<PAGE>

      PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
                             CONFIDENTIAL TREATMENT

                    LICENSE, SUPPLY AND DISTRIBUTION AGREEMENT

THIS LICENSE, SUPPLY AND DISTRIBUTION AGREEMENT ("Agreement"), effective as of
17th July, 1998, is made by and between Pacific Biometrics, Inc., a company duly
organized and existing under the laws of Delaware, having its principal place of
business at 1370 Reynolds Avenue, Irvine, CA 92614 ("PBI") and Segix Italia
S.p.A., a company duly organized and existing under the laws of Italy, having
its principal place of business at Via del Mare, 36-00040, Pomezia (Roma),
Italia ("Segix").

WHEREAS:

PBI and Segix are Parties to that certain Evaluation Agreement dated August 6th,
1997, which provided that Segix conduct a market and technical evaluation of
PBI's Osteopatch* (the "Product", as hereinafter defined); 

Segix exercised its option pursuant to the Evaluation Agreement to be the
exclusive distributor and licensee of the Product in the Territory, as
hereinafter defined; and

Segix has or is willing to establish appropriate facilities, know-how and
ability to market and sell the Product in the Territory.

NOW, THEREFORE, the Parties agree as follows:


1.   DEFINITIONS

     As used herein the following capitalized terms shall have the following
     respective meaning:

     1.1    "COMMERCIAL INTRODUCTION" shall mean January 1, 1999, or the date
            on which all necessary approvals have been obtained from the
            Italian Authorities for the marketing and sale of the Product in
            the Territory, whichever is the later.

     1.2    "EFFECTIVE DATE" shall mean 17th July, 1998.

     1.3    "INITIAL TERM" shall mean the period from the Effective Date until
            the date corresponding to the tenth anniversary of Commercial
            Introduction.

     1.4    "KNOW-HOW" shall mean any and all information in the possession or
            otherwise under the control of PBI required for (i) marketing the
            Product including, but not limited to, promotional and advertising
            materials and technical specifications; (ii) analyzing the patches
            using PBI's


                                       
<PAGE>

            Assays including, but not limited to, laboratory 
            instructions, practices and procedures, and quality control 
            specifications as set forth in Exhibit C.

     1.5    "OSTEOPATCH-TM-" shall mean PBI's patented skin patch sweat
            collection device. A list of relevant patents and patent
            applications, together with dates of application and grant and
            territorial application, is set forth in Exhibit E.

     1.6    "PARTIES" shall mean PBI and Segix.

     1.7    "PBI'S ASSAYS" shall mean PBI's proprietary immunoassay systems
            useful for analyzing Osteopatch-TM- for the presence of at least
            one biochemical bone marker.

     1.8    "PRODUCT" shall mean Osteopatch-TM- and PBI's Assays, as well as 
            all improvements thereto and replacements thereof now or hereafter
            developed or sold by or on behalf of PBI during the term of this
            Agreement, provided that PBI is not legally prohibited from
            passing on such improvements and replacements to Segix.

     1.9    "PROFICIENCY TESTING PROGRAM" shall mean a series of tests,
            inspections and analyses established by PBI, the objective of
            which is to verify that laboratory work performed in connection
            with the use and evaluation of the Product meets quality control
            specifications set by PBI.

     1.10   "RENEWAL TERM" shall have the meaning set out in Section 16.1.2.

     1.11   "TERMINATION DATE" means the later of: (i) the last day of the
            Initial Term, or (ii) the last day of any Renewal Term.

     1.12   "TERRITORY" shall mean Italy, San Marino and the Vatican.

     1.13   "CONTRACT EXCHANGE RATE" shall mean US$1.00=ITL1,750 or its Euro
            equivalent when the bilateral conversion rate is fixed relative to
            Italy's participation in the European Monetary Union. 

2.   PAYMENT

     As consideration for the rights granted by PBI to Segix under this
     Agreement, on the Effective Date Segix shall pay to PBI US$[    *    ]. 
     From such sum payable, Segix shall deduct a credit from PBI to Segix of
     US$[    *    ], provided that Segix already has paid to PBI the sum of
     US$[    *    ] for


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     exclusivity pursuant to the Evaluation Agreement and the further sum of 
     $[    *    ] to cover PBI's costs for patch supply and processing pursuant 
     to the Evaluation Agreement.


3.   DISTRIBUTION OF THE PRODUCT

     3.1    EXCLUSIVE RIGHTS.  On the terms set out in this Agreement, Segix
            shall be the exclusive distributor and licensee of the Product in
            the Territory.  Segix agrees to market, sell, and use the Product
            only for those biochemical markers approved in advance, in
            writing, by PBI.  Any orders for Product received by PBI for sale
            in the Territory shall be immediately referred to Segix and PBI
            shall not knowingly supply Product to third parties destined for
            sale or use in the Territory.

     3.2    TERRITORIAL LIMITATION.  With respect to the Product, Segix shall,
            during the term of this Agreement, refrain from seeking customers,
            establishing any branch or maintaining any distribution depot
            outside the Territory, unless otherwise consented to in writing by
            PBI.  Segix agrees to use its reasonable efforts to control
            distribution of the Product in the Territory so that it is not
            available outside of the Territory.

     3.3    INDEPENDENT CONTRACTOR.  The relationship of Segix and PBI with
            respect to this Agreement and transactions concerning the Product
            shall be that of independent contractors, and nothing contained in
            this Agreement shall be construed to: (i) give either Party the
            power to direct or control the day-to-day activities, expressly
            including marketing activities, of the other, (ii) constitute the
            Parties as partners, joint venturers, co-owners or otherwise as
            participants in a joint or common undertaking, or (iii) allow
            either party to create or assume any obligation on behalf of the
            other for any purpose whatsoever.

