and components which will be included in
         the instrument that are being  specified/developed  by other members of
         the SPR STAT System development team.

2.2      Vendor and Contract Manufacturer Sourcing

         RC+A/PDC  will  support  Program  Management  in  the   identification,
         qualification  and  selection  of  clinical  prototype  and  production
         vendors and a contract manufacturer.

         It is highly  recommended  that a  selected  contract  manufacturer  be
         employed  to  construct   the  clinical   prototypes   from   prototype
         engineering   documentation   to  become   familiar   with  the  system
         requirements    and   to    provide    recommendations    for    system
         manufacturability, reliability and cost optimization.

2.3      Detailed Component Design/Engineering

         2.3.1    Design Layout/Pro-E CAD Database

         RC+A/PDC  will develop a complete  Pro-E  database  for the  commercial
         design of the instrument  sub-systems/components  it is responsible for
         developing.  The CAD database will be reviewed with Program  Management
         and Quantech  development  resources for  confirmation of component and
         subsystem functional and assembly requirements.

         RC+A/PDC  will  coordinate  with  Quantech  selected   vendors/contract
         manufacturer(s)   regarding   costing   and   timing   for   production
         implementation planning.

         2.3.2    Performance Criteria Verification

         FEA modeling and analysis  will be conducted as required to confirm the
         mechanical,  thermal and mold flow  specifications  for the  instrument
         components under development by RC+A/PDC.


<PAGE>

Phase II - Clinical Prototype Instrument Development


         2.3.3    Prototype Part Documentation

         RC+A/PDC will produce detailed  engineering  drawings and updated Pro-E
         database  for the  instrument.  The  database  will be capable of being
         directly  employed in tooling  production  by vendors with  appropriate
         CAD/CAM capabilities.

         2.3.4    Material and Process Specifications

         RC+A/PDC will develop and document the material/process  specifications
         for the instrument.

         2.3.5    Preliminary Cost Roll-up

         Quotes from vendors and suppliers will be used to develop a preliminary
         cost estimate for instrument parts, tooling, fixturing and labor.

2.4      Design Review

         A detailed design review of design/performance specifications,  DFM/DFA
         requirements,  regulatory,  safety,  environmental,  patent and tooling
         lead times and cost will be conducted.

2.5      Design Engineering Modifications

         The  instrument  design  and  specifications  will be  revised  per the
         mutually agreed to results of the review Activity 2.4 above.

2.6      Program/Design Review

         A detailed design review of the design  documentation,  specifications,
         schedule  and costs  will be  conducted  with  Program  Management  and
         selected production vendor(s) candidates.  Updates and revisions to the
         program plan will be made as required.

Note:  Future  phases  of this  program  will be  defined  per the  requirements
identified  by Program  Management  and  RC+A/PDC.  Currently  those  phases are
anticipated to be:

         Phase III - Clinical Prototype Instrument Production Support
         Phase IV - Production Design/Specification Support
         Phase V - Release to Production Support

RC+A/PDC proposes to support Quantech in the execution of these activities,  but
does not anticipate having primary deliverables responsibility for them, in that
production resources should be available within the required timeframe.


<PAGE>


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

Page 1 of 2

Client:           Quantech Ltd. - Joe Shaw

Project:          SPR STAT System Instrument Development

Project No:       3224/(QTECH101596)

Date:             October 15, 1996

Phase             Activity                                             Fees

I                 Instrument Concept Optimization

                  A.  Concept Improvements/Integration                 $82,300
                      (Activity 1.1-1.5)

                  B.  Demonstration Mockup Development                 $22,000
                      (Activity 1.6-1.7)

                  Reimbursable Expenses                                $4,000*

II                Clinical Prototype Instrument Development            $193,700*
                  (Activity 2.1-2.6)

                  Reimbursable Expenses                                $6,000*

III-V             Clinical Prototype/Production Support                TBD
                  (Activities To Be Determined Per Quantech/RC+A)

* Budget Estimates













<PAGE>






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

Page 2 of 2

Client:           Quantech Ltd. - Joe Shaw

Project:          SPR STAT System Instrument Development

Project No:       3222/(QTECH101596)

Date:             October 15, 1996


Notes:

1.       Estimates
         The  budget  estimated  fees will be quoted for  Client  approval  upon
         completion of each previous phase or activity.

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 STAT System Instrument Development

Project No:       3224/(QTECH101596)

Date:             October 15, 1996

Phase             Activity                                             Fees

I                 Instrument Concept Optimization

                  A.  Concept Improvements/Integration                 $82,300
                      (Activity 1.1-1.5)

                  B.  Demonstration Mockup Development                 $22,000
                      (Activity 1.6-1.7)

                  Reimbursable Expenses                                $4,000*

* 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:  10/15/96

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

Client Purchase Order No:2012        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.

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.


<PAGE>

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: 10/15/96
     (Rev. 12-21-95)