Confidential materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. AGREEMENT between SAGEM SA and HEIMANN BIOMETRIC SYSTEMS GmbH 1 / 38 TABLE OF CONTENTS

EX-10.10 2 dex1010.htm EXHIBIT 10.10 EXHIBIT 10.10

Exhibit 10.10

Confidential materials omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote omissions.

AGREEMENT

between

SAGEM SA

and

HEIMANN BIOMETRIC SYSTEMS GmbH

1 / 38

TABLE OF CONTENTS


1	Definitions of terms	4
2	Statement of purpose	5
3	Nature of the Relationship between the PARTIES	6
4	Organizational Structure	7
5	Technical Roles and Responsibilities	7
6	Marketing Roles and Responsibilities	8
7	Orders and Delivery	10
8	Prices	11
9	Ownership and license of software	11
10	Spare parts	12
11	Report of product defects, complaints	12
12	Enhancement of the Products	13
13	Escrow	13
14	Intellectual Property Indemnity	14
15	Limitation of liability	15
16	Effective date and term of AGREEMENT	15
17	Termination	16
18	Applicable Law	17
19	Disputes	17
20	Miscellaneous Provisions	17


Exhibit 1	Non Disclosure Agreement dated 26 November 1996	20
Exhibit 2	HBS price list	23
Exhibit 3	Discount on HBS price list applicable to SAGEM	24
Exhibit 4	SAGEM price list	26
Exhibit 5	Discount on SAGEM’s price list applicable to HBS	27
Exhibit 6	Terms and conditions of sale	28
Exhibit 7	Software license terms and conditions	31
Exhibit 8	SAGEM’s customers	33
Exhibit 9	HBS product technical specification	37
Exhibit 10	Sagem product technical specification	38

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This Agreement is made this day of 1998, by and between,

SAGEM SA, a French corporation having its registered office at 6 avenue d’Iéna, 75116 PARIS, France, represented by Mr Jean Paul JAINSKY, Managing director, Security of the Defense and Security division,

(hereinafter referred to as “SAGEM”),

and

HEIMANN BIOMETRIC SYSTEMS, a German corporation having its registered office at Loebstedter Strasse 107-109, 07749 Jena, Germany, represented by Dr. Bernd Reinhold, President of the Heimann Biometric Systems GmbH,

(hereinafter referred to as “HBS”),

(hereinafter singly referred to as “PARTY”)

(hereinafter collectively referred to as “the PARTIES”)

RECITALS

WHEREAS, SAGEM is a leading designer, manufacturer and supplier of Automated Fingerprint Identification Systems (“AFIS”), with customers worldwide for whom SAGEM and its subsidiary, SAGEM MORPHO, Inc. have installed and maintained AFIS products;

WHEREAS, HBS is one of the leading manufacturers of Livescan Fingerprint imaging equipment and supplied Livescanner technology for the world’s first country-wide Live Scanner Network Installation in Japan;

WHEREAS, the Parties recognize that their technology and experience are complementary; and

WHEREAS, the Parties share a mutual interest and commitment to attaining a leadership position in all relevant markets for livescan fingerprinting products.

NOW, THEREFORE, the Parties agree as follows:

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1	Definitions of terms

For the purposes of this Agreement, the following words or phrases, or a pronoun used in its place, shall have the meanings set forth below.

1.1 AGREEMENT

This Agreement includes all its exhibits.

1.2 FIRST LEVEL MAINTENANCE

means the maintenance support offered to an end-user by a help desk facility.

1.3 GSP

means Gateway Service Provider, a SAGEM process which acts as a communication interface between input and processing devices.

1.4 ILS² or INTEGRATED LIVE SCANNER SYSTEM

means the LBS developed by SAGEM that incorporates: (a) the HBS-proprietary LSS and drivers; (b) the SAGEM-proprietary APPLICATION SOFTWARE, SAGEM-proprietary image processing functions such as: the SAGEM Coder, the SAGEM Sequence check module and the SAGEM Matcher; (c) a high resolution printing solution.

1.5 IQS

means Image Quality Standard and it is the standard proposed by the FBI, US Federal Bureau of Investigation that defines the requirement for fingerprint images to be used within an Automated Fingerprint Identification Systems.

1.6 LBS

means Live Booking Station and represents the generic product that allows to capture fingerprint and/or palmprint images, alphanumerical data and other additional information on a subject for the purpose of case management such as in police application. LBS incorporates: (a) an optical block and drivers to capture fingerprint and/or palmprint images; (b) an application software used to manage the process of fingerprint image capture and to provide a man-machine interface, image processing functions such as coding, and matching of fingerprints; (c) a high resolution printing solution; (d) communication functions.

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SAGEM is developing a LBS product known by the commercial name of Integrated Live Scan System, or ILS2.

1.7 LSS

means the Live Scanner System designed by HBS that incorporates the optical block and the HBS-proprietary software modules that perform object-oriented classes for hardware interface, communication and service libraries developed by HBS that enables the direct digital capture of fingerprint and palmprint images specific to each enrollee.

1.8 NGA

means the SAGEM-proprietary New Generation AFIS.

1.9 SAGEM APPLICATION SOFTWARE

means the software developed by SAGEM that provides the man-machine interface, workflow manager, database, screens, printer management modules, communications and network interfaces, and other software modules used to control the operation of the SAGEM’s LBS and its interfaces to external systems. The SAGEM APPLICATION SOFTWARE may include a SAGEM-proprietary GSP module.

1.10 SECOND LEVEL MAINTENANCE

means an on-site repair or replacement of a failed component by the selling company or its subcontractor.

1.11 THIRD-LEVEL MAINTENANCE

means factory or depot repair of a failed component.

2	Statement of purpose

2.1

PARTIES’ Goals

HBS as hardware manufacturer wants to sell live scanner equipment to integrators to develop its market share. To achieve that goal, HBS should develop state-of-the-art LSS and facilitate their integration into systems by their customers.

SAGEM as integrator wants to sell systems and peripheral equipment to end-user customers and system integrators to develop its market share. To achieve that goal, SAGEM should develop state-of-the-art live booking station to provide existing customers of Morpho AFIS and all other end-users and system integrators.

The PARTIES recognize that their objectives as their technologies and experiences are

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complementary and that they will benefit from a collaboration to achieve their target and even reach higher goals than by acting alone.

2.2

PARTIES’ interests in the collaboration

HBS wants to sell to SAGEM live scan equipment to be incorporated into a LBS. To maintain and improve its OEM offer to its customers (i.e. integrators) HBS wants to reach state-of-the-art technology and provide its customers with easy-to-integrate equipment.

SAGEM wants to purchase from HBS equipment to be incorporated into a LBS as easily as possible. In addition, to bring to and to maintain for its customers the state-of-the-art technology to capture fingerprint and palmprint and associated information SAGEM wants to improve its understanding of the technology and its evolution to anticipate customer needs.

By collaborating, the PARTIES will jointly benefit from sharing their experience, optimize the definition of both sides’ products and minimize the time to integration. From this long-term relationship both PARTIES will secure their investment on the technology, share information on the market and improve their understanding of the market evolution.

HBS will optimize its product interface with integrators; integrate SAGEM software modules to bring intelligence to its hardware; and benefit from a privilege access to Morpho-AFIS customers.

SAGEM will optimize optical block and other hardware integration; improve its understanding of the technology and provide its customers with solution of better cost performance ratio.

2.3

Collaboration contents

HBS shall develop a new LSS commonly defined with SAGEM to reach the market’s requirement. HBS shall also develop a IQS compliant printing service.

SAGEM shall develop SAGEM APPLICATION SOFTWARE to integrate the new HBS LSS to design a new product, ILS², which should meet the highest standard of the live booking station market. SAGEM shall market the ILS² toward end-users or system integrators and especially Morpho-AFIS customers.

HBS shall support SAGEM’s effort to integrate the newly developed LSS and printing solution.

HBS shall sell to SAGEM and its subsidiary SAGEM MORPHO Inc., under the terms and conditions contained in this AGREEMENT, the newly developed LSS and printing solution.

SAGEM shall buy from HBS the newly developed LSS, to promote and sell the new Live Booking Station, ILS². SAGEM shall market, sell and support under its own responsibility this product.

SAGEM shall sell to HBS, under the terms and conditions contained in this

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AGREEMENT, the newly developed SAGEM APPLICATION SOFTWARE as well as software function modules and support HBS’s effort to sell LBS equipment that integrates SAGEM APPLICATION SOFTWARE.

To support HBS sales, SAGEM shall sell to HBS the customization of the SAGEM APPLICATION SOFTWARE so that HBS can provide customers with adapted solution.

The PARTIES shall have a common marketing activity to maximize the sale of the LBS and to avoid as far as possible inefficient competition between the PARTIES.

3	Nature of the Relationship between the PARTIES

The PARTIES agree that the AGREEMENT does not alter the PARTIES’ respective individual business organizations. The PARTIES agree that their rights and obligations under this AGREEMENT are strictly limited to those rights and responsibilities set forth in this AGREEMENT. To that end, the PARTIES may continue the development, manufacture, marketing and sale of their respective items and services.

SAGEM and HBS shall act as independent contractors in the performance of this AGREEMENT, and neither PARTY shall act as an agent for, or partner, of the other PARTY without prior written consent of the other PARTY. Nothing in this AGREEMENT shall be deemed to constructively create, to give effect to, or otherwise to recognize a joint venture, teaming agreement, partnership or formal business entity of any kind, and the rights and obligations of the PARTIES shall be limited to those expressly set forth herein. Nothing contained in this AGREEMENT shall be construed as providing for the sharing of profits or losses arising out of the efforts of either or both PARTIES.

4	Organizational Structure

In order to accomplish the goals identified in the section 2 of this AGREEMENT, the PARTIES shall apply their complementary expertise, experience and capabilities within the following organizational structure.

4.1

Steering Committee.

The PARTIES shall establish a Steering Committee, comprised of senior representatives from SAGEM and HBS. The Steering Committee will direct the JTG.

4.2

Joint Task Group.

The PARTIES shall establish a Joint Task Group (“JTG”). The JTG will be comprised of personnel from each of the PARTIES. Each PARTY will designate one representative to the JTG as that PARTY’s Senior Representative to the JTG.

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5	Technical Roles and Responsibilities

The PARTIES agree to allocate their respective technical roles and responsibilities as follows:

5.1

Joint Responsibilities.

The PARTIES agree that they shall be jointly responsible for the following:

•

New LBS requirements definition;

•

Printing service requirement definition;

•

determining the structure of software modules running on the LBS;

•

developing and executing a hardware and software certification procedure for the LBS;

5.2

SAGEM Responsibilities.

The PARTIES agree that SAGEM shall be responsible for:

•

developing LBS SAGEM APPLICATION SOFTWARE;

•

developing of all necessary communication and network interfaces;

•

maintaining a world-wide organization to support users of the LBS including both FIRST- and SECOND-LEVEL MAINTENANCE of the ILS².

•

developing a ILS² User Guide, Customization Guide, Systems Administrator Guide, Interface Developer’s Guide, and End-User Training Guide and course curricula;

•

marketing and selling of the ILS² world-wide.

5.3

HBS Responsibilities.

The PARTIES agree that HBS shall be responsible for:

•

developing LBS hardware, including the LSS and a ruggedized cabinet;

•

developing an upgraded LSS, to meet NIST standard requirements.

•

developing an upgraded LSS software compatible with the structure of the SAGEM APPLICATION SOFTWARE;

•

obtaining FBI Image Quality Standards (IQS) certification at least at the level of IQS Appendix G;

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•

obtaining the CE mark and UL certification for the complete LBS;

•

developing documentation for a Maintenance Guide for the LSS;

•

developing a high resolution printing solution to achieve IQS true gray scale printing;

•

providing THIRD LEVEL MAINTENANCE on the LSS component and cabinet.

6	Marketing Roles and Responsibilities

6.1

SAGEM’s marketing and sales activities

The ILS² is a SAGEM’s product. Except as set forth elsewhere in this AGREEMENT, SAGEM shall have an unrestricted and exclusive right to market and to sell the ILS², either directly or through its authorized reseller(s).

However both PARTIES consider it is their best interest to collaborate on the marketing activity. The common goal of the PARTIES shall be to attain the greatest possible number of LBS sales and to avoid useless competition between the PARTIES.

To this end, SAGEM will exert its best efforts to promote and sell the LBS in all relevant markets regardless of size or scope of the opportunity.

SAGEM may use Heimann Systems GmbH, HBS mother company, as a distribution channel. If this possibility is used, SAGEM and Heimann Systems GmbH will sign a separated distribution contract.

6.2

HBS marketing and sales activities

The PARTIES recognize that, as an equipment manufacturer, HBS has the unrestricted rights to continue to sell its existing and future LSS as a component of integrated systems developed by third parties.

HBS is fully entitle to promote, demonstrate and sell the LBS that incorporates SAGEM APPLICATION SOFTWARE when compatible with its current activity of equipment manufacturer with the restriction of territories as set below and when the sale is not going against SAGEM’s interest.

To this end, SAGEM will sell to HBS licenses of the SAGEM APPLICATION SOFTWARE and/or software modules such as sequence check, image compression, etc… with licenses allowing HBS to sublicense to end users and to integrators with the restriction as set here under.

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(a)

For end user customers, SAGEM agree to sell to HBS, a license of the SAGEM APPLICATION SOFTWARE including sublicensing to a third party.

(b)

For integrators, SAGEM agree to negotiate on a case-by-case basis the sale of licenses of the SAGEM APPLICATION SOFTWARE and/or software modules with authorization to sublicense. SAGEM is entitled to request from HBS to limit the sales contract with its customer to a peculiar end-user.

