<PAGE>   1
                                                                EXHIBIT 10.12

[CONFIDENTIAL TREATMENT REQUESTED.  CONFIDENTIAL PORTIONS OF THIS
DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH
THE COMMISSION]
                                        DEVELOPMENT AND SUPPLY AGREEMENT

                                                    F1-METER


Between:

                                            LRE Relais + Elektronik GmbH
                                                     - Medial Technology -
                                            Linprunstra(beta)e 16
                                            80335 Munchen
                                            Germany

                                            (hereinafter referred to as LRE)

and

                                            BIOSITE
                                            Diagnostics Incorporated
                                            11030 Roselle Street
                                            San Diego, CA 92121 U.S.A.

                                            (hereinafter referred to as BIOSITE)
<PAGE>   2
                                    ARTICLE I

                            Purpose of this Agreement

         Subject matter of this agreement is the development, subsequent serial
production and supply of a portable, fluorescence remission photometer which is
defined in the specifications attached to this agreement as Attachment A
(hereinafter referred to as Fl-Meter).

         The development and subsequent serial production of the Fl-Meter will
be done by LRE exclusively for BIOSITE in accordance with the objectives and
performance requirements as set out in the specifications and in conformity with
the Project Plan attached to this agreement (Attachment B).




         Specifications (Attachment A) and Project Plan (Attachment B) can be
changed and/or extended only by written approval of both parties.

                                   ARTICLE II

                                   Development

         LRE shall develop for BIOSITE a Fl-Meter in accordance with the below
paragraphs 2.1 to 2.4. For this development, BIOSITE shall bear all internal and
external cost which arise at LRE, shall reimburse these costs to LRE pursuant to
paragraphs 2.1 to 2.4.




         2.1  Feasibility Study.

         The feasibility study has been started November 1993. With the
completion of the feasibility study LRE will deliver the draft specifications
including the draft industrial design, the

                                       -1-
<PAGE>   3
Project Plan and a breadboard reader to evaluate fluorescence remission signals
by a PC.
         
   

         Within 10 days after BIOSITE's acceptance of the results of the
feasibility study as described above, BIOSITE will pay LRE the actual costs for
the feasibility study as invoiced up to a maximum of DM 125.000.00.

         2.2  Functional Fluorescence Reader

         LRE shall deliver in accordance with the specifications and the Project
Plan 5 (five) Functional Fluorescence Readers with machined optics and
controlled by PC, designed to evaluate Prototype cardiac marker devices.

         Within 10 days after BIOSITE's acceptance of the Functional
Fluorescence Readers as described above, BIOSITE will pay LRE all actual cost
for the Functional Fluorescence Reader as invoiced up to a maximum of DM
280.000.00.
    

         2.3  Prototype Meter.

   

         In accordance with the Specifications (Attachment A) and the Project
Plan (Attachment B) LRE will deliver such number of Prototype Meters,
performing the major functions of the final product as BIOSITE requests (which
shall not be less than 50 nor more than 100).  The majority of the mechanical
parts will be machined and the housing will be close to the final design.

         Within 10 days after BIOSITE's acceptance of the first 5 (five)
Prototype Meters as described above, BIOSITE will pay LRE the actual costs for
the Prototype Meter development as invoiced up to a maximum of DM 785.000.00
(DM 825.000.00 with optional printer).

         Additional Prototype Meters requested by BIOSITE shall be built and
supplied by LRE at a transfer price per meter of [CONFIDENTIAL MATERIAL 
REDACTED AND FILED SEPARATELY WITH THE COMMISSION] with optional printer).
Within 30 days after BIOSITE's acceptance of each additional Prototype Meter
requested by BIOSITE, BIOSITE will pay LRE the transfer price therefor as
invoiced.
    

         2.4  Preproduction Meter.

   
         The development work for the Preproduction Meter shall be initialed by
written approval of the Prototype Meters by BIOSITE (see Art. 3.3).

         12 (twelve) Preproduction Meters will be delivered in accordance to
the final Specifications including tooled parts and final software.  The
delivery date is shown in the Project Plan (Attachment B).

         Within 10 days after BIOSITES's acceptance of the 12 (twelve)
Preproduction Meters as described above, BIOSITE will pay LRE the actual costs
for the Preproduction Meter development as invoiced up to a maximum of DM
670.000.00 (DM 885.000.00 with optional printer).

         Additional Preproduction Meters can be built by LRE, provided that
BIOSITE will place an order timely in advance at an increased transfer price
per meter not to exceed [CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY 
WITH THE COMMISSION] with optional printer) which will be quoted separately by
LRE.  Within 30 days after BIOSITE's acceptance of each additional Preproduction
Meter ordered by BIOSITE, BIOSITE will pay LRE the transfer price therefor as
invoiced.

         The development will be completed with the shipment of the first 12
(twelve) Preproduction Meters as described above and the written acceptance of
BIOSITE.
    

         2.5  Termination of Development.

         (a)      By BIOSITE.

   
         During the development phase BIOSITE may terminate the agreement
without there being and without giving any causes on 30 days prior written
notice to LRE.
    

