<PAGE>
                                                     EXHIBIT 10.26


* Portions of this document have been omitted pursuant to a request for
confidential information.


                    TECHNICAL DEVELOPMENT AND LICENSE AGREEMENT

          This Agreement dated as of the 8th day of December, 1997 (the
"Agreement") by and between ACTIMED LABORATORIES, INC. ("ActiMed"), a Delaware
corporation, having its principal place of business at 5 Terri Lane, Burlington,
NJ  08016, and PACIFIC BIOMETRICS, INC. ("PBI"), a Delaware corporation, having
its principal place of business at 1370 Reynolds Avenue, Suite 119, Irvine, CA
92614.

          WHEREAS, ActiMed possesses proprietary thin film and dye technology
suitable for use in Product, as herein defined;

          WHEREAS, ActiMed further possesses GMP manufacturing facilities and
adaptable manufacturing equipment;

          WHEREAS, PBI possesses a proprietary, non-invasive glucose diagnostic
test using a saliva sampling device known as SalivaSac-Registered Trademark-;

          WHEREAS, ActiMed and PBI desire to enter into a development
relationship to develop Product, as herein defined;

          WHEREAS, PBI desires to obtain from ActiMed and ActiMed desires to
grant to PBI, an exclusive, world-wide license to manufacture and market
Product, as herein defined, in the Field, as herein defined; and

          WHEREAS, ActiMed desires to obtain from PBI, and PBI desires to grant
to ActiMed, a right of first refusal to exclusively manufacture Product, as
herein defined.

          NOW THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:

          1.   DEFINITIONS.  Unless otherwise provided, each capitalized term
used herein shall have the following meaning.

               1.1.   "ActiMed Core Technology" shall mean technology, both
devices and methods, described or claimed in the ActiMed Patents, and/or related
to dye, film or ENACT flow-through technology, and any extension, improvement,
enhancement, modification or continuation thereof.

               1.2.   "ActiMed Patents" shall mean the Patents specified in
Exhibit A, and any additional Patents owned or controlled by ActiMed during the
term of the ActiMed License, the claims of which cover use, sale or manufacture
of Product.  Notwithstanding the provisions of this Section 1.2, ActiMed Patents
shall not include ActiMed Program Patents.


<PAGE>

               1.3    "ActiMed Program Inventions" shall have the meaning
stated in Section 7.1.1.

               1.4.   "ActiMed Program Patents" shall mean any Patents claiming
ActiMed Program Inventions.

               1.5.   "Additional Countries" shall have the meaning stated in
Section 7.8.

               1.6.   "Affiliate" shall mean any corporation, partnership or
organization which directly or indirectly controls, is controlled by or is under
common control with a party.  Existence of such control is established by the
direct or indirect ownership of more than 50% of the voting interest in an
entity.

               1.7.   "Agreed Countries" shall have the meaning stated in
Section 7.7.

               1.8.   "Coating" shall mean the steps of manufacturing a Test
Device, either alone or as part of a multi-component Product, involving coating
the physical substrate of the Test Device with Formulation.

               1.9.   "Development Budget" shall mean the projected cost of
funding the Development Plan, as agreed to by the parties.

               1.10.  "Development Plan" shall mean a research and development
plan for the development of First Generation Monitoring Product as defined in
Section 1.15, Second Generation Monitoring Product as defined in Section 1.41,
and Screening Product as defined in Section 1.40, through the Development
Program, which plan shall include a Development Budget, a specific schedule for
work, performance milestones, product specifications and personnel requirements
for each product, and which is attached hereto as Exhibit B, and as modified
from time to time.

               1.11.  "Development Program" shall mean the collaborative
research and development program to develop Product.

               1.12.  "Field" shall mean human non-invasive saliva glucose
testing for screening for and monitoring diabetes.

               1.13.  "Finishing" shall mean the steps of manufacturing a Test
Device, either alone or as part of a multi-component Product, after Coating,
involving lamination and cutting.

               1.14.  "First Commercial Sale" as to a specific type of Product
shall mean the first time such Product is sold to non-Affiliate third parties.


                                         -2-

<PAGE>

               1.15.  "First Generation Monitoring Product" shall mean a
multi-component sampling and measurement device which shall include a Test
Device, a collection sack based on SalivaSac-Registered Trademark-, and a
measurement meter, which First Generation Monitoring Product, at the time of
manufacture, use or sale, is either (a) covered by one or more claims of the
ActiMed Patents or the ActiMed Program Patents, or produced, processed or
otherwise manufactured by any method and/or process covered by one or more
claims of the ActiMed Patents or the ActiMed Program patents, or (b) covered by
one or more claims of the Joint Program Patents, or produced, processed or
otherwise manufactured by any method and/or process covered by one or more
claims of the Joint Program Patents.

               1.16.  "Formulation" shall mean a mixture of components, which
may include dyes, stabilizers, surfactants and additives, used in the
manufacture of a Test Device to provide sensitivity to the Test Device.

               1.17.  "Formulation Transfer Price" shall have the meaning set
forth in Section 6.4.3.1.

               1.18.  "Formulation Supply Agreement" shall have the meaning set
forth in Section 6.4.3.

               1.19.  "Fully Absorbed Plant Cost" shall mean the cost of
manufacturing a product or component of a finished product.  This cost includes
direct labor, including salary, taxes, and fringe benefits; materials; and plant
overhead, including indirect labor, supervision, rent, utilities, taxes, and
other necessary plant costs applied to the units of product or component
produced.  Overhead charges shall be applied on the basis of reasonable
estimates of production volume for the product in question and allowing for
absorption of overhead costs by other products or components produced in the
same plant.  GAAP accounting principles shall be applied in the calculation of
cost, and PBI shall have the right to audit the cost calculation at its own
expense.

               1.20.  "Intellectual Property" shall mean the intellectual
property described by and contained within the ActiMed Patents, the PBI Patents,
and Program Inventions.

               1.21.  "Invention Owner" shall have the meaning stated in
Section 7.6.

               1.22.  "Joint Program Inventions" shall have the meaning stated
in Section 7.1.3.

               1.23.  "Joint Program Patents" shall mean any Patents claiming
Joint Program Inventions.

               1.24.  "Manufacturing Agreement" shall have the meaning stated
in Section 6.2.


                                         -3-
<PAGE>

               1.25.  "Manufacturing Process" shall mean all steps of
manufacturing a Test Device from Formulation and necessary raw materials,
including, but not limited to, Coating and Finishing.

               1.26.  "Manufacturing Process Information" shall have the
meaning stated in Section 6.3.2.

