Technology Development/license Agreement

EFFECTIVE DATE: 16 December 1997


PARTIES:


Quantech, Ltd. ("Quantech") a Minnesota corporation 1419 Energy Park Drive Saint Paul, Minnesota 55108


The Perkin Elmer Corporation ("PE") a New York corporation 761 Main Avenue Norwalk, Connecticut 06589-0001


RECITALS:


A. Quantech is the successor in interest of Spectrum Diagnostics, S.p.A. ("Spectrum") under a certain License, Sublicense and Purchase Agreement between Spectrum and the Serono Companies (defined below) dated 7 November 1991, as amended by an Amendment to License Agreement dated 31 October 1997 (collectively, the "Serono Agreement", a copy of which is attached hereto as Exhibit A).


B. Quantech desires PE's technical assistance in conducting research and development of products utilizing SPR Technology (defined below) and wishes to grant PE a license under the Serono Technology and Quantech Intellectual Property (defined below).


C. PE desires to acquire such a license from Quantech to enable it to make, use and sell devices incorporating SPR Technology.


The Parties therefore agree as follows:


1. DEFINITIONS


As used herein, the following words shall have the designated meanings:


1.1. "Affiliate" means a Person who, directly or indirectly, controls,
is controlled by, or is under common control with the specified
entity.


1.2. "Calendar Quarter" means each three-month period ending March 31,
June 30, September 30 and December 31.


1.3. "Consumable" means parts incorporating or designed to utilize SPR
Technology on which chemical analysis is conducted. It is to be


understood that Consumables shall not include any Instrument
necessary for conducting the chemical analysis.


1.4. "Instrument" means read-out instruments incorporating or designed
to utilize SPR Technology which are used to conduct chemical
analysis.


1.5. "Joint Invention" means any invention made jointly by at least
one employee or Assignor of each party. Assignors are defined as
non-employees who are required to assign inventions to a party.


1.6. "Licensed Products" means any Licensed Consumable or Licensed
Instrument


1.7. "Licensed Consumable" means any Consumable which (i) but for the
license granted herein, the manufacture, use or sale of which
would infringe any Patent Rights; or (ii) is produced through the
use of or otherwise incorporates Quantech Intellectual Property
which has been disclosed to PE.


1.8. "Licensed Instrument" means any Instrument which (i) but for the
license granted herein, the manufacture, use or sale of which
would infringe any Patent Rights; or (ii) is produced through the
use of or otherwise incorporates Quantech Intellectual Property
which has been disclosed to PE.


1.9. "Medical Diagnostics" means those fields, applications and
products which: (i) under current laws and regulations as of the
Effective Date, require United States Food and Drug
Administration approval for sale or distribution or would require
such approval if the application or product incorporating the
application or field were to be sold in the United States; and/or
(ii) are useful in veterinary medicine for the treatment of
animals.


1.10. "Net Sales" means PE's gross receipts from sales of Licensed
Products, less actual transportation costs, taxes, and credits
for returns.


1.11. "Nucleic Acid Diagnostics" means Medical Diagnostics which
involve the identification and/or quantification of nucleic
acids.


1.12. "Patent Rights" means those patents and patent applications
listed on Exhibit B, together with any continuations,
continuations-in-part, divisions, reissues and/or extensions
thereof and any foreign counterparts to such patents and
applications.


1.13. "PE Intellectual Property" means PE's proprietary information
(including, but not limited to, data, substances, processes,
materials, formulae, know-how, trade secrets, computer programs,
software, firmware, inventions other than Joint Inventions, and
patents) relating to SPR Technology which PE develops or in which
PE acquires an interest during the term of this Agreement, but
excluding any information which PE is prevented from disclosing
to Quantech under an obligation of confidentiality to a third
party.


1.14. "PE License" means those licenses granted by Quantech to PE in
Section 2 below.


1.15. "PE Sublicensee" means a third party to which PE has granted a
sublicense under Section 2 to manufacture Licensed Products and
to sell such manufactured Licensed Products to a party other than
PE.


1.16. "PE Sublicensee Royalties" means all monies received by PE from
a PE Sublicensee under an agreement sublicensing the rights
granted to PE in this Agreement, less any monies received from
the PE Sublicensee solely to compensate PE for research or
consulting services.


1.17. "Person" shall mean any natural person, corporation,
partnership, trust, joint venture or other entity.


1.18. "Quantech Intellectual Property" means Quantech's proprietary
information (including, but not limited to, data, substances,
processes, materials, formulae, know how, trade secrets, computer
programs, software, firmware, and inventions) relating to SPR
Technology which exists as of the Effective Date of this
Agreement or which Quantech develops or in which Quantech
acquires an interest during the term of this Agreement.


1.19. "Quantech License" means that license granted by PE to Quantech
in Section 3 below.


1.20. "Royalty Year" means a calendar year except that the first
Royalty Year shall be that period of time between the Effective
Date of this Agreement and 31 December 1998.


1.21. "Royalty-Bearing Instrument" means any Licensed Instrument which
does not utilize a new Consumable for each sample. In the case of
an instrument that combines licensed and unlicensed technologies,
the royalty shall apply uniquely to the SPR detector portion of
the instrument. The detector includes a grating-coupled SPR,
optics, and a sample holder.


1.22. "Serono Companies" means, collectively, Laboratoires Serono
S.A., the successor in interest of Serono Diagnostic S.A., and
Applied Research Systems ARS Holding N.V.


1.23. "Serono Royalties" means 15% of the Total Royalties.


1.24. Serono Technology means the products and intellectual property
that are the subject of the Serono Agreement.


1.25. "SPR" means surface plasmon resonance.


1.26. "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.


1.27. "Territory" means the world.


