Exhibit 10.3
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                              DATED: 1st July 2002




                                 UNIPATH LIMITED



                                       and



                        HALL EFFECT TECHNOLOGIES LIMITED








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                       RESEARCH AND DEVELOPMENT AGREEMENT

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                                    CONTENTS

Clause ............................                                      Page

CONTENTS.............................................................     2
BACKGROUND...........................................................     3
1.   Interpretation..................................................     3
2.   The Project.....................................................     4
3.   Provision of Information........................................     5
4.   Intellectual Property Rights....................................     5
5.   Price and Payment...............................................     7
6.   VAT.............................................................     7
7.   Confidentiality.................................................     7
8.   Warranties......................................................     8
9.   Term and Termination............................................     8
10.  Limitation of Liability.........................................     9
11.  Force Majeure...................................................    10
12.  Notices.........................................................    10
13.  Assignment and Subcontracting...................................    11
14.  Disputes........................................................    11
15.  General.........................................................    11


Schedules

1. Project...........................................................    14
2. Field of Interest.................................................    15
3. Project Plan......................................................    16
4. Fees  ............................................................    17

Signatories..........................................................    18

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THIS AGREEMENT is dated 1st July, 2002

BETWEEN:

(1)  UNIPATH LIMITED  (registered  number 0417198) whose registered office is at
     Priory Business Park, Bedford, MK44 3UP (Unipath); and

(2)  HALL  EFFECT   TECHNOLOGIES   LIMITED  (registered  number  3344705)  whose
     registered office is at Unit 2, Taurus Park, Europa Boulevard,  Warrington,
     WA5 5TN, England (HET).

BACKGROUND

IT IS AGREED:

1.   Interpretation

1.1  In this agreement:

     Affiliate means, in relation to a party, any other entity which directly or
     indirectly  Controls,  is  Controlled  by, or is under  direct or  indirect
     common Control with, that party from time to time;

     Background  Intellectual  Property Rights means any  Intellectual  Property
     Rights,  which are used in performing any Project and which are owned by or
     licensed solely to one of the parties prior to the Effective Date;

     Confidential   Information   means  the   confidential   information   more
     particularly described in clause 7;

     Control means that a person possesses, directly or indirectly, the power to
     direct or cause the direction of the  management  and policies of the other
     person,  whether  through the  ownership of voting  shares,  by contract or
     otherwise, and Controls and Controlled shall be interpreted accordingly;

     Effective Date means 8th May 2002;

     Field of Interest is as defined in Schedule 2;

     Foreground  Intellectual  Property Rights means any  Intellectual  Property
     Rights that arise or are  obtained or developed by either party on or after
     the Effective Date in the course of or in connection with any Project;

     Intellectual Property Rights means (i) copyright,  patents, database rights
     and  rights  in  trade   marks,   and  designs   (whether   registered   or
     unregistered);  (ii) applications for registration,  and the right to apply
     for registration, for any of these rights; and (iii) all other intellectual
     property  rights and  equivalent or similar  forms of  protection  existing
     anywhere in the world;

     Project means the project to be carried out by Unipath and HET,  details of
     which are set out in  Schedule  1 to this  agreement,  as may be amended by
     written agreement from time to time;

     Project Plan means the agreed plan for the implementation of the Project as
     set out in Schedule 3;

     Project Report means the written report  prepared and agreed by Unipath and
     HET at the  completion  of the Project,  as more fully  described in clause
     2.7;

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     Technology  and  Know-how  means all  information,  know-how,  confidential
     information,    specifications,   formulae,   data,   processes,   methods,
     techniques,  and other  technology which is (i) under the control of either
     party as of the  Effective  Date,  is  relevant  to the  Project and may be
     freely  disclosed to each other;  or (ii) is generated by the parties under
     this agreement;

1.2  The headings in this agreement do not affect its interpretation.

1.3  The schedules and appendices to this agreement form part of it.

1.4  If there is any conflict or  inconsistency  between a term in the main part
     of this agreement and a term in any of the schedules or appendices or other
     documents  referred to or otherwise  incorporated into this agreement,  the
     term in the main part of this agreement shall take  precedence,  unless the
     schedule or the  appendices or other document  which is  incorporated  into
     this agreement is expressly stated to take precedence over this agreement.

2.   The Project

2.1  Schedule  1  sets  out  details  of the  Project  as at the  date  of  this
     agreement.  The Project, as defined in Schedule 1, may be amended from time
     to time by the mutual agreement of the parties recorded in writing.