The general terms and conditions and selling price applicable to those sales are described in the Exhibit 6.

6.3

Exclusivity and common marketing activities

6.3.1 Markets and opportunities

6.3.1.1 In consideration of SAGEM and SAGEM MORPHO Inc.’s existing customers, HBS agrees not to compete against SAGEM as a prime contractor or a subcontractor in providing to SAGEM’s (or SAGEM MORPHO Inc.) customers a LBS. A list of SAGEM’s and SAGEM MORPHO Inc.’s existing AFIS customers is provided in the Exhibit 8. This list shall be updated by SAGEM and transmitted to HBS during quarterly marketing meetings.

6.3.1.2 In consideration of HBS’s existing agreement with Mitsui & Co. Ltd. and Mitsui’s subsidiaries in Asia and Australia, the PARTIES agree to negotiate with Mitsui & Co. Ltd. the possibility of a joint marketing strategy specific to the Asian and Australian markets.

6.3.1.3 If HBS want to be directly involved in promoting its technology toward a end-user and the sale is combined with the sale of an AFIS, HBS shall offer SAGEM a right of first refusal to be its partner as AFIS provider. SAGEM shall provide a written answer to HBS within 20 days.

6.3.1.4 However HBS shall not be precluded from selling at any time its equipment to any third party under OEM agreement.

6.3.2 Common marketing activities

The PARTIES shall meet on a quarterly basis to determine a joint strategy for promoting, pricing, and positioning the LBS within identified markets and market segments. As an outcome of these meetings, the PARTIES shall jointly:

(a)

Establish and respect LBS pricing policy.

(b)

Develop a sales forecast.

(c)

Develop a manufacturing production forecast.

(d)

Develop a global Marketing Plan.

(e)

Coordinate their individual development of relevant marketing literature such as brochures, specification sheets, video presentations, and other printed and

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electronic information resources describing the LBS, as necessary to fulfill the purposes of this AGREEMENT.

7	Orders and Delivery

7.1

From SAGEM to HBS

Products purchase orders shall be sent to SAGEM SA, Identification Systems Department, 61 rue Salvador Allende 92151 NANTERRE Cedex France. Products listed on the Exhibit 4 shall have a standard lead-time of four (4) weeks. For products subject to acceptance by SAGEM regarding HBS customer, SAGEM will issue an acceptation document within ten (10) calendar days from receipt of each purchase order.

For products that require customization of the software, a first meeting to define the end user requirement should be held within fifteen (15) calendar days from the date when SAGEM receives a specification document from HBS describing the work to be done. After this first meeting SAGEM shall issue within a reasonable time a commercial proposal for the customization to be done.

Delivery and price is defined as Ex works SAGEM SA premises in France, according to the Incoterms 1990 and shall exclude transport costs and the V.A.T. payable under the applicable law.

7.2

From HBS to SAGEM

Products purchase orders shall be sent to Heimann Biometric Systems GmbH, Löbstedter Str. 107-109, D-07749 Jena/Germany. Products listed on Exhibit 2 have a standard lead-time of four (4) weeks by an order to 10 pieces. By an order more than 10 pieces the delivery time will be negotiated between the PARTIES.

For products that require customized software or hardware, a first meeting to define the end user requirement should be held within fifteen (15) calendar days from the date when HBS receives a specification document from SAGEM describing the work to be done. After this first meeting HBS shall issue within a reasonable time a commercial proposal for the customization to be done.

Delivery and prices shall be Ex Works HBS/Jena (Ex Works Rittal/Werk Rittershausen for cabinets) according to the Incoterms 1990 and shall exclude transport costs and the V.A.T. payable under the applicable law.

8	Prices

8.1

General rules

This paragraph can be applied for sales from SAGEM to HBS as well as from HBS to

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SAGEM.

Terms and Conditions of the purchase are described in the Exhibit 6 and terms and conditions to license software are described in the Exhibit 7.

Prices for SAGEM to purchase to HBS are in Deutsche Mark (DM) as set forth in the Exhibit 2.

Prices for HBS to purchase to SAGEM are in French Franc (FRF) as set forth in the Exhibit 4.

Both PARTIES agree to switch their price list and payment to Euro at the beginning of 1999 when Euro becomes applicable in both countries and at the official exchange rate.

Same prices and conditions are applicable to direct orders from SAGEM’s subsidiary, SAGEM Morpho Inc., Tacoma, Washington. The cumulative effect defined in the Exhibit 3 should apply by adding orders placed by SAGEM and SAGEM Morpho Inc.

Prices defined in the Exhibits’ price lists may be modified from time to time with ninety (90) days advanced written notice from the selling PARTY. Such increases, if any, shall not exceed 10 % (ten percent) in any year. In the event of any price increase, the selling PARTY will honor all orders received and accepted prior to the effective date of change.

8.2

Most preferred customer clause

The PARTIES agree that all prices charged to the purchasing PARTY under this AGREEMENT shall be no less favorable than the lowest prices charged by the selling PARTY to other third parties for products in like quantities and with the same or substantially the same functionalities.

9	Ownership and license of software

9.1 HBS shall own all right, title and interest to the HBS software listed in Exhibit 2, subject to the license granted to SAGEM in article 9.3 below. SAGEM shall own all right, title and interest to the SAGEM software listed in Exhibit 4, subject to the license granted to HBS in Section 9.2 below.

9.2 HBS is hereby granted by SAGEM a non-exclusive license to the SAGEM APPLICATION SOFTWARE and software modules described in Exhibit 4 for use only on LBS under the terms of the standard license form which is attached in Exhibit 7 to :

(a)

to sublicense to end users and/or systems integrators, and

(b)

to use for assembling a LBS, and

(c)

for demonstration purposes.

HBS shall have no right to modify SAGEM’s software. HBS further agrees that HBS

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has no other rights to the software other than the license rights to be provided thereunder. When HBS sells or licenses any products, HBS must either sublicense SAGEM’s software to the customer under substantially the same conditions and limitations as set forth in the standard form license agreement attached in Exhibit 7 such customer to execute a license with SAGEM using such form.

9.3 SAGEM is hereby granted by HBS a non-exclusive license to the HBS software described in Exhibit 2 for use only on LBS under the terms of the standard license form which is attached in Exhibit 7 to:

(a)

to sublicense to end users and/or systems integrators, and

(b)

to use for assembling a LBS, and

(c)

for demonstration purposes.

SAGEM shall have no right to modify HBS’s software. SAGEM further agrees that SAGEM has no other rights to the software other than the license rights to be provided thereunder. When SAGEM sells or licenses any products, SAGEM must either sublicense HBS’s software to the customer under substantially the same conditions and limitations as set forth in the standard form license agreement attached in Exhibit 7 or require such customer to execute a license with HBS using such form.

9.4 Either PARTY undertakes to inform the other PARTY no later than at the end of each quarter of any sublicenses of the other PARTY software granted to third parties during the previous quarter.

10	Spare parts

10.1 HBS agrees to supply to SAGEM all replacement or replacement equivalent spare parts for the products supplied under this AGREEMENT for a period of at least five (5) years from the date the last product unit is delivered to SAGEM. The list of spare parts, including prices and applicable discounts is set forth in Exhibit 2.

10.2 HBS shall provide spare parts ordered by SAGEM and/or its subsidiary SAGEM MORPHO Inc., and such order is accepted by HBS, within thirty (30) days of such order.

10.3 HBS shall repair, return and have delivered to SAGEM and/or its subsidiary SAGEM MORPHO Inc. any parts sent by SAGEM and/or its subsidiary SAGEM MORPHO Inc. for repair within twenty (20) days of receipt of the said parts in HBS’s premises. Upon becoming aware of the replacement of a spare part into the LBS, HBS may also send in advance a replacement part prior to receiving the defective one from SAGEM instead of repairing. SAGEM shall pay the cost and be responsible for the transportation of the spare parts to HBS premises while HBS shall bear the costs and be responsible for the transportation of repaired parts to SAGEM or SAGEM’s customers site.

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11	Report of product defects, complaints

Upon discovering or being notified of any defects relating to the LBS or upon receiving any complaints from end users, the receiving PARTY shall promptly provide written notification to the other PARTY specifying the nature and severity of the defect or complaint and what measures, if any, the receiving PARTY has taken with respect to such defect or complaint.

12	Enhancement of the Products

12.1

Disclosure.

The PARTIES shall meet quarterly to discuss enhancements to LBS technology developed or under development by each PARTY. Each PARTY shall have appropriate personnel attend such meetings to accomplish their purpose. Upon request of either PARTY, such meetings shall be augmented by the provision of additional written or oral information related to such shared enhancements. All information not generally known to the public that is discussed at such meetings or provided with respect to such enhancements shall be deemed confidential information of the discloser. Neither PARTY shall have any license or other rights to any shared enhancement developed by or for the other PARTY or its affiliates unless and until the same is made available to such PARTY pursuant to the next paragraph.

12.2

Licensing.

A PARTY shall make each shared enhancement available to the other PARTY under a license on or before the date that the PARTY or any of its affiliates distributes such enhancement to any third party. Neither PARTY shall have any obligation to make any other enhancement available to the other PARTY under this AGREEMENT.

12.3

Accommodation of Patent Application Requirements.

If the PARTY which owns the intellectual property right in any enhancement notifies the other PARTY that it intends to file patent application(s) with respect to such shared enhancement and thereafter diligently pursues such patents, the other PARTY will refrain from using or distributing such shared enhancement (or any portion thereof) in a manner which would adversely affect the availability of such patents.

13	Escrow

13.1 Each PARTY shall provide for deposit in escrow all definition and fabrication files of the hardware listed in Exhibit 2 and the source code of any software listed in Exhibits 2 and 4 necessary to produce, service and maintain the hardware and the software to be used with the other PARTY’s supplied elements to form a LBS (“Escrow Deposit”). Each PARTY shall provide its Escrow Deposit within thirty days of the Date of signature of the Escrow agreement to the [THIRD-PARTY ESCROW COMPANY] which shall act as the escrow agent. Each PARTY agrees that its Escrow Deposit may be reviewed by a third party who is

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subject to a confidentiality agreement in order to determine that the Escrow Deposit contains all data necessary to either build the LBS if it is hardware or generate new binary copies of the software. Each Party shall update its Escrow Deposit as necessary to reflect any revision in the technical data or source code on deposit within thirty days of such revision. For each Escrow Deposit, the PARTY shall obtain a receipt.

The Escrow Agent shall release or disclose a PARTY’s Escrow Deposit to the other PARTY only in the following circumstances: (1) material non-performance by a PARTY of its obligations under this AGREEMENT provided that the PARTY fails to cure this nonperformance within sixty days of receipt of a cure notice from the PARTY (or if such breach cannot be reasonably cured within such sixty day period, the defaulting PARTY has not commenced efforts to cure such breach within such period); or (2) insolvency, dissolution or bankruptcy proceedings are instituted against the PARTY.

In the event that a PARTY rightfully obtains possession of the Escrow Deposit of the other PARTY in accordance with the release conditions listed hereabove, this PARTY may use the Escrow Deposit solely to perform services and deliver products in accordance with the AGREEMENT. Any other use of the Escrow Deposit is strictly prohibited. This PARTY shall exercise the same degree of care to avoid publication, dissemination and disclosure of the Escrow Deposit of the other PARTY to third parties as it does with its own information which it does not wish to have published, disseminated or disclosed to others.

13.2 Escrow triggers. It is expressly understood by the PARTIES hereto that a failure on the part of one PARTY to perform the obligations described in Sections 16.4 and 17.3 shall trigger release of all escrowed material belonging to that PARTY to the other PARTY.)

13.3 HBS and SAGEM shall sign a separate Escrow agreement on the basis of the provisions of Sections 13.1 and 13.2 hereunder within two (2) months after the EFFECTIVE DATE of the AGREEMENT.

14	Intellectual Property Indemnity

14.1

Indemnification by HBS:

14.1.1 Except as set forth above, HBS shall defend, indemnify and hold harmless SAGEM and SAGEM’s customers from any and all claims, demands, proceedings, actions, liabilities and costs resulting from any alleged infringement of patents, copyrights and other intellectual property rights owned by third parties by SAGEM’s purchase or resale of any HBS products or HBS software purchased or licensed by SAGEM from HBS under this AGREEMENT. SAGEM shall give HBS notice of any such claim made against SAGEM promptly after SAGEM learns of the same, tender to HBS control over the settlement or defense (at HBS’s defense) any such claim, demand, proceeding or action and assist HBS in doing so (at HBS’s expense) upon reasonable request by HBS.

14.1.2 If, as a result of such claim, demand, proceeding or action, SAGEM or SAGEM’s customers shall be enjoined from selling or using the HBS products or software, HBS shall at its option, either (i) procure for SAGEM the right to sell or use such products or software, (ii) modify such products or software keeping the same functional specifications, so that they become non-infringing, or (iii) provide to SAGEM non-infringing products or

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software meeting the same functional specifications. If none of the foregoing alternatives is available notwithstanding HBS’s best efforts to the contrary, HBS shall refund to SAGEM the amount paid by SAGEM for the infringing product or software.

14.1.3 The foregoing states the entire liability of HBS for infringement of intellectual property rights of third parties, and in particular, HBS has no obligation to indemnify SAGEM for infringement of patents resulting from alterations of the HBS products not approved by HBS or combinations of the HBS products with other products not authorized by HBS where such infringement would not exist absent such combination. THIS PROVISION IS STATED IN LIEU OF ANY OTHER EXPRESSED, IMPLIED, OR STATUTORY WARRANTY AGAINST INFRINGEMENT AND SHALL BE THE SOLE AND EXCLUSIVE REMEDY FOR INTELLECTUAL PROPERTY INFRINGEMENT OF ANY KIND OF HBS PRODUCTS OR SOFTWARE.