         If BIOSITE terminates the agreement during the development phase under
paragraph 10.3, then BIOSITE shall have the exclusive right to use and disclose
all inventions, discoveries, improvements, information, data and other
technology, whether patentable or not, (i) conceived solely by employees or
others on behalf of LRE during the term of the feasibility study or the balance
of the development program directly or indirectly with the use of funding,
materials or information provided by BIOSITE, or (ii) conceived jointly by
employees or others on

                                       -2-
<PAGE>   4
behalf of LRE and by employees or others on behalf of BIOSITE under the
feasibility study or the balance of the development program, together with all
patent and other intellectual property rights thereto (collectively, the "Joint
Technology").

   
        If BIOSITE terminates the agreement during the development phase for
any reason other than paragraph 10.3, BIOSITE shall have no rights or license
to use or disclose the Joint Technology.
    

         (b)      By LRE.

   
         During the development phase LRE may terminate the agreement only (i)
under paragraph 10.3, or (ii) upon 30 days prior written notice to BIOSITE, if
the parties mutually determine in the course of one of the development phases
that the intended result of the development cannot be achieved or, for reasons
beyond the reasonable control of LRE, can only be achieved at expenditure by
LRE, significantly in excess of the costs described in paragraphs 2.1 to 2.4,
for which BIOSITE is unwilling to reimburse LRE after notice thereof.
    

         If LRE terminates the agreement in the development phase, under
paragraph 10.3, BIOSITE shall have no rights or license to use or disclose the
Joint Technology. If LRE terminates the agreement during the development phase
under paragraph 2.5(b)(ii), then BIOSITE shall have the exclusive right to use
and disclose the Joint Technology.

         (c)      Costs of Development.

         In case of termination by either party during the development phase,
LRE shall use Is best efforts to limit or cancel any outstanding commitments in
connection with the development. Subject to paragraphs 2.1 to 2.5(b), BIOSITE
shall bear all costs incurred by LRE for all development work performed through
the effective termination date, and for all outstanding obligations which were
incurred by LRE in good faith in advance and which cannot be canceled.

                                       -3-
<PAGE>   5
         2.6  Cooperation.

         LRE and BIOSITE will designate project leaders who shall be the main
contact persons during the development phase.

         LRE shall keep BIOSITE reasonably informed throughout each stage of the
development phase of the status of Ks research and development efforts, of its
actual expenses incurred in relation to the budgeted expenses.

         BIOSITE shall have the right to visit LRE's facilities on reasonable
request to inspect the research, development and manufacturing conducted by LRE,
to make copies of all applicable records and to discuss the same with employees
of LRE.

         At least once every six (6) months during the development phase, LRE
and BIOSITE shall meet, alternating between Munchen and San Diego, to discuss
the status of the development phase and the plans therefor. Such meeting shall
include the project leaders and such others as the parties determine reasonably
necessary or appropriate.

                                   ARTICLE III
                                     Tooling

         3.1  Type of Tooling

         The majority of tools will be molds for plastic housing parts.

         3.2  Prototype Meter Tooling.

         The total cost of the additional tooling necessary to efficiently
produce the estimated quantity of Prototype Meters

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<PAGE>   6
   
         The total cost of the additional tooling necessary to efficiently
produce the estimated quantity of Prototype Meters is estimated to be 
DM 195,000.00 (DM 215,000.00 with optional printer).
    

         The tooling has to be ordered two-three (2-3) months prior to the build
of Prototype Meters. LRE will inform BIOSITE appropriately about delivery times,
conditions and actual costs. The tooling will be ordered by LRE after the
receipt of a written approval from BIOSITE to order the tooling. Payment of
tooling cost by BIOSITE are due

   
          - one third with approval by BIOSITE to order the tooling.
            ----------------------------------------------------------
          - one third after shipment of first Prototype Meters, and
            ----------------------------------------------------------
          - one third after final shipment of Prototype Meters by LRE.
            ----------------------------------------------------------
    

   
    

         3.3      Preproduction Meter Tooling.

   
         The total cost of tooling for the Preproduction Meters is estimated to
be DM 440,000.00 (DM 485,000.00 with optional printer).
    

   
         The tooling has to be ordered 6-8 months prior to the build of
Preproduction Meters. LRE will inform BIOSITE appropriately about delivery
times, conditions and actual costs.
    

         The tooling will be ordered by LRE after the receipt of a written
approval from BIOSITE to order the tooling. Payment of tooling cost by BIOSITE
are due 

   
    - one third with approval by BIOSITE to order the tooling.
      -----------------------------------------------------------------------
    - one third after shipment of first Preproduction Meters, and
      -----------------------------------------------------------------------
    - one third after final approval by BIOSITE of the tooling for use in the
      -----------------------------------------------------------------------
    


                                       -5-
<PAGE>   7
                  - [CONFIDENTIAL MATERIAL REDACTED AND FILED
         SEPARATELY WITH THE COMMISSION]

                  - [CONFIDENTIAL MATERIAL REDACTED AND FILED
         SEPARATELY WITH THE COMMISSION] production of the FI-
         Meters by LRE.

         3.4      Minimize Cost.

         Both parties will properly cooperate to minimize risk and cost of
tooling.