2.2  Each  party  agrees  to  use  its  reasonable   endeavours  to  fulfil  its
     obligations and  responsibilities as set out in the Project and the Project
     Plan.

2.3  The  parties  shall  each  appoint a  project  manager  to  assume  overall
     responsibility  for its roles and obligations under this agreement (Project
     Manager).  The Project  Managers  will be  responsible  for (amongst  other
     things):

     (a)  co-ordinating   all  development  work  in  respect  of  the  Project,
          including overseeing the performance and quality of the Project;

     (b)  arranging  and attending  (personally  or by  representative)  at each
          party's  own cost  progress  meetings as  described  in clause 2.6 and
          other  meetings,  at intervals  and  locations  as agreed  between the
          parties from time to time, to discuss developments and seek to resolve
          any issues  arising.  The Project  Managers  shall use all  reasonable
          endeavours to resolve issues arising under this  agreement,  but shall
          refer all  problems  which are outside  their  ordinary  authority  to
          resolve to  appropriate  members  of the  parties'  respective  senior
          management;

     (c)  day to day liaison between the parties;

     (d)  preparing and agreeing the Project Reports; and

     (e)  any other  matters as may be agreed  between the parties  from time to
          time.

2.4  Each party shall have the right to replace its appointed Project Manager at
     any time on prior written notice to the other party.

2.5  Subject to the obligations of  confidentiality  contained in clause 7, each
     party shall permit the other's  Project  Manager (and other duly authorised
     representatives)  access  to its  premises  at which the  Project  is being
     conducted  as is  reasonably  required  having  regard  to the  nature  and
     progress of the Project.

2.6  The  parties  agree,  at least once every 3 months  during the term of this
     agreement, or at other intervals, and at locations as may be agreed between
     them from time to time,  to  arrange  and attend at their own cost by their
     duly  authorised   representatives,   including  their  respective  Project
     Managers,  meetings  to discuss and review the  progress  and status of the

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     Project  performed under this agreement,  and consider  proposals and agree
     actions  in  relation  to the  Project  with a view to  ensuring  a  timely
     completion of the Project in accordance with the Project Plan and any dates
     and quality standards as may be agreed between the parties.

2.7  On  completion  of the  Project,  the  parties  shall  jointly  inspect and
     evaluate the work  performed and shall produce and sign the Project  Report
     in respect of the Project,  incorporating  those matters and details as may
     be agreed  between the parties  but as a minimum the Project  Report  shall
     include  enough  detail so that the Project  Report can be  understood by a
     reasonable  scientist who is familiar with this branch of technology.  Each
     party shall be entitled to retain two copies of the Project  Report for its
     records.

3.   Provision of Information

3.1  During the term of this  agreement,  each party  undertakes to use its best
     efforts to make  available to the other party all relevant  Technology  and
     Know-How at its disposal which is reasonably  required for the  performance
     by that other party of its part of the Project.  Without  limitation to the
     generality  of the  foregoing,  each of the  parties  agrees  that it shall
     provide  the  other  party  in good  time  with  (or  with  access  to,  as
     appropriate) information,  documents, material, data, experience, expertise
     and  equipment,  as is reasonably  required in order for the other party to
     perform its obligations under the Project.

3.2  Each party shall keep the other party  informed as necessary in relation to
     all relevant improvements in Technology and Know-How, marketing information
     and other  information  in its possession or control which is necessary for
     the performance by that other party of its obligations under the Project.

3.3  In providing any  Technology  and Know-How to the other party,  each of the
     parties  shall  use  its  best  efforts  to  ensure  the  accuracy  of that
     Technology and Know-How and in the event of any error with that  Technology
     and  Know-How,  will  promptly  notify the  correction  of the error to the
     receiving party.  Subject to clause 8.1, the providing party shall be under
     no further  obligation  or  liability  in respect  of such  Technology  and
     Know-How and no warranty or  representation of any kind is made or is to be
     implied as regards the  sufficiency,  accuracy,  fitness for any purpose of
     such Technology and Know-How.

4.   Intellectual Property Rights

4.1  Background Intellectual Property Rights

     (a)  Subject to the obligations of  confidentiality  contained in clause 7,
          each party shall give full  disclosure to the other of all  Background
          Intellectual  Property  Rights  owned by or  licensed  by it which are
          relevant  to the  Project and which are  reasonably  required  for the
          performance  by that other  party of its part of the  Project  and the
          other  party  shall be entitled to use the same solely for the purpose
          and duration of the Project.

