Document:

EX-10.3

SUBSIDIARY GUARANTY

THIS SUBSIDIARY GUARANTY is made and entered into as September 1, 2009, by each of Pacific
Biometrics, Inc., a Washington corporation, Pacific Biomarkers, Inc., a Washington corporation, PBI
Technology, Inc., a Washington corporation, and BioQuant, Inc., a Michigan corporation (each, a
“Guarantor” and collectively, the “Guarantors”), to and for the benefit of Terry M. Giles, an
individual residing in the State of Texas (“Lender”).

RECITALS

A. Lender and Pacific Biometrics, Inc., a Delaware corporation (“Borrower”), have entered into
that certain Loan and Security Agreement dated of even date herewith (the “Loan Agreement”),
pursuant to which Lender has agreed to make certain loans to Borrower (the “Loans”). Capitalized
terms used in this Guaranty without definition shall have their respective meanings as defined in
the Loan Agreement, a copy of which has been provided to the Guarantors.

B. Each Guarantor is wholly-owned by Borrower and will be directly benefited by Lender making
the Loans to Borrower and the Guarantors acknowledge that, absent this Guaranty, Lender would not
make the Loans to Borrower.

GUARANTY

In consideration of the foregoing, the Guarantors, jointly and severally, make the following
promises and guarantees:

1. Each Guarantor, jointly and severally, unconditionally and irrevocably guarantees and
promises to pay the Obligations of Borrower to Lender under or pursuant to the Loan Agreement,
whether absolute or contingent, liquidated or unliquidated, determined or undetermined, as if the
payment of such Obligations constituted the direct primary obligation of such Guarantor. If, at
any time, default shall be made by Borrower in the payment of any Obligations due Lender in
connection with the Loans, Guarantors shall pay upon demand any sums, interest, or other charges
that may be due to Lender. This Guaranty is a guaranty of payment and not of collection.

2. In order to secure this Guaranty, each Guarantor hereby grants to Lender, and its
successors and assigns, a first priority security interest in the Collateral (defined below). This
Agreement shall continue until all Obligations are paid in full.

(a) For purposes of the foregoing grant of security interest to Lender, “Collateral” means all
of Guarantor’s right, title and interest in, to and under all of its assets, whether now owned or
existing or hereafter acquired or arising, and wherever located including, but not limited to the
following: all cash and cash equivalents, accounts, deposit accounts, inventory, equipment, goods,
documents, instruments, contract rights, general intangibles, chattel paper, investment property
(including, without limitation, all equity interests owned by such Guarantor), letter-of-credit
rights, trademarks, trademark applications, tradestyles, patents, patent applications, copyrights,
copyright applications and other intellectual property in which such Guarantor now has or hereafter
may acquire any right, title or interest, all proceeds and products thereof (including, without
limitation, proceeds of insurance) and all additions, accessions and substitutions thereto or
therefor. Unless otherwise defined herein, terms that are defined in Article 9 of the Uniform
Commercial Code as in effect, from time to time, in the State of Washington (the “Uniform
Commercial Code”) and used herein shall have the meanings given to them in the Uniform Commercial
Code. Notwithstanding the foregoing, the Collateral shall not include any of such property that is
subject on the date hereof to certain outstanding security interests (and the related UCC-1
financing statements relating thereto) granted by Guarantor to third parties in connection with
certain equipment financings.

(b) The security interests granted herein shall be perfected by Lender’s filing of appropriate
Uniform Commercial Code Forms UCC-1 with the appropriate government filing offices (including, as
applicable, any required filings with the United States Patent and Trademark Office). In
connection with the foregoing, each Guarantor authorizes Lender to prepare and file any financing
statements describing the Collateral without otherwise obtaining Guarantor’s signature or consent
with respect to the filing of such financing statements.

(c) Upon the payment in full of the Obligations, all security interests granted hereby shall
terminate and all rights to the Collateral shall revert to Guarantors, as applicable. Upon any
such termination, the Lender shall, at Guarantor’s expense, execute and deliver to such Guarantor
such documents as Guarantor shall reasonably request to evidence such termination.

3. Any waiver by Lender of any of the terms or conditions of the Loan Agreement, the giving of
any consent or the granting of any indulgences or extensions of time to Borrower, to all of which
each Guarantor hereby consents, may be done without notice to Guarantors and without releasing the
obligations of Guarantors hereunder.