14.2

Indemnification by SAGEM :

14.2.1 Except as set forth above, SAGEM shall defend, indemnify and hold harmless HBS and HBS’s customers from any and all claims, demands, proceedings, actions, liabilities and costs resulting from any alleged infringement of patents, copyrights and other intellectual property rights owned by third parties by HBS’s purchase or resale of any SAGEM products or SAGEM software purchased or licensed by HBS from SAGEM under this AGREEMENT. HBS shall give SAGEM notice of any such claim made against HBS promptly after HBS learns of the same, tender to SAGEM control over the settlement or defense (at SAGEM’s defense) any such claim, demand, proceeding or action and assist SAGEM in doing so (at SAGEM’s expense) upon reasonable request by SAGEM.

14.2.2 If, as a result of such claim, demand, proceeding or action, HBS or HBS’s customers shall be enjoined from selling or using the SAGEM products or software, SAGEM shall at its option, either (i) procure for HBS the right to sell or use such products or software, (ii) modify such products or software keeping the same functional specifications, so that they become non-infringing, or (iii) provide to HBS non-infringing products or software meeting the same functional specifications. If none of the foregoing alternatives is available notwithstanding SAGEM’s best efforts to the contrary, SAGEM shall refund to HBS the amount paid by HBS for the infringing product or software.

14.2.3 The foregoing states the entire liability of SAGEM for infringement of intellectual property rights of third parties, and in particular, SAGEM has no obligation to indemnify HBS for infringement of patents resulting from alterations of the SAGEM products not approved by SAGEM or combinations of the SAGEM products with other products not authorized by SAGEM where such infringement would not exist absent such combination. THIS PROVISION IS STATED IN LIEU OF ANY OTHER EXPRESSED, IMPLIED, OR STATUTORY WARRANTY AGAINST INFRINGEMENT AND SHALL BE THE SOLE AND EXCLUSIVE REMEDY FOR INTELLECTUAL PROPERTY INFRINGEMENT OF ANY KIND OF SAGEM’s PRODUCTS OR SOFTWARE.

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15	Limitation of liability

UNDER NO CIRCUMSTANCES WILL EITHER PARTY HAVE ANY LIABILITY FOR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF PROFITS, LOSS OF USE OR LOSS OF BUSINESS. IN NO EVENT WILL THE LIABILITY OF SAGEM TO HBS OR THE LIABILITY OF HBS TO SAGEM UNDER THIS AGREEMENT EXCEED THE VALUE OF THE PRODUCTS ORDERED DURING THE TERM OF THE AGREEMENT, EXCEPT IN CASE OF DEATH OR PERSONAL INJURY WHERE NO LIMITATION OF LIABILITY SHALL APPLY.

16	Effective date and term of AGREEMENT

16.1

Effective date

The effective date of this AGREEMENT (“the EFFECTIVE DATE”) shall be the date when this AGREEMENT has been executed by both PARTIES.

16.2

Term

The term of this AGREEMENT shall commence as of the EFFECTIVE DATE and shall remain valid during 5 years unless extended in accordance with article 16.3 of this AGREEMENT.

16.3

Extension of the term

The AGREEMENT shall then automatically renew for successive one year periods unless a PARTY notifies the other PARTY of its intention not to renew the AGREEMENT with a six month written notice prior to the date of renewal.

16.4

Continued access to technology

Should either PARTY elect not to renew the AGREEMENT as provided in article 16.3 hereabove, then the canceling PARTY shall offer the other PARTY the right to continue buying the technology and components necessary to build the LBS for a period of at least 3 years from the date of termination of this AGREEMENT at the lowest price previously offered to any customer of the canceling PARTY.

17	Termination

17.1

By default

If there is a material breach of this AGREEMENT by a PARTY that is not cured within sixty (60) days after the non-defaulting PARTY gives the defaulting PARTY written notice of such material breach (or if such breach cannot be reasonably cured within such sixty

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(60) day period and, the defaulting PARTY has not commenced efforts to cure such breach within such period), then the non-defaulting PARTY may terminate this AGREEMENT immediately by written notice to the defaulting PARTY. Except as otherwise provided in this AGREEMENT, upon such termination the PARTIES’ performance obligations shall cease, but the PARTIES shall not be released from the duty to perform their obligations up to the date of termination.

17.2

Effect of termination or expiration

Upon termination or expiration of this AGREEMENT, each PARTY shall promptly return to the Disclosing PARTY all disclosed Confidential Information.

Upon termination or expiration of this AGREEMENT for any cause whatsoever, all sublicenses of HBS software granted by SAGEM and all sublicenses of SAGEM’s software granted by HBS to customers will remain in full force.

17.3

Continuing obligation

After termination of this AGREEMENT, each PARTY shall continue to provide all technical assistance, spare parts and components, necessary for the other PARTY to comply with all commitments existing at the time of termination.

Should this AGREEMENT terminate due to reasons of breach by one of the PARTIES, the non-breaching PARTY shall, for a period of not less than the term of this AGREEMENT, have the right to continue selling LBS and/or LBS’s components included in that AGREEMENT and shall be entitled to receive, from the breaching PARTY, all components necessary to build, install, and maintain the LBS.

18	Applicable Law

This AGREEMENT shall be governed by the Federal laws of Switzerland.

19	Disputes

19.1 The PARTIES shall use their best efforts to resolve all disputes between them at the lowest level and on an amicable basis. To that end, the PARTIES agree that disputes shall first be presented to each PARTY’s Senior Representative to the JTG. The dispute must be so presented within 5 (five) days after the dispute arises. If the Senior Representatives are unable to resolve the dispute within 5 (five) days (or such other time as the Senior Representatives agree), the Senior Representatives shall present the dispute to the Steering Committee.

19.2 If the Steering Committee is unable to resolve the dispute within 14 (fourteen) days, the Steering Committee shall present the issue to each PARTY’s Chief Executive Officer for resolution.

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19.3 If the Chief Executive Officers are unable to resolve the dispute within 30 (thirty) days, the dispute shall be resolved by arbitration under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with the said rules. All arbitration proceedings shall take place in Geneva, Switzerland and shall be conducted in the English language. Any resulting arbitration award shall be final and binding on the PARTIES.

20	Miscellaneous Provisions

20.1

Force Majeure.

Neither PARTY shall be responsible for any loss, delay, or breach in delivery or performance of any obligations under this AGREEMENT (other than an obligation to make any payment of money) caused by: third parties; governmental regulations, controls, directions, orders, or other acts; outbreak of a state of emergency, acts of God or the public enemy, war, hostilities, civil commotion, riots, freight or trade embargoes, epidemics, perils of the sea, or other natural casualties; fires, floods, explosions, or serious accidents; strikes, walk-outs, or other labor troubles causing cessation, slow-down, or other interruption of work; communication line failures; either PARTY’s inability, after due and timely diligence, to procure materials, parts, equipment, or services; or any other cause beyond the affected PARTY’s control or not occasioned by the affected PARTY’s fault or negligence.

20.2

Waiver.

The failure by either PARTY to enforce any default or right reserved to it, or to require performance of any of the terms, covenants, or provisions of this AGREEMENT by the other PARTY at the time designated shall not be construed as a waiver of any default or right to which the other PARTY is entitled, nor shall it in any way affect the right of the PARTY to enforce the terms, covenants, provisions, or rights thereafter.

20.3

Entire Agreement.

This AGREEMENT constitutes the entire agreement of the PARTIES on the subject matter hereof. No waiver or amendment of any provision of this AGREEMENT shall be valid unless made in writing and executed by both PARTIES. This AGREEMENT supersedes any and all prior written and oral agreements between the PARTIES except as set forth in this AGREEMENT and except more specifically the Non Disclosure Agreement dated 26/11/96 which shall remain in full force and effect.

20.4

Successors and Assigns.

Neither PARTY will assign this AGREEMENT or any of its rights, title or interests under this AGREEMENT, by operation of law or otherwise without the prior written consent of the other. However, each PARTY hereby consents to any assignment of all of the other PARTY’s right, title and interests under this AGREEMENT to a subsidiary of the assigning PARTY; provided such subsidiary signs a document assuming all of the obligations of the

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assigning PARTY under this AGREEMENT and agreeing to comply with the terms set forth in this AGREEMENT and that a copy of such document is provided to the non-assigning PARTY. No assignment by either PARTY, with or without the consent of the other PARTY, will relieve or release the PARTY making the assignment from any of its obligations under this AGREEMENT. Subject to the foregoing, this AGREEMENT will be binding upon, inure to the benefit of, and be enforceable by each of the PARTIES and their respective successors and assigns.

20.5

Notice to PARTIES.

All notices and demands of any kind which a PARTY may serve upon another PARTY under this AGREEMENT shall be served by personal service, or by leaving the notice or demand at the address set forth below, or by forwarding a copy thereof by first class mail, postage prepaid, or facsimile, addressed as follows:


To SAGEM:		SAGEM SA
		Department Identification Systems
		61 rue Salvador Allende
		92751 Nanterre Cedex
		France

		Attn: The Managing director of the department

To HBS:		Heimann Biometric Systems GmbH
		Loebstedter Strasse 107-109
		07749 Jena
		Germany

		Attn: The President

or to such other address as may be specified from time to time by the relevant PARTY. Service shall be deemed complete when the PARTY to whom it is addressed receives the notice or demand.

20.6

Unenforceable Provisions.

If any provision of the AGREEMENT shall be declared void or unenforceable by any court or administrative body of competent jurisdiction, the validity of any other provisions that can be given effect shall not be affected thereby.

20.7

Counterparts.

This AGREEMENT may be executed by the PARTIES in counterparts, each of which will be deemed an original, but both of which together will constitute one and the same instrument.

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20.8

No Partnership, Franchise or Agency.

This AGREEMENT will not be interpreted or construed to create any partnership, franchise or agency relationship between the PARTIES or to impose any partnership, franchise or agency obligation or liability upon either PARTY. Without limiting the generality of the foregoing, neither PARTY will have, by virtue of this AGREEMENT, any right, power or authority to act as the agent of, enter into any contract, make any representation or warranty, or incur any obligation or liability of the other PARTY.

20.9

English Language.

The English language shall be used in this AGREEMENT, including any amendments hereto, and in other documents exchanged between the PARTIES in performance of this AGREEMENT.

20.10

Confidentiality.

Any disclosure of confidential information between the PARTIES shall take place in the framework and in accordance with the Non Disclosure agreement signed on 26 November 1996 between the PARTIES attached in Exhibit 1 and any amendment to it.

The PARTIES agree that the content of this AGREEMENT is confidential.

20.11

Survival.

Articles 9, 12, 16.4, 17.3, 19.3 of this AGREEMENT shall survive the termination or expiration of this AGREEMENT.

IN WITNESS WHEREOF, the PARTIES have duly entered into this AGREEMENT as of the date first above written.


For HEIMANN BIOMETRIC SYSTEMS GmbH				For SAGEM SA

DR. BERND REINHOLD				JEAN PAUL JAINSKY


Signature				Signature

President of the Heimann Biometric Systems GmbH				Managing Director, Security of the Defense and Security division

30-12-1998
Date				Date

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Exhibit 1 Non Disclosure Agreement dated 26 November 1996

NON DISCLOSURE AGREEMENT

This Agreement is entered into as of this 26 November 1996 between

SAGEM SA, a public limited liability company existing and organised under the laws of France, whose registered office is at 6, avenue d’Iéna, 75783 PARIS Cedex 16, France, represented by Mr. Daniel DUPUY acting through its Defence and Security Division, hereafter referred to as “SAGEM”, of the first part,

and,

RJM IMAGE TECHNOLOGY, a German Company with its registered office at RJM Image Technology Löbstedterstrasse 107-109, D-07749 Jena, GERMANY (hereinafter designated as RJM), represented by Mr Bernd REINHOLD, of the second part.

SAGEM S.A. and RJM may exchange terchnical, commercial and financial information related to a Fingerprint technology being their respective proprietary or confidential information, in order to investigate potential avenues of cooperation.

Consequently, the parties desire to settle the conditions of the disclosure of the confidential information and to define the rules relating to its use and protection.

NOW THEREFORE, RJM and SAGEM agree as follows :

1 - PURPOSE

The purpose of this Agreement is to settle the conditions of the disclosure of the confidential information and to define the rules relating to its use and protection.

However, each party shall remain free to disclose or not confidential information to the other party and shall have no obligation to enter into the contemplated co-operation.

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2 - DEFINITION OF THE CONFIDENTIAL INFORMATION

The undertakings and obligations under this Agreement shall apply to any information which is disclosed by either party to the other party and identified as confidential by the disclosing party.

To be considered as confidential information, all written information must be marked with the word “CONFIDENTIAL” or with a word of similar import.

All confidential information disclosed orally or visually during meetings, shall be identified as confidential at the time of disclosure and shall be confirmed as such in writing by the disclosing party within 30 days of the disclosure.

3 - LIMITATION OF THE CONFIDENTIALITY

The undertakings and obligations under this Agreement shall not apply to any information which:

•

is in the public domain at the time of disclosure or after the disclosure, other than through an act or negligence of the receiving party,

•

is already in the possession of the receiving party as a result of its own research, provided that the receiving party can prove thereof,

•

has been lawfully received from any third party.

4 - RIGHTS AND OBLIGATIONS

4.1

Each party undertakes not to use the confidential information disclosed by the other party other than for the purpose of this Agreement.

The receiving party undertakes not to make copy of the confidential information, without the prior written approval of the other party.

However, this approval shall not be necessary for copies, reproductions or duplications assigned to an internal use, for the purpose set forth above.