               1.27.  "Net Sales" shall mean all sales of Product by PBI or its
sublicensees, less:  (a) normal trade and cash discounts actually allowed to
customers; (b) credits or refunds actually allowed, including chargebacks,
consistent with a policy to be established by ActiMed and PBI and industry
practices; (c) freight charges and insurance paid directly with respect to the
sale; and (d) sales and other excise taxes imposed and paid directly with
respect to the sale.

               1.28.  "Non-Owning Party" shall have the meaning stated in
Section 7.6.

               1.29.  "Overrun Expenses" shall mean research or
development-related expenses in excess of the Development Budget.

               1.30.  "Patents" shall mean patents, patent applications,
continuations, continuations-in-part, divisionals, patents of addition,
reissues, renewals or extensions thereof and all Supplemental Patent
Certificates ("SPCs").

               1.31.  "PBI Patents" shall mean the Patents specified in Exhibit
C, and any additional Patents owned or controlled by PBI during the term of the
PBI License, the claims of which cover any aspect of activities pursuant to the
Development Program, and/or the manufacture of Product.  Notwithstanding the
provisions of this Section 1.31, PBI Patents shall not include PBI Program
Patents.

               1.32.  "PBI Patents" shall mean PBI's patent(s) specified in
Exhibit C.

               1.33.  "PBI Profit Target" shall have the meaning stated in
Section 6.2.1.

               1.34.  "PBI Program Inventions" shall have the meaning stated in
Section 7.1.2.

               1.35.  "PBI Program Patents" shall mean any Patents claiming PBI
Program Inventions.

               1.36.  "Product" shall mean Screening Product, First Generation
Monitoring Product, and/or Second Generation Monitoring Product.


                                         -4-
<PAGE>

               1.37   "Product Launch Date" as to a specific type of Product
shall mean the date of First Commercial Sale of such Product in the Field.

               1.38.  "Program Inventions" shall mean all inventions,
discoveries, designs, works of authorship and other know-how which arise under
the Development Program.

               1.39.  "Royalty Period" as to a specific type of Product shall
mean the period commencing with the Product Launch Date, and ending on the
termination date of the license granted by ActiMed pursuant to Article 4 hereof.

               1.40.  "Screening Product" shall mean a multi-component sampling
and screening device consisting of a Test Device that provides a qualitative,
yes/no threshold value and a collection sack based on SalivaSac-Registered
Trademark-, which Screening Product, at the time of manufacture, use or sale, is
either (a) covered by one or more claims of the ActiMed Patents or the ActiMed
Program Patents, or produced, processed or otherwise manufactured by any method
and/or process covered by one or more claims of the ActiMed Patents or the
ActiMed Program Patents, or (b) covered by one or more claims of the Joint
Program Patents, or produced, processed or otherwise manufactured by any method
and/or process covered by one or more claims of the Joint Program Patents.

               1.41.  "Second Generation Monitoring Product" shall mean an
integrated sampling and measurement device consisting of a Test Device and a
collection sack based on SalivaSac-Registered Trademark-, and a measurement
meter, which Second Generation Monitoring Product, at the time of manufacture,
use or sale, is either (a) covered by one or more claims of the ActiMed Patents
or the ActiMed Program Patents, or produced, processed or otherwise manufactured
by any method and/or process covered by one or more claims of the ActiMed
Patents or the ActiMed Program Patents, or (b) covered by one or more claims of
the Joint Program Patents, or produced, processed or otherwise manufactured by
any method and/or process covered by one or more claims of the Joint Program
Patents.

               1.42.  "Test Device" shall mean a solid phase, high sensitivity,
disposable device containing a dye described or claimed in the ActiMed Patents
(including, without limitation, a proprietary hydrogen peroxide sensitive dye),
e.g., a C3-based glucose detection film.

               1.43.  "Third Party Confidentiality Agreement" shall have the
meaning stated in Section 6.4.4.

               1.44.  "Third Party Manufacturer" shall mean a third party
licensed to manufacture Product pursuant to Section 6.4 hereof.

               1.45.  "Transfer Price" shall have the meaning stated in
Section 6.2.1.


                                         -5-
<PAGE>

          2.   DEVELOPMENT PROGRAM.

               2.1.   PURPOSE.  The parties agree that the purpose of the
Development Program is the development of Product for commercial use.

               2.2.   IMPLEMENTATION OF DEVELOPMENT PLAN.  Each of the parties
hereto shall use all commercially reasonable efforts to undertake the
Development Program in accordance with the Development Plan set forth in
Exhibit B, as modified from time to time by written mutual agreement of the
parties, and the milestones set forth therein.

                      2.2.1.  Each party shall designate one (1) of its
employees as a member of an Advisory Committee, and an additional employee as an
alternate member, which Advisory Committee shall oversee the implementation of
the Development Plan.  Each party can replace its designated Committee member at
its discretion, but no more frequently than one time per calendar year.

                      2.2.2.  Each of the parties shall provide the Advisory
Committee complete monthly written reports and data on the status of their work
under the Development Plan, and such other reports and information as may be
requested from time to time by the Advisory Committee.

               2.3.   ADVISORY COMMITTEE.  The Advisory Committee shall (a)
meet regularly, but no less than once a quarter, (b) monitor the Development
Program, (c) oversee the implementation of the Development Plan, including, but
not limited to, determining the satisfaction of milestones, reviewing the
Development Budget, monitoring payments thereunder, making strategic decisions
on overall scientific direction, and proposing revisions to the Development Plan
to the parties as necessary, and (d) perform such other duties as the parties
may from time to time agree to in writing.  By affirmative vote, the Advisory
Committee may make such changes or modifications to the Development Plan as may
be necessary to achieve the milestones set forth therein. If the Advisory
Committee is unable to agree on any aspect of the implementation of the
Development Plan, including funding issues, strategy, and scientific direction,
such implementation decisions shall be made by PBI, provided that PBI shall give
full consideration and weight to ActiMed recommendations.  PBI shall promptly
inform ActiMed of its decision in writing, and within thirty (30) days of
receipt of such notice, ActiMed may terminate the Development Program if ActiMed
in good faith believes that the Development Program is not technically feasible
in light of PBI's decision.

               2.4.   PROJECT MANAGERS.  In addition to the Advisory Committee,
each party shall appoint from its employees other than those on the Advisory
Committee one (1) Project Manager, which Project Managers shall be jointly
responsible for coordination and communication between the parties.


                                         -6-
<PAGE>

               2.5.   RESEARCH FUNDING.

                      2.5.1.  The Development Budget shall be funded by PBI.

                      2.5.2.  The Development Budget shall be mutually agreed 
upon on an annual basis by the Advisory Committee, within sixty (60) days of 
the date hereof, and every twelve (12) months thereafter.  The Development 
Budget shall include a fee of no less than [    *   ] per year per full-time 
equivalent research scientist working on the Development Program and shall 
include additional Program expenses.