4. Each Guarantor hereby waives notice of acceptance of this Guaranty and agrees that this
Guaranty is a continuing one. The obligations of Guarantors hereunder shall not be released by
Lender’s receipt, application, or release of security given for the performance of covenants and
conditions of the Loans or the Loan Agreement on Borrower’s part to be performed or observed; nor
by any modification, amendment or other change in the terms or conditions of the Loans or the Loan
Agreement. Lender shall have no obligation first to exhaust or pursue Lender’s remedies against
Borrower before Lender shall have the right to proceed against any Guarantor hereunder.

5. The liability of each Guarantor hereunder shall in no way be affected by any of the
following: (a) the release or discharge of Borrower in any creditors’, receivership, bankruptcy or
other proceedings; (b) the impairment, limitation or modification of the liability of Borrower in
bankruptcy, or of any remedy for the enforcement of Borrower’s liability under the Loan Agreement
resulting from the operation of any present or future provision of the federal bankruptcy act or
other statute or from the decision of any court; (c) any disability or other defense of Borrower;
or (d) the cessation from any cause whatsoever of the liability of Borrower.

6. Until the Obligations have been paid in full, Guarantors (a) shall have no right of
subrogation against Borrower by reason of any payments or acts of performance by Guarantors, in
compliance with the obligations of Guarantors hereunder, (b) waive any right to enforce any remedy
which Guarantors now or hereafter shall have against Borrower by reason of any one or more payments
or acts of performance in compliance with the obligations of Guarantors hereunder, and
(c) subordinate any liability or indebtedness of Borrower now or hereafter held by Guarantors to
the obligations of Borrower to Lender under the Loan Agreement.

7. This Guaranty may not be changed, modified, discharged or terminated in any manner other
than by an agreement in writing signed by Guarantors and Lender.

8. If Lender shall employ an attorney to enforce or defend any of Lender’s rights or remedies
hereunder, Guarantors shall pay all attorneys’ fees, costs, and expenses and all other costs and
expenses incurred by Lender in connection therewith, including costs of appeal, if any, regardless
of whether an action is commenced by Lender.

9. Any notice given by any party hereunder shall be in writing and personally delivered, sent
by overnight courier, or United States mail, postage prepaid, or sent by facsimile, or other
authenticated message, charges prepaid, to the other party’s address set forth below. Each party
may change the address or facsimile number to which notices, requests and other communications are
to be sent by giving written notice of such change to each other party. Notice given by hand
delivery shall be deemed received on the date delivered; if sent by overnight courier, on the next
Business Day after delivery to the courier service; if by first class mail, on the third Business
Day after deposit in the U.S. Mail; and if by facsimile, on the date of transmission. The initial
addresses for notices are as follows:

	 	 	 
	If to any Guarantor, to:
	 	c/o Pacific Biometrics, Inc.

220 West Harrison Street

Seattle, WA 98119

Attention: Chief Executive

Officer

Facsimile: (206) 298-9838

	If to Lender, to:
	 	Terry M. Giles

11002 Wickwood Drive

Houston, Texas 77024

Facsimile: (713) 464-0411

10. This Agreement shall inure to the benefit of and shall be binding on the parties hereto
and their respective successors and permitted assigns. No party may assign or transfer any of its
respective rights or obligations under this Agreement without the consent of the other parties
hereto.

11. This Agreement shall be governed by, and construed in accordance with, the internal laws
of the State of Washington.

12. All claims, disputes, controversies, or other matters in question arising out of or
relating to this Agreement that cannot be resolved by the parties shall be resolved first through
mediation and second, if still not resolved, by binding arbitration, in accordance with the
procedures set forth in the Loan Agreement, which are incorporated by reference herein.

13. This Agreement may be executed in any number of counterparts which, when taken together,
shall constitute but one agreement.

ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, MODIFY OR AMEND ANY TERMS OF
THE LOAN DOCUMENTS, RELEASE ANY GUARANTOR, FORBEAR FROM ENFORCING REPAYMENT OF THE LOAN OR THE
EXERCISE OF ANY REMEDY UNDER THE LOAN AGREEMENT, OR MAKE ANY OTHER FINANCIAL ACCOMMODATION
PERTAINING TO THE LOAN ARE ALL UNENFORCEABLE UNDER WASHINGTON LAW.

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

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EXECUTED as of the day and year first above written.