4.2

Each party undertakes to take all the measures for the protection of the confidential information of the other party and to prevent disclosure to any third party. Any third party means any individual or legal entity other than RJM, SAGEM AND the RHEINMETALL INDUSTRIE AG personnel which have a need for knowledge thereof for the purpose mentioned in the preamble hereof.

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However, each party shall have the right to disclose said information to its employees who need to know this information for the purpose of this Agreement. Such employees shall be notified of the confidential nature of such information and the receiving party shall have its employees comply with this non-disclosure agreement.

4.3

Each party shall remain the sole owner of the confidential information disclosed to the other party under this Agreement.

No license or other right, express or implied, is granted by the disclosing party to the receiving party pursuant to this Agreement under any patent right, copyright or other intellectual property right.

The receiving party undertakes not to obtain intellectual and/or industrial property rights on the basis of the confidential information.

5 - EXCHANGE OF CONFIDENTIAL INFORMATION

For the exchange of the confidential information, the documents have to be sent:

•

To SAGEM

SAGEM SA

PARIS LA DÉFENSE

61, rue Salvador Allende

92751 NANTERRE CEDEX

FRANCE

Attention M. Bernard DIDIER

Tel. : 33 (1) 40 70 88 33

Fax : 33 (1) 40 70 68 60

•

To RJM

Löbstedterstrasse 107-109

D-07749 Jena

ALLEMAGNE

Attention Mr. Bernd REINHOLD

Tel. : 49 (36 41) 67 65 12

Fax : 49 (36 41) 67 65 10

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6 - RETURN OF CONFIDENTIAL INFORMATION

All confidential information disclosed by a party to the other party, remains the ownership of the disclosing party and shall immediately be returned to the disclosing party upon its request, including any and all copies thereof.

7 - COMING INTO FORCE - DURATION

The term of this non-disclosure agreement is 3 years from the date of its execution.

However, the obligations of confidentiality and restriction of use of the confidential information shall survive during 2 years from the expiration of this Agreement, unless the information concerned has fallen in the scope of the limitation of confidentiality set forth above.

8 - GOVERNING LAW - LITIGATION

8.1-	This Agreement shall be construed in all respects in accordance with the laws of France.

8.2-

SAGEM and RJM will always use their best efforts to settle any disputes between them on an amicable basis. Any dispute which is not settled amicably within a reasonable time, shall be submitted to arbitration by either party for final settlement according to the Arbitration Rules then in effect of the International Chamber of Commerce.

Such arbitration shall take place in Paris, FRANCE in the English language, and shall be conducted by 3 (three) arbitrators, appointed pursuant to the said Rules.

The decision of the arbitrators shall be final and without appeal and may be enforced in any Court having jurisdiction over the parties or their assets.

The English text of this agreement shall be the sole governing text.

IN WITNESS WHEREOF, the parties hereto have caused their duly authorised representatives to execute this Agreement in English in two (2) originals as of the day and year first above written.




RJM				SAGEM

				Daniel DUPUY Vice President, SAGEM SA Managing Director.

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Exhibit 2 HBS price list


	*Description of the product*	*End user price*

1	LS1/P+subsystem ILM2 scanner module DSCI interface board Cable ILM2-DSCI Foot cable incl. cable Software license for HBS “Capture” software module* with CORBA functions* interface	[****]

2	LS1-CARDPRINT Software license for HBS “Print” software module with CORBA functions* interface including the Print Engine (gray scale dithering) runtime license and the WSQ (image decompression) runtime license *excluding the Orbix runtime license	[****]

3	Cabinet Booking station cabinet Fans and air filters Supply voltage to be chosen (110V/240/, 50Hz/60Hz)	[****]

4	Installation/Training	Case by case

	SPARE PARTS	SAGEM prices

5.1.	ILM2 scanner module	[****]

4.2.	DSCI interface board	[****]

4.3.	Interface cable CAB1-ILM-FG	[****]

4.4.	Foot pedal with cable ILM-FSW1	[****]

4.5.	Cabinet fan	[****]

4.6.	Set air filter pads	[****]

4.7.	Cleaning set for optics	[****]

4.8.	Tool set	[****]

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Exhibit 3 Discount on HBS price list applicable to SAGEM

In accordance to the general aims and targets of the strategic partnership between SAGEM and HBS, the following pricing is made as a “most preferred customer” price for SAGEM and is beginning with a discount of [****]% to the HBS list price as set in Exhibit 1 for the first order quantity. Two possibilities are offered:

1. Separate Orders

The price per OEM package (including all items listed above) and the Cabinet option is as follows:

[****]

2. Frame Contract and Call Orders

It is a combination of a frame contract and separate call orders.

•

The proposed order quantity for such a frame contract is [****] (or more).

•

For a time period of 1 year.

•

The call order quantity can be between 1 and the maximum quantity (no rules).

•

Advance payment would be 10% of the full volume.

•

The invoice amount per unit for any shipment would deduct these 10% from the price - so the advance payment would be given back unit per unit during the term of the frame order.

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•

In case that after 1 year the full amount is not reached, the advance payment will be kept as compensation. No further claims will be made.

3. Accumulated price Order

This quotation is valid only for one calendar year (order/delivery from 1^st January until 31^st December). Every call order adds up to the earlier orders. And so the discount rates add up also.

As an example:

•

first call order [****] pieces, price for one LS1/P+ subsystem is [****]

•

second order [****] pieces, price for one LS1/P+ package is [****]

•

third order [****] pieces, price for one LS1/P+ package is [****]

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Exhibit 4 SAGEM price list


	Description of the Product	List Price

1	Complete booking station software application Price does not include Versant, Orbix, Ilogviews, Aware WSQ software licenses	[****]

1.1	Standard customization (language type 1)¹ Specific screens, Documentation (user guide, administrator guide, training guide) Software version management Certification	To be defined

1.2	Standard customization (language type 2) Specific screens, Documentation (user guide, administrator guide, training guide) Software version management Certification	To be defined

1.3	Special customization (software development required)	Case by case

2	Maintenance and support	Case by case

2.1	Telemaintenance option	Case by case

3	Training	Case by case

4	Software modules

4.1	Sequence check software module	To be defined

4.2	SAGEM’s WSQ compression module	To be defined

¹	Language type 1: All European languages; Language type 2: Arabic, Chinese like languages

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Exhibit 5 Discount on SAGEM’s price list applicable to HBS


Quantity	Discount rate	Application SW
Price list	0	[****]
[****]	[****]	[****]
[****]	[****]	[****]
[****]	[****]	[****]
[****]	[****]	[****]
[****]	[****]	[****]

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Exhibit 6 Terms and conditions of sale

1.	GENERAL

1.1	The terms and conditions of sale contained herein apply to all quotations and purchase orders entered into between SAGEM and HBS relative to the hardware and software sold by one PARTY to the other PARTY in the framework of the AGREEMENT and the sale of the products listed in the Exhibit 2 and 4.

The failure of SAGEM or HBS to object to provisions contained in any communication from the other PARTY shall not be deemed a waiver of the provisions of these terms. Any changes in the terms contained herein or in the AGREEMENT must be specifically agreed to in writing by an officer of SAGEM or HBS before becoming binding on such PARTY.

1.2	Such terms shall be applicable whether or not they are attached to or enclosed with the products to be sold hereunder.

1.3	The company selling (SAGEM or HBS) shall be referred to as the SELLER. The company buying (SAGEM or HBS) shall be referred to as the BUYER.

2.	ORDERS

2.1

A quotation does not constitute an offer and may be withdrawn or revised at any time prior to acceptance. An order shall only be valid if made in writing and detailing the Product name and quantity required, the price (exclusive of VAT), the requested date for delivery as appropriate and, the address to which the Products are to be delivered as specified in the order. An order shall be validly accepted by a director or other duly authorized representative of SAGEM or HBS.

2.2	The buyer shall be entitled to postpone the delivery date of any order once by a maximum period of three (3) months.

If the BUYER requests the SELLER by a written notice to postpone the delivery date within seven (7) days before this delivery date, the SELLER may invoice the total price of the order at the before agreed delivery date.

If the BUYER requests the SELLER by a written notice to postpone the delivery date for more than 10 units, the BUYER will bear any reasonable additional costs due to the postpone of the delivery provided that this costs will not exceed 2% per month of the total price of the postponed order.

2.3

If either PARTY is responsible for a delay in delivery, the other PARTY who can establish credibly that he suffered a loss from such delivery may claim agreed compensation of 0.5% of the delayed products for every completed week of delay but in no event shall the aggregate of such compensation exceed a total of 5% of the price of the delayed products. Additional claims for compensation from the other PARTY shall be excluded in all cases of delayed delivery even after expiry of an extension of time that may have been granted to the PARTY in delay. This exclusion shall not apply in cases of willful misconduct or gross negligence on the part of the PARTY in delay.

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3.	EXPORT LICENSES

The SELLER shall use their best efforts to obtain any necessary export licenses for shipment from France or Germany to foreign countries on behalf of the BUYER provided the BUYER has supplied the SELLER with all the information necessary to obtain such licenses. The BUYER shall be responsible for obtaining all import licenses required by any country and all reexport licenses.

4.	DELIVERY DATES

4.1	Delivery dates shall be as described in the Section 7 of this AGREEMENT.

4.2	The products may be delivered in one or more consignments.

5.	PACKAGING

Prices include the cost of non-returnable packaging. Any additional or special packaging requirements will be charged to the BUYER separately.

6.	TRANSFER OF RISK

Risk in the Products shall pass to the BUYER upon delivery but prior to loading.

7.	INSPECTION

7.1

The BUYER shall examine the Products forthwith following delivery and shall notify the other PARTY in writing by registered letter within one week after delivery of any reservations concerning the packaging of the Products, the number of packages, any defects in the Products and shall identify any deficiency or any surplus (as the case may be).

7.2	If the SELLER does not receive such notice within such time the SELLER and any delivery agent engaged by the SELLER shall be discharged from all liability in respect of defects or deficiencies arising during transportation.

8.	TRANSFER OF TITLE TO PRODUCTS

All Products sold or supplied under these terms of sale shall remain the property of the SELLER until full and complete payment of the price by the BUYER.

9.	PRICES - TERMS OF PAYMENT

9.1	All prices quoted and agreed are Ex-Work SELLER premises.

9.2

Value added tax and other taxes paid or payable by the SELLER (other than any tax imposed on the net income of SAGEM) in respect of the sale of Products or the receipt of the payment therefor under these Terms and Conditions shall be additional to prices quoted by the SELLER and shall be borne and paid by the BUYER.

9.3	The SELLER shall invoice the BUYER upon delivery of the products. For orders greater than [****], special terms of payment shall be negotiated.

9.4	Unless otherwise agreed between SAGEM and HBS in writing, the price of the products shall

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be payable within sixty (60) days from the date of invoice. The price shall be paid without deduction, deferment, set-off, counter claim or other withholding whatsoever.

9.5

If the SELLER does not receive payment of any sum on the due date the BUYER agrees that interest for late payment shall accrue on the full amount outstanding daily from the due date until the date of receipt of payment by the SELLER at the rate of 6% per annum. The BUYER shall reimburse the SELLER in respect of all costs and fees including legal fees occasioned in the recovery of any sum owed by the BUYER to the SELLER.

10.

ACCEPTANCE OF THE PRODUCTS

During the first thirty (30) days following receipt of any Products by either PARTY at the place of delivery, the BUYER may conduct incoming inspection tests to confirm that each Product conforms to the applicable specifications set forth in the order or any applicable document. Unless written notice of Product nonconformity is provided to the selling PARTY within such thirty days period, the product will be deemed accepted.

The selling PARTY will repair or replace at no charge to the BUYER any non-conforming Product that is rejected by the BUYER within fifteen (15) days following receipt of non conformity.

11.

INTELLECTUAL PROPERTY

The BUYER shall not alter any marking or lettering on the Products and shall not apply any additional markings or lettering to any such Product unless otherwise agreed in writing or stipulated by any applicable law or regulation.

12.

WARRANTY

12.1

The SELLER warrants that the Products delivered by itself will reasonably comply with the specifications of the SELLER relating thereto and will, under normal conditions of use, be free from defects in title, design, material and workmanship for a period of 12 months from the date of delivery. During such twelve (12) month period and provided that the BUYER gives the SELLER written notice of any such defect within thirty (30) days of the date of appearance thereof, the SELLER may in its sole discretion repair or replace the defective Products at its own cost and expense. If after the expenditure of its best efforts the SELLER is unable to repair or replace such non conforming product, the SELLER shall refund to the BUYER the amount the BUYER paid for such product.

This warranty is effective unless the defects are caused by and attributed to normal wear and tear, improper maintenance or use, faulty installation, lack of compliance with applicable written instructions or specifications provided by the SELLER to the BUYER, negligence, accident, tampering, or substitution of inferior quality components parts.

In addition during such 12 month period the SELLER shall provide the other warranty services described in the AGREEMENT.

12.2

The foregoing warranties are the only warranties made by the SELLER to the BUYER. The SELLER expressly disclaims any implied warranties of merchantability and fitness for particular purpose, and any other warranties, whether implied, express, or arising by operation of law, trade usage or course of dealing.

* *

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Exhibit 7 Software license terms and conditions

1.	SCOPE OF LICENCE:

For the purpose of these Terms and Conditions, the term “SOFTWARE” shall mean and include any proprietary software owned by HBS or SAGEM and licensed to either HBS or SAGEM in the framework of the AGREEMENT and the sale of the LBS, so as all associated user documentation and any microcode encased in hardware. The PARTY granting the license shall be referred to as the LICENSOR whereas the PARTY receiving the license shall be referred to as the LICENSEE.