     3.4    SKILLED SALESPERSONS AND MARKETING.  Segix shall employ and train
            for the marketing and sale of the Product persons of adequate and
            suitable skill and experience in the field of marketing products
            related to osteoporosis.  Segix agrees to maintain at all times a
            sufficient sales force and an adequate sales organization to meet
            the demand for the Product in the Territory.



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<PAGE>

     3.5    USE OF PBI TRADEMARK AND PATENTS.  PBI hereby grants to Segix a
            license to use, in the Territory, the "Osteopatch-TM-" trademark,
            PBI's patented skin patch sweat collection device and all other
            PBI's patented and proprietary information and Know-How relative
            to the Product, in accordance with and in performance of the terms
            of this Agreement. 

     3.6    LABELLING OF PRODUCT.  The Product labelling shall be in
            accordance with the Italian language text which, together with
            English translation, is set forth in Exhibit D. Such text shall be
            amended from time to time by agreement between the Parties or as
            required by the Italian Health Authorities or the United States
            Food and Drug Agency (FDA). However, if compliance with a
            requirement of the FDA for the exportation of the Product would
            cause a breach of the requirements of the Italian Health
            Authorities, then the Parties shall meet and attempt in good faith
            to find a solution. Such text shall appear on all packaging of the
            Product, including on the boxes, the accompanying leaflets and on
            each sachet containing the patch, and shall describe Segix as
            exclusive licensee for the Territory.

4.   SUPPLY

     4.1    PRODUCT.  Except as expressly provided herein, and subject to the
            terms and conditions of this Agreement, Segix shall purchase from
            PBI, and PBI shall supply to Segix, all Segix's requirements of
            Product.

     4.2    PRICE AND PAYMENT.  (a) Subject to Section 4.2(b), PBI shall sell
            Product to Segix at a price set by PBI as set forth in
            Exhibit "A."  All prices for Product charged by PBI will be ex-PBI's
            facilities in the United States, at which point title and risk of 
            loss shall pass from PBI to Segix. All non-U.S. taxes, fees, 
            duties and other charges with respect to the sale by PBI to Segix 
            of the Products shall be paid by Segix. PBI shall provide reasonable
            assistance to Segix in arranging for the shipping of Product to 
            Segix pursuant to Segix' instructions,  All payments due PBI 
            pursuant to this Agreement shall be paid within [ * ] days from the 
            date of shipment to Segix.  If Segix fails to make any payment to 
            PBI when due, PBI may, without affecting its rights under this 
            Agreement, delay any future shipments of the Products to Segix 
            until such sums have been paid.  All payments to PBI pursuant to 
            this Agreement shall be made in United States currency, by check or 
            by wire transfer of funds; provided, however, that if PBI elects to 
            manufacture the Products in


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<PAGE>

            the Territory it may notify Segix of its election to receive payment
            in the currency of the Territory, and the prices for the Products 
            shall thereupon be calculated based upon the conversion rate for 
            such currency as published in the WALL STREET JOURNAL on the date 
            hereof (the "Contract Exchange Rate").  PBI reserves the right to
            change prices up to a maximum annual increase of [      *      ]
            by giving Segix [  * ] days notice in writing of such changes,
            provided that such increases are due to documented increases in the 
            cost of primary materials to and/or labor costs of PBI or its
            suppliers; provided, however, that PBI shall have the right to
            request good faith re-negotiation of the Product price if its gross 
            profit margin on Products sold in the Territory drops below 
            [         *           ].  If the Parties are unable to reach
            agreement as a result of such renegotiations, PBI shall have the
            right to suspend or terminate this Agreement as provided in
            Section 4.2(b).

            (b) Should the US Dollar/Italian lira exchange rate fluctuate by 
            in excess of [     *     ] above or below the Contract Exchange 
            Rate ("Exchange Rate Fluctuation"), then the economic viability 
            of this Agreement may need to be reconsidered.  In such event, 
            either Party may call upon the other, by written notice, to enter 
            into a Product price review, whereupon the Parties, in good 
            faith, shall consider a new price for the Product.  Failing 
            agreement within thirty (30) days of the date of the written 
            notice requesting the price review, and providing that the 
            Exchange Rate Fluctuation persists, either Party may suspend the 
            operation of this Agreement for up to one hundred eighty (180) 
            consecutive days and no more than a total of one hundred eighty 
            (180) days in the aggregate over the life of this Agreement.  
            Should the Exchange Rate Fluctuation still prevail at the 
            expiration of this period, either Party may terminate this 
            Agreement by written notice to the other.

     4.3  FORECASTS, ORDERS AND ACCEPTANCE.

          4.3.1  FORECASTS AND QUARTERLY PURCHASES ORDERS. During the term of 
                 this Agreement, Segix shall provide to PBI: (i) at least [*]
                 days prior to the beginning of each calendar quarter, a 
                 written forecast of Segix's anticipated requirements for the 
                 Product during the next four calendar quarters, such written 
                 forecast to be advisory in nature only, and (ii) at least [*]
                 days prior to the beginning of each calendar quarter, a 
                 written purchase order for the Product for such calendar 
                 quarter (the "Quarterly Purchase Order"). Each and every


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<PAGE>

                 Quarterly Purchase Order shall be within [*                ]
                 of the most recent forecast for that calendar quarter, and 
                 will include without limitation the shipment destination and 
                 a requested delivery date or, in the event that Segix desires
                 that the Product corresponding to such Quarterly Purchase 
                 Order be shipped in more than one shipment, a shipment 
                 destination and a requested delivery date for each such 
                 shipment.  The requested delivery date(s) shall fall any time
                 within the applicable calendar quarter.  Within [ * ]
                 days after receipt of each and every Quarterly Purchase 
                 Order, PBI shall confirm to Segix in writing without 
                 qualification its acceptance of such Quarterly Purchase 
                 Order, also enclosing a copy of the letter of confirmation, 
                 if any, from PBI's supplier; provided, however, that Segix 
                 delivers such Quarterly Purchase Order to PBI in accordance 
                 with the above.