     (b)  Save for the right to use the Background  Intellectual Property Rights
          contained in clause 4.1(a),  nothing in this agreement  shall restrict
          that party's right to use such Background Intellectual Property Rights
          for any other purpose whatsoever.  No licence or similar right to such
          Background  Intellectual  Property  Rights,  expressed or implied,  is
          granted, assigned or transferred by either party under this agreement,
          unless  expressly  agreed in writing and signed by both parties.  Each
          party shall be and shall  remain the sole and  exclusive  owner of any
          and all of its Background Intellectual Property Rights.

4.2  Foreground Intellectual Property Rights

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     (a)  Any Foreground Intellectual Property developed or created in Unipath's
          Field of Interest shall vest in and be owned absolutely by Unipath and
          any  Foreground  Intellectual  Property  developed or created in HET's
          Field  of  Interest  shall  vest in and be  owned  absolutely  by HET.
          Nothing in this  agreement  shall  restrict a party's right to use its
          Foreground  Intellectual  Property Rights for any purpose  whatsoever.
          Save for the right to use the Foreground  Intellectual Property Rights
          for the purpose and  duration  of the  Project,  no licence or similar
          right to such Foreground  Intellectual  Property Rights,  expressed or
          implied,  is granted,  assigned or  transferred  by either party under
          this agreement,  unless expressly agreed in writing and signed by both
          parties.

4.3  In the event that the parties  disagree on the ownership of any  Foreground
     Intellectual Property Rights, the dispute shall be dealt with in accordance
     with clause 14.

4.4  Each party agrees to sign all  documents  and provide any other  reasonable
     assistance,  at the other party's  request and expense,  whether  during or
     after  the  termination  of this  agreement  so that the party  making  the
     request  may  apply  for,   obtain  and  enforce  any  of  its   Foreground
     Intellectual Property Rights .

4.5  To the extent that either party  sub-contracts  performance of the Project,
     that party shall ensure that any Foreground  Intellectual  Property  Rights
     created from the work of its sub-contractors shall be assigned to the party
     whose  relevant Field of Interest those  Foreground  Intellectual  Property
     Rights fall within.

4.6  Each  party  shall  immediately  give  written  notice  to the other of any
     infringement or threatened  infringement of, or any challenge to, the other
     party's Background  Intellectual Property Rights,  Foreground  Intellectual
     Property Rights or any unauthorised use of the other party's Technology and
     Know-How by a third party which comes to its knowledge. The party that owns
     the  Background  Intellectual  Property  Rights,   Foreground  Intellectual
     Property  Rights or  Technology  and  Know-How  to which the  infringement,
     threatened  infringement  or challenge  relates shall  decide,  in its sole
     discretion, what steps shall be taken (if any) to resolve the activity.

4.7  Subject to the remainder of this clause 4, each party (Indemnifying  Party)
     shall,  at its own  expense,  defend or at its  option  settle  any  action
     brought  against the other party  (Indemnified  Party) which  consists of a
     claim that the use of the Indemnifying  Party's  Technology and Know-How or
     Background Intellectual Property Rights for any activity contemplated under
     this agreement  infringes any  Intellectual  Property Right  belonging to a
     third party,  and the  Indemnifying  Party agrees to be responsible for all
     losses,  costs (including  reasonable legal costs),  damages,  liabilities,
     claims and  expenses  suffered  or  incurred  by the  Indemnified  Party in
     connection with any such claim. The Indemnifying  Party's obligations under
     this clause 4.7 shall be conditional on the Indemnified Party:

     (a)  notifying  the  Indemnifying  Party within 30 days of  receiving  such
          claim;

     (b)  giving  the  Indemnifying   Party  express  authority  to  proceed  as
          contemplated by this clause4.7; and

     (c)  providing the Indemnifying  Party with all such available  information
          and assistance as it may reasonably require.

4.8  In addition and without  prejudice to clause 4.7, in the event that the use
     of  the  Indemnifying   Party's   Technology  and  Know-How  or  Background
     Intellectual  Property  Rights  for any  activity  contemplated  under this
     agreement  infringes any  Intellectual  Property Right belonging to a third
     party, the Indemnifying  Party shall have the right, at its sole option and
     at its own  expense,  either to  modify  its  Technology  and  Know-How  or

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     Background  Intellectual  Property Rights to be non-infringing or to obtain
     at its own expense for the  Indemnified  Party a licence to continue  using
     the Indemnifying Party's Technology and Know-How or Background Intellectual
     Property  Rights,  provided  that in the event that the parties  reasonably
     agree that it is not  possible  either to modify the  Indemnifying  Party's
     Technology and Know-How or Background  Intellectual  Property  Rights to be
     non-infringing or to obtain for the Indemnified Party a licence to continue
     using the  Indemnifying  Party's  Technology  and  Know-How  or  Background
     Intellectual  Property Rights then the Indemnified Party may terminate this
     agreement immediately on written notice.  Termination under this clause 4.8
     shall be without  prejudice  to the rights of either  party  accrued at the
     date of termination.