               2.6.   PAYMENTS TO ACTIMED.  During the term of the Development
Program, ActiMed shall submit monthly invoices for all costs incurred by ActiMed
pursuant to the Development Plan, inclusive of all taxes (the "Research Fee"),
and which invoice shall be accompanied by documentation sufficient to support
the Research Fee set forth in such invoice.  Payment of the Research Fee shall
be made by PBI within thirty (30) days of receipt of an invoice, provided that
the Research Fee is consistent with the Development Budget.

               2.7.   OVERRUN EXPENSES.  Overrun Expenses shall be funded by
the incurring party unless prior written approval of the other party to fund all
or part of such Overrun Expense is obtained.

               2.8.   DURATION AND EXTENSION OF DEVELOPMENT PROGRAM.  The
Development Program shall be conducted for that period of time established in
the Development Plan.  The parties anticipate that the Development Program shall
commence on or about January 1, 1998, and shall continue for a period of
twenty-four (24) months, which period may be extended upon the written agreement
of the parties hereto.

          3.   PBI LICENSE.

               3.1.   GRANT.  PBI hereby grants to ActiMed a non-exclusive,
royalty-free right and license to use the PBI Patents and PBI Program Patents,
solely for the purpose of the Development Program ("PBI License").

               3.2.   DURATION.  The PBI License shall continue for the
duration of the Development Program.

          4.   GRANT OF ACTIMED LICENSE.

               4.1.   ActiMed hereby grants to PBI an exclusive, world-wide
right and license, with the right to sublicense, to use the ActiMed Patents, and
ActiMed Program Patents, to make, use, have made, sell, offer for sale, market
and distribute Product solely for use in the Field (the "ActiMed License").


                                          7
                 *Omitted pursuant to a request for confidential treatment.

<PAGE>

               4.2.   DURATION.  The ActiMed License shall continue in each
country in which there exists a licensed Patent until the last to expire of such
Patents, except as provided in Section 4.3 below.

               4.3.   TERMINATION.  ActiMed shall have the right to terminate
the ActiMed License as to any country if PBI fails to meet its obligations
pursuant to Article 5 to pay Royalties owing for Net Sales of Product by PBI or
its sublicensees in that country, after ninety (90) days of written notice of
PBI's failure and ActiMed's intention to terminate pursuant to this Section.

               4.4.   EXPLOITATION.  PBI shall use commercially reasonable
efforts to produce and market Product for use in the Field, at PBI's expense,
including, but not limited to, obtaining regulatory approval therefor.  At PBI's
request, ActiMed shall provide such data and other information in ActiMed's
possession about its Test Device as may be required by PBI in obtaining
regulatory approval of Product.

          5.   ROYALTIES.

               5.1.   PBI shall pay royalties for Net Sales of Product by PBI
or its sublicensees in the amount of [  *  ] of Net Sales, or as otherwise set
forth on Exhibit D ("Royalties"), subject to this Article 5.

               5.2.   Forty-five (45) days after the close of each quarter, PBI
shall pay the Royalties for Net Sales made the previous quarter by PBI and sixty
(60) days after the close of each quarter, PBI shall pay the Royalties for Net
Sales made the previous quarter by its sublicensees.  Accompanying each payment
of Royalties, PBI shall transmit to ActiMed a report detailing Net Sales for the
quarter by country, including dates and amounts of sale, and sufficiently
detailed to allow ActiMed to calculate Royalties owed.

               5.3.   PBI shall keep complete and accurate records of all 
sales and fees subject to the royalty obligations of this Article 5.  ActiMed 
shall have the right, at ActiMed's expense, through a certified public 
accountant or like person, to examine such records during regular business 
hours; provided, however, that such examination shall not take place more 
often than once a year. If such examination reveals an underpayment of 
Royalties greater than [        *        ], PBI shall reimburse ActiMed for 
the cost of such examination.

               5.4.   Beginning at the Product Launch Date for each type of
Product, and for the term of the ActiMed License, PBI shall meet minimum annual
sales volumes as set forth in Exhibit D ("Minimum Annual Sales").  Beginning at
the end of Year 2, and at the end of each Year thereafter, if the sum of all the
annual sales made by PBI and its sublicensees in the preceding two (2) Years is
less than the sum of the Minimum Annual Sales for each of the preceding two (2)
Years, ActiMed in its sole discretion may notify PBI that the ActiMed License as
to that type of Product is henceforth non-exclusive.


                                          8
                 *Omitted pursuant to a request for confidential treatment.

<PAGE>

          6.   RIGHT OF MANUFACTURE.

               6.1.   At such time as PBI determines that it will have Product
manufactured, PBI shall promptly notify ActiMed in writing of its determination.
Such writing shall include sufficient information regarding PBI's manufacturing
requirements as necessary to allow ActiMed to evaluate performing the
manufacture.  Within thirty (30) days, ActiMed shall confirm in writing to PBI
its intent to negotiate a manufacturing agreement.

               6.2.   MANUFACTURING AGREEMENT.  In the event ActiMed exercises
its rights pursuant to Section 6.1, the parties shall negotiate in good faith to
enter into a mutually acceptable exclusive manufacturing agreement
("Manufacturing Agreement").

                      6.2.1.   TRANSFER PRICE.  Such agreement shall include a
transfer price for delivery of the Product by ActiMed to PBI equal to [  *  ] of
Fully Absorbed Plant Cost per Product ("Transfer Price").  ActiMed and PBI agree
and acknowledge that PBI's profit target in each of the screening and monitoring
markets is [  *  ] gross profit ("PBI Profit Target").  If, at the time the
parties are negotiating to enter into a Manufacturing Agreement, the parties
reasonably agree that the Product will not be competitive in the target market
at the agreed Transfer Price, the parties will negotiate in good faith to reduce
both the Transfer Price and the PBI Profit Target proportionately to gain and
retain market share for the Product.  The Manufacturing Agreement shall contain
terms and conditions allowing for later similar adjustment(s) of the Transfer
Price, if the parties agree an adjustment is necessary, and corresponding
adjustment(s) of the PBI Profit Target.

                      6.2.2.   LICENSE.  The Manufacturing Agreement shall
include an exclusive, royalty-free right and license to ActiMed to use the PBI
Patents and PBI Program Patents to make Product for sale or use by PBI and its
sublicensees.

                      6.2.3.   TERMINATION.  The Manufacturing Agreement shall
provide that in the event ActiMed should decide to cease the manufacture of
Product, ActiMed shall give 180 days' notice of its decision, and, as requested
by PBI, shall cooperate with PBI in securing a Third Party Manufacturer, and
provide information sufficient to manufacture Product.