          4.3.2  SUPPLEMENTAL PURCHASE ORDER. In addition to its Quarterly 
                 Purchase Orders, Segix may provide to PBI at any time a 
                 supplemental purchase order for Products ("Supplemental 
                 Purchase Order"), each of which will include without 
                 limitation the shipment destination and a requested delivery
                 date.  Within [ * ] days after receipt of any Supplemental 
                 Purchase Order, PBI shall advise Segix in writing without 
                 qualification of its acceptance or not of such Supplemental 
                 Purchase Order; provided however, that such Supplemental 
                 Purchase Order has been provided to PBI at least [ * ] days 
                 prior to the requested delivery date.  PBI's acceptance
                 shall include without limitation an estimated shipment date
                 corresponding to each requested delivery date in Segix's
                 Supplemental Purchase Order.

          4.3.3         OBLIGATION TO SUPPLY.  PBI shall use its best efforts to
                 supply the Product to Segix, it being understood that PBI's
                 ability to meet Segix's requirement for Product depends in 
                 part, on PBI's ability to obtain ordered Product from its 
                 suppliers.  Accordingly, PBI's failure to fill Segix's orders 
                 due solely to PBI's inability to obtain sufficient Product 
                 from PBI's suppliers shall not be a breach of this Agreement. 
                 However, any material breach by a PBI supplier of its


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<PAGE>

                 supply obligations to PBI shall be evaluated by the Parties 
                 in good faith, to decide on the opportunity of taking legal 
                 action against such supplier.  In the event that a claim is 
                 made or suit initiated against such a supplier, Segix shall 
                 be entitled to recover its damages resulting from the breach 
                 by such supplier out of any damages recovered or settlement 
                 made with such supplier.  [                                 

                                          *

                                             ]

          4.3.4         DELIVERY.  PBI shall use its best efforts to ship the
                 Product corresponding to Segix's purchase order on PBI's 
                 estimated shipment date, but in no event shall shipment be 
                 made prior to Segix's requested delivery date or later than 
                 [ * ] days after PBI's estimated shipment date.  The method 
                 of shipment shall be specified by Segix and Segix will pay 
                 all freight, insurance, and shipping expense.

          4.3.5         COMMENCEMENT OF PURCHASE ORDERS.  It is foreseen that 
                 the first forecasts and orders shall be placed by Segix on or
                 before [   *   ], 1999, relative to the [ * ] calendar 
                 quarter of 1999, provided that the Parties shall meet during 
                 [   *   ] 1999 in order to discuss the proposed forecasts and
                 orders which Segix shall make. At the same time and 
                 subsequently, in April of each year, the Parties shall review
                 the specified forecast and order times, with a view to 
                 reducing to a minimum the deadlines contained in Section 
                 4.3.1. The orders for the calendar quarters prior to the 
                 [ *  ] quarter 1999 shall be regulated by separate letter 
                 exchanged by the Parties contemporaneously with the signing 
                 of this Agreement.

     4.4  ACCEPTANCE.  After receipt by Segix of an invoice from PBI, the 
          invoice will be due and payable as provided in this Agreement 
          unless the shipment is rejected as non-conforming as provided below 
          within [ * ] days of its receipt at the address designated by 
          Segix.  Each


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<PAGE>

          shipment of a Product from PBI to Segix shall be accompanied by a 
          quality control certificate.  Failure to meet specifications and 
          other defects referred to in Section 5.1 will be the only basis 
          upon which a shipment may be rejected by Segix.  Unless Segix 
          advises PBI that a shipment is non-conforming within [ * ] days of 
          its receipt, such shipment shall be deemed accepted.  Each shipment 
          from PBI will contain numbers identifying the manufacturing lot or 
          lots for control purposes.  Segix will keep accurate records which 
          will enable it to determine to which customers of Segix the 
          Products and each manufacturing lot were shipped.

5.   WARRANTY FOR THE PRODUCT

     5.1  EXPRESS LIMITED WARRANTY.  PBI warrants that the Product shall
          conform to the specifications set forth in Exhibit B and the label
          set forth in Exhibit D and be free from defects in materials and
          workmanship and of merchantable quality and fit for the purpose
          for the period set by the expiration date(s) indicated on Product
          beyond the date of acceptance by Segix pursuant to Section 4.4
          (the "Warranty Period").  The warranties set out in this Section
          5.1 and in Section 7.1.1 are the exclusive warranties given by PBI
          with respect to the Product.

     5.2  REMEDY.  During the Warranty Period, PBI shall repair or replace,
          at PBI's option and expense, any Product that does not perform in
          accordance with specifications set forth in Exhibits B and D. 
          PBI's obligation to repair or replace defective Product pursuant
          to this Section 5.2 shall not apply to Product that has not been
          handled and stored in accordance with PBI's instructions and
          product specifications, or has been subjected to misuse, neglect,
          modification or unusual physical or chemical stress after delivery
          to Segix.  PBI's warranty to repair or replace, and its
          performance under the warranty, [ 
                                  * 
                         ] shall be the sole remedies available to Segix 
          for the delivery of non-conforming or defective Product.


6.   CUSTOMER PRICE

     Subject to Sections 8.1 and 8.2 hereof, Segix shall have the sole right
     to establish and control the price of the Product to its customers.