                                   ARTICLE IV
                Development Results/Industrial Proprietary Rights

         4.1      Tooling.

         BIOSITE shall be the sole owner of all tooling including molds. Upon
expiration or termination of this agreement, LRE shall transfer to BIOSITE all
applicable tooling, including molds. LRE shall provide such technical assistance
to BIOSITE

         4.2      Development Rights.

         (a) LRE shall be the sole owner of all inventions, discoveries,
improvements, information, data and other technology, whether patentable or not,
(i) owned by LRE prior to beginning the feasibility study, (ii) licensed to LRE
prior to or during the term of this agreement, or (iii) conceived solely by
employees or others on behalf of LRE during the term of the feasibility study or
the balance of the development program without the use directly or indirectly of
funding, materials or information provided by BIOSITE, together with all patent
and other intellectual property rights thereto (collectively, the

                                       -6-
<PAGE>   8
"LRE-Technology"). BIOSITE shall have the right to use, and subject to the
provisions of Article 9 Confidentiality to disclose, the LRE Technology
disclosed by LRE under this agreement solely for the purpose of performing its
obligations under this agreement.

   
         (b) LRE and BIOSITE jointly shall own all Joint Technology. LRE shall
have the right to use, and subject to the provisions of Article 9
Confidentiality, to disclose, the Joint Technology (i) during the term of this
agreement and for a period of two (2) years after the expiration or termination
of this agreement, only for purposes to which BiOSITE gives its prior express
written consent, which shall not be unreasonably withheld, and (ii) thereafter,
for any purpose whatsoever without the prior written consent of BIOSITE;
provided, however, if this agreement is terminated (A) by BIOSITE under
paragraph 10.3 or (B) by LRE under paragraph 2.5(b)(ii). BIOSITE shall have the
exclusive right to use, and subject to the provisions of Article 9
Confidentiality, to disclose, the Joint Technology for any purpose subject to
the provisions of paragraph 4.3.(a). BIOSITE's right to use and disclose the
Joint Technology after termination or expiration of this agreement for whatever
purpose shall survive the termination or expiration of this agreement, except if
LRE has terminated the agreement pursuant to paragraph 10.3 or BIOSITE has
terminated the agreement during the development phase pursuant to paragraph
2.5(a).
    

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<PAGE>   9
         (c) BIOSITE shall be the sole owner of all inventions, discoveries,
improvements, information, data and other technology, whether patentable or nor,
(i) owned by BIOSITE prior to beginning the feasibility study, (ii) licensed to
BIOSITE prior to or during the term of this agreement, or (iii) conceived solely
by employees or others on behalf of BIOSITE during the term of the feasibility
study or the balance of the development program, together with all patent and
other intellectual property rights thereto (collectively, the "BIOSITE
Technology"). LRE shall have the right to use, and subject to the provisions of
Article 9 Confidentiality to disclose, the BIOSITE Technology disclosed by
BIOSITE under this agreement solely for the purpose of performing its
obligations under this agreement.

         (d) LRE at its sole expense shall have the right to control the
preparation, filing, prosecution, maintenance and enforcement of all patent
applications and patents regarding the LRE Technology. BIOSITE at its sole
expense shall have the right to control the preparation, filing, prosecution,
maintenance and enforcement of all patent applications and patents regarding
BIOSITE Technology. Each party shall have the right to control the preparation,
filing, prosecution, maintenance and enforcement of all patent applications and
patents regarding Joint Technology, provided, however, if both parties wish to
control the patent rights with respect to any of the Joint Technology, then LRE
and BIOSITE shall meet and determine by mutual agreement which party shall have
the right

                                       -8-
<PAGE>   10
to control the patent right with respect to such Joint Technology. The party
that controls the patent rights with respect to any Joint Technology shall bear
the costs therefor, including the accruing costs for the remuneration of
employees' inventions according to the Law on Employees' inventions (Gesetz uber
Arbeitnehmererfindungen), unless the parties otherwise agree in writing.

         (e) If LRE directly or indirectly uses any Joint Technology for the
benefit of any third party or transfers any Joint Technology to any third party,
LRE shall pay to BIOSITE an amount equal to the cost paid to LRE by BIOSITE to
develop such technology.

         4.3      Exclusivity.

         (a) During the term of this agreement, BIOSITE shall be obligated to
purchase the Fl-Meter exclusively from LRE and not to commission any third party
to produce the Fl-Meters, except (i) if LRE is not capable to produce sufficient
quantity of Fl-Meters to satisfy BIOSITE's needs, or (ii) with respect to any
specific immunoassay application which BIOSITE requests, if LRE is prohibited
from producing Fl-Meters for BIOSITE for such immunoassay application. In
particular, BIOSITE shall not change the Fl-Meter on its own authority, and
shall not pass on to third parties any know-how relating to the individual
development phases and to the finished product Fl-Meter except to the extent
reasonably necessary to sell or use the Fl-Meter in the immunoassay field.

                                       -9-
<PAGE>   11
   
         (b) During the term of this agreement, LRE shall not develop or
commercialize, other than for the account or benefit of BIOSITE, any portable
meter (collectively, the "Competitive Meters") for the quantitative measurement
of (i) any analytes which are quantitatively measured by any portable meter
which BIOSITE is actively developing or commercializing together with LRE, or
(ii) any other analytes listed on Exhibit A hereto.  Upon full payment of all
development cost pursuant to Article 2 hereof, BIOSITE shall be entitled to
purchase and sell the F1-Meter exclusively. Notwithstanding the foregoing, the
exclusivity rights and obligations under this paragraph 4.3(b), with respect to
(i) any analytes which are quantitatively measured by any portable meter which
BIOSITE is actively developing or commercializing together with LRE within one
year prior to the expiration or termination of this Agreement, or (ii) any other
analytes listed on Exhibit A hereto shall survive such expiration or termination
for a period of two (2) years after such expiration or termination, except (1)
if this agreement is terminated by LRE under paragraph 10.2(b) or 10.3, or (2)
if this agreement is terminated by BIOSITE under paragraph 2.5(a), other than
for grounds specified under paragraph 10.3.
    