Subject to the terms and conditions set forth hereunder, the LICENSOR hereby grants to the LICENSEE a perpetual, non exclusive and non transferable license to:

•

use the SOFTWARE in accordance with the terms and conditions set out below and the AGREEMENT,

•

store the SOFTWARE on, transmit it through, and display it on the Hardware,

•

use the SOFTWARE in support of the use of the associated Hardware,

•

make no more than 2 copies of the SOFTWARE in machine readable form only for its own use when and to the extent necessary for the utilization of the SOFTWARE on the Hardware, provided it reproduces the copyright notice and any other legend of ownership.

•

make no more than 5 copies of the associated user documentation in printed form only for its own use and when and to the extent necessary for the utilization of the SOFTWARE on the Hardware.

2.	LICENCE RESTRICTIONS:

2.1	Limited use: This licence is for use of the SOFTWARE in only with the Hardware and only within the framework of a LBS.

2.2	No transfer: This licence is granted only to the LICENSEE and the LICENSEE is not authorized to transfer or assign it to any third PARTY, unless authorized in writing by LICENSOR beforehand. The LICENSEE is authorized to sub licence it to .

2.3	No reverse engineering: LICENSEE shall not reverse engineer, decompile or attempt to translate the SOFTWARE supplied in object code back into either an language or a high level language, except as specifically permitted by law and supervision of LICENSOR.

3.	PROTECTION OF PROPRIETARY INFORMATION:

3.1

The SOFTWARE, including any enhancement thereof or other modification thereto and information therein, shall be considered “Proprietary Information” of LICENSOR and shall remain the exclusive property of LICENSOR. Except as authorized in writing by LICENSOR beforehand, the LICENSEE shall take all necessary precautions as are reasonable to ensure that neither it nor any of its employees, agents or representatives disclose any Proprietary Information other than to employees, agents or representatives of the LICENSEE who have a need to know within the context of the AGREEMENT or use any Proprietary Information,

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except in connection with use of the Hardware by the LICENSEE for the purposes contemplated hereunder and in the AGREEMENT.

LICENSOR reserves the right to protect against the unauthorized disclosure of various components of the SOFTWARE by encasing the same in sub-systems of the Hardware. The LICENSEE agrees not to disclose such components of the SOFTWARE or provide access to the content of such sub systems (i.e. microcodes for example) to any third party except to the extent that such access is necessary for the installation and day-to-day operation of the Hardware or except as authorized by LICENSOR. The LICENSEE agrees to comply with such further reasonable requests of LICENSOR in order to ensure that LICENSOR’s Proprietary Information is not disclosed.

3.2	The LICENSEE acknowledges that LICENSOR considers that the SOFTWARE contains copyright material and trade secrets and accordingly the LICENSEE is responsible for taking appropriate action to satisfy the following for the protection and security of the SOFTWARE :

•

not distributing nor consenting to the distribution of any of the SOFTWARE without LICENSOR’s written consent,

•

not allowing access by any third party to any SOFTWARE or database provided by LICENSOR to the LICENSEE hereunder.

•

maintaining records of the number of all copies of the SOFTWARE.

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Exhibit 8 SAGEM’s customers

Morpho^® AFIS users world-wide

[****]

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Exhibit 9 HBS product technical specification

[****]

37 / 38

Exhibit 10 Sagem product technical specification

[****]

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Amendment no. 1

to the Agreement no DDS/65/413/Pse

signed on 30 December 1998

(hereinafter referred to as « the AGREEMENT»)

between

SAGEM SA, a French corporation having its registered office at 6 avenue d’Iéna, 75116 Paris, France, represented by Mr. Jean-Paul JAINSKY, Managing Director, Security of the Defense and Security Division,

(hereinafter referred to as « SAGEM »),

and

HEIMANN BIOMETRIC SYSTEMS, a German corporation having its registered office at Loebstedter Strasse 107-109, 07749 Jena, Germany, represented by Dr. Bernd REINHOLD, President,

(hereinafter referred to as « HBS »),

THE PARTIES HEREBY AGREE AS FOLLOWS:

ARTICLE 1

The Parties agree to replace the existing exhibits 2 and 3 of the AGREEMENT by the exhibits 2 and 3 attached to this Amendment.

ARTICLE 2

SAGEM SA wishes to take advantage of the pricing conditions of the Frame Contract for LS1/P+, LS1/T+. Therefore, SAGEM SA commits to order to HBS, within a twenty four (24) months period from TO, at least [****], LS1/P+ or LS1/T+ in the frame of the provisions of article 1 and article 3 of “Attachment to Exhibit 3/Year 2000”, attached to this Amendment.

TO is the date of signature by both parties of this Amendment No: 1.

ARTICLE 3

Unless modified by this Amendment, all articles and exhibits of the AGREEMENT remain in full force and effect.

Page 1 sur 2

IN WITNESS WHEREOF, the Parties hereto have caused this AMENDMENT to be duly executed by their authorized representatives, in duplicate originals as of the day and year written hereunder.



For and on behalf of				For and on behalf of

SAGEM SA				HEIMANN BIOMETRIC SYSTEMS

Jean-Paul JAINSKY				Bernd REINHOLD

Managing Director,				President

Security of the Defense and Security Division

Date : 22^nd August 2000				Date : 26^th August 2000

Page 2 sur 2

Exhibit 2

Agreement DDS/65/413/Pse


Exhibit 2		HBS price list

Year 2000

A. LS1/P+

The price list is valid from the 1^st January 2000 until release of a new one by HBS.


	Description of the product		End user price
1	LS1/P+subsystem		[****]
		ILM2 scanner module
		DSCI interface board
		Cable ILM2-DSCI
		Foot pedal incl. Cable
		Software license for HBS “Capture” software module* with CORBA functions* interface
2	LS1-CARDPRINT		[****]
		Software license for HBS “Print” software module with CORBA functions* interface including the Print Engine (gray scale dithering) runtime license and the WSQ (image decompression) runtime license * excluding the Orbix runtime license
3	Cabinet		[****]
		Booking station cabinet
		Fans and air filters
		Supply voltage to be chosen (110V/240/, 50Hz/60Hz)
4	Installation/Training		Case by case

		*SPARE PARTS*	SAGEM prices

5.1	ILM 2 scanner module		[****]

5.2	DSCI interface board		[****]

5.3	Interface cable CAB1-ILM-FG		[****]

5.4	Foot pedal with cable ILM-FSW1		[****]

5.5	Cabinet fan		[****]

5.6	Set air filter pads		[****]

5.7	Cleaning set for optics		[****]

5.8	Tool set		[****]

Page 1 sur 8

Agreement DDS/65/413/Pse

B. LS1/T+

The price list is valid from the 1^st January 2000 until release of a new one by HBS.


	Description of the product		End user price
1	LS1/T+subsystem		[****]
		ILM3 scanner module
		DSCI interface board
		Cable ILM3-DSCI
		Foot pedal incl. Cable
		Software license for HBS “Capture” software module* with CORBA functions* interface
2	LS1-CARDPRINT		[****]
		Software license for HBS “Print” software module with CORBA functions* interface including the Print Engine (gray scale dithering) runtime license and the WSQ (image decompression) runtime license * excluding the Orbix runtime license
3	Cabinet		[****]
		Booking station cabinet
		Fans and air filters
		Supply voltage to be chosen (110V/240/, 50Hz/60Hz)
4	Installation/Training		Case by case

		*SPARE PARTS*	SAGEM PRICES

5.1	ILM scanner module		[****]

5.2	DSCI interface board		[****]

5.3	Interface cable CAB1-ILM-FG		[****]

5.4	Foot pedal with cable ILM-FSW1		[****]

5.5	Cabinet fan		[****]

5.6	Set air filter pads		[****]

5.7	Cleaning set for optics		[****]

5.8	Tool set		[****]

Page 2 sur 8

Agreement DDS/65/413/Pse

C. LS2


	Description of the product		End user price
1	LS2		[****]
		LS2
		DSCI interface board
		Cable LS2-DSCI
		Foot pedal incl. Cable
		Software license for HBS “Capture” software module* with CORBA functions* interface
2	LS2-CARDPRINT		[****]
		Software license for HBS “Print” software module with CORBA functions* interface including the Print Engine (gray scale dithering) runtime license and the WSQ (image decompression) runtime license * excluding the Orbix runtime license
3	Installation/Training		Case by case

		*SPARE PARTS*	SAGEM PRICES

5.1	LS2 scanner module		[****]

5.2	DSCI interface board		[****]

5.3	Interface cable CAB1-LS2-FG		[****]

5.4	Foot pedal with cable LS2-FSW1		[****]

5.7	Cleaning set for optics		[****]

5.8	Tool set		[****]

Page 3 sur 8

Exhibit 3

Agreement DDS/65/413/Pse

Exhibit 3 Discount on HBS price list applicable to SAGEM

Year 2000

1.	Separate Orders

A. LS1/P+ Finger- and Palmprint Scanner (IQS App. G)

The price per OEM package (including all items listed above), the HBS software and the Cabinet option is as follows:


quantity	discount rate to the first order quantity	LS1/P+subsystem	LS1-CARDPRINT	Cabinet option
[****]	[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]	[****]

B. LSI/T+ Tenprinter (IQS App. F)

The price per OEM package (including all items listed above), the HBS software and the Cabinet option is as follows:


quantity	discount rate to the first order quantity	LS1/T+subsystem	LS1-CARDPRINT	Cabinet option
[****]	[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]	[****]

C. One Finger rolled live scanner (LS2)


quantity	discount rate to the first order quantity	LS2 subsystem	LS2-CARDPRINT	Cabinet option
[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]	n.a.
[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]

Accumulated price Order

This quotation is valid for one calendar year (order/delivery from 1^st January until 31^st December). Every call order adds up to the earlier orders. And so the discount rates add up also.

2.	Frame Contract regulations

See Attachment

Page 4 sur 8

Agreement DDS/65/413/Pse

Attachment to Exhibit 3/Year 2000:

Frame Contracts

1.	ORDERS AND SHIPMENT SCHEDULE FOR LS1/P+ AND LS1/T+

1.1. Frame order period for 24 months, frame order volume = [****]

To take advantage of the Frame Contract conditions, SAGEM shall commit to order the total number of LS1/P+ and LS1/T+ Products to be delivered to SAGEM for a time period of 24 consecutive months.

The 24 months time period shall start on the date of acknowledgement of this SAGEM SA Commitment by HBS without any modifications.

•

The SAGEM SA commitment shall be made in reference to this attachment. HBS will acknowledge this SAGEM SA commitment in writing. SAGEM will afterwards issue valid Purchase Orders from time to time to release the shipment of the specified Products to be delivered in said frame order time frame. HBS will confirm Purchase Orders in writing.

•

The SAGEM SA commitment must be to order [****] or more for a time period of 24 months for accumulated LS1/P+ and LS1/T+ modules.

•

The Products will be available from HBS as follows:

•

Regular shipment of max. 10 pieces lead time 4 weeks A.R.O.,

•

Regular shipment of max. 25 pieces per month lead time 8 weeks A.R.O.,

•

Regular shipment of max. 25 pieces per week lead time 16 weeks A.R.O.,

•

The price for said Products per piece will be those applicable according to the discount for the total quantity indicated in the frame order and in the time frame of the frame order. This price shall be used starting with the first shipment already.

•

SAGEM shall send to HBS a rolling forecast for the expected call order quantity and product version for the next 3 months in the first week of each month.

•

At the end of the 24 months frame order period, HBS shall establish the total number of Products delivered to SAGEM, and sold during this period, and shall compare this number to the number given by SAGEM in the frame order at the beginning of this period.

•

If the realized numbers of sales in the time period 24 months are lower than minimum number [****] than SAGEM has failed the frame order and must pay at the end of the period the price differences for LS1/P+ and LS1/T+ separately for each calendar year, confirmed with the prices and discounts in Exhibit 3 / Separate orders “A. LS1/P+” and Exhibit 3/Separate orders “B. LS1/T+”.

•

If the sold quantity is higher than [****] but not in the same quantity range as the quantity of the frame order, the difference of the sales amount shall be computed based on the stair step pricing and shall be compensated between SAGEM and HBS either directly by money transfer (both ways) or indirectly via product shipments (if it is from HBS to SAGEM and if this suits better).

Page 5 sur 8

Agreement DDS/65/413/Pse

1.2. Frame order period 24 months, frame order volume > [****] pieces: Stair step pricing

Under condition that SAGEM will indicate the volume for the frame order period, the price for one LS1/T+ or LS1/P+ Product set is as follows:


Quantity Range	Price for LS1/P+ or LS1/T+ subsystem Prices in EURO	Quantity Range	Cabinet Option Prices in EURO	LS1_CARDPRINT/ Option Prices in EURO
[****]	[****]	[****]	[****]	[****]
[****]	[****]	[****]		[****]
[****]	[****]	[****]		[****]
[****]	[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]	[****]

A last call order can be added to the number of sold products, compared at end of period with the frame order, with following condition:

a cash-in-advance of 50% of the last call order volume, to be on hands of HBS before end of the regarded period.

[****]

1.3. Orders for LS1_CARDPRINT and LS1_CABINET

Payment for cumulated orders of LS1/P+ and LS1/T+ in the frame of this Amendment shall be paid within 30 days from the date of invoice.

Together with Call Purchase Orders for LS1 subsystems SAGEM SA can separate order LS1_CARDPRINT and LS1 cabinet confirm with the prices discount in Exhibit 3 / Year 2000 / 1. Separate Orders.

Page 6 sur 8

Agreement DDS/65/413/Pse

2.	ORDERS AND SHIPMENT SCHEDULE FOR LS2

To take advantage of the Frame Contract conditions, SAGEM shall commit to order the total number of LS2 Products to be delivered to SAGEM for a time period of 24 consecutive months.

