EX-10..3






AMENDMENT NO. 2




This Amendment No. 2 (this “Amendment”), dated as of January 31, 2005, is entered into by and
between PACIFIC BIOMETRICS, INC., a Delaware corporation (the “Company”), each of the Company’s
subsidiaries set forth on Annex A hereto (the “PBME Subsidiaries” and each, a “PBME Subsidiary”)
and LAURUS MASTER FUND, LTD., a Cayman Islands company (“Laurus”), for the purpose of amending the
terms of (i) the Subsidiary Guaranty, dated May 28, 2004 (as amended, modified or supplemented from
time to time, the “Subsidiary Guaranty”) by and among each PBME Subsidiary and Laurus, (ii) the
Master Security Agreement, dated May 28, 2004 (as amended, modified or supplemented from time to
time, the “Security Agreement”) by and among the Company, each PBME Subsidiary and Laurus and (iii)
the Stock Pledge Agreement, dated as of May 28, 2004, by and between the Company and Laurus (as
amended, modified or supplemented from time to time, the “Stock Pledge Agreement”). Capitalized
terms used herein without definition shall have the meanings ascribed to such terms in the
Securities Purchase Agreement (as defined below).



WHEREAS, the Company and Laurus are party to that certain securities purchase agreement dated
as of May 28, 2004 (the “Securities Purchase Agreement”) for the sale by the Company to Laurus of a
secured convertible term note; and



WHEREAS, each PBME Subsidiary and Laurus have agreed to make certain changes to the Subsidiary
Guaranty as set forth herein; and



WHEREAS, the Company, each PBME Subsidiary and Laurus have agreed to make certain changes to
the Master Security Agreement as set forth herein; and



WHEREAS, the Company and Laurus have agreed to make certain changes to the Stock Pledge
Agreement as set forth herein;



NOW, THEREFORE, in consideration of the above, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:



Subsidiary Guaranty



1. The Preamble to the Subsidiary Guaranty is hereby amended by deleting the text “with
respect to the Note” appearing in the penultimate sentence therein and inserting the text “to
Laurus” in lieu thereof.



Security Agreement



2. Section 2 of the Security Agreement is hereby amended by deleting the text “with respect to
the Note” appearing therein and inserting the text “to Laurus” in lieu thereof.



Stock Pledge Agreement



3. Section 2(d) of the Stock Pledge Agreement is hereby amended by deleting the text “with
respect to the Note” appearing therein and inserting the text “to Laurus” in lieu thereof.



Miscellaneous



4. This Amendment shall be effective as of the date hereof following the execution and
delivery of same by each of the Company, each PBME Subsidiary and Laurus.



5. Except as specifically set forth in this Amendment, there are no other amendments to the
Subsidiary Guaranty, the Security Agreement or the Stock Pledge Agreement, and all of the other
forms, terms and provisions of the Subsidiary Guaranty, the Security Agreement or the Stock Pledge
Agreement remain in full force and effect.



6. The Company hereby represents and warrants to Laurus that as of the date hereof all
representations, warranties and covenants made by Company and/or each PBME Subsidiary, as the case
may be, in connection with the Subsidiary Guaranty, the Security Agreement and the Stock Pledge
Agreement are true, correct and complete and all of Company’s and its Subsidiaries’ covenant
requirements have been met.



7. This Amendment shall be binding upon the parties hereto and their respective successors and
permitted assigns and shall inure to the benefit of and be enforceable by each of the parties
hereto and its successors and permitted assigns. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. This Amendment may be executed
in any number of counterparts, each of which shall be an original, but all of which shall
constitute one instrument.



* * * *





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IN WITNESS WHEREOF, each of the Company, each PBME Subsidiary and Laurus have caused this

Amendment to be effective and signed in its name effective as of the date set forth above.





PACIFIC BIOMETRICS, INC.



	 	 	 
	By:

Name:

Title:

	 	/s/ Ronald R. Helm

Ronald R. Helm

Chief Executive Officer








	 	 	 	BIOQUANT, INC.





	 	 	 
	By:

Name:

Title:

	 	/s/ Ronald R. Helm

Ronald R. Helm

Chief Executive Officer








	 	 	 	PACIFIC BIOMETRICS, INC.






(Washington State Lab)



	 	 	 
	By:

Name:

Title:

	 	/s/ Ronald R. Helm

Ronald R. Helm

Chief Executive Officer








	 	 	 	PBI TECHNOLOGY, INC.





	 	 	 
	By:

Name:

Title:

	 	/s/ Ronald R. Helm

Ronald R. Helm

Chief Executive Officer








	 	 	 	LAURUS MASTER FUND, LTD.






By: /s/




	 	 	 	Name:





Title:



2



ANNEX A




SUBSIDIARIES





1. BIOQUANT, INC.




2. PACIFIC BIOMETRICS, INC.




(Washington State Lab)




	 	3.	 	PBI TECHNOLOGY, INC.






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