         4.4      Technical Information.

         BIOSITE will have access to all technical documentation such as
drawings, circuit diagrams, software listings, etc. produced under this
agreement exclusively for the Fl-Meter. The corresponding documents shall be
provided by LRE on the demand

                                      -10-
<PAGE>   12
by BIOSITE after the receipt of payment for the actual development phase.

   
         4.5      NO ROYALTIES
                  
                  Subject to the provisions of paragraph 4.2(e), any proprietary
                  rights (like copy rights, patents, etc.), that LRE or BIOSITE
                  already possess or that will be created under this agreement,
                  and that are utilized for design and manufacture of the
                  Fl-Meter under this agreement, may be so utilized without any
                  obligation of either party to pay royalties to the other
                  party.
    

                                    ARTICLE V

                                Serial Production

         5.1 For the term hereof, BIOSITE shall purchase all Fl-Meters it
requires exclusively from LRE, and LRE shall have the exclusive right and
obligation to produce all Fl-Meters required by BIOSITE, except (i) if LRE is
not capable to produce sufficient quantity of Fl-Meters to satisfy BIOSITE's
needs, or (ii) with respect to any specific immunoassay application which
BIOSITE requests, if LRE is prohibited from producing Fl-Meters for BIOSITE for
such immunoassay application.

         5.2 Each Fl-Meter shall be manufactured in accordance with the
Specifications. The Specifications may be modified from time to time only by
written approval of both parties.

   
         5.3 In order to appropriately prepare for the necessary production
volumes LRE needs firm orders for the first 2 quarters prior to the beginning of
the first full year of production and an update each subsequent quarter
(revolving forecast) for the following 4 quarters.
    


                                      -11-
<PAGE>   13
   
         The shipments will commence about 4 months after receipt of the
corresponding orders.
    

         BIOSITE shall place its orders and forecasts, and shall purchase
Fl-Meters, as follows:

   
         BIOSITE shall purchase a specified quantity of Fl-Meters specified in
each order and forecast as follows: BIOSITE shall purchase in the first quarter
all Fl-Meters firmly ordered for the first quarter according to BIOSITE's
binding order. BIOSITE shall purchase in the 2nd quarter at least two-thirds of
the quantity ordered for the 2nd quarter. The remaining one-third of the
quantity firmly ordered for the 2nd quarter may be accepted by BIOSITE
alternatively in the third or fourth quarter following the order and forecast.
The forecast for the 3rd quarter and not purchased in the 3rd or 4th quarter
following the order and forecast shall not be binding on BIOSITE. BIOSITE shall
be obligated to reimburse LRE for the costs of materials purchased for that
quantity of Fl-Meters forecast for the 3rd quarter and not purchased in the
    

                                      -12-
<PAGE>   14
   
3rd or 4th quarter following the order and forecast, which costs were incurred
by LRE in good faith in advance and which cannot be canceled; provided, however,
that BIOSITE shall be entitled to credit such reimbursed costs ratably against
the purchase price of a like quantity of Fl-Meters purchased thereafter. BIOSITE
shall have this right to credit for a period of at least one (1) year after
BIOSITE has reimbursed LRE for such cost of materials. The forecast for the 4th
quarter following the order and forecast shall not be binding on BIOSITE and
shall be used for orientation.
    

         Each firm purchase order shall provide delivery dates and delivery
information requirements.

   
         5.4 If serial production is not possible for whatever reason--unless
BIOSITE terminated this agreement under paragraph 10.2 (c) or 10.3--or if
BIOSITE fails to order and purchase 500 F1-Meters during the first twelve (12)
months of production, BIOSITE shall reimburse LRE for that portion of the cost
for the specific tooling purchased by LRE for the Fl-Meter specific production
equipment that was not reimbursed through the pricing structure for the first
twelve (12) months of production.
    

   
         5.5 Delivery by LRE shall be made at least quarterly. LRE shall deliver
a minimum quantity of 50 F1-Meters in
    

                                      -13-
<PAGE>   15
each delivery. LRE shall deliver a quantity in excess of the minimum quantity as
soon as it is able to do so. After BIOSITE has informed LRE of the needed
quantity and has placed the respective orders, LRE shall use its commercially
reasonable efforts to meet BIOSITE's requested delivery dates, although the
quantities to be delivered and the dates of delivery may vary in accordance with
LRE's capacity. BIOSITE's order shall be delivered in the quarter following the
order. Within a quarter LRE may deliver the whole quantity at once or may,
alteratively, make up to six (6) partial deliveries the quantities of which to
be determined by LRE, unless still provided otherwise by the contract parties.

   
         5.6 If BIOSITE discontinues its orders for a period of four (4) months,
(a) in the event that the material necessary for BIOSITE's next order is already
available at LRE or will be promptly available somewhere else, delivery by LRE
shall commence not later than four (4) months after receipt of BIOSITE's next
order, or (b) otherwise, delivery by LRE shall commence not later than ten (10)
months after receipt of BIOSITE's next order.
    