4.9  This  clause  4  states  the  entire   obligation   and  liability  of  the
     Indemnifying  Party to the  Indemnified  Party  and the sole  remedy of the
     Indemnified Party in respect of any infringement or alleged infringement of
     any Intellectual Property Right by the use of the Technology.

5.   Price and Payment

5.1  In  consideration  for HET undertaking  the development  work as set out in
     Schedule 1, Unipath shall pay the fees to HET in accordance  with the terms
     of Schedule 4. If any  additional  expenditure  is required for the Project
     which is not set out under  Schedule 4, the  parties  shall meet to discuss
     that expenditure.  HET shall not incur any additional  expenditure  without
     the prior written consent of Unipath.

5.2  Subject to clause  5.3,  Unipath  shall pay to HET the fees  within 30 days
     after it has received the relevant invoice from HET.

5.3  HET shall  include on or with each invoice  provided to Unipath  under this
     agreement  such  details as are  reasonably  required  or  appropriate  for
     Unipath to verify the  accuracy of the invoice  and HET's  compliance  with
     this agreement.  HET shall maintain  complete and accurate  records of, and
     supporting  documentation for, all amounts billable to and payments made by
     Unipath  under  this  agreement,  in  accordance  with  generally  accepted
     accounting  principles  applied on a  consistent  basis,  and shall  retain
     records for each invoice for at least 2 years from the date of such invoice
     was received by Unipath.

6.   VAT

6.1  If any VAT is  properly  chargeable  in respect  of any supply  made by HET
     under  this  agreement,  Unipath  shall  pay the  amount of that VAT to HET
     against the issue of a proper VAT invoice by HET.

1.1  Without  limiting  clause 6.1,  each amount  stated as payable by HET under
     this  agreement  is  exclusive  of VAT (if any) and is to be construed as a
     reference to that amount plus any VAT in respect of it.

7.   Confidentiality

7.1  Each of the parties  undertakes to keep confidential and not to disclose to
     any third  party or to use  themselves  other than for the  purposes of the
     Project or as permitted  under or in  accordance  with this  agreement  any
     confidential  or secret  information  in any form  directly  or  indirectly
     belonging  or relating to the other  party,  its  Affiliates,  its or their
     business  or  affairs,  disclosed  by the one  and  received  by the  other
     pursuant to or in the course of this  agreement or the  Project,  including
     without limitation any Technology and Know-How, Project Reports, Background
     Intellectual Property Rights or Foreground  Intellectual Property Rights of
     the  other and the  existence  and  terms of this  agreement  (Confidential
     Information).

7.2  Each of the parties undertakes to disclose Confidential  Information of the
     other on a  confidential  basis only to those of its  officers,  employees,
     agents,  professional advisers, bankers and contractors, to whom and to the
     extent to which, such disclosure is necessary for the purposes contemplated
     under this  agreement  and to ensure that all such  personnel  are bound by
     obligations of confidentiality no less onerous than those contained in this
     agreement.

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7.3  Each party shall, upon the written request of the other, procure that, free
     of expense  to the  other,  there is  forthwith  returned  to the other any
     material in which there is recorded any Confidential Information as defined
     in clause 7.1 save  insofar as the same falls  within the Field of Interest
     of the party  receiving  such  written  request or falls  within any of the
     exceptions specified in clause 7.4.

7.4  The  obligations  contained  in this  clause 7 shall  survive the expiry or
     termination  of this agreement for any reason for a period of 10 years from
     the  date  of  expiration  or  termination  but  shall  not  apply  to  any
     Confidential Information which:

     (a)  is publicly known at the time of disclosure to the receiving party;

     (b)  after  disclosure  becomes  publicly  known  otherwise  than through a
          breach  of  this  agreement  by the  receiving  party,  its  officers,
          employees, agents or contractors;

     (c)  can be  proved  by the  receiving  party  to have  reached  its  hands
          otherwise  than by being  communicated  by the other  party  including
          being known to it prior to disclosure,  or having been developed by or
          for it wholly independently of the other party or having been obtained
          from a third party without any restriction on disclosure on such third
          party of which the recipient is aware, having made due enquiry;

     (d)  is  required  by law,  regulation  or order of a  competent  authority
          (including any regulatory or governmental body or securities exchange)
          to  be  disclosed  by  the  receiving  party,   provided  that,  where
          practicable,  the disclosing party is given reasonable  advance notice
          of the intended disclosure.