GUARANTORS:

PACIFIC BIOMETRICS, INC.

a Washington corporation

By:  /s/ Ronald R. Helm

Ronald R. Helm

Chief Executive Officer

PACIFIC BIOMARKERS, INC.

a Washington corporation

By:  /s/ Ronald R. Helm

Ronald R. Helm

Chief Executive Officer

PBI TECHNOLOGY, INC.

a Washington corporation

By:  /s/ Ronald R. Helm

Ronald R. Helm

Chief Executive Officer

BIOQUANT, INC.

a Michigan corporation

	 	 	 	 	 
	 	 	By:
	 	/s/ Ronald R. Helm

	 	 	 	 	 

	 	 	 	 	Ronald R. Helm

Chief Executive Officer

	AGREED TO AND

ACCEPTED BY LENDER:
	 	

	 	

	 	 	 	 	/s/ Terry M. Giles

	 	 	 
	 	 

	 	 	TERRY M. GILES

2EX-10.4

STOCK REDEMPTION AGREEMENT

This Stock Redemption Agreement (the “Agreement”) is made as of September 1, 2009 (the
“Effective Date”), by and between Pacific Biometrics, Inc., a Delaware corporation (the “Company”),
and Terry M. Giles, an individual residing in the State of Texas (“Seller”).

RECITALS

A. Seller desires to tender for redemption, and the Company desires to redeem from Seller, on
the terms and conditions provided in this Agreement, all right, title and interest in 2,391,906
shares (the “Shares”) of common stock of the Company owned by Seller (the “Redemption”).

B. Concurrently with this Redemption, the Company is entering into a $4 million loan agreement
with Seller (the “Loan”).

AGREEMENT

In consideration of the mutual covenants, agreements, representations, warranties and
conditions herein contained, the parties hereby agree as follows:

1. Redemption of Shares. Subject to the terms and conditions of this Agreement, the
Company hereby agrees to redeem from Seller, and Seller agrees to tender for redemption by the
Company, all of such Seller’s right, title and interest in the Shares, free of any lien, security
interest, encumbrance, charge or claim of any party. The Redemption shall be effective as of the
Effective Date, and shall occur immediately upon closing of the Loan. Seller shall take all
further actions and execute any and all additional documentation requested by the Company to
evidence the Redemption and transfer of the Shares to the Company.

2. Redemption Price. The price per Share redeemed shall be $0.70 (the “Redemption
Price”).

3. Delivery of Share Certificates and Payment.

(a) Share Certificates. On or prior to the Effective Date, Seller shall deliver to
the Company a share certificate or certificates representing the Shares (each, a “Certificate”)
together with a signed stock power in the form provided by the Company’s transfer agent. If any
Certificate shall have been lost, stolen or destroyed, in lieu of delivering such Certificate
Seller shall deliver an affidavit setting forth the claimed loss, theft or destruction and shall
provide the Company with a reasonable indemnity against any claim that may be made against the
Company with respect to such Certificate. Upon Redemption, the Certificates representing the
Shares will become treasury shares in the Company, as issued but not outstanding shares of common
stock of the Company.

(b) Payment. Upon Seller’s delivery of the Certificates or affidavit as provided in
Section 3(a), the Company shall pay the Redemption Price to Seller for the Shares, in cash or by
check or wire transfer, or by netting out the Redemption Price from the Loan proceeds.

4. Representations and Warranties of Seller. Seller represents and warrants to the
Company that:

(a) Seller is the sole record and beneficial owner of the Shares and holds the Shares free and
clear of all liens, security interests, claims, charges and encumbrances of any kind. The Shares
are not subject to options, warrants, contracts or agreements of any kind.

(b) Seller has the full and unrestricted legal right, power and authority to enter into and to
perform this Agreement. This Agreement constitutes Seller’s valid and binding obligation,
enforceable against Seller in accordance with its terms.

(c) The execution, delivery and performance of this Agreement and the other agreements
contemplated herein will not conflict with any provision of, or constitute a breach of or default
under, any agreement, indenture or other instrument to which Seller is a party or by which Seller
or any of Seller’s property is bound or affected.

(d) Seller has received all the information that Seller considers necessary or appropriate to
be able to evaluate the risks and merits of the transaction contemplated under this Agreement and
to reach an informed and knowledgeable decision whether to tender the Shares for redemption by the
Company. Seller has reviewed the Company’s reports and other filings made with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
required to be filed through the date hereof (the “Reports”). Seller has also reviewed the
Supplemental Disclosure provided by the Company, dated as of August 6, 2009. Seller has been
afforded the opportunity to ask questions and receive answers from the Company regarding its
business and financial condition and other matters deemed necessary to Seller, and all such
questions, if any, have been answered to Seller’s full satisfaction.

(e) Seller acknowledges and agrees that the Company has not made any representation, warranty
or other statements regarding the current or future value of the Shares. Except for the Company’s
representations and warranties in Section 5, Seller is not relying on any representation or
warranty of the Company (or any of its officers, directors, employees or agents) in electing to
sell the Shares pursuant to the terms of this Agreement.