The 24 months time period starts on the date of receipt by SAGEM the date of acknowledgement of this SAGEM SA Commitment by HBS without any modifications.

•

The SAGEM SA commitment shall be made in reference to this attachment HBS will acknowledge this SAGEM SA commitment in writing. SAGEM will afterwards issue valid Purchase Orders from time to time to release the shipment of the specified Products to be delivered in said frame order time frame. HBS will confirm Purchase Orders in writing.

•

The Products will be available from HBS as follows:


Regular shipment of max. 10 pieces		lead time 4 weeks A.R.O.
Regular shipment of max. 25 per month:		lead time 8 weeks A.R.O.,
Regular shipment of max. 25 per week:		lead time 16 weeks A.R.O.

•

The price for said Products per piece will be those applicable according to the discount for the total quantity indicated in the frame order in the time frame of the frame order. This price shall be used starting with the first shipment already.

•

SAGEM shall send to HBS a rolling forecast for the expected call order quantity and product version for the next 3 months in the first week of each month.

•

Shipment shall preferably be made in monthly shipment lots.

•

If the realized numbers of sales in the time period 24 months are lower than minimum number [****], than SAGEM has failed the frame order and must pay at the end of the period the price differences for LS2 separately for each calendar year, confirmed with the prices and discounts in Exhibit 3/ Separate orders “C.LS2”.

•

Frame order period 24 months, frame order volume > [****]: Stair step pricing

Under condition that SAGEM will indicate the volume for the frame order period, the price for one LS2 Product set is as follows:


Quantity Range	Price for LS2 subsystem Prices in EURO	LS2_CARDPRINT/ Option Prices in EURO
[****]	[****]	[****]
[****]	[****]	[****]
[****]	[****]	[****]
[****]	[****]	[****]
[****]	[****]	[****]

Page 7 sur 8

Agreement DDS/65/413/Pse

Invoicing will be made by HBS for each individual shipment. Payments shall be made by SAGEM against each individual invoice. The price shall be paid without deduction, deferment, set-off, counter claim or other withholding whatsoever. A last call order can be added to the number of sold products, compared at end of period with the frame order, with the following condition:

a cash-in-advance of 50% of the last call order volume, to be on hands of HBS before end of the regarded period.

3.	Miscellaneous Provisions:

3.1.

HBS live scanners are subject to technical progress. HBS will inform SAGEM with written notice about such progress. Substantial changes are matter of a confirmation of a new delivery standard. In case of substitution of parts, technologies or software as an improvement the price set out in this agreement will not be amended. In the case of new hardware or software functionality added to the existing products, HBS will make this available to SAGEM in extension of the options, in the same volume discount rate as in this agreement. Pending orders will not be affected.

3.2.

Substitution of HBS’s Hardware or Software in case of HBS products no longer supported by HBS: In this event, the price set out in this agreement will not be amended. Warranty and maintenance shall continue for the substituted hardware and software at the same conditions as for the hardware or software substituted. Pending orders will not be affected.

3.3.	HBS undertakes to inform SAGEM of any substantial changes to the Products or of any substitution of hardware and software in accordance with articles 1 and 2 here above with a thirty days notice prior to the availability on the market of the modified Products.

3.4.	If HBS and SAGEM confirm in written form joint marketing activities to the same customer, the products jointly marketed will be included in the quantity commitment of this frame contract, who ever is the seller of the products to the customer.

3.5.	In case HBS issues a new price list within the period (24 months), SAGEM price will be revised accordingly if and only if lower prices are available for equivalent products.

3.6.	SAGEM discount rate on OEM or frame contract price for new products shall be at least the same discount rate as in this agreement.

3.7.	SAGEM and HBS have the intention to define additional rules and procedures including how to handle software updates and how to solve software malfunctions in an Amendment No: 2.

Page 8 sur 8

Amendment no. 2

to the Agreement no DDS/65/413/Pse

signed on 30 December 1998

(hereinafter referred to as « the AGREEMENT »)

between

SAGEM SA, a French corporation having its registered office at 6 avenue d’Iéna, 75116 Paris, France, represented by Mr. Jean-Paul THIERRY, Managing Director, Security of the Defense and Security Division,

(hereinafter referred to as « SAGEM »),

and

HEIMANN BIOMETRIC SYSTEMS, a German corporation having its registered office at Loebstedter Strasse 107-109, 07749 Jena, Germany, represented by Dr. Bernd REINHOLD, President, (hereinafter referred to as «HBS»),

THE PARTIES HEREBY AGREE AS FOLLOWS:

ARTICLE 1

SAGEM SA intends to profit of pricing conditions offered by HBS for at least [****] LS1_CABINET. For that, SAGEM SA commits to order from TO until TO + 18 months, end of the month, at least [****] LS1_CABINET, under the terms of the Frame agreement agreed between the parties and hereafter attached.

TO is the date of signature by both parties of this document.

ARTICLE 2

Unless modified by this Amendment, all articles and exhibits of the AGREEMENT remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed by their authorized representatives, in duplicate originals as of the day and year written hereunder.


For and on behalf of SAGEM SA				For and on behalf of HEIMANN BIOMETRIC SYSTEMS


Jean-Paul THIERRY				Bernd REINHOLD
Managing Director,				President
Security Activity
Defense and Security Division
Date: March 2^nd, 2001				Date: March 9^th, 2001
Attachment : Frame Agreement for LS1_CABINET

1 of 1

Attachment to Amendment no. 2 to the AGREEMENT

Frame Agreement for LS1_CABINET

1. Terms and Conditions for the supply of LS1-CABINET products

Herewith SAGEM shall commit to order [****] LS1_CABINET_V115 and/or LS1_CABINET_V230 products to be delivered during a time period starting from TO until TO +18 months, end of the month in single shipments.

The time period shall start on the date of signature by both parties of the amendment N°:2 to the AGREEMENT N°: DDS/65/413/Pse signed on 30 December 1998 (TO).

SAGEM and/or its subsidiary, SAGEM Morpho Inc (SMI), shall issue single call orders defining the quantity, the Voltage version and the delivery destination for these single shipments.

•

The price for LS1_CABINET_V115 and LS1_CABINET_V230 products per piece will be those applicable according to the discount for a single order with similar quantity, agreed in the Amendment no. 1 to the AGREEMENT. This price shall be used starting with the first shipment already.

Price:..................[****]

•

SAGEM shall send to HBS forecasts for the expected call orders LS1_CABINET products quantities and product version, for a following six (6) months period. HBS expects these forecast information:

•

on TO, to cover the period from TO to TO + 6 months,

•

on TO + 5 months to cover the period from TO + 6 months to TO + 12,

•

on TO + 11 months to cover the period from TO + 12 months to TO + 18,

These forecasts shall mention separately the SAGEM and the SAGEM Morpho Inc. LS1 CABINET product information.

The total quantity of the three SAGEM forecasts shall represent [****] LS1_CABINET products.

The total quantity of the three SAGEM Morpho Inc. (SMI) forecasts shall represent [****] LS1_CABINET products.

If the necessary forecast information is not available on one of the indicated date, then HBS will take into account a forecast quantity, for the concerned period, of [****] LS1_CABINET products for SAGEM ([****] in V230 version and [****] in V115 version) and [****] LS1_CABINET_V115 products for SAGEM Morpho Inc.

However the total quantity of LS1_CABINET products to be forecasted by SAGEM during the 18 months period shall never exceed [****] without the SAGEM consent.

•

Within each of the six (6) months periods above mentioned, SAGEM and SAGEM Morpho Inc. shall issue, call orders covering the whole quantity of the concerned forecast. These call orders shall mention the required quantities and the LS1 CABINET version (LS1_CABINET_V115 and/or LS1 _CABINET_V230).

1 of 3

Attachment to Amendment no. 2 to the AGREEMENT

•

HBS shall have the forecasted quantity of LS1_CABINET products available as follows:


• Regular shipment of max. 10 pieces		lead time 4 weeks A.R.O

• Regular shipment of max. 25 pieces per month		lead time 8 weeks A.R.O.,

• Regular shipment of max. 25 pieces per week		lead time 16 weeks A.R.O.,

•

SAGEM and SAGEM Morpho Inc., shall have the possibility, in the call orders to modify the product version of the LS1 CABINET.

•

At the end of each 6 months period, HBS shall establish the total number of products delivered to SAGEM and to SAGEM Morpho Inc., during this period, and shall compare this number to the number given by the forecasts at the beginning of this period.

•

If the realized numbers of sales are lower than forecasted for the concerned 6 months period, then:

•

SAGEM will issue call orders covering the remaining quantity and mentioning the required LS1 CABINET version (LS1_CABINET_V115 and/or LS1_CABINET_V230) and delivery destination, on TO + 5 months and/or TO + 11 months.

•

HBS will ship all remaining LS1_CABINET_products to SAGEM and/or to SAGEM Morpho Inc. according to the here above call orders and invoice them to SAGEM.

•

SAGEM have the right to increase the forecast quantity by additional 10 LS1_CABINET products of both versions with a 1 month forecast period prior the date of the delivery. For larger quantities SAGEM SA and/or SAGEM Morpho Inc. shall announce the increased quantity 3 months prior to the delivery date.

•

If the number of delivered LS1_CABINET products has reached the frame agreement quantity earlier than the end of the 18 months frame agreement period, then the frame agreement is fulfilled but the economical conditions of the frame agreement will apply until TO +18 months, end of the month.

•

If the total realized number of ordered LS1_CABINET products, on TO + 18 months, end of the month, are lower than the frame agreement quantity for LS1_CABINET products, then SAGEM SA has failed the frame agreement. In this case HBS would charge compensations calculated as follows:

•

For the number of ordered LS1_CABINET, the price difference between the price given in this amendment and the price of a separate order with similar quantity, based on the commercial conditions of “Exhibit 3 Discount on HBS price list applicable to SAGEM” set forth in the amendment N°l to the AGREEMENT, plus

•

[****] of the LS1_CABINET product price set forth in this amendment, for each LS1_CABINET product not ordered.

These compensations shall be charged to SAGEM.

2 of 3

Attachment to Amendment no. 2 to the AGREEMENT

2 . Payment conditions for LS1_CABINET products


Terms of delivery:		Ex work (ICC Incoterms ed. 2000)

Terms of payment:		Invoicing will be made for each individual shipment 100% payment 30 days after date of delivery

Issuing of invoices:		Invoices will be issued always with the date when the ordered equipment is ready to picked up at the HBS location in Jena / Germany.

Payments:		Each invoice shall be paid without deduction, deferment, set-off, counter claim or other withholding whatsoever. All bank charges are for the account of SAGEM. Payments shall be made free at HBS’s paying office.

Account:		All payments to the account of Supplier at: [****]


For and on behalf of				For and on behalf of
SAGEM SA				HEIMANN BIOMETRIC SYSTEMS


Jean-Paul THIERRY				Bernd REINHOLD
Managing Director,				President
Security Activity
Defense and Security Division
Date : March 2^nd, 2001				Date: March 9^th, 2001

3 of 3

Amendment no. 3

to the Agreement no. DDS/65/413/Pse

(hereinafter referred to as « the AGREEMENT »)

signed on 30 December 1998

between

SAGEM SA, a French corporation having its registered office at 27 rue Leblanc, 75115 Paris, France, represented by Mr. Jean-Paul THIERRY, Managing Director, Security Activity of the Defense and Security Division,

(hereinafter referred to as « SAGEM »),

and

HEIMANN BIOMETRIC SYSTEMS, a German corporation having its registered office at Unstrutweg 4, 07743 Jena, Germany, represented by Dr. Bernd REINHOLD, President,

(hereinafter referred to as « HBS »),

THE PARTIES HEREBY AGREE AS FOLLOWS:

ARTICLE 1

The Parties agree to add the new HBS scanner product LS1/P++ to the list of products offered by HBS to SAGEM in the AGREEMENT and its amendments 1 and 2. The technical description of this product “LS1/P+, P++, T+, LITE. Delivery Specification : OEM/VAR version” Ref.: LS1_DLV_SPEC_OEMVAR Version 10 dated 11 March 2002 is attached to this Amendment.

The LS1/P++ product will be handled as part of the current frame contract set forth in Amendments 1 and 2 to the AGREEMENT and will also be included in the corresponding quantity calculation of the frame contract.


	*Description of the product*	*Frame order Price*

1	LS1/P++ subsystem LS1/P++ scanner block with IEEE interface IEEE interface cable Foot pedal incl. Cable Software license for HBS “Capture DLL” software module	[****]

2	LS1/P++/PAD subsystem LS1/P++ scanner block with IEEE interface and integrated signature PAD IEEE interface cable Foot pedal incl. Cable Software license for HBS “Capture DLL” software module	[****]


The products will be available from HBS as follows:

• Regular shipment of max. 10 pieces		lead time 4 weeks A.R.O.,

• Regular shipment of max. 25 pieces per month		lead time 8 weeks A.R.O.,

• Regular shipment of max. 25 pieces per week		lead time 16 weeks A.R.O.,

Payment for orders of LS1/P++ products in the frame of this Amendment shall be processed within 60 days from the date of invoice.

ARTICLE 2

The Parties agree to add the new HBS scanner product LS1/LITE to the list of products offered by HBS to SAGEM.

The LS1/LITE product will be handled as a separate product according to the attached price list and shall not be part of the frame contract. The technical description of this product “LS1/P+, P++, T+, LITE. Delivery Specification : OEM/VAR version” Ref.: LS1_DLV_SPEC_OEMVAR Version 10 dated 11 March 2002 is attached to this Amendment.