         5.7 If a shipment of Fl-Meter or any portion thereof is damaged or
defective, then BIOSITE shall have the right to reject such shipment or the
portion thereof that fails to conform. BIOSITE in good faith shall consult with
LRE, and if applicable the carrier, in making any determination that any

                                      -14-
<PAGE>   16
   
shipment or portion is defective. BIOSITE shall give written notice to LRE of
its rejection hereunder, specifying the grounds for such rejection. BIOSITE
shall hold the defective shipment or portion for up to six (6) months, for
return to LRE or disposition at LRE's option and at LRE's expense, if found to
be not in conformance with the Specifications. LRE shall use its commercially
reasonable efforts to cure such rejection or replace such spoiled, damaged or
defective shipment of Fl-Meter within ninety (90) days after receipt of notice
of rejection thereof. If no notice of rejection is given by BIOSITE within
thirty (30) days after receipt of any shipment of Fl-Meters, the shipment of the
Fl-Meters shall be deemed to have been accepted.
    

         5.8 BIOSITE shall have the right to designate one or more third
parties, including E. Merck, to purchase Fl-Meters under this agreement for sale
and use on such terms and conditions as agreed by BIOSITE and E. Merck or such
other third party. Each such third party shall have the right to purchase
Fl-Meters directly from LRE, and shall be obligated to make forecasts, place
orders and pay the transfer price therefor directly to LRE, on the terms and
conditions of this agreement. BIOSITE shall give written notice to LRE of any
third party so designated.


                                      -15-
<PAGE>   17
                                   ARTICLE VI

                             Supply Price and Volume
  
         6.1 Prices are fixed for the first 12 months of production and depend
on the total quantity of Fl-Meters ordered during such period. The transfer
prices are:

   
         -  at up to [CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH
            THE COMMISSION] per year [CONFIDENTIAL MATERIAL REDACTED AND FILED
            SEPARATELY WITH THE COMMISSION] with optional printer.

         -  at up to [CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH
            THE COMMISSION] per year [CONFIDENTIAL MATERIAL REDACTED AND FILED
            SEPARATELY WITH THE COMMISSION] with optional printer.

         -  at up to [CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH
            THE COMMISSION] per year [CONFIDENTIAL MATERIAL REDACTED AND FILED
            SEPARATELY WITH THE COMMISSION] with optional printer.

         After the first 12 months of production, the transfer prices will be
         reduced as follows:

         -  at up to [CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH
            THE COMMISSION] per year [CONFIDENTIAL MATERIAL REDACTED AND FILED
            SEPARATELY WITH THE COMMISSION] with optional printer.

         -  at up to [CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH
            THE COMMISSION] per year [CONFIDENTIAL MATERIAL REDACTED AND FILED
            SEPARATELY WITH THE COMMISSION] with optional printer.

         -  at up to [CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH
            THE COMMISSION] per year [CONFIDENTIAL MATERIAL REDACTED AND FILED
            SEPARATELY WITH THE COMMISSION] with optional printer.
    

         The transfer price for the Fl-Meters for each order shall be calculated
based on the forecasted orders for Fl-Meters for such year. After the actual
quantity of Fl-Meters ordered in any year are calculated after the end of such
year, the transfer price for all Fl-Meters ordered during such year shall be
adjusted, and the parties shall promptly settle any amounts underpaid or
overpaid during such year in a manner mutually acceptable to both parties.

                                      -16-
<PAGE>   18
         6.2 Prices are free on board Munich airport or Frankfurt airport for
Fl-Meters in adequate bulk packing for overseas shipments. If BIOSITE desires
single packing which is fit for final sale, LRE will offer packing as specified
by BIOSITE at additional cost.

         Prices do not include the German value added tax or any US taxes.

         6.3 For each delivery accepted pursuant to paragraph 5.7, BIOSITE shall
make payment within 30 days from receipt of such delivery and the corresponding
invoice.

                                   ARTICLE VII

                                 Quality Control

         LRE will perform regular in-process controls and a final test for each
Fl-Meter shipped in accordance with the specifications, keeping complete records
of the results of each test.The testing procedures and the permissible
variations and tolerances will be agreed upon between LRE and BIOSITE and laid
down in the final specifications.

         The test reports of each Fl-Meter delivered can be provided to BIOSITE
if desired.

         LRE shall not make any changes to the final specification without
BIOSITE's prior written approval.


                                      -17-
<PAGE>   19
                                  ARTICLE VIII

                                    Warranty

         The warranty period for each Fl-Meter produced under this agreement
will be twenty-four (24) months from the date of shipment. It will cover defects
in material, workmanship, design and performance as per specifications and
intended use of the Fl-Meter. Warranty does not cover any battery-related
defects.

         LRE will repair or replace any defective Fl-Meter during the
warranty-period at its own expense. Upon request, BIOSITE shall return all
defective Fl-Meters to LRE at LRE's expense.

                                   ARTICLE IX

                                 Confidentiality

   
         9.1 During the term of this agreement and for a period of five (5)
years after, each party will hold in strict confidence and not disclose to third
parties, not use except for the purposes of this agreement, and restrict access
to those persons (including consultants) carrying out activities under this
agreement, any and all information disclosed by the other party under this
agreement and treated as confidential by such party. Notwithstanding the
foregoing, LRE and BIOSITE each shall have the right to disclose Joint
Technology to any third party with whom it has or proposes to enter into a
business relationship, provided that such third party has executed a written
agreement
    

                                      -18-
<PAGE>   20
with it to maintain in confidence and not use such confidential information
except as otherwise authorized by this agreement.