1.1  This clause 8 replaces the  confidentiality  agreement dated 24th June 2002
     to be replaced  between  Unipath and HET and that  agreement is  terminated
     save that any information disclosed under that confidentiality agreement is
     now subject to the obligation of  confidentiality  contained in this clause
     8.

8.   Warranties

8.1  Each of the parties warrants that:

     (a)  it shall perform the Project in a professional  manner with reasonable
          skill and care, using suitably qualified personnel,  and shall use all
          reasonable endeavours to achieve the objectives of the Project;

     (b)  all Technology and Know-How provided by it to the other party will be,
          to the best of its  knowledge,  accurate  and complete in all material
          respects,  and it is entitled to provide  that  information,  data and
          materials to the other without recourse to any third party; and

     (c)  without  limitation  to the  foregoing,  its  Background  Intellectual
          Property Rights or the use of those Background  Intellectual  Property
          Rights under this  agreement  do not, so far as it is aware,  infringe
          the rights of any third party,  and no third party has  threatened or,
          so far as it is aware, is currently threatening proceedings in respect
          of any infringement,  and none of its Background Intellectual Property
          Rights  is  the  subject  of any  actual  or,  so far as it is  aware,
          threatened challenge or opposition or revocation proceedings.

9.   Term and Termination

9.1  This agreement shall come into effect on the Effective Date and, subject to
     the remaining  terms of this  agreement,  shall  continue in full force and
     effect until the completion of the Project  unless agreed  otherwise by the
     parties in writing.

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9.2  HET shall have the right to terminate  this  agreement if Unipath  fails to
     pay any invoice  submitted in accordance  with Schedule 4 which is properly
     due and which  remains  unpaid  for a period of 30 days after  Unipath  has
     received the relevant invoice from HET.

9.3  Unipath  shall have the right to terminate  this  agreement if HET fails to
     complete  any of the key  milestones  (as  defined in  schedule 4) within a
     reasonable period of time.

9.4  Each party shall be  entitled  to  terminate  this  agreement  at any time,
     including  during the currency of the Project,  by notice in writing to the
     other if:

     (a)  the other party is in material  breach of this agreement  which breach
          is irremediable  or, if remediable,  is not remedied by the defaulting
          party within 30 days of being requested to do so by the other;

     (b)  the other party ceases to do business, becomes unable to pay its debts
          as they fall due,  becomes  or is deemed  insolvent,  has a  receiver,
          manager,  administrator,  administrative  receiver or similar  officer
          appointed  in  respect  of the  whole  or any  part of its  assets  or
          business,  makes any  composition or  arrangement  with its creditors,
          takes or suffers any similar action in consequence of debt or an order
          or resolution is made for its  dissolution or liquidation  (other than
          for the purpose of solvent  amalgamation  or  reconstruction),  or any
          equivalent or similar action or proceeding is taken or suffered in any
          jurisdiction and the same is not dismissed or discharged within thirty
          (30) days thereafter;

     (c)  the other party is in breach of any of its confidentiality obligations
          under clause 7;

     (d)  the other party  challenges  or disputes  the validity or ownership of
          any of the terminating party's Background Intellectual Property Rights
          or Foreground Intellectual Property Rights;

     (e)  the other party undergoes any change in legal or beneficial  ownership
          or  control,  unless  such  ownership  or  control is  acquired  by an
          Affiliate.

9.5  Within 30 days of termination of this  agreement,  each party shall,  where
     reasonably  practical,  return  to the other all  documents  and  materials
     (whether in tangible or electronic form) supplied by one party to the other
     under  this  agreement   which  contain   reference  to  any   Confidential
     Information  and all copies  thereof  then in the  possession  or under the
     control of the other.  Save that this clause shall not apply to the Project
     Reports.

9.6  Termination in accordance with this clause 9 shall be without  prejudice to
     the rights of the parties accrued at the date of termination.

10.  Limitation of Liability

10.1 Subject to clauses 10.2 and 10.3:

     (a)  the liability of either party under this  agreement,  whether  arising
          from negligence, breach of contract or otherwise, is excluded; and

     (b)  neither  party shall be liable to the other party for any  indirect or
          consequential loss or damage including,  without limitation,  any loss
          of business or profits in each case whether  arising from  negligence,
          breach of contract or otherwise.