* Omitted pursuant to a request for confidential treatment


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<PAGE>

7.   REPRESENTATIONS AND WARRANTIES, AND INDEMNIFICATION

     7.1  REPRESENTATIONS AND WARRANTIES.

          7.1.1  REPRESENTATIONS AND WARRANTIES OF PBI.  PBI represents and
                 warrants that: (i) the Product will conform to the 
                 specifications set forth in Exhibit "B"; (ii) the Product will 
                 be manufactured and handled in compliance with all applicable 
                 laws and regulations; (iii) PBI has the full power, right and 
                 authority to carry out its obligations under this Agreement, 
                 and is owner of the Osteopatch trademark and owner of or 
                 Licensee under the patents for the Product relative to the 
                 Territory which to the best of its knowledge and belief, have 
                 not been challenged or contested by any third party as at the 
                 date hereof; and (iv) PBI has not previously granted and will 
                 not grant any rights to sell the Product to any third party 
                 that conflict with the rights granted to Segix herein.

          7.1.2  REPRESENTATIONS AND WARRANTIES OF SEGIX.  Segix represents and
                 warrants that: (i) Segix has the full power, right and 
                 authority to enter into and carry out its obligations under 
                 this Agreement, and (ii) the Product will be handled by Segix 
                 in compliance with all applicable laws and regulations of the 
                 Territory.

     7.2  INDEMNIFICATION.

          7.2.1  INDEMNIFICATION BY PBI.  PBI shall defend and indemnify Segix
                 against, and hold Segix harmless from, any and all claims, 
                 suits, losses, liabilities and expenses (including reasonable 
                 attorneys fees of attorneys) caused by any Product used in 
                 accordance with instructions and specifications or through the 
                 negligence of PBI, or from the breach of any representation or 
                 warranty set forth in Section 7.1.1; provided that: (i) PBI 
                 shall have sole control of such defense, and (ii) Segix shall 
                 provide notice promptly to PBI of any actual or threatened 
                 claim of which Segix becomes aware.  In the event of any such 
                 claim, Segix shall provide PBI, at PBI's expense, information 
                 and assistance as PBI may reasonably request for purposes of 
                 defense.


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<PAGE>

          7.2.2  INDEMNIFICATION BY SEGIX.  Segix shall defend and indemnify PBI
                 against, and hold PBI harmless from, any and all losses, costs,
                 liabilities or expenses (including reasonable attorneys fees of
                 attorneys) arising out of or in connection with the use or sale
                 of the Product by Segix,  excluding claims covered by Section 
                 7.2.1, or from the breach of any representation or warranty set
                 forth in Section 7.1.2; provided that (i) Segix shall have sole
                 control of such defense and (ii) PBI shall provide notice 
                 promptly to Segix of any actual or threatened claim of which 
                 PBI becomes aware.  In the event of any such claim, PBI shall 
                 provide Segix, at Segix' expense, information and assistance as
                 Segix may reasonably request for purposes of defense.

          7.2.3  EXCEPTIONS.  Notwithstanding the foregoing, with respect to 
                 third party claims or demands or other events covered by 
                 Section 7.2.2 relating to PBI's continuing business 
                 relationships (as determined in the reasonable judgment of PBI)
                 including, without limitation, such PBI's relationships with 
                 customers, vendors or suppliers, PBI shall have the right to 
                 employ counsel and defend and/or settle such claims or demands 
                 at its own expense; provided that, except with the consent of 
                 Segix, no settlement of any such claim or demand of third-party
                 claimants and the costs incurred in reaching such settlement 
                 (including without limitation reasonable fees of attorneys and 
                 other professionals) shall be determinative of the liability of
                 Segix or the amount of liability of Segix to PBI with respect 
                 to any such individual claim or demand not previously consented
                 to by Segix in writing.


8.   PROVISIONS ON COOPERATION BETWEEN THE PARTIES

     8.1  PROFICIENCY TESTING.  Segix, through independent laboratories used
          by Segix, shall participate in the Proficiency Testing Program
          throughout the term of this Agreement and agrees to employ
          laboratory practices that assure compliance with PBI's quality
          control specifications, which, in preliminary form as agreed by
          the Parties, are attached hereto as Exhibit "C". Within [*]days of
          the Effective Date, PBI shall provide Segix


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          with its finalized proposed quality control specifications and,
          within a further period of [*] days, Segix shall communicate to
          PBI any difficulties it foresees in implementing such
          specifications, whereupon the Parties shall use their best efforts
          to agree on the final specifications. PBI shall render assistance
          to Segix in providing instructions to the independent laboratories
          on the laboratory practices to be adopted. PBI shall have the
          right to terminate this Agreement on written notice to Segix
          specifying the nature of Segix' non-conformance in reasonable
          detail if Segix's laboratory practices do not meet such agreed
          quality control specifications within [ * ] days after receipt of
          PBI's written notice of non-compliance with such quality control
          specifications.

     8.2  BEST EFFORTS.  Segix, in accordance with prudent application of
          business judgment, shall use its best efforts to promote the use,
          sale, marketing and distribution of the Product in the Territory
          and to safeguard PBI's interest within the Territory.

     8.3  FAIR COMPETITION.  Segix shall follow the rules of fair
          competition in the Territory and otherwise conduct its business
          with a view to gain goodwill to the Product, Segix and PBI.

     8.4  COOPERATION.  The Parties shall in good faith cooperate in the
          development of promotional materials with respect to the sale and
          marketing of the Product in the Territory and in the training of
          Segix's sales force.