                      6.2.4.   OTHER TERMS AND CONDITIONS.  The Manufacturing
Agreement shall include other terms and conditions as agreed to by the parties.

               6.3.   TERMINATION OF RIGHT OF MANUFACTURE.  In the event that
ActiMed does not elect to enter into negotiations with PBI, or, if by the
expiration of one hundred twenty (120) days from PBI's initial notice, the
parties cannot agree on terms and conditions of a manufacturing agreement:

                      6.3.1.   PBI shall be free to contract with a third party
for manufacture of the Product, pursuant to Section 6.4; and


                                          9
                 *Omitted pursuant to a request for confidential treatment.

<PAGE>

                      6.3.2.   ActiMed shall, within sixty (60) days of a
request from PBI for the same, provide PBI with a writing containing such
information as ActiMed possesses at the time of the request regarding the
Manufacturing Process which ActiMed reasonably believes is necessary to enable
PBI or a third party to manufacture Product as specified ("Manufacturing Process
Information"), which Information shall be based on the level closest to
full-scale production achieved through the Development Program, for example,
laboratory tests, pilot plant tests or production line tests.  ActiMed shall
have no obligation to develop such Information, other than as specified herein
as part of the Development Program, or to update such Information at any
subsequent time, and makes no representation that the Manufacturing Process
Information is sufficient to allow a third party to manufacture Product.

               6.4.   THIRD PARTY MANUFACTURE.

                      6.4.1.   PBI shall have the right under Article 4 to
grant a limited license to such Third Party Manufacturer to manufacture Product
from Formulation and raw materials, subject to the terms of this Section.  The
Third Party Manufacturer's sublicense shall be limited to manufacture of Product
for PBI and its sublicensees. The Third Party Manufacturer shall not have the
right to (1) manufacture Formulation; (2) manufacture Product for anyone other
than PBI and its sublicensees; (3) use Product; (4) sell Product; (5) assign its
sublicense; or (6) grant sublicenses.

                      6.4.2.   PBI shall be limited to one (1) Third Party
Manufacturer at any given time of any Product component which is either (a)
covered by one or more claims of the ActiMed Patents or the ActiMed Program
Patents, or produced, processed or otherwise manufactured by any method and/or
process covered by one or more claims of the ActiMed Patents or the ActiMed
Program Patents, or (b) covered by one or more claims of the Joint Program
Patents, or produced, processed or otherwise manufactured by any method and/or
process covered by one or more claims of the Joint Program Patents.

                      6.4.3.   FORMULATION SUPPLY AGREEMENT.  In the event PBI
exercises its right to grant a license to a Third Party Manufacturer pursuant to
this Section 6.4, PBI and Actimed shall negotiate in good faith to enter into a
mutually acceptable Formulation supply agreement ("Formulation Supply
Agreement").

                         6.4.3.1.  The Formulation Supply Agreement shall
include a transfer price for delivery of Formulation by ActiMed to PBI, or, at
PBI's request, to the Third Party Manufacturer, equal to [  *  ] of Fully
Absorbed Plant Cost for manufacture of Formulation, except that should the
transfer price exceed [  *  ] per Test Device, for amounts in excess of [  *  ]
per Test Device, the transfer price shall be calculated based on [  *  ] of
Fully Absorbed Plant Cost ("Formulation Transfer Price").

                         6.4.3.2.  The Formulation Supply Agreement shall
include an obligation by Actimed to supply Formulation in sufficient quantities
and in a timely


                                          10
                 *Omitted pursuant to a request for confidential treatment.

<PAGE>

fashion to meet PBI's manufacturing needs, subject to sufficient advance 
notice by PBI of its projected needs, and such other terms and conditions as 
agreed to by the parties.

                      6.4.4.   In the event PBI exercises its right to grant a
license to a Third Party Manufacturer pursuant to this Section 6.4, at PBI's
request, ActiMed shall provide up to five (5) person days to consulting to the
Third Party Manufacturer to assist the Third Party Manufacturer in the
implementation of the Manufacturing Process Information, at the cost to PBI of
[  *  ] per day.

                      6.4.5.   PBI shall obtain a signed confidentiality
agreement from any such Third Party Manufacturer ("Third Party Confidentiality
Agreement"), the terms and conditions of which shall be subject to prior written
approval by ActiMed, and a copy of such Third Party Confidentiality Agreement
shall be provided to ActiMed.  ActiMed shall be an acknowledged third party
beneficiary of such Third Party Confidentiality Agreement.  Any breach of the
terms of the Third Party Confidentiality Agreement by a Third Party Manufacturer
shall be deemed a breach of this Agreement by PBI.

                      6.4.6.   PBI shall give the Third Party Manufacturer only
such Confidential Information as is required for the Third Party Manufacturer to
manufacture the Product and only after such Confidential Information has been
identified to ActiMed.  In particular, and without limitation of the other
provisions of this Section 6.4, the Third Party Manufacturer shall not be given
any information regarding the Formulation except as necessary to manufacture
Product.  The Third Party Manufacturer shall not utilize the Confidential
Information for any other purpose whatsoever.

          7.   OWNERSHIP OF INTELLECTUAL PROPERTY.

               7.1.   OWNERSHIP OF PROGRAM INVENTIONS.  As to ownership of
Program Inventions:

                      7.1.1.   ActiMed shall have and retain sole and exclusive
title to Program Inventions, if such Program Invention is related to ActiMed
Core Technology ("ActiMed Program Inventions");

                      7.1.2.   PBI shall have and retain sole and exclusive
title to Program Inventions, if such Program Invention is related to PBI Core
Technology, ("PBI Program Inventions");

                      7.1.3.   ActiMed and PBI shall jointly have and retain
title to Program Inventions, if such Program Invention is related to both
ActiMed Core Technology and PBI Core Technology, or if such Program Invention
involve a combination thereof ("Joint Program Inventions"); and


                                          11
                     *Omitted pursuant to a request for confidential treatment.

<PAGE>

                      7.1.4.   the employer(s) of the inventing scientist(s)
shall have and retain title, if such Program Invention relates to neither
ActiMed Core Technology nor PBI Core Technology.  If the inventing scientist(s)
is/are ActiMed employee(s), such Program Inventions shall be deemed ActiMed
Program Inventions; if the inventing scientist(s) is/are PBI employee(s), such
Program Inventions shall be deemed PBI Program Inventions, and if there is at
least one inventing scientist who is an employee of ActiMed and at least one
inventing scientist who is an employee of PBI, such Program Inventions shall be
deemed Joint Program Inventions.