10.2 Neither  party,  including for the purpose of this clause 10, any Affiliate
     of either  party,  limits its  liability for fraud or for death or personal
     injury  arising from its  negligence  or that of its  employees,  agents or
     subcontractors.

10.3 The  exclusion  of  liability  set out in  clause  10.1  shall not apply in
     relation to:

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     (a)  the indemnity given in clause4.7, in respect of which the liability of
          either party shall not exceed in aggregate  (pound)50,000 per event or
          series of connected events;

     (b)  any breach of the obligation of  confidentiality,  in respect of which
          the   liability   of  either  party  shall  not  exceed  in  aggregate
          (pound)50,000 per event or series of connected events; or

     (c)  ,Unipath  only,  for a breach of any obligation to pay under clause 5,
          in respect of which the  liability  for the  period  during  which the
          failure to pay occurred  shall not exceed in aggregate  the values set
          out below:

                      Period                        Maximum Aggregate Liability
-------------------------------------------------   ---------------------------
Failure to make a payment between Contract              (pound)128,813
signing & Project Start and Completion of Stage 1
-------------------------------------------------   ---------------------------
Failure to make a payment between Completion of         (pound)69,302
Stage 1 and Completion of Stage 2
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Failure to make a payment between Completion of         (pound)43,362
Stage 2 and Completion of Stage 3
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10.4 Each party  shall  remain  responsible  for the acts and  omissions  of its
     subcontractors  as if they were the acts and  omissions of the party or its
     employees or agents.

11.  Force Majeure

11.1 Neither  party  shall  be  liable  to the  other  party  for any  delay  or
     non-performance  of its obligations  under this agreement  arising from any
     cause  or  causes  beyond  its  reasonable   control   including,   without
     limitation,  any of the following: act of God, governmental act, war, fire,
     flood, explosion,  civil commotion.  Subject to the affected party promptly
     notifying  the  other  party  in  writing  of the  cause  of the  delay  or
     non-performance  and the likely  duration of the delay or  non-performance,
     and provided the affected party uses its reasonable endeavours to limit the
     effect of that delay or non-performance on the other party, the performance
     of the affected party's  obligations,  to the extent affected by the cause,
     shall be suspended during the period that the cause persists.  If the delay
     or  non-performance  described  under the first  sentence  continues  for a
     period greater than 3 months,  each party shall have the right to terminate
     this agreement.

12.  Notices

12.1 Any  notice or other  document  to be served  under this  agreement  may be
     delivered or sent by post or facsimile process to the party to be served at
     its address set out below:

     (a)  to Unipath at: (b) to Hall Effect Technologies at:

          Priory Business Park                 22 The Office Village
          Bedford                              Exchange Quay
          MK44 3UP                             Manchester M5 3EQ
          ---------------------------------    ---------------------------------
          Fax: +44 1234 5002                    Fax: +44 161 848 9226
          ---------------------------------    ---------------------------------
          Marked for attention of Company      Marked for attention of the Chief
          Secretary                            Executive Officer
         ---------------------------------    ----------------------------------

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          or at any other address or facsimile  number or to any other addressee
          as it may have  notified  to the other party in  accordance  with this
          clause 12. Any notice or other  document sent by post shall be sent by
          prepaid  first  class  recorded  delivery  post (if  within the United
          Kingdom) or by prepaid airmail (if elsewhere).

12.2 In proving  service of a notice or document it shall be sufficient to prove
     that  delivery  was made or that the  envelope  containing  the  notice  or
     document was properly  addressed and posted  (either by prepaid first class
     recorded  delivery post or by prepaid airmail,  as the case may be) or that
     the facsimile  message was properly  addressed and despatched,  as the case
     may be.

13.  Assignment and Subcontracting

13.1 Subject to 13.2, neither party may assign,  sublicense,  transfer, create a
     charge  over or  otherwise  dispose  of any of its  rights or  transfer  or
     otherwise  dispose of any of its obligations  under this agreement  without
     the  prior  written   consent  of  the  other  party  which  shall  not  be
     unreasonably withheld or delayed.

13.2 Nothing in this  agreement  shall  prevent or  restrict  either  party from
     assigning, sublicensing,  transferring, creating a charge over or otherwise
     disposing  of any of its  rights or from  subcontracting,  transferring  or
     otherwise  disposing of any of its  obligations  under this agreement to an
     Affiliate or to any person  acquiring the whole or any part of its business
     or assets.