     8.5  COSTS.

          8.5.1  SALES COSTS.  Except as set forth in Section 8.3, Segix shall
                 bear all costs associated with Segix's promotion and sale of 
                 the Product in the Territory.

          8.5.2  COSTS FOR CLINICAL STUDIES.  Segix shall bear all costs 
                 associated with any clinical tests and studies of the Product
                 related to the selling of or maintaining of all required 
                 approvals or registrations for the Product in the Territory.

     8.6  INSPECTIONS AND REPORTING.

          8.6.1  INSPECTION BY SEGIX.  PBI shall permit Segix, upon [ *] 
                 business days prior notice, to inspect the facilities and 
                 audit the manufacturing records of PBI and PBI's 
                 subcontractors, if 


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<PAGE>

                 any, at reasonable times and in the presence of a 
                 representative of PBI, to assure compliance with the terms 
                 and conditions of this Agreement.

          8.6.2  INSPECTION BY PBI.  Segix shall permit PBI, upon [ * ]
                 business days prior notice, at reasonable times and in
                 the presence of a Segix representative, to inspect 
                 Segix's facilities, including laboratories, 
                 warehouses, and the storage and traceability of the 
                 Products, to assure compliance with the terms and 
                 conditions of this Agreement.

          8.6.3  REPORTING BY SEGIX.  Within [ * ] days from the close of
                 each calendar quarter, Segix shall render to PBI a written
                 report setting forth the number and type of PBI's assays
                 performed by Segix during that quarter and the actual
                 prices charged by Segix for Products and assays during such
                 quarter, denominated in Italian Lira.  Segix shall keep
                 complete and accurate books and records containing all
                 information and data which may be necessary to ascertain
                 and verify the information provided in such reports.  Such
                 books and records shall be open to examination, at PBI's
                 expense, by any designated agent or employee of PBI.  PBI
                 may exercise its right of audit no more frequently than [ * ] 
                 in any calendar year and may only conduct [     *      ]
                 for a given reporting period.  The records for any given
                 calendar year shall be preserved for a period of [*] years
                 from the end of that calendar year. All information,
                 documents, and records of Segix examined by the designated
                 agent or employee of Segix shall be maintained in strict
                 confidence.

          8.6.4  REPORTING BY PBI:  Within [ * ] days from the close of each
                 calendar quarter, PBI shall render to Segix a written
                 report setting forth PBI's fully burdened cost for Product
                 during such calendar quarter. PBI shall keep complete and
                 accurate books and records containing all information and
                 data which may be necessary to ascertain and verify the
                 information provided in such reports.  Such books and
                 records shall be open to examination, at Segix' expense, by
                 any designated agent or employee of Segix.  Segix may
                 exercise its right of audit no more frequently than once in
                 any calendar year and


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                                       12

<PAGE>

            8.6.5  may only conduct a single audit for a given reporting period.
                   The records for any given calendar year shall be preserved 
                   for a period of three years from the end of that calendar 
                   year.  All information, documents, and records of PBI 
                   examined by the designated agent or employee of PBI shall be 
                   maintained in strict confidence.

     8.7    RIGHT OF FIRST NEGOTIATION.  PBI grants to Segix a right of first
            negotiation for the Territory with respect to the development and
            commercialization by PBI of new devices and methods for the
            identification of bone resorption markers used for the management
            of osteoporosis. PBI shall provide written notice to Segix of all
            such new developments for which it has proprietary rights,
            following which Segix shall have a period of three calendar months
            to decide whether it is interested in carrying out an evaluation
            study for such new devices and methods. Should Segix decide that
            it wishes to carry out such an evaluation study, then the Parties
            shall enter into good faith negotiations for the purpose of
            concluding an evaluation agreement and license and distribution
            agreement for the Territory in a form similar to the agreements
            for Osteopatch.


9.   SUPPORT TO SEGIX

     PBI agrees to:

     (i)    give all reasonable assistance to Segix, at Segix's expense, in
            its sales activities with respect to the Product in the Territory;

     (ii)   supply Segix with Know-How, including such advertising and
            promotional material for the Product as is developed by PBI as
            well as relevant information as concerns the Product including but
            not limited to the handling and use of the Product; all direct
            costs for translation of such material to the language of the
            Territory (or any language other than the language used in the
            material provided by PBI) and the cost of printing the material
            shall be paid by Segix; the Parties acknowledge that the Product,
            to the extent possible, given local legal and cultural
            differences, shall be promoted and marketed consistently
            throughout the world;


                                      13
<PAGE>

     (iii)  review and give opinion on and approve the contents of any of
            Segix's printed materials as relates to information with respect
            to the Product; it being understood that PBI must approve in
            advance any such printed material to be used by Segix; provided,
            however, that, in the event that PBI has not provided comments or
            approval or consent in writing within [      *        ] days after
            receipt of such printed material from Segix, approval and consent
            for Segix's use of such printed material shall be deemed to have
            been given by PBI;

     (iv)   provide reasonable assistance to Segix, at Segix's expense, in its
            use, analysis and evaluation of PBI's assays;

     (v)    give Segix access to PBI quality assurance, quality control and
            production records as can be reasonably required by Segix for the
            performance of its obligations or undertaking under this Agreement
            or as reasonably necessary for Segix to defend or otherwise pursue
            legal action in connection with Segix's rights hereunder.

10.  CHANGES IN THE PRODUCT

     PBI shall have the right, for clear and objective medical, scientific or
     technical reasons, to make changes in the Product or its packaging, upon
     [ * ] days prior written notice to Segix.  The Parties shall in good
     faith consult with respect to any such proposed changes, to assure
     conformity with labeling requirements applicable in the Territory.  The
     Parties acknowledge that changes in the Product may require the further
     approval of relevant regulatory agencies and shall give due consideration
     to the costs and delays inherent in such changes.