               7.2.   ASSIGNMENT OF PROGRAM PATENTS.  Each party shall assign
Patents of Program Inventions to the owner of such Program Invention as
established in Section 7.1.  Patents of Joint Program Inventions shall be
assigned by the inventing party to both parties.

               7.3.   Each party hereto shall enter into a written agreement
with each person that it intends to involve in conducting the Development Plan,
prior to the commencement of such person's involvement with the Development
Plan, providing for the prompt disclosure to such party of any technology that
such person may invent or discover, solely or jointly, and assigning to such
party all of such person's right, title and interest in such technology.

               7.4.   Each party, on behalf of itself and its directors,
employees, officers, shareholders, successors and assigns hereby waives any and
all actions and causes of action, claims and demands whatsoever, in law or
equity of any kind it or they may have against any other party hereto, its
officers, directors, employees, shareholders, agents, successors and assigns,
which may arise in any way, except as a result of gross negligence,
recklessness, or willful misconduct, in performance of Patent activities under
this Article 7.

               7.5.   Each party hereto shall disclose to the other party all
information that it may receive (other than from the other party hereto)
concerning the institution or possible institution of any interference,
opposition, re-examination, reissue, revocation, nullification or any official
proceeding involving Patents of Program Inventions, including without limitation
the complete text thereof.

               7.6.   The owner of a solely-owned Program Invention ("Invention
Owner") shall, by qualified independent patent counsel and other intellectual
property counsel, prepare, file and prosecute all United States patent,
copyright and other applications for such Program Invention including divisions,
continuations, continuations-in-part, reissues, reexaminations and derivatives,
at the Invention Owner's expense.  If the Non-owning Party is the inventing
party, the Non-owning Party shall cooperate as necessary in the prosecution.
The Invention Owner shall provide the other party ("Non-owning Party") with
copies of all such patent, copyright and other applications and filings within
thirty (30) days of the date of such filing, and shall endeavor to deliver to
the Non-owning Party copies of any communications with the applicable patent or
copyright office, including without limitation, all office actions and
responses, each patent or copyright application and filing, and each
registration that issues thereon.


                                         -12-
<PAGE>

               7.7.   The Development Plan shall include a list of foreign
countries in which an Invention Owner shall seek foreign patent rights at the
Invention Owner's expense ("Agreed Countries").  The list may be amended from
time to time by mutual agreement of the parties.  At the Invention Owner's
discretion, an Invention Owner of a Program Invention may seek foreign patent
rights at the Invention Owner's expense in foreign countries other than the
Agreed Countries.

               7.8.   PBI may request foreign patent rights in ActiMed Patents
and/or ActiMed Program Patents for which U.S. applications are filed during the
term of this Agreement for foreign countries other than the Agreed Countries
("Additional Countries").  PBI must request such rights, and specify the
Additional Countries, within seven (7) months after the filing date of the U.S.
application.  PBI shall pay all costs associated with preparation, filing,
prosecution, and maintenance of ActiMed Patents and ActiMed Program Patents in
Additional Countries.  All ActiMed Patents and ActiMed Program Patents will be
held in the name of ActiMed and obtained using counsel selected by ActiMed.
Failure to request such foreign patent rights will be considered an election not
to seek foreign patent rights.  ActiMed may file patent application(s) at its
own expense in any Additional Country in which PBI has not elected to secure
foreign rights, and any such foreign application(s) and resultant patent(s)
shall not be subject to this Agreement.  Nothing in this Section 7 is intended
to, or shall, preclude PBI from selling or using Product in countries in which
no patent protection exists.

               7.9.   As to Patents of Joint Program Inventions, the parties
shall agree on a case-by-case basis as to which party shall control the
preparation, filing and prosecution of such Joint Program Patents in the United
States, in Agreed Countries and in such foreign countries listed on Exhibit E,
and how the expenses of seeking such patent rights shall be allocated.  The
parties agree that patent rights shall be sought for Joint Program Inventions in
the United States and in Agreed Countries, and that it would be highly desirable
to seek patent rights in the Additional Countries listed on Exhibit E.  All
Joint Program Patents will be held in the name of both parties.  Neither party
shall seek Patent rights in a foreign country other than the Agreed Countries
and the Additional Countries listed on Exhibit E without prior written consent
of the other party.

               7.10.  PBI may terminate its license to a foreign patent
application(s) or patent(s) in an Additional Country, and its obligation to pay
for those foreign rights, upon ninety (90) days written notice to ActiMed.
ActiMed may, at its sole discretion and expense, continue prosecution and/or
maintenance of any patent(s) or application(s) for which PBI has relinquished
rights.

               7.11.  DISCONTINUANCE OF OBLIGATION TO PROSECUTE.  The Invention
Owner may, at any time, in its sole discretion decide that it desires to
discontinue its responsibility for prosecution or maintenance of a particular
Patent or copyright application or applications, or with respect to one or more
Patent or copyright applications in a particular country.  In such event, the
Invention Owner shall promptly notify in writing the Non-owning Party of its
intention 


                                         -13-
<PAGE>

to discontinue responsibility for prosecution or maintenance for such Patent or
copyright application or applications, and, in any event, at least sixty (60)
days prior to the effective date of such proposed discontinuance, in order to
permit the Non-owning Party to determine whether it wishes to assume the
responsibility therefor.  The Non-owning Party shall have the right and option,
but not the obligation, to assume the responsibility for prosecution and
maintenance of such Patent or copyright or applications therefor which the owner
desires to discontinue.  The Non-owning Party shall inform the Invention Owner
in writing of its decision to assume the responsibility for prosecution and
maintenance of such Patent or copyright or applications therefor and the
Invention Owner shall execute and deliver such documents and take such actions
as are reasonably necessary or appropriate to effect such assumption and
transfer of responsibility.

               7.12.  MAINTENANCE OF PROPRIETARY RIGHTS.  From and after the
date of this Agreement, except as otherwise set forth in this Article 7, the
party that has responsibility for particular Intellectual Property, shall take
all actions reasonably necessary to diligently prosecute and maintain any
Patents, copyrights or applications therefor covered by such Intellectual
Property in the respective offices in which such patent or copyright
applications have been filed.  Such party shall also pay for all reasonable
costs for the preparation, prosecution, issuance and maintenance of all patent
and copyright applications that may be filed after the execution of this
Agreement that cover the Intellectual Property.

               7.13.  CONTROL OF JOINT PROGRAM PATENTS.  The parties agree that
each will use Joint Program Patents solely for the purpose of the Development
Program and manufacturing, marketing and distribution of Product in the Field,
pursuant to the terms and conditions of this Agreement, as except as otherwise
agreed in a writing signed by both parties.  The parties agree to negotiate in
good faith to reach such agreement.  The parties specifically acknowledge that
without such signed writing, neither will use Joint Program Patents outside the
Field.