	*Description of the product*	List Price

1	LS1/LITE subsystem LSI/LITE scanner block with IEEE interface IEEE interface cable Foot pedal incl. Cable Software license for HBS “Capture DLL” software module	[****]

2	LS1/LITE/SUITCASE Optionally available transport suitcase equipped with wheels and transport handle	[****]


The products will be available from HBS as follows:

• Regular shipment of max. 10 pieces		lead time 4 weeks A.R.O.,

• Regular shipment of max. 25 pieces per month		lead time 8 weeks A.R.O.,

• Regular shipment of max. 25 pieces per week		lead time 16 weeks A.R.O.,

Payment for orders of LS1/LITE products in the frame of this Amendment shall be processed within 60 days from the date of invoice.

HBS will support the evaluation and the market introduction of the new LS1/LITE product. For that purpose every system ordered by SAGEM and/or SMI from signature of this amendment will be provided with [****] discount on the above mentioned list price.

The parties agree to start negotiations in the event of specific projects with special requirements.

ARTICLE 3

The Parties agree to add the products mentioned in Article 1 and 2 of this Amendment to a new frame contract (Amendment no. 4 to the AGREEMENT), which is intended to be valid from August 2002 as replacement of the current frame contract agreements.

ARTICLE 4

Unless modified by this Amendment, all articles and exhibits of the AGREEMENT and of its amendments Nr 1 and 2 remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have caused this AMENDMENT to be duly executed by their authorized representatives, in duplicate originals as of the day and year written hereunder.


For and on behalf of				For and on behalf of

SAGEM SA				HEIMANN BIOMETRIC SYSTEMS

Jean-Paul THIERRY				Dr. Bernd REINHOLD
Managing Director,				President
Security Activity of the Defense
and Security Division
Date : . .2002				Date: 12^th April 2002

TECHNICAL DESCRIPTION REFERENCED IN ARTICLES I AND II

[****]

Amendment no. 4

to the Agreement no. DDS/65/413/Pse

(hereinafter referred to as « the AGREEMENT »)

between

(hereinafter referred to as « SAGEM »),

and

HEIMANN BIOMETRIC SYSTEMS, a German corporation having its registered office at Unstrutweg 4, 07743 Jena, Germany, represented by Dr. Bernd REINHOLD, President,

(hereinafter referred to as « HBS »),

THE PARTIES HEREBY AGREE AS FOLLOWS:

ARTICLE 1

Frame Order for [****] products to be chosen amongst LS1/P+, LS1/P++ and LS1/T+ products.

SAGEM and SAGEM Morpho Inc (SMI) commit together to order to HBS at least a total of [****] LS1/P+ and/or LS1/P++ and/or LS1/T+ products until 31^st December 2003 (end of the term of the AGREEMENT).


	*Description of the product*	Frame Order Price
1	LS1/P+ subsystem LS1/P+ scanner block (ILM2) DSCI interface board W2T Cable Scanner block – DSCI Foot pedal incl. Cable Software license for HBS “Capture DLL” software module	[****]
2	LS1/T+ subsystem LS1/T+ scanner block (ILM3) DSCI interface board W2T Cable Scanner block – DSCI Foot pedal incl. Cable Software license for HBS “Capture DLL” software module	[****]
3	LS1/P++ subsystem LS1/P++ scanner block with IEEE interface IEEE interface cable Foot pedal incl. Cable Software license for HBS “Capture DLL” software module	[****]
4	LS1/P++/PAD subsystem LS1/P++ scanner block with IEEE interface and integrated signature PAD IEEE interface cable Foot pedal incl. Cable Software license for HBS “Capture DLL” software module	[****]

The SAGEM/SMI commitment shall be valid with signature of this amendment but not earlier than 27^th August 2002. SAGEM will afterwards issue valid Purchase Orders from time to time to release the shipment of the specified Products to be delivered in said frame order time frame. HBS will confirm Purchase Orders in writing.

SAGEM shall send to HBS a rolling forecast for the expected call order quantity and product version for the next 6 months in the first week of each semester.

At the end of the frame order period, HBS shall establish the total number of Products ordered by SAGEM and/or SMI.

•

If the quantity ordered is higher or equal to [****], then SAGEM has fulfilled the frame order and each additionally product ordered shall be sold at the same price until 31^stDecember 2003.

•

If the quantity ordered is less than [****], then SAGEM must pay at the end of the frame order period a sum corresponding to [****] of the unit price of the LS1/P+ product for each product of the Frame Order not ordered (i.e. [****] less the products not ordered by 31^st December 2003).

The technical description of this “LS1/P+, P++, T+, LITE. Product, Delivery Specification : OEM/VAR version” Ref. : LS1_DLV_SPEC_OEMVAR Version 10 dated 11^th March 2002 is attached to this Amendment.

ARTICLE 2

Frame Order for [****] LS1_CABINET products

SAGEM and SAGEM Morpho Inc. (SMI) commit together to order to HBS at least a total of [****] LS1_CABINET_V115 and/or LS1_CABINET_V230 products by 31^st December 2003.

The unit price for LS1_CABINET_V115 and LS1_CABINET_V230 products is:

Price: ....................[****]

The SAGEM/SMI commitment shall be valid with signature of this amendment but not earlier than 27^th August 2002. SAGEM will afterwards issue valid Purchase Orders specifying the Voltage version of the Products to release the shipment of the Products to be delivered in the said frame order time frame. HBS will confirm Purchase Orders in writing.

At the end of the frame order period, HBS shall establish the total number of Products ordered by SAGEM and/or SMI.

•

If the quantity ordered is higher or equal to [****], then SAGEM has fulfilled the frame order and each additionally product ordered shall be sold at the same price until 31^st December 2003.

•

If the quantity ordered is less than [****], then SAGEM agrees to pay at the end of the frame order period a sum of [****] of the unit price of the LS1_CABINET product for each LS1_ CABINET product of the frame order not ordered until 31^st December 2003.

The technical description of this product “LS1/P+, P++, T+, LITE Delivery Specification : OEM/VAR version” Ref. : LS1_DLV_SPEC_OEMVAR Version 10 dated 11^th March 2002 is attached to this Amendment.

ARTICLE 3

The Parties agree to add the new HBS scanner product LS1/LITE to the list of products offered by HBS to SAGEM.

The LS1/LITE product will be handled as a separate product according to the attached price list.


	*Description of the product*	List price
1	LS1/LITE subsystem LS1/LITE scanner block with IEEE interface IEEE interface cable Foot pedal incl. Cable Software license for HBS “Capture DLL” software module	[****]
2	LS1/LITE/SUITCASE Optionally available transport suitcase equipped with wheels and transport handle	[****]

Each system, ordered by SAGEM and/or SMI until 31^st December 2003, will be provided with [****] discount on the above mentioned list price per scanner system.

The parties agree to start negotiations in the event of specific projects with special requirements.

The technical description of this product “LS1/P+, P++, T+, LITE. Delivery Specification : OEM/VAR version” Ref. : LS1_DLV_SPEC_OEMVAR Version 10 dated 11^th March 2002 is attached to this Amendment.

ARTICLE 4

The Parties agree to add the HBS scanner LS2/F and LS2/CHECK products to the list of products offered by HBS to SAGEM.

The LS2/F and the LS2/CHECK products will be handled as separate products according to the attached price list.


	*Description of the product*	List price
1	LS2/F subsystem LS2/F scanner block with IEEE interface IEEE interface cable Foot pedal incl. cable Software license for HBS “Capture DLL” software module	[****]
2	LS2/CHECK subsystem LS2/CHECK scanner block with IEEE interface IEEE interface cable Foot pedal incl. Cable Software license for HBS “Capture DLL” software module	[****]

Each system, ordered by SAGEM and/or SMI until 31^st December 2003, will be provided with [****] discount on the above mentioned list price per scanner system.

The parties agree to start negotiations in the event of specific projects with special requirements.

The technical description of the LS2/F and LS2/CHECK products (reference datasheet LS2/F and LS2/CHECK) is attached to this Amendment.

ARTICLE 5

For SAGEM’s subsidiary SMI the payment period remains with 30 days. Therefore the frame order price for the products listed in ARTICLEs 1,2,3,4 of this amendment will be as follows:


	*Description of the product*	Frame Order Price
1	LS1/P+ subsystem	[****]
2	LS1/T+ subsystem	[****]
3	LS1/P++ subsystem	[****]
4	LS1/P++/PAD subsystem	[****]
5	LS1/LITE subsystem	[****]
6	LS1/LITE/SUITCASE	[****]
7	LS1_CABINET	[****]
8	LS2/F subsystem	[****]
9	LS2/CHECK subsystem	[****]

The discount definitions for the products listed in ARTICLEs 3 and 4 of this amendment remain valid.

ARTICLE 6

For the products mentioned in ARTICLEs 1,2,3 and 4 of this amendment the following terms and conditions are applicable.


Terms of delivery:	For LS scanner products (products numbered 1,2, 3, 4, 5, 8 and 9 of the table of ARTICLE 5 hereabove)

	Ex Work HBS Jena /Incoterms 2000
	• max. 10 pieces	lead time 4 weeks A.R.O.,
	• max. 25 pieces per month	lead time 8 weeks A.R.O.,
	• max. 25 pieces per week	lead time 16 weeks A.R.O.,

	For LS1-Cabinet products (product numbered 7 of the table of ARTICLE 5 above)

	Ex Work HBS Jena /Incoterms 2000
	• max. 10 pieces	lead time 6 weeks A.R.O.,
	• max. 25 pieces per month	lead time 10 weeks A.R.O.,
	• max. 25 pieces per week	lead time 18 weeks A.R.O.,

Terms of payment:	Payment 60 days after date of invoice
	Except for SMI which has to pay within 30 days after the date of invoice as defined in ARTICLE 5


Issuing of Invoices:		Invoices will be always issued on the date when the equipment ordered is ready for pick up at the HBS location in Jena / Germany.

Payments:		Each invoice shall be paid without deduction, deferment, set-off, counter claim or other withholding whatsoever. All bank charges will be paid by SAGEM.

Account:		All payments to the account of HBS at: [****]

ARTICLE 7

The protocol « Business relationship in Australia, Statement 2”, dated 20^th July 2001 shall continue to be valid until the soonest of the two following dates : (i) 31th December 2003 or (ii) the date when the cumulative number of LS1/P+ products ordered for Australia has reached [****] units (including the LS products already ordered at the date of the signature of this Amendment, [****] units).

The prices for the products listed in ARTICLEs 1,2,3,4 of this amendment ordered by SAGEM for SAGEM Australasia, will be as follows:


	*Description of the product*	*Frame Order Price*
1	LS1/P+ subsystem	[****]
2	LS1_CABINET	[****]

The discount definitions for the products listed in ARTICLEs 3 and 4 remain valid.

ARTICLE 8

Unless modified by this Amendment, all articles and exhibits of the AGREEMENT and amendments 1, 2 and 3 remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have caused this AMENDMENT to be duly executed by their authorized representatives, in duplicate originals as of the day and year written hereunder.


For and on behalf of				For and on behalf of

SAGEM SA				HEIMANN BIOMETRIC SYSTEMS

Jean-Paul THIERRY				Dr. Bernd REINHOLD

Managing Director,				President

Security Activity of the Defense

and Security Division,

Date: . .2002				Date: 12^th April 2002

TECHNICAL DESCRIPTIONS REFERENCED IN ARTICLES I-IV

[****]

Amendment no. 5

to the Agreement no. DDS/65/413/Pse

(hereinafter referred to as « the AGREEMENT »)

between

SAGEM SA, a French corporation having its registered office at 27 rue Leblanc, 75115 Paris, France, represented by Mr. Jean-Paul THIERRY, Managing Director, Security Activity of the Defense and Security Division,

(hereinafter referred to as “SAGEM”),

and

HEIMANN BIOMETRIC SYSTEMS, a German corporation having its registered office at Unstrutweg 4, 07743 Jena, Germany, represented by Dr. Bernd REINHOLD, President,

(hereinafter referred to as “HBS”),

THE PARTIES HEREBY AGREE AS FOLLOWS:

ARTICLE 1

In consideration of the importance for Heimann Systems, Wiesbaden, to offer live scan systems for the German market as an system integrator and in consideration of the interest of SAGEM and HBS to continue the co-operation within the frame of the Agreement dated December 30^th, 1998, the Parties agreed to modify the Marketing Roles and Responsibilities according to article 6 specially for livescan- related tenders in Germany:

For SAGEM:

•

To grant Heimann/HBS with the right to answer as a Prime Contracter to all livescan-related tenders issued in Germany and to accept to be subcontractor to Heimann/HBS.

For Heimann/HBS:

•

To commit to use SAGEM ILSS Software for all livescan- related tenders issued in Germany.

•

To commit to work with SAGEM in order to integrate the SAGEM ILSS Software with Heimann/HBS livescan for all tenders in Germany.

•

To use both SAGEM logo and Heimann logo in any document provided by Heimann/HBS in the frame of the livescan-related tenders in Germany, except for direct tender response documents provided by Heimann/HBS to the German Police Forces. These response documents will contain a clear explanation of the co-operation between SAGEM and Heimann/HBS.

•

To display for all livescan- related tenders issued in Germany both SAGEM logo and Heimann logo on major hardware components and ILSS screens for live scan units sold in Germany and to declare the live scan booking station to German Customers as being the result of the co-operation between HBS and SAGEM.

•

To take into account all livescan units sold by Heimann/HBS for all livescan- related tenders issued in Germany as part of the Frame orders commitments indicated in Amendment Nr 4 to the Agreement DDS/65/413/Pse and to modify accordingly the Amendment Nr 4 with respect to that.