14.  Disputes

14.1 Any dispute arising out of or in connection with this agreement  (Dispute),
     shall be referred by either party first to the nominated representatives of
     each of the parties for  resolution.  If the Dispute  cannot be resolved by
     the  nominated  representatives  of the  parties  within 14 days  after the
     Dispute  has  arisen,  either  party may give  notice to the other party in
     writing  (Notice)  that a Dispute has arisen.  Within  seven days after the
     date of the Notice,  the Dispute shall be referred to a senior executive of
     each of the  parties  for  resolution.  If the  Dispute is not  resolved by
     agreement in writing  between the parties  within 14 days after the date of
     the Notice,  the Dispute shall be resolved in accordance with the remaining
     provisions of this clause 14.

14.2 Any Dispute  which has not been  resolved  under clause 14.1 shall,  at the
     request of either  party made within 30 days after the Notice is given,  be
     referred to  arbitration  and finally  resolved  by  arbitration  under the
     Controlled Cost Rules at the Chartered Institute of Arbitration,  and those
     rules are deemed incorporated by reference in this agreement

14.3 This clause 14 is without prejudice to either party's right to seek interim
     relief against the other party (such as an injunction)  through the English
     courts to protect its rights and interests,  or to enforce the  obligations
     of the other party.

15.  General

15.1 No  partnership  or agency:  Nothing in this  agreement  shall be deemed to
     constitute a partnership  between the parties,  nor constitute either party
     the agent of the other party for any purpose.

15.2 Counterparts: This agreement may be executed in any number of counterparts.
     This has the same effect as if the signatures on the counterparts were on a
     single copy of this agreement.

15.3 Waiver: The rights of each party under this agreement:

     (a)  may be exercised as often as necessary;

     (b)  are  cumulative  and not  exclusive of rights or remedies  provided by
          law; and

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                                       12
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     (c)  may be waived only in writing and specifically.

          Delay in exercising or  non-exercise of any such right is not a waiver
     of that right.

15.4 Amendments:  Any  amendment of this  agreement  shall not be binding on the
     parties  unless set out in writing,  expressed to amend this  agreement and
     signed by authorised representatives of each of the parties.

15.5 Severability:  If any term of this agreement is or becomes illegal, invalid
     or unenforceable in any jurisdiction, that shall not affect:

     (a)  the legality,  validity or  enforceability in that jurisdiction of any
          other term of this agreement; or

     (b)  the legality,  validity or  enforceability  in other  jurisdictions of
          that or any other provision of this agreement.

     In the event any term or  provision  of this  agreement  is  declared to be
     invalid,  the  parties  agree  that such  invalidity  shall not  affect the
     validity  of the  remaining  terms and  provisions  of this  agreement  and
     further agree to substitute  for the invalid term or provision a valid term
     or provision  which  approximates  the intent and  business  purpose of the
     invalid term or provision as closely as possible.

15.6 Further assurance:  Each party undertakes, at the request, cost and expense
     of the other party,  to sign all documents and to do all other acts,  which
     may be necessary to give full effect to this agreement.

15.7 Costs:  Each  party  shall  pay the costs and  expenses  incurred  by it in
     connection with the entering into of this agreement.

15.8 Language:  Any notice given in connection  with this  agreement  must be in
     English.

15.9 Third Party Rights:  A person who is not a party to this  agreement may not
     enforce any of its terms under the Contracts  (Rights of Third parties) Act
     1999.

15.10 Whole agreement:

     (a)  This  agreement,  the  documents  referred to in it contains the whole
          agreement   between   the  parties   relating   to  the   transactions
          contemplated  by this agreement and supersede all previous  agreements
          between the parties relating to those transactions.

     (b)  Subject to clause 15.10(c),  each party  acknowledges that in entering
          into this agreement it has not relied on any representation, warranty,
          collateral  contract or other assurance  (except those set out in this
          agreement and the documents  referred to in it made by or on behalf of
          any other party before the date of this  agreement.  Each party waives
          all  rights and  remedies  which,  but for this  clause  15.10,  might
          otherwise be  available  to it in respect of any such  representation,
          warranty, collateral contract or other assurance.

     (c)  Nothing in clause 15.10(b) limits or excludes any liability for fraud.

15.11 Jurisdiction:   parties  agree  that,  subject  to clause 14,  the English
      courts  are to have  exclusive  jurisdiction to settle  any disputes which
      may  arise in connection  with  this agreement and  that  any  proceedings
      arising  in  connection  with  this  agreement  may  be brought  to  those
      courts.