         Excepted from this only shall be the information which

         (a)      is in public domain at the time of disclosure,

         (b)      becomes otherwise part of public domain through no
fault of the receiving party,

         (c) was in the possession of the receiving party at the time of
disclosure by the other party as shown by the receiving party's written records,
or thereafter becomes available from a third party who has the right to disclose
it. Companies which LRE or BIOSITE control or are under common control with LRE
or BIOSITE are not regarded as third parties. These companies and persons
(including consultants) carrying out activities under this agreement may be
given such information only if they have accepted the confidentiality terms of
this agreement as binding them.

         9.2 For purposes of the Article 9, Joint Technology shall constitute
confidential information with respect to both parties.

         9.3 The obligations of confidentiality and non-use contained in Article
9 shall not apply to the extent that the receiving party is required to disclose
information by applicable law, regulation or court order.

         9.4 Neither party shall disclose any terms or conditions of this
agreement to any third party without the prior consent of the other party.
Notwithstanding the foregoing, the parties shall agree upon the substance of
information that can be used

                                      -19-
<PAGE>   21
to describe the terms of this transaction without the other
party's prior consent.

                                    ARTICLE X

                                      Term

         10.1  During the Development Phase.

         This agreement may be terminated by either party during the development
phase only as provided in paragraph 2.5.

         10.2  During Serial Production.

    
        (a) This agreement can be terminated by either party by giving 12
             months prior written notice, or the first time, however, with
             effect on December 31, 1998.

         (b) LRE can terminate the agreement earlier if BIOSITE will not place a
             minimum order of 300 F1-Meters within a period of 12 months.

         (c) BIOSITE can terminate this agreement earlier if LRE fails to supply
             BIOSITE with its firmly ordered quantities of Fl-Meters for two (2)
             consecutive calendar quarters under Art. 5.
    

         10.3  At Any Time.

         Either party has the right to terminate this agreement at
any time, without previous notice for cause, if

         (a) the other party commits a material breach of any of the covenants
and terms herein contained and has not, [CONFIDENTIAL MATERIAL REDACTED AND
FILED SEPARATELY WITH THE COMMISSION] after having been required in writing to
do so, remedied such breach; provided, however, that there shall not

                                      -20-
<PAGE>   22
exist a material breach within the meaning of this paragraph 10.3(a) ff the
parties mutually determine under paragraph 2.5(b)(ii) that the intended result
of the development cannot be achieved or, for reasons beyond the reasonable
control of LRE, can only be achieved at expenditure by LRE, significantly in
excess of the costs described in paragraphs 2.1 to 2.4, for which BIOSITE is
unwilling to reimburse LRE after notice thereof; or

         (b) a petition is filed by or against the other party under any
bankruptcy or insolvency laws; provided that if the other party gives adequate
assurance of contesting any such petitions and such petitions are dismissed
within one hundred eighty (180) days of filing, such filing shall not constitute
a cause of termination.

         10.4  Notice.

         Notice of termination shall be effective upon receipt.

         10.5  Effect.

         Expiration or termination of this agreement shall not
relieve the parties of any obligation accruing prior to such expiration or
termination. The provisions of Articles 4.9 and 11 shall survive the expiration
or earlier termination of this agreement.

         10.6  Force Majeure.

         Neither party shall be held liable or responsible to the other party
nor be deemed to have defaulted under or breached this agreement for failure or
delay in fulfilling or performing any term of this agreement to the extent, and
for so long as,

                                      -21-
<PAGE>   23
such failure or delay is caused by or results from causes beyond the reasonable
control of the affected party including fire, floods, embargoes, war, acts of
war (whether war be declared or not), insurrections, riots, civil commotions,
strikes, lockouts or other labor disturbances, act of God or acts, omissions or
delays in acting by any governmental authority or the other party.

                                   ARTICLE XI

                          Indemnification and Insurance

         11.1 Regarding LRE's liability, the provisions of German law relating
to damages and product liability shall apply.

         11.2 LRE shall maintain products liability insurance against claims
regarding the manufacture of the Fl-meters by LRE in such amounts as it
customarily maintains for its manufacture of similar products in Germany. LRE
shall maintain such insurance during the term of this agreement and thereafter
for so long as it maintains insurance for such covering such activities.

                                   ARTICLE XII

                                  Conciliation

         BIOSITE and LRE shall exercise their commercially reasonable efforts to
settle between themselves in an amicable way any dispute, controversy or claim
which may arise out of or relating to this agreement within thirty (30) days
after one

                                      -22-
<PAGE>   24
party receives notice from the other party of such dispute, controversy or
claim.

                                  ARTICLE XIII

                                Final Provisions

         13.1 This agreement and the transactions contemplated thereby are
governed exclusively by the substantive laws of the Federal Republic of Germany
exclusive of the German international law and any supranational or international
bodies of law. This shall not apply to the provisions regarding the confidential
information of BIOSITE, pursuant to Article 9 Confidentiality, which shall be
construed and interpreted in all respects in accordance with the laws of the
State of California.