SAGEM and HBS shall define the commercial details for the use of the SAGEM ILSS Software in a frame contract including the necessary initial costs and the licence costs related to the expected German sales volume.

ARTICLE 2

Unless modified by this Amendment, all articles and exhibits of the AGREEMENT and amendments 1, 2, 3 and 4 remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have caused this AMENDMENT to be duly executed by their authorized representatives, in duplicate originals as of the day and year written hereunder.


For and on behalf of				For and on behalf of

SAGEM SA				HEIMANN BIOMETRIC SYSTEMS
Jean-Paul THIERRY				Dr. Bernd REINHOLD
Managing Director,				President
Security Activity of the Defense And Security Division,

Date: . 2002				Date: 3^rd July 2002

Amendment no. 6

to the Agreement no. DDS/65/413/Pse

(hereinafter referred to as « the AGREEMENT »)

between

SAGEM SA, a French corporation having its registered at 27 rue Leblanc, 75115 Paris, France, represented by Mr. François PERRACHON, Managing Director, Identification Systems,

(hereinafter referred to as « SAGEM »),

and

HEIMANN BIOMETRIC SYSTEM, a German corporation having its registered office at Unstrutweg 4, 07743 Jena, Germany, represented by Dr. Bernd REINHOLD, President,

(hereinafter referred to as « HBS »),

THE PARTIES HEREBY AGREE AS FOLLOWS:

ARTICLE 1

The Parties agreed on mutual basic Marketing Roles and Responsibilities specially for livescan- related tenders in Germany as defined in the Amendment no. 5 to the Agreement n° DDS/65/413/Pse. As indicated therein, “SAGEM and HBS shall define the commercial details for the use of the SAGEM ILSS Software in a frame contract including the necessary initial costs and the licence costs related to the expected German sales volume.”

These details and the associated initial costs and licence costs are defined in the present AGREEMENT.

The following definitions and procedures shall be used for the practical implementation of this co-operation:

1.1 Basic Software, Basic Software Options, Customized Basic Software and Project Specific Work

SAGEM will offer to HBS and HBS will purchase from SAGEM software for the livescan booking station and the according runtime licenses. The following definitions for terms shall be used:

Basic Software (ILS2 version 5.1 at the date of signature of this Amendment) Basic Software is the software which is made available by SAGEM to HBS in the frame of the tender (RFP) of Sachsen-Anhalt with the generic set of functions and features as detailed in Appendix A.

The Basic Software is software that can be used on a PC with MS Windows-2000, in conjunction with any the following HBS scanner models:

•

LS1/P+ with PCI board

•

LS1/T+ with PCI board

•

LS1 /P++ with 1394 Interface

Page 1

The Basic Software referenced and managed in SAGEM includes:

•

COTS software components from Third Parties, integrated into the ILS2 software: ILOGVIEWS_RT, VERSANT_RT, ORBACUS_RT, PYTHON, and XML Parser.

•

Software components from Sagem, integrated into the ILS2 software: Sequence Check and Quality Check, WSQ compression/decompression

•

DOCUMENTATION from Sagem: User documentation, Administration guide, Installation guide, Customisation guide, provided in English and in electronic form (pdf file format)

All runtime licenses of the Basic Software as defined above together form the “ILS2_5.1_RT” as listed under item B in the table of section 1.2 below.

Basic Software Options

Options of the Basic Software are the parts of the software proposed in the frame of the RFP Sachsen Anhalt as an option as detailed in Appendix A, which can be added to the Basic Software. Archiving and documentation shall be done by SAGEM in a similar manner as for the Basic Software. The runtime license of the only Basic Software Option proposed in the frame of the RFP Sachsen Anhalt, “Flatbed Cardscanning”, is the “ILS2_CARDSCAN_RT” as listed under item C in the table of section 1.2 below.

Upon request SAGEM shall send to HBS the price of any other Basic Software Options requested in other future RFPs.

Customized Basic Software (provided by SAGEM)

Customized Basic Software are those parts of the Basic Software which need to be customised for the specific requirements of the RFP Sachsen Anhalt as described in the according tender specification documents as detailed in Appendix A. Delivery of the software and the documentation shall be provided by SAGEM on a case by case basis as requested by HBS in an order sent to SAGEM for the corresponding end user project in Germany. The development work of the Customized Basic Software for Sachsen-Anhalt provided by SAGEM to HBS is the “ILS2SW_CUSTOM_01_DEV” as listed under item D in the table of section 1.2 below. HBS is entitled to duplicate the Customization Basic Software for each license of Basic Software sold by HBS

Upon request SAGEM shall send to HBS the price of any other Customized Basic Software requested in other future German RFPs.

Project Specific Work

Any specific functions or features which are not part of the Basic Software, Basic Software Options and Customized Basic Software and which will be developed by SAGEM for HBS on a case by case basis after receipt of an order from HBS.

Page 2

1.2 Prices, Proposals, Tender Responses

For all German tenders, the following pricing shall be applicable between SAGEM and HBS. All prices are exclusive of VAT.


Item No.	Item	Item Description	Price, exclusive VAT	Comments

A	ILS2_Basic Software Tools Kit	Delivery of the Software tools kit that allows HBS to perform the customization of the Generic software version ILS2 5.1.Training for HBS (for a max. of 3 persons, duration 5 days), to be held in Eragny.	[****]	SAGEM will install: The software tools kit, the customized software (Item D) on PC platform( provided by HBS). The InstallShield version 5.1 to generate ILS2 customised software will be provided by HBS.

B	ILS2_Basic Software _RT, RunTime license	Delivery of the RunTime licence with a Dongle. This RunTime licence allow HBS to integrate its Print Server Software for printing.	[****]	flat rate price per Livescan unit, applicable for all German installations starting with livescan station number 1, no further volume discount

C	ILS2_CARDSC AN_RT, the optional card scanning software extension, runtime license	Delivery of the RunTime licence that allows to scan the tenprint forms (as defined in Appendix A) via EPSON Expression 1680 scanner. This RunTime License includes the RunTime licence to drive this EPSON scanner and complies with the IQS standard.	[****]	flat rate price per Livescan unit, applicable for all German installations starting with livescan station number 1, no further volume discount.

D	ILS2SW_CUST OM_01_DEV	Delivery of the customized ILS2 version 5.1 software in accordance with	[****]	Development of a customized software as defined in Appendix A.

Page 3


		SAGEM proposal defined in Appendix A. (SAGEM technical answer to Sachsen-Anhalt Tender).

E	ILOGVIEW_DEV	Ilogview developer software	[****]	price of the ILOGVIEWS license when purchased via Sagem (without training).

HBS will communicate all available official tender documents and other available information to SAGEM, together with the explicit request for the submittal of Project Specific Work proposals including pricing, estimated time period needed to perform it, and other commercially and technically needed commitments. HBS and SAGEM will work in cooperation to clarify all points of the tender. SAGEM will then transmit in due time its price proposals to HBS which may include different options.

For each Project Specific Work, Sagem shall prepare and submit to HBS an official commercial proposal no later than 1 week before the submittance of HBS’s proposal in the frame of the tender, and HBS shall order with reference to this commercial proposal from Sagem. If such proposal is not available and received by HBS in due time ahead of the dead line for the tender response, and if the German end user is not willing to extend the dead line for submission of tender responses, then HBS will be free to either exclude that part of the requested tender item from the response or to include a solution from HBS or any other third party for the requested tender item. In such case HBS shall inform Sagem of what it has proposed to the customer.

1.3 Warranty

Warranty period for all software and any dongles from Sagem shall be 12 months from their date of delivery to HBS. Therefore runtime licenses and dongles will be delivered with an identifier that defines the type of license and the serial number(s), and such identifiers will be listed on the shipping documents from Sagem.

HBS will maintain a report log of the use of all runtime licenses on end user systems and send it to SAGEM upon SAGEM’s request.

During the warranty period, Sagem shall fix all problems of its software and corresponding hardware dongles reported to SAGEM by HBS and acknowledged by SAGEM. Sagem shall provide such fix to HBS in a form that complies with the applicable tools and procedures for the installation, testing, and maintenance of the systems.

During End User acceptance tests HBS shall inform SAGEM about any problem. During the warranty period SAGEM shall assist HBS in the End User Acceptance tests by fixing any reported problem. The path leading to the problem resolution shall be jointly defined.

1.4 Acceptance tests

Page 4

Since the Basic Software and the Basic Software Options are standard software provided by SAGEM to Customers world-wide, no acceptance test will be performed for this software alone.

For any Customized Basic Software provided by SAGEM and any Project Specific Work Sagem and HBS will perform their internal acceptance tests as requested by their internal quality assurance rules. Sagem and HBS will allow each other to participate during such internal acceptance tests. Regardless of that HBS will promptly inform Sagem about any difficulty or non-performance which might occur during HBS internal or HBS performed end user acceptance tests. Given the nature of the Customized Basic Software, Sagem and HBS agree that the end user in Sachsen-Anhalt and any further customer shall be the party able to confirm the acceptance of the delivered software, insofar Sagem’s and HBS’ internal acceptance tests are of a preliminary nature.

However it is agreed that the Customized Basic Software shall be accepted by HBS acting on behalf of itself no later than one month after the delivery of the Customized Basic Software even if the Acceptance is not signed yet by the End User unless the delay in the Acceptance test is attributable to SAGEM.

1.5 Delivery schedule

To comply with the requirements defined in Appendix A, SAGEM will provide HBS with the following software versions:

BASIC SOFTWARE:

ILS2 version 5.1: This version contains all the functions requested in the RFP exept for those functions provided in the version 5.2 and 5.3.

ILS2 version 5.1 is available as from 30 July 2002.

ILS2 version 5.2: This version based on ILS2 version 5.1 will provide the following functions:

+ Experimental prints function as defined in SAGEM answers to the RPF in Appendix A

+ Users management through NT domain as defined in SAGEM answers to the RPF in Appendix A

ILS2 version 5.2 will available as from 30 October 2002.

Page 5

BASIC SOFTWARE OPTIONS:

ILS2 version 5.3: This version based on ILS2 version 5.2 will provide the following function:

+ Cardscan function for Tenprint (front side) and Palmprint (back side) KP1 paper document acquisition as defined in SAGEM answers to the RPF in Appendix A. ILS2 version 5.3 will be available as from 30 December 2002

SAGEM will always deliver the latest available version of the Basic Software and Basic Software options unless otherwise decided by SAGEM and unless this version does not meet the requirements of the end user.

In case that SAGEM should not be able to deliver ordered software to HBS (e.g. due to technical problems of the latest available version) in due time, SAGEM and HBS shall jointly define how to proceed and whether alternative approaches (e.g. usage of another version of the software) can reasonably be proposed to the end user.

The delivery period of any available version of Basic Software and Basic Software Options is 4 weeks from the receipt of the HBS order.

CUSTOMIZED BASIC SOFTWARE

Any Customized Basic Software as defined in Appendix A ordered by HBS to SAGEM will be delivered within 3 months from the receipt of the order.

The Software tools kit (Item A of table 1.2) shall be delivered once to HBS at the same time of the first delivery of Customized Basic Software (Item D of table 1.2) in Eragny.

1.6 Terms of payment

SAGEM will send the invoice for any software delivered to HBS on the date defined in the table below. HBS will pay to SAGEM within 60 days after date of invoice.


Item No.	Item Description	1^st Tender	Up From 2^nd Tender
A	ILS2_Basic Software_ToolsKit	After finishing training	Not necessary

B	ILS2_Basic Software_RT	After order by HBS	After order by HBS

C	ILS2_CARDSCAN_RT	After order by HBS	After order by HBS

D	ILS2SW_CUSTOM_O1_DEV	At the first of the 2 following dates: (i) after acceptance by the end user or (ii) 1 month after delivery of the software by SAGEM.	Not applicable

E	ILOGVIEW_DEV	After order by HBS	Not necessary

Page 6

1.7 Licensing Conditions and Rights

In addition to the license terms and conditions of Exhibit 7 of the AGREEMENT, Sagem and HBS agree on the following specific licensing conditions:

Sagem is entitled to the following rights and obligations:

•

to deliver any software (section 1.2) ordered by HBS in form of a Master Copy on CD-ROM or other mutually defined removable data media

•

to mark such media with identifiers

•

to inform HBS about any new update, upgrade or fix that might become available in future for the Software

•

to request HBS for reporting on the performance of the Software

HBS is entitled to the following rights and obligations:

•

to install the Software on any computer hardware that complies with the applicable technical requirements specified by SAGEM,

•

to supply the Software together with such computer hardware as a complete system to end users in Germany

•

to store the Software on HBS-internal computers for archival purposes

•

the create and keep under HBS control further copies of the delivered Master Copy for data safety purposes only,

•

to use HBS-internal tools to archive the different versions of the Software

•

to maintain such Software for end users in Germany

•

to modify those parts of the Customized Basic Software developed by SAGEM to customize it for other German end users and maintain it in accordance with SAGEM’s instructions.

•

to install additional software on the computer hardware (e.g. remote administration tools, the HBS print software) provided that the installation of this additional software is compatible with SAGEM’s Software.

•

to develop new customizations of the Customized Basic Software for future new end users in Germany, or alternatively to ask Sagem to propose the development of new customizations, on a case-by-case basis.

•

to be responsible for those parts of the Customized Basic Software which are configured or customized by HBS and for any additionally installed software

1.8 Maintenance

Sagem shall offer to HBS optional maintenance prices for the maintenance of the Basic Software and any Project Specific Works after the expiration of the warranty. If needed, HBS shall order such maintenance together with the original runtime license.

Page 7

ARTICLE 2

Unless modified by this Amendment, all articles and exhibits of the AGREEMENT and amendments 1, 2, 3, 4 and