15.12 Governing law: This agreement is governed by English law.


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<PAGE>

                                       13
________________________________________________________________________________


THIS AGREEMENT has been signed on behalf of the parties by their duly authorised
representatives (see below).

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<PAGE>

                                       14
________________________________________________________________________________


                                   SCHEDULE 1

THE PROJECT


o    Title

     Feasibility,   development  and  introduction  to  market  of  a  low-cost,
     minimally  invasive system to measure plasma or blood coagulation using the
     patented technology of Unipath and the patented  measurement  techniques of
     HET.


o    Objectives of Project

HET Obligations:

     HET shall use its reasonable efforts to achieve the objectives of the three
     stages of the  projects  within the time frame set out in  Schedule  3. The
     three stages are as follows:

     Stage 1: Proof of principle and optimise measurement methodology:

     Outcome:  Definition of the measurement methodology (or combination of
                 methodologies)
               Demonstration of the test principle using laboratory equipment
                 and prototype test devices Assessment of the performance
               characteristics of the test
                   Blood volume requirement (Target <= 1ul)
                   Accuracy:  Correlation  of the  measurement  method to a lab
                      result  using  clinical
                   reference sample (Target Correlation => 0.95)
                   Precision:  Reproducibility  of a sample  tested  at low,
                      mid and high INR  (Target
                   Precision <= 5% CV at all levels)

     Stage 2:  Development of the system design and configuration

     Outcome:  Development of the system performance, Definition of the
                 instrument design
               Development of the system configuration to achieve product
                 requirement specifications:
               Definition of the instrument design to meet product requirement
                 specifications

     Stage 3:  Optimised  system  configuration  for  production  release and
               transfer of the  technology to
               Unipath
               Meter design finalised
               Meter bill of materials defined
               Meter design specifications defined
               1st run meter samples built
               Meter reliability testing completed
               Meter test fixtures requirements defined
               Meter hardware and software validation plans defined
               Final system tested to meet product requirements specifications

UNIPATH Obligations:
During  each stage of the project and within the time frames set out in schedule
3, Unipath shall ensure the timely supply of materials and technical  support as
may be reasonably requested by HET from time to time to support the projects.


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                                       15
________________________________________________________________________________


                                   SCHEDULE 2

FIELD OF INTEREST

Part A

         The Field of Interest of Unipath shall mean any  Intellectual  Property
         Rights which have any  application in the field of Medical  devices for
         point of care  testing or home  testing for  measuring  plasma or blood
         coagulation.



Part B

         The Field of  Interest  of HET  shall  mean all  Intellectual  Property
         Rights which are outside of the Field of Interest of Unipath.

         If  any  of  HET's   Foreground   Intellectual   Property  Rights  have
         application in the Field of Interest of Unipath,  HET shall first offer
         to  Unipath  an  exclusive  licence  to those  Foreground  Intellectual
         Property Right in the Field of Interest of Unipath.  Unipath shall have
         an exclusive option over those HET's Foreground  Intellectual  Property
         Rights for  exploitation  in the Field of  Interest  of  Unipath  for a
         period of 6 months from the date that HET first offers those Foreground
         Intellectual  Property  Rights to Unipath.  Unipath may  exercise  this
         option at any time prior to the end of the 6 month period.

________________________________________________________________________________

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                                       16
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                                   SCHEDULE 3

PROJECT PLAN


                                   [[GRAPHIC]]

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                                       17
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                                   SCHEDULE 4



FEES

The Fees will be paid in three instalments according to the following budget:




                                   [[GRAPHIC]]


HET may submit  invoices to Unipath only upon  achievement of each milestone set
out in the table below.

                Milestone                             Max Milestone Payment
                ---------                             ---------------------
       (a) Contract signing & Project Start              (pound)128,813

       (b)  Completion  of Stage 1.                      (pound)69,302

       Stage 1 shall be  completed  on HET
       achieving the objects of Stage 1 as
       set out under Schedule 1

       (c) Stage 2 shall be completed  on HET
       achieving  the objects of                         (pound)43,362
       Stage 2 as set out under Schedule 1

HET  shall  not incur  any  other  charges  except  as set out  above  except as
expressly agreed to by Unipath in writing prior to the charge being incurred.


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                                       18
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SIGNATORIES


Signed by David Scott                                         Date

/s/ David Scott
-------------------------------------
for Unipath Limited




Signed by John Fuller                                          Date

/s/  John Fuller
-------------------------------------
For Hall Effect Technologies Limited


________________________________________________________________________________