         13.2 Any dispute arising out of or in relation to this agreement
including disputes regarding its validity shall be resolved by binding
arbitration conducted under the International Chamber of Commerce Arbitration
Rules. The procedural rules shall follow the German rules of Civil Procedure,
unless the rules of the International Chamber of Commerce provide for different
rules. Any such arbitrations shall be conducted in English language with such
rules, and shall be held in Munchen, Germany. One judge shall be named by the
party bringing the action, one judge shall be named by the party defending such
action and the presiding judge shall be named by the two judges appointed. At
least one of the judges shall have command of the German language. The
arbitrators shall have the authority to grant specific performance, and to

                                      -23-
<PAGE>   25
allocate between the parties the costs of arbitration in such equitable manner
as they determine. Judgment upon the award so rendered may be entered in any
court having jurisdiction or application may be made to such court for judicial
acceptance of any award and an order of enforcement, as the case may be.

         13.3 This agreement and its Attachments embody the entire and standing
agreement among the parties and supersede all previous written or oral
agreements with respect to the development and sale of the Fl-Meter.

         13.4 Modifications of and amendments to this agreement as well as the
suspension of its provisions shall become effective only when approved by both
parties in writing.

         13.5 Subject to the choice of law provisions of paragraph 13.1, LRE and
BIOSITE shall comply in all material respects with all applicable laws and
regulations in the performance of their respective obligations under this
agreement.

         13.6 Any consent, notice or report required or permitted to be given or
made under this agreement by one of the parties to the other shall be in
writing, delivered personally or by facsimile (and promptly confirmed by
personal delivery, air mail, internationally-recognized delivery service or
courier), air mail, internationally-recognized delivery service or courier,
postage prepaid (where applicable), addressed to such other party at its address
indicated below, or to such other address as the addresses shall have last
furnished in writing to the addressor and (except as otherwise provided in this
agreement) shall be effective upon receipt by the addresses.

                                      -24-
<PAGE>   26
         If to BIOSITE:                  BIOSITE Diagnostics Incorporated
                                         11030 Roselle Street
                                         San Diego, California 92121, U.S.A.
                                         Attention:  Kim D. Blickenstaff
                                                     President

         with a copy to:                 Pillsbury Madison & Sutro
                                         235 Montgomery Street, 15th Floor
                                         San Francisco, California 94104, U.S.A.
                                         Attention:  Thomas E. Sparks, Jr.

         If to LRE:                      LRE Relais + Elektronik GmbH
                                         Linprunstra(beta)e 16
                                         80335 Munchen
                                         Federal Republic of Germany
                                         Attention:  Reinhold Hartwich
                                                     President

         13.7 BIOSITE and LRE each acknowledge that the development and
commercialization rights and information disclosure requirements of this
agreement are subject to certain laws and regulations of the Federal Republic of
Germany and the United States of America relating to the export of products and
technical information. without limiting the application of paragraph 13.1,
BIOSITE and LRE each shall comply with all applicable laws and regulations.

         13.8 It is expressly agreed that BIOSITE and LRE shall be independent
contractors and that the relationship between the two parties shall not
constitute a partnership, joint venture or agency. Neither BIOSITE nor LRE shall
have the authority to make any statements, representation or commitments of any
kind, or to take any action, which shall be binding on the other, without the
prior consent of the party to do so.

         13.9 The English language version of this agreement shall govern and
control any translations of this agreement into any other language.

                                      -25-
<PAGE>   27
         13.10 In the event of one or more provisions of this agreement becoming
void, the remaining provisions contained herein shall remain in full force and
effect. The parties agree to have provisions having become void shall be deemed
as severable and be replaced by valid provisions which maintain the intentions
of the invalid provisions as far as possible.


Munchen/Nordlingen,                          San Diego,
September 23, 1994                           September 23, 1994 
LRE Relais + Elektronik GmbH                 BIOSITE Diagnostics
                                             Incorporated
 /s/ Reinhold Hartwich                       /s/ Kim D. Blickenstaff
----------------------------                 -------------------------
Reinhold Hartwich                            Kim D. Blickenstaff
President                                    President


                                      -26-


<PAGE>   28
                                   EXHIBIT A
                                   ---------

                              ADDITIONAL ANALYTES
                              -------------------


   
<TABLE>
<CAPTION>
Category                        Analytes
<S>                             <C>

Other Drugs                     [CONFIDENTIAL MATERIAL REDACTED 
                                AND FILED SEPARATELY WITH THE COMMISSION]
                                
                                                               
Therapeutic Drugs               [CONFIDENTIAL MATERIAL REDACTED 
                                AND FILED SEPARATELY WITH THE COMMISSION]

Drug Monitoring                 Sandimmune
                                Sandimmune Neoral
                                [CONFIDENTIAL MATERIAL REDACTED 
                                AND FILED SEPARATELY WITH THE COMMISSION]

[CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION]
</TABLE>
    

                                       20

<PAGE>   29
                             ATTACHMENT B   Page 7

--------------------------------------------------------------------------------
        project plan CK-Meter           LRE Relais + Elektronik Sept 1994
                         Customer:  Biosite Diagnostics
                            Resources Abbreviations
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nr.     Name                                    Kurzel
--------------------------------------------------------------------------------
<S>     <C>                                     <C>
16      Biosite                                 BIOSITE
--------------------------------------------------------------------------------
 2      Bereichsleitung / J. Denker             BL
--------------------------------------------------------------------------------
14      EE                                      E
--------------------------------------------------------------------------------
 5      Elektronik Entwicklung                  EE
--------------------------------------------------------------------------------
 9      Einkauf                                 EK
--------------------------------------------------------------------------------
13      Extem                                   Ext
--------------------------------------------------------------------------------
 6      Fertigungsleitung Medizin               FLME
--------------------------------------------------------------------------------
 1      Geschaftsleitung / R. Hartwich          GL
--------------------------------------------------------------------------------
15      MK                                      M
--------------------------------------------------------------------------------
 3      Marketing/Kunde                         M/K
--------------------------------------------------------------------------------
11      Fertigung Medizin                       MED
--------------------------------------------------------------------------------
 4      Konstruktion                            MK
--------------------------------------------------------------------------------
 7      Projektleitung                          PL
--------------------------------------------------------------------------------
10      Qualitats Leitung                       QA
--------------------------------------------------------------------------------
 8      Qualitatssicherung/Entwicklung          QAE
--------------------------------------------------------------------------------
12      Qualitatssicherung Inspection           QAI
--------------------------------------------------------------------------------
17      Resourcen                               Resources
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
                CKM03                           page 7
--------------------------------------------------------------------------------
</TABLE>

LRE RELAIS + ELEKTRONIK GMBH
Bereich Medizintechnik                             Munich, Sept. 21, 1994/BU/AH

Annex 1
-----
To Contract Fl-Meter
--------------------
SPECIFICATION FOR Fl-METER

1.      Previous remark

1.1     Cooperation with Biosite

1.1.1   This specification will be changed and supplemented, as necessary,
        during development.

1.1.2   LRE commits themselves to support Biosite concerning changes or
        supplementation of this specification, and to immediately inform Biosite
        in the case of any variation of the unit from the specification.

1.1.3   Should it prove, during development, that the requirements of this
        specification are not sufficient, have to be supplemented or cannot be
        met, LRE and Biosite must come to an agreement concerning the new or
        changed requirements

1.1.4   The characteristics defined in this valid specification are the basis
        for the minimum requirements.  The test procedures shall be fixed in an
        agreement concerning the final quality control.

1.1.5   Biosite provides the test and control standards necessary for control
        of the development steps and quality control in series production.

1.2     System

         This specification describes the technical requirements and the frame
         conditions for development of a fluorescence photometer for
         quantitative determination up to [CONFIDENTIAL MATERIAL REDACTED AND
         FILED SEPARATELY WITH THE COMMISSION] parameters in blood.  Accuracy of
         the whole system has to be defined for each parameter.

         The upper and lower limit for the measurement range should be defined
         by Masterstandard high and low up to [CONFIDENTIAL MATERIAL REDACTED
         AND FILED SEPARATELY WITH THE COMMISSION] parameters.  Measurement
         values are relative and will be converted by means of blank values
         determined during

--------------------------------------------------------------------------------
                                  page-1-of 34


<PAGE>   30
        adjustment of the equipment.  Display of the measurement result shall be
        the parameter concentration in digital numbers.  The lot-specific data
        are stored in a code chip.

2.      Fl-Meter as part of a diagnostic system
        -----------------------

2.1     Fl-Meter shall be used as part of a closed diagnostic system for
        determination of parameter in blood in conjunction with code chip.

2.2     The instrument evaluates biosite cardiac device.

        Description of this test device, see Annex 1 of this specification.
   
        [CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
        COMMISSION]

2.3     [CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
        COMMISSION]

2.4     [CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
        COMMISSION]
    

2.5     For the adjustment and control of the instrument, Biosite shall provide
        control devices (Master-standards) (see Annex 9) equivalent to the test
        devices (Annex 1)

3.      Description of the instrument
        -----------------------

3.1     Design

        LRE makes proposals concerning the housing as well as the arrangement
        of keys and display and come to an agreement with Biosite.

        Biosite defines:
        - Color of housing
        - Color of keys

        - Inscription of housing (designation, logo, inscription of operation
          element

--------------------------------------------------------------------------------
                                  page-2-of 34


<PAGE>   31
        - Text of model identification label

3.2     The instrument consists of the following elements:

   
        [27 PAGES OF CONFIDENTIAL SPECIFICATIONS REDACTED AND FILED SEPARATELY
        WITH THE COMMISSION]

        [CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
        COMMISSION]
    
<PAGE>   32
Annex 7:        Packaging
-------------------------
[CONFIDENTIAL MATERIAL REDACTED & FILED SEPARATELY WITH THE COMMISSION]

Annex 8:        Linear mode and emission measurement
----------------------------------------------------
[CONFIDENTIAL MATERIAL REDACTED & FILED SEPARATELY WITH THE COMMISSION]

Annex 9:        Industrial design
---------------------------------
[CONFIDENTIAL MATERIAL REDACTED & FILED SEPARATELY WITH THE COMMISSION]

Annex 9:        Industrial design
---------------------------------
[CONFIDENTIAL MATERIAL REDACTED & FILED SEPARATELY WITH THE COMMISSION]

Annex 9:        Industrial design
---------------------------------
[CONFIDENTIAL MATERIAL REDACTED & FILED SEPARATELY WITH THE COMMISSION]