               7.14.  THIRD PARTY INFRINGEMENT.  In the event that ActiMed or
PBI becomes aware of actual or threatened infringement of a Program Invention in
the Field, that party shall promptly notify the other party in writing.

                      7.14.1.  SOLELY OWNED PROGRAM INVENTIONS.  As to solely
owned Program Inventions, the Invention Owner shall have the first right but not
the obligation to bring, at its own expense, an infringement action against any
third party and to use the Non-owning Party's name in connection therewith.  If
the Invention Owner elects not to commence a particular infringement action
against a third party, then the Invention Owner shall

                            (a)  negotiate with such third party in lieu of such
action, for a period not to exceed six (6) months, except with the written
consent of the Non-owning Party, or

                            (b)  within forty-five (45) days after becoming
aware of actual or threatened infringement, give written notice to the
Non-owning Party and permit the


                                         -14-
<PAGE>

Non-owning Party to institute and prosecute such infringement action at its own
expense.  The party conducting such action shall have full control over its
conduct, including settlement thereof provided such settlement shall not be made
without the prior written consent of the other party if it would adversely
affect the rights of the other party.  In any event, ActiMed and PBI shall
assist one another and cooperate in any such litigation at each other's request
without expense to the requesting party.

                      7.14.2.  JOINT PROGRAM INVENTIONS.  As to Joint Program
Inventions, within fifteen (15) days of such notice, the parties shall agree
upon (1) whether to negotiate with such third party or to bring an infringement
action; (2) counsel for such action; and (3) allocation of expenses therefor.
If the parties fail to agree within fifteen (15) days, either party may
unilaterally, at its own expense, take such action it deems reasonably necessary
to protect the Joint Program Invention, and may seek reimbursement of a portion
of such expenses through arbitration pursuant to Section 13.2 hereof.

          8.   REPRESENTATIONS AND WARRANTIES.

               8.1.   BY ACTIMED.  ActiMed represents and warrants to PBI as
follows:

                      8.1.1.   ActiMed has all necessary corporate power to
authorize the execution and consummation of this Agreement, and its execution
and consummation will not contravene, result in the breach of, or constitute a
default under any order, judgment, decree or award of any court or other
governmental body, or any agreement or instrument by which it is bound.

                      8.1.2.   ActiMed has the full right, power and authority
to grant the licenses in the Intellectual Property that it has granted, or will
grant, as the case may be, under this Agreement; it has not assigned,
transferred or otherwise encumbered such right, power and authority; to the best
of its actual knowledge, no other person or entity has any claim of ownership
whatsoever with respect to its intellectual property; to the best of its actual
knowledge, the exercise of the rights granted by it in its license grants in
this Agreement will not infringe any rights (including without limitation patent
rights) owned or possessed by any third party; and to the best of its actual
knowledge, there are no pending claims or litigation relating to its
intellectual property.

               8.2.   BY PBI.

                      8.2.1.   PBI has all necessary corporate power to
authorize the execution and consummation of this Agreement, and its execution
and consummation will not contravene, result in the breach of, or constitute a
default under any order, judgment, decree or award of any court or other
governmental body, or any agreement or instrument by which it is bound.


                                         -15-
<PAGE>

                      8.2.2.   PBI has the full right, power and authority to
grant the licenses in the Intellectual Property that it has granted, or will
grant, as the case may be, under this Agreement; it has not assigned,
transferred or otherwise encumbered such right, power and authority; to the best
of its actual knowledge, no other person or entity has any claim of ownership
whatsoever with respect to its intellectual property; to the best of its actual
knowledge, the exercise of the rights granted by it in its license grants in
this Agreement will not infringe any rights (including without limitation patent
rights) owned or possessed by any third party; and to the best of its actual
knowledge, there are no pending claims or litigation relating to its
intellectual property.

          9.   INDEMNIFICATION.

               9.1.   INDEMNIFICATION BY ACTIMED.  ActiMed shall indemnify and
hold harmless PBI, its affiliates, officers, directors, employees, agents and
representatives and any person claiming by or through any of them from and
against any and all losses arising out of or resulting from:  (i) any breach of
any of the representations or warranties made by ActiMed in this Agreement; and
(ii) any failure by ActiMed to perform in all material respects any of its
covenants or agreements contained in this Agreement, except to the extent such
losses arise from the gross negligence or willful misconduct of PBI.

               9.2.   INDEMNIFICATION BY PBI.  PBI shall indemnify and hold
harmless ActiMed, its affiliates, their respective officers, directors,
employees, agents and representatives and any person claiming by or through any
of them from and against any and all losses arising out of or resulting from:
(i) any breach of any of the representations or warranties made by PBI in this
Agreement; (ii) any failure by PBI to perform in all material respects any of
its covenants or agreements contained in this Agreement, except to the extent
such losses arise from the gross negligence or willful misconduct of ActiMed;
and (iii) any claim of bodily injury or property damage relating to the
development, manufacture, use, distribution or sale of the Product or due to the
negligence or willful misconduct of PBI or its employees or agents.

               9.3.   PROCEDURE.

                      9.3.1.   In the event that an indemnified party
("Indemnitee") shall suffer a loss which is not the subject of a claim, demand,
action, suit, proceeding, arbitration, investigation or inquiry (each and all of
the foregoing items being herein referred to as "Litigation"), the Indemnitee
shall give notice thereof to the party from whom such indemnification is being
sought (the "Indemnitor").

                      9.3.2.   Promptly after receipt by an Indemnitee of
written notice of the assertion or the commencement of any Litigation with
respect to any matter referred to in this Article 9, the Indemnitee shall give
written notice thereof to the Indemnitor and shall thereafter keep the
Indemnitor reasonably informed with respect thereto, provided that failure of
the Indemnitee to give the Indemnitor prompt notice as provided herein shall not
relieve the Indemnitor of any of its obligations hereunder.  In case any such
Litigation is brought against any


                                         -16-
<PAGE>

Indemnitee, the Indemnitor shall be entitled to assume the defense thereof, by
written notice to the Indemnitee of its intention to do so, within thirty (30)
calendar days after receipt of notice from the Indemnitee, with counsel
reasonably satisfactory to the Indemnitee at the Indemnitor's own expense.  If
the Indemnitor shall assume the defense of such Litigation, it shall not settle
such Litigation unless such settlement includes as an unconditional term thereof
the giving by the claimant or the plaintiff of a release of the Indemnitee,
satisfactory to the Indemnitee, from all liability with respect to such
Litigation.  Notwithstanding the assumption by the Indemnitor of the defense of
any Litigation as provided in this subsection, the Indemnitee shall be permitted
to join in the defense of such Litigation and to employ counsel at its own
expense.