11.  COMPETITION

     Without the prior written consent of PBI, during the term of this
     Agreement Segix will refrain from manufacturing, selling or otherwise
     distributing in the Territory products which are competitive with or
     otherwise for the same prescriptive purposes as the Product.


* Omitted pursuant to a request for confidential treatment


                                      14
<PAGE>

12.  REPORTS OF SIDE EFFECTS OF THE PRODUCT

     12.1   The Parties shall immediately upon becoming aware of any side
            effects related to the handling or use of the Product give report
            thereof to the other Party in such form and manner as the Parties
            from time to time may decide.  The same shall apply for any
            information regarding the safety, efficacy or stability of the
            Product.

     12.2   The provisions of this Section 12 shall survive the expiration or
            termination of this Agreement and continue for so long as any
            statute of limitation may run with respect to claims or demands
            regarding the safety, efficacy or stability of the Product.


13.  SECRECY AND NON-USE

     13.1   CONFIDENTIAL INFORMATION.  During the term of this Agreement and
            thereafter, any technical, commercial or other information of a
            confidential nature disclosed by either of the Parties shall be
            treated as strictly confidential and use of such information by
            Segix shall be solely for the sale of the Product in the Territory
            and by PBI shall be solely for the manufacturing and sale of the
            Product outside the Territory and neither Party shall, without the
            prior written consent of the other Party, pass it on to any person
            except to those of either Party's employees for whom such
            information shall be required for the proper performance of their
            duties and who are themselves bound by obligations of secrecy and
            non-use in respect thereof.

     13.2   DOCUMENTATION.  All printed material, instructions,
            specifications, technical data and other documents or information
            material of any kind relating to the Product provided to Segix by
            PBI shall remain the property of PBI.  Upon expiration or
            termination of this Agreement for any reason, all such material
            and documents as well as all copies thereof shall be returned to
            PBI forthwith, provided, however, that Segix may retain one copy
            of such material and documents for archival purposes.

     13.3   RIGHT TO RESULTS OF CLINICAL TESTS AND STUDIES.  Subject to the
            terms of this Agreement, each Party shall disclose to the other
            the results of any clinical studies involving the Product carried
            out by or on behalf of such Party.  Both Parties have the right to
            use the result of such clinical studies and the documentation
            involved in such studies [     *      ];provided, however, that
            Segix may only use such results and documentation


* Omitted pursuant to a request for confidential treatment


                                      15
<PAGE>

            submitted by PBI for the purpose of carrying out its undertakings 
            under this Agreement, and PBI may, during the term of this 
            Agreement, only use such results and documentation submitted by 
            Segix for activities outside the Territory.

14.  FORCE MAJEURE

     14.1   EXCUSE FROM FULFILLMENT.  Except as set forth in Section 14.2, the
            Parties shall be excused from fulfillment of any obligation under
            this Agreement, except any payment obligation, to the extent that
            and for so long as such fulfillment is prevented or delayed in
            whole or in part by causes beyond its reasonable control from
            fire, flood, war, embargoes, blockades, riots, governmental
            interference, acts or omissions of any governmental authority,
            compliance with government regulations (including those introduced
            during the term hereof), acts of God, delays or shortages in
            transportation or inability to obtain necessary materials from
            usual sources or from defects or delays in the performance of its
            suppliers or sub-contractors if caused by any circumstance
            referred to in this Section 14.  Upon the occurrence of any such
            event the Party affected shall, without delay, inform the other
            Party thereof.

     14.2   TERMINATION RIGHT.  If, by reason of any of the circumstances set
            out in Section 14.1, the fulfillment of any obligation under this
            Agreement becomes impossible for more than [ * ] consecutive days,
            either Party shall be entitled to terminate this Agreement by
            written notice to the other.

15.  PATENT PROVISIONS

     PBI may, in its discretion, seek to secure and maintain any patent or
     other proprietary rights which may be available with respect to the
     production, manufacture and sale of the Products.  PBI may initiate
     infringement litigations on patent(s) and proprietary rights owned by PBI
     relating to the Products in the sole discretion of PBI.  Either Party
     shall notify the other Party of any such infringement of the
     aforementioned patent(s) and proprietary rights within the Territory and
     PBI shall have six months in which to terminate the infringement or
     initiate litigation against an alleged infringer.  In the event that PBI,
     for any reason, does not terminate the infringement or initiate
     litigation within the six months, Segix shall be deemed to have the
     right, but not the obligation, to bring an action in its own name or, if
     required by law to bring such action in the name of the holder


* Omitted pursuant to a request for confidential treatment


                                      16
<PAGE>

     of the patent, in the name of PBI.  PBI will cooperate with Segix and Segix
     shall bear the cost and expenses incurred in relation to the litigation if 
     Segix brings suit.  Whichever Party bears the costs of litigation against 
     infringers shall receive all damages and other recoveries awarded in such 
     instance.  No settlement, consent judgement or other voluntary disposition 
     of the litigation which may have an adverse effect on the rights of one 
     Party may be entered into without the consent of the other Party.

16.  TERM AND TERMINATION

     16.1   TERM OF THE AGREEMENT.

     16.1.1        TERM.  Except as expressly provided herein, this Agreement
            shall commence upon the Effective Date and shall continue in full
            force and effect until the Termination Date.

     16.1.2        RENEWAL TERM.  This Agreement shall be renewable for
            successive periods of three years, upon the terms and conditions
            hereof, except that the Parties shall negotiate, in good faith, to
            set a revised schedule of minimum purchases of Product by Segix.
            Such revised schedule shall reasonably take into account the sales
            trends over the preceding term and other relevant market factors.
            Segix shall have the right to commence negotiations for Renewal
            Term during the last year of the Initial Term.