1.28. "Total Royalties" means the sum of the Consumable Royalties,
Instrument Royalties and Sublicense Royalties defined in Section
5.2 of this Agreement.


2. LICENSE TO PE


2.1. EXCLUSIVE PE LICENSE. Subject to the terms and conditions of
this Agreement, Quantech hereby grants to PE an exclusive license
(the "Exclusive PE License") under the Serono Technology and
Quantech Intellectual Property upon the terms and conditions of
this Agreement to make, have made for it, use, and sell Licensed
Products throughout the Territory for all fields, but excluding
1) Medical Diagnostics 2)any confidential information of a third
party which Quantech is prevented from disclosing to PE under an
obligation of confidentiality to a third party or 3) any license
(other than the Serono Agreement) Quantech obtains under a third
party's technology unless that license permits Quantech to
sublicense to PE the third party's technology.


2.2. NON-EXCLUSIVE PE LICENSE. Subject to the terms and conditions of
this Agreement, Quantech hereby grants to PE a non-exclusive
license (the "Non-exclusive PE License") under the Serono
Technology and Quantech Intellectual Property upon the terms and
conditions of this Agreement to make, have made for it, use, and
sell Licensed Products throughout the Territory for Nucleic Acid
Diagnostics, but excluding 1)any confidential information of a
third party which Quantech is prevented from disclosing to PE
under an obligation of confidentiality to a third party or 2) any
license (other than the Serono Agreement) Quantech obtains under
a third party's technology unless that license permits Quantech
to sublicense to PE the third party's technology.


2.3. PE'S RIGHT TO SUBLICENSE. PE shall have the right to sublicense
its rights under the Exclusive PE License and the Non-exclusive
PE License (collectively, the "PE License"), provided that no
such sublicense shall be granted unless Quantech has first
approved the terms of the sublicense agreement, which approval
shall not be withheld unreasonably.


3. LICENSE TO QUANTECH


3.1. QUANTECH LICENSE. Subject to the terms and conditions of this
Agreement, PE hereby grants to Quantech a non-terminable,
royalty-free exclusive license (the "Quantech License") under any
PE Intellectual Property which arises from a joint development
effort with Quantech to make, have made for it, use, and sell
Licensed Products throughout the Territory for Medical
Diagnostics. Quantech and PE agree to negotiate in good faith a
license of commensurate scope for any PE Intellectual Property
which does not arise from a joint development effort with
Quantech and any other proprietary technology under which
Quantech would need to be licensed to exploit the Quantech
License and under which PE has the right to grant a license or
sublicense.


3.2. QUANTECH'S RIGHT TO SUBLICENSE. Quantech shall have the right to
sublicense its rights under the Quantech License, provided that
no such sublicense shall be granted unless PE has first approved
the terms of the


sublicense agreement, which approval shall not be withheld
unreasonably.


4. TECHNICAL ASSISTANCE


4.1. TECHNICAL ASSISTANCE TO PE. Within thirty days after the
effective date of this Agreement, Quantech shall deliver to PE
such documentation as is reasonably available reflecting the
Quantech Intellectual Property. Quantech shall provide technical
assistance to PE upon PE's reasonable request to enable PE to
manufacture the Licensed Products, but excluding 1)any
confidential information of a third party which Quantech is
prevented from disclosing to PE under an obligation of
confidentiality to a third party or 2) any license (other than
the Serono Agreement) Quantech obtains under a third party's
technology unless that license permits Quantech to sublicense to
PE the third party's technology.


While Quantech will strive to provide such technical assistance
promptly, there may be occasions when Quantech does not have
available to it suitably qualified and/or experienced personnel
capable of providing such technical assistance or when such
personnel cannot reasonably be spared from their regular duties,
and PE acknowledges that Quantech cannot and does not warrant
that it will be able to provide such technical assistance at the
particular times requested by PE.


4.2. TECHNICAL ASSISTANCE TO QUANTECH. PE will keep Quantech apprised
of the development of any PE Intellectual Property under which
Quantech is licensed in the Quantech License.


4.3. OWNERSHIP OF INVENTIONS. Each party shall own an undivided one-
half interest in Joint Inventions. Each inventor shall assign
all rights in a Joint Invention to Quantech and Quantech shall
assign (and hereby does assign) an undivided one-half interest in
each such Joint Invention to PE. If either party deems it
appropriate, the parties shall retain mutually acceptable patent
counsel to render an opinion as to the patentability of a Joint
Invention and to prepare, file, and prosecute such patent
applications as may reasonably be required to provide protection
for such Joint Inventions. With respect to Joint Inventions, PE
shall not grant any license under its rights therein to any third
party to make, have made, use or sell Medical Diagnostics and
Quantech shall not grant any license under its rights therein to
any third party to make, have made, use or sell products which
are not Medical Diagnostics. Should either party choose to bring
suit for infringement by a third party of any patent in a Joint
Invention, the party bringing suit shall have the right to join
the other party as a party to the suit to the extent required by
law, provided the party bringing suit must indemnify, defend and
hold the other party harmless against any costs, fees, damages,
liabilities or other expenses relating thereto. The parties
agree to execute and exchange upon request such


documents as may be necessary or desirable to carry out the
provisions of this Section 4.3.


5. ROYALTIES AND REPORTS


5.1. QUANTECH DEVELOPMENT PHASES. Exhibit C defines four phases of
Quantech product development, designated Phase I, Phase II, Phase
III and Phase IV, and, for each such Phase, the areas of PE
expertise with respect to which Quantech seeks PE's assistance.
Quantech will notify PE upon completion of each Phase. Royalties
provided in section 5.2 will be reduced upon completion of a
Phase if the Phase is completed with PE's as ...