(f) Seller acknowledges that it has been advised to consult with, and has consulted with or
had the opportunity to consult with, independent legal, tax and other professional advisers with
respect to the Redemption, including the fairness of the Redemption Price and the other terms of
this Agreement.

5. Representations and Warranties by the Company. The Company represents and warrants
to Seller that:

(a) The Company is a corporation validly existing under the laws of the State of Delaware.
The Company has the full legal right, power and authority to enter into and to perform this
Agreement. The execution, delivery and performance by the Company of this Agreement have been duly
authorized by all requisite action of the Company. This Agreement constitutes the Company’s valid
and binding obligation, enforceable against the Company in accordance with its terms.

(b) The execution, delivery and performance of this Agreement and the other agreements
contemplated herein will not conflict with any provision of, or constitute a breach of or default
under, any agreement, indenture or other instrument to which the Company is a party or by which the
Company or any of the Company’s property is bound or affected;

(c) The payment of the Redemption Price hereunder (immediately following closing of the Loan)
will not constitute a distribution prohibited by the Delaware General Corporation Law.

(d) As of their respective dates, the Reports complied as to form in all material respects
with the requirements of the Exchange Act and rules and regulations of the SEC promulgated
thereunder applicable to such Reports.

6. Indemnification by Seller. Seller shall indemnify, hold harmless and defend the
Company from and against, and reimburse it with respect to, any and all losses, damages,
liabilities, costs, and expenses, including without limitation interest, penalties and reasonable
attorneys’ fees (collectively, “Damages”) incurred by it based on or arising out of any breach or
inaccuracy of any representation or warranty of Seller made in this Agreement or any document,
certificate or agreement delivered in accordance with this Agreement.

7. Release of Claims. In consideration of the Redemption Price to be paid to Seller,
and except for the rights created under this Agreement, by executing this Agreement, Seller, on
behalf of Seller and its affiliates, forever releases and discharges, and promises not the sue, the
Company, and each of its directors, officers, stockholders, affiliates, employees, agents,
attorneys and representatives, and any successors in interest, heirs and assigns of any of the
foregoing released persons and entities (collectively, “Releasees”)) from, any and all past,
present or future claims, demands, agreements, obligations or causes of action, whether known or
unknown, direct or contingent, liquidated or unliquidated, matured or unmatured, in law or at
equity, which Seller has or which may later accrue to or be acquired by Seller against the
Releasees, arising from or in any way connected with the Shares, the Redemption, and any matters
associated therewith. Seller executes this Agreement freely and voluntarily and not under duress.
Seller acknowledges that he has been advised to consult with counsel of Seller’s choice about the
legal effects of making the foregoing release.

8. Successors and Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

9. Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.

10. Notices. Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given (a) upon personal
delivery to the party to be notified, (b) upon receipt by the sender of a confirmation of a
successful facsimile transmission, (c) one business day after deposit with a nationally recognized
overnight courier service, prepaid for overnight delivery and addressed as set forth on the
signature page hereto, or (d) three days after deposit with the U.S. Postal Service, postage
prepaid, registered or certified with return receipt requested and addressed to the party to be
notified at the address indicated for such party on the signature page hereto, or at such other
address as such party may designate by ten days’ advance written notice to the other parties.

11. Expenses. If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees,
costs and necessary disbursements in addition to any other relief to which such party may be
entitled.

12. Entire Agreement; Amendments and Waiver. This Agreement constitutes the full and
entire understanding and agreement among the parties with regard to the subject matter hereof. Any
term of this Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or prospectively),
only with the written consent of the Company and Seller.

13. Governing Law. This Agreement shall be governed by and construed under the laws
of the State of Washington, without giving effect to principles of conflicts of law. If any action
or other proceeding shall be brought on or in connection with this Agreement, the venue of such
action shall be in King County, Washington.

14. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

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EXECUTED as of the date first set forth above.

COMPANY:

PACIFIC BIOMETRICS, INC.

	 	 	 
	 	 	By: /s/ Ronald R. Helm

	 	 	 

	 	 	Ronald R. Helm

Chief Executive Officer

	 	 	Address:

	 	 	220 West Harrison Street

Seattle, Washington 98119

Attn: Chief Executive Officer

Fax: (206) 298-9838

	SELLER:
	 	

	 	 	/s/ Terry M. Giles

	 	 	 

	 	 	TERRY M. GILES

	 	 	 
	Address:

	 	

	11002 Wickwood Drive

	Houston, Texas 77024

	Facsimile:

	 	(713) 464-0411

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