     16.2   TERMINATION AT WILL.

     16.2.1        Segix, at any time during the term of this Agreement, for
            any reason or for no reason, may terminate this Agreement upon [ * ]
            days prior written notice to PBI.  The effective date of such
            termination shall be as set forth in Segix's written notice to
            PBI, provided that such effective date shall be not less than [ * ]
            days after the date of such written notice.  In the event of
            termination under this Section 16.2.1, Segix shall, at PBI's sole
            discretion, pay for all Product ordered (but not for that which
            has been forecast) by Segix pursuant to Section 4.3.1, including
            payment for Product ordered but not yet delivered.


* Omitted pursuant to a request for confidential treatment


                                      17
<PAGE>

     16.2.2        Promptly following its notice of termination pursuant to
            Section 16.2.1, Segix shall, where permitted, reassign any
            registrations of the Product in the Territory to PBI, at Segix's
            expense, and such reassignment, where possible, shall have been
            registered on the effective date of such termination.

     16.2.3        Following termination by Segix pursuant to Section 16.2.1,
            Segix shall for [ * ] years refrain from selling any product which
            competes with the Product, unless such termination by Segix was by
            virtue of breach on the part of PBI.

16.3 TERMINATION FOR CAUSE.

     16.3.1        BY EITHER PARTY.  Without prejudice to any other rights it
            may have hereunder or at law, either Party shall have the right to
            terminate this Agreement without prior notice upon the occurrence
            of any of the following:

            (i)    the other Party should materially breach any of the 
                   material provisions or material conditions of this 
                   Agreement, and should fail to cure such breach within [ * ]
                   days after receipt of notice of such breach in writing from
                   the non-breaching Party;

           (ii)    the other Party becomes insolvent, an order for relief is
                   entered against the other Party under any bankruptcy or 
                   insolvency laws or laws of similar import, or the other 
                   Party fails generally to pay its debts as they become due;

          (iii)    the other Party makes an assignment for the benefit of its
                   creditors or a receiver or custodian is appointed for it or
                   its business is placed under attachment, garnishment or 
                   other process involving a significant portion of its 
                   business.

     16.3.2        BY PBI.  Exhibit "A" attached hereto sets forth minimum
            expenditures which Segix must make during the 12 month period
            starting on the Commercial Introduction of Product in the


* Omitted pursuant to a request for confidential treatment


                                      18
<PAGE>

            Territory ("Year 1") and during the 12 month period thereafter 
            ("Year 2") in supporting commercialization of the Product in the 
            Territory (inclusive of the purchase cost of the Product and 
            testing).  Exhibit "A" also sets forth the minimum purchases of 
            Product which Segix must make during the 12 month period following 
            Year Two ("Year 3") and each year thereafter during the term of 
            this Agreement (respectively, "Year 4," "Year 5," etc.).  Without 
            prejudice to any other rights PBI may have hereunder or at law, if 
            Segix either fails to meet the quality control standards following 
            PBI's written notice as provided in Section 8.1 hereof or fails to 
            satisfy (i) its minimum expenditure obligations as to Year One or 
            Year Two, (ii) its minimum purchase obligations in Year Three, 
            (iii) at least [    *    ] of its minimum purchase obligations in 
            any "Year" after Year Three, or (iv) at least [    *    ] of its 
            total minimum purchase obligations in any two consecutive "Years" 
            after Year Three, PBI shall have the right to terminate this 
            Agreement on notice to Segix.

16.4 RIGHTS AND DUTIES UPON TERMINATION

     16.4.1        SURVIVAL.  The following sections of this Agreement shall
            survive expiration or termination of this Agreement as follows:

            (i)    upon expiration of this Agreement, Sections 5, 7, 12, 13,
                   16.4 and 17;

           (ii)    upon termination of this Agreement by Segix pursuant to
                   Section 16.3, Sections 5, 7, 12, 13, 16.4 and 17; and

          (iii)    upon termination of this Agreement by Segix pursuant to
                   Section 16.2 or by PBI pursuant to Section 16.3, Sections 
                   5, 7, 12, 13, 16.4 and 17.

     16.4.2        OUTSTANDING OBLIGATIONS.  Expiration or termination of this
            Agreement shall not relieve either of the Parties of its then
            outstanding and unfulfilled obligations or liabilities with
            respect to the other Party.


* Omitted pursuant to a request for confidential treatment


                                      19
<PAGE>

     16.4.3 LIMITATION ON LIABILITY. Notwithstanding Section 16.3.1, neither
            party shall be liable to the other for consequential or indirect
            damages as a result of any breach of this Agreement.


17.  MISCELLANEOUS

     17.1   ASSIGNMENT.  Each Party shall have the right to assign this
            Agreement only in the event of merger or acquisition or the sale
            of substantially all of the assets to which this Agreement
            relates.  In all other cases, assignment shall require the
            approval of the other Party, which approval may not be
            unreasonably withheld.

     17.2   NOTICES.  Any notice required or permitted to be given hereunder
            shall be given in writing by delivery in person, by telefax with
            confirmed answer-back, or by registered air mail, postage prepaid,
            addressed as first set forth above or to such other address as
            either Party may specify on notice to the other Party.  Unless
            otherwise specifically provided for herein, such notice shall take
            effect upon receipt by addressee, provided that such notice shall
            be deemed to have arrived upon the expiration of five days from
            the date of sending in case of mail and 24 hours from the hour of
            sending in case of telefax.