                      9.3.3.   If the Indemnitor shall fail to notify the 
Indemnitee of its desire to assume the defense of any such Litigation within 
the prescribed period of time, or shall notify the Indemnitee that it will 
not assume the defense of any such Litigation, then the Indemnitee may assume 
the defense of any such Litigation, in which event it may do so in such 
manner as it may deem appropriate, and the Indemnitor shall be bound by any 
determinations made in such Litigation or any settlement thereof effected by 
the Indemnitee. The Indemnitor shall be permitted to join in the defense of 
such Litigation and to employ counsel at its own expense.

          10.  LIMITATION OF LIABILITY.  Except as set forth in Article 9, 
the parties' liability to each other for any losses or damages, direct or 
indirect, in contract, tort or otherwise, arising out of the subject matter 
of this Agreement shall be limited to actual and direct damages.  In no event 
shall either party be liable to the other for special, punitive, incidental 
or consequential damages.

          11.  TERM, TERMINATION AND BREACH.

               11.1.  TERM.  The term of this Agreement shall begin on the 
date hereof, and shall continue until the ActiMed License terminates unless 
terminated earlier under this Article 11.  Termination of the Development 
Program shall not terminate this Agreement, which shall continue in full 
force and effect.

               11.2.  MATERIAL BREACH.  Either party may terminate this 
Agreement upon a material breach of any of the terms of this Agreement by the 
other party if the terminating party has given the breaching party notice of 
the breach and the breaching party has failed to remedy such breach within 
forty-five (45) days of notice of such breach.  For purposes of this 
Agreement, failure of either party to materially comply with the Development 
Plan, including a failure to achieve milestones, shall constitute a breach.

               11.3.  RIGHTS UPON TERMINATION.

                      11.3.1.  In the event this Agreement is terminated by
either party, then each of the parties shall promptly return the other's
Confidential Information, as defined in Article 12.


                                         -17-
<PAGE>

                      11.3.2.  Upon termination, PBI shall cease manufacture
and sale of the Product, except that PBI shall be permitted to sell existing
inventory of the Product for a commercially reasonable time.

               11.4.  SURVIVAL.  In the event that this Agreement is terminated
by either party for any reason, the following sections shall remain in force and
in effect:  Article 5, Article 7, Article 12, Section 13.2, Section 13.13.

          12.  CONFIDENTIALITY.

               12.1.  CONFIDENTIAL INFORMATION.  Except as provided below, each
party to this Agreement shall keep secret and confidential the information,
data, results and materials of the others disclosed to it prior to and during
the term of this Agreement (collectively, the "Confidential Information").  In
addition, the Confidential Information shall include the terms and conditions of
this Agreement.  For purposes of this Article 12, a party or parties receiving
Confidential Information shall be termed the "Recipient" and the party providing
the Confidential Information to the Recipient shall be termed the "Discloser".

               12.2.  NON-DISCLOSURE.  Recipient shall safeguard and hold
confidential the Confidential Information with the same degree of care (but not
less than a reasonable standard of care) it customarily employs with its own
proprietary information, and shall not cause or permit the disclosure to, or use
by, any person of such information, except as expressly permitted in writing by
the Discloser or as specifically permitted in this Article 12.

               12.3.  PERMITTED DISCLOSURE.  Recipient shall limit disclosure
of the Discloser's Confidential Information to those of its officers, employees,
agents and representatives who shall have a need to know such information.
Recipient may disclose Discloser's Confidential Information to the extent
required by law, after providing Discloser with thirty (30) days' advance
written notice of Recipient's intent to disclose, specifying the Confidential
Information which Recipient intends to disclose.  On a case by case basis,
Recipient may seek written permission from Discloser to disclose specific
Confidential Information to actual or potential sublicensees and distributors,
subject to appropriate confidentiality obligations, which permission shall not
be unreasonably withheld.

               12.4.  NON-CONFIDENTIAL INFORMATION.  The obligations of this
Article 12 shall not apply to information that:  (a) is publicly known prior to
or after disclosure hereunder other than through acts or omissions attributable
to the Recipient or its employees or representatives; (b) as demonstrated by
prior written records, is already known to Recipient at the time of disclosure
hereunder; (c) is disclosed in good faith to Recipient (without obligation as to
confidentiality) by a third party having a lawful right to do so; (d) is
independently developed by Recipient which independent development can be
documented by Recipient; or (e) is required to be disclosed pursuant to a court
order.


                                         -18-
<PAGE>

               12.5.  ADDITIONAL MEASURES.  Recipient shall take such actions
as Discloser may reasonably request from time to time to safeguard the
confidentiality of any information subject to the terms of this Article 12.

          13.  MISCELLANEOUS PROVISIONS.

               13.1.  REMEDIES.  Each of the parties hereto acknowledges and
agrees that in the event of a breach or threatened breach of Article 12 of this
Agreement, the other party has no adequate remedy at law and accordingly shall
be entitled to injunctive and other equitable remedies in addition to any remedy
it might have at law or in equity.

               13.2.  ARBITRATION.  Any controversy, dispute or claim among the
parties arising out of or relating to this Agreement which cannot be amicably
settled by the parties, shall be decided by arbitration in accordance with the
rules of the American Arbitration Association for commercial arbitration in
effect at the time the dispute arises, unless the parties hereto mutually agree
otherwise.  Any demand for arbitration must be made in writing to the other
party, within a reasonable time after the controversy, dispute or claim arises.
There will be a panel of three (3) arbitrators, one (1) selected by ActiMed, one
(1) selected by PBI, and one (1) selected by mutual agreement of the arbitrators
selected by ActiMed and PBI, respectively.  If the arbitrators selected by
ActiMed and PBI, respectively, cannot agree on a third arbitrator within thirty
(30) days, then the American Arbitrators Association shall select the third
arbitrator.  Any arbitration involving Patents, Products, Program Inventions, or
improvements thereof shall be heard by arbitrators who are experts in such
areas.  The seat of the arbitration shall be in New Jersey if PBI demands
arbitration, and in California if ActiMed demands arbitration.  There shall be a
stenographic record of the proceedings.  The decision of the arbitrators shall
be made by majority vote and shall be final and binding upon both parties.
Neither party shall have the right independently to seek recourse to a court of
law or other authorities in lieu of arbitration.  Reasonable expenses of the
arbitration shall be borne equally by the parties.  Each party shall bear the
expenses of its counsel and other experts.