    17.3    ENTIRE AGREEMENT.

            17.3.1        ENTIRE UNDERSTANDING. This Agreement sets forth the 
                   entire agreement and understanding between PBI and Segix, as 
                   to the subject matter of this Agreement, and merges all prior
                   discussions between them and neither of the Parties shall be 
                   bound by any conditions, definitions, warranties or 
                   representations with respect to the subject matter of this 
                   Agreement, other than as expressly provided in this Agreement
                   or duly set forth on or subsequent to the date hereof, in 
                   writing, and signed by a proper and duly authorized 
                   representative of the Party hereto to be bound thereby.

            17.3.2        AMENDMENTS.  Amendments, modifications and alterations
                   to this Agreement shall be made in writing signed by both 
                   Parties.


                                      20
<PAGE>


            17.3.3        EXHIBITS.  All exhibits referred to herein shall form 
                   an integral part of this Agreement.

            17.4   WAIVER.  If either Party should at any time waive its rights 
                   due to breach or default by the other Party of any of the 
                   provisions of this Agreement, such waiver shall not be 
                   construed as a continuing waiver regarding that breach or 
                   default or other breaches or defaults of the same or other 
                   provisions of this Agreement.

            17.5   SEVERABILITY.  In the event that any provisions of this 
                   Agreement shall be found in any jurisdiction to be in 
                   violation of public policy or illegal or unenforceable in 
                   law or equity, such finding shall in no event invalidate any 
                   other provision of this Agreement in that jurisdiction, and 
                   this Agreement shall be deemed amended to the minimum extent 
                   required to comply with the law of such jurisdiction.

            17.6   TAXES OR SIMILAR CHARGES.  Any stamp duty, tax or similar 
                   charge for the registration, if any, of this Agreement or the
                   like in the Territory shall be paid by Segix.

            17.7   INJUNCTION.  A violation by either Party of Section 13 shall 
                   be deemed to be a material breach of a material provision of 
                   this Agreement pursuant to the terms of Section 16.3 hereof, 
                   and, in addition to any other rights of the non-breaching 
                   Party, the non-breaching Party shall have the right and 
                   remedy to have the provisions of Section 16 specifically 
                   enforced, it being acknowledged and agreed that any such 
                   violation might cause irreparable injury to the non-breaching
                   Party and that money damages will not provide an adequate 
                   remedy to the non-breaching Party.

18.  CHOICE OF LAW

     This Agreement and all purchase orders issued hereunder shall be governed
     and interpreted, and all rights and obligations of the Parties shall be
     determined, in accordance with the laws of England without regard to its
     conflict of laws rules.


                                      21
<PAGE>

19.  DISPUTE RESOLUTION

    19.1   If a dispute arises out of or in connection with this Agreement,
           including any question as to its existence, interpretation,
           performance validity or termination, the Parties agree to first
           seek amicable settlement by conciliation under the UNCITRAL
           Conciliation Rules administered by the London Court of
           International Arbitration.

    19.2   If such dispute is not resolved within thirty (30) days, or such
           further period as the Parties shall agree in writing, after the
           appointment of the conciliator, the dispute shall be referred to
           and finally resolved by arbitration under the UNCITRAL Arbitration
           Rules administered by the London Court of International
           Arbitration, which Rules are deemed to be incorporated by
           reference into this clause.

           (i)     The appointing authority shall be the LCIA;

          (ii)     The number of arbitrators shall be one, unless otherwise a
                   greed by the Parties;

         (iii)     The place of arbitration shall be London, England; and

          (iv)     The language to be used in the arbitral proceedings shall be
                   English.


IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate, each
Party taking one copy, on the day and year first above written.


PACIFIC BIOMETRICS, INC.               SEGIX ITALIA


/s/ Paul G. Kanan                      /s/ Luigi Baldassarri
-----------------------                -------------------------
By:  Paul G. Kanan                     By: Luigi Baldassarri
     President & CEO                       CEO


                                      22
<PAGE>

                                   EXHIBIT A

                PRICING SCHEDULE/MINIMUM INVESTMENTS AND PURCHASES

Products shipped in any year will be sold at the following prices during Year 1
following Commercial Introduction[                              * 
                                                         ]:

<TABLE>
<CAPTION>
                                               Sales Price
                                          (Ex-PBI's Facility In
Item                                          U.S. DOLLARS)
----                                      ---------------------
<S>                                       <C>
Pyridinoline Kit                             $[  *  ]

Osteopatch (bulk packaged)                   $[  *  ] per patch

</TABLE>

In addition to the foregoing, Segix shall pay PBI (i) [     *      ] of all
amounts (net of discount and net of any amount pre-paid to Segix and payable by
Segix to the laboratory for the relative test analysis and delivery costs, as
documented) received by Segix in excess of [     *     ] and less than or equal
to [    *     ], per test, and (ii) [    *    ] of all amounts (net of discount
and net of any amount pre-paid to Segix and payable by Segix to the laboratory
for the relative test analysis and delivery costs, as documented) received by
Segix in excess of [     *     ]  per test.  


<TABLE>
<CAPTION>

Minimum Purchases/Investment (per Section 16.3.2)        Amount of Investment
(commencing from Commercial Introduction)                or Number of Tests
-------------------------------------------------        --------------------
<S>                                                      <C>
             Year 1**                                    [        *        ]
             Year 2                                      [        *        ]
             Year 3                                      [        *        ]
             Year 4                                      [        *        ]
             Year 5                                      [        *        ]
             Year 6-10                                   [        *        ]
</TABLE>

As used herein, a "test" shall mean an Osteopatch used for a single diagnostic
test for a single individual.

**  Year 1 investment shall also include all Segix investment expended prior to
the Commercial Introduction. 


* Omitted pursuant to a request for confidential treatment


                                      23