               13.3.  PUBLIC COMMUNICATIONS.  Neither party shall make any
press release or other similar public disclosure or announcement concerning this
Agreement, without the prior written consent of the non-disclosing party, except
as otherwise required by law.  Consent will be deemed granted if no response is
received from the non-disclosing party within five (5) business days of its
confirmed written request for approval from the disclosing party.
Notwithstanding the foregoing, in the event such disclosure or public
announcement is required to be made on a more immediate basis in order to comply
with applicable state or federal securities laws, then approval will be deemed
granted if no response is received from the on-disclosing party within the time
frames required by law; provided, however, that the disclosing party provides
the non-disclosing party with notice of the legally required time frame for
approval of the disclosure at the time of providing a copy of the proposed
disclosure or announcement.


                                         -19-
<PAGE>

               13.4.  APPROVAL OF PUBLICATIONS.  All proposed publications,
abstracts or oral presentations disclosing research or results obtained in the
performance of the Development Program must be agreed to by both parties and
must be submitted for review at least sixty (60) days in advance of the expected
publication or presentation date.  In the event either party is of the opinion
that such publication, abstract or presentation would constitute the disclosure
of subject matter proprietary to either company or the premature publication of
patentable subject matter, either party shall promptly notify the other in
writing, who should then delay publication or presentation of such article or
abstract for a period of sixty (60) days until either (a) a United States patent
application shall have been filed, or (b) the relevant teaching shall have been
sufficiently deleted from the proposed publication, abstract or presentation in
order to preclude public disclosure of the subject matter.

               13.5.  CONSENTS NOT UNREASONABLY WITHHELD OR DELAYED.  Whenever
provision is made in this Agreement for either party to secure the consent or
approval of the other, such consent or approval shall not be unreasonably
withheld or delayed.

               13.6.  ENTIRE AGREEMENT; WAIVERS.  This Agreement constitutes
the entire agreement among the parties hereto pertaining to the subject matter
hereof and supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties with
respect to such subject matter.  No waiver of any provision of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar).

               13.7.  AMENDMENT OR MODIFICATION.  The parties hereto may not
amend or modify this Agreement except in such manner as may be agreed upon by a
written instrument executed by both parties.

               13.8.  INDEPENDENT CONTRACTORS.  The parties agree that with
respect to the business arrangement contemplated herein they shall both be
acting as independent contractors and nothing herein contained or contained in
this Agreement shall constitute the parties as entering upon a joint venture nor
shall constitute either party as the agent for the other for any purposes
whatsoever.

               13.9.  SEVERABILITY.  In the event that any provision hereof
would, under applicable law, be invalid or unenforceable in any respect, such
provision shall (to the extent permitted under applicable law) be construed by
modifying or limiting it so as to be valid and enforceable to the maximum extent
compatible with, and possible under, applicable law.  The provisions hereof are
severable, and in the event any provision hereof should be held invalid or
unenforceable in any respect, it shall not invalidate, render unenforceable or
otherwise affect any other provision hereof.

               13.10. ASSIGNMENT; BINDING EFFECT.  Neither party shall assign,
transfer or otherwise dispose of this Agreement in whole or in part to any
individual, firm or corporation without the prior written consent of the other
party, which consent shall not be unreasonably


                                         -20-
<PAGE>

withheld.  Notwithstanding the foregoing, this Agreement shall be assignable 
by either party without the consent of the other to an Affiliate or in the 
event of a merger, consolidation or sale of substantially all of the assets 
or stock of the assigning party.  All of the terms and provisions of this 
Agreement shall be binding upon and shall inure to the benefit of the parties 
hereto and their respective transferees, successors and assigns (each of 
which such transferees, successors and assigns shall be deemed to be a party 
hereto for all purposes hereof).

               13.11. NOTICES.  Any notices or other communications required or
permitted hereunder shall be sufficiently given if in writing and delivered
personally or sent by telecopier, Federal Express (or similar courier service),
or registered or certified mail, postage prepaid, addressed as follows:

                      If to ActiMed, to it at:
                      5 Terri Lane
                      ----------------------------------
                      Burlington, NJ 08016
                      ----------------------------------
                      ----------------------------------

                      If to PBI, to it at:
                      1370 Reynolds Ave
                      ----------------------------------
                      Suite 119
                      ----------------------------------
                      Irvine, CA 92614
                      ----------------------------------

          Unless otherwise specified herein, such notices or other
communications shall be deemed received (a) on the date delivered, if delivered
personally, (b) three business days after being sent by Federal Express or a
similar overnight courier service, if sent by Federal Express or such similar
courier service, (c) one business day after being delivered, if delivered by
telecopier and (d) five business days after being sent, if sent by registered or
certified mail.  Each of the parties hereto shall be entitled to specify a
different address by giving notice as aforesaid to the other party hereto.

               13.12. COUNTERPARTS.  This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute but one and the same instrument.

               13.13. GOVERNING LAW.  This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts executed in and to be performed in that state, without giving effect
to any choice or conflict of law provision or rule that would cause the
application of the laws of any other jurisdiction.  The parties agree that New
Jersey courts (state and federal) will have exclusive jurisdiction over any
disputes arising out of this Agreement.


                                         -21-
<PAGE>

               13.14. FORCE MAJEURE.

                      13.14.1. MEANING.  "Force Majeure" shall mean any
cause which is beyond the reasonable control of the party invoking Force Majeure
and which, by the exercise of reasonable diligence, such party is unable to
prevent, including but not limited to, and whether or not of the same class or
kind as, the following:  any law, decree, regulation, order, or request of any
governmental authority (national, state, or regional), nationalization,
expropriation, confiscation, requisition, riot, war, hostilities, public
disturbance, act of the public enemy, act of terrorism, strike, lockout or other
labor dispute, fire, flood, earthquake, storm, tidal wave, explosion, Act of
God, accident of navigation, breakdown or failure of transportation or
transportation facilities.

                      13.14.2. LIMITATIONS.  The provisions of this
Section 13.14 shall not be available to a party if such party fails to use
reasonable diligence to remedy the applicable situation described in
Section 13.14 in an adequate manner and with all reasonable dispatch or if such
applicable situation is caused by such party, except that this Section 13.14
shall not require the settlement of strikes or labor controversies by acceding
to the demand of the opposing party or parties.

          IN WITNESS WHEREOF, the parties hereto have caused this Research and
Development Agreement to be executed effective as of the date first above
appearing.

                                   ACTIMED LABORATORIES, INC.

                                   By: /s/ James A. Wylie, Jr.
                                      ---------------------------------
                                         Name: James A. Wylie, Jr.
                                         Title: President

                                   Date: 12/11/97
                                        -------------------------------

                                   PACIFIC BIOMETRICS, INC.

                                   By: Paul G. Kanan
                                      ---------------------------------
                                         Name: Paul G. Kanan
                                         Title: President and CEO

                                   Date: 12/8/97
                                        -------------------------------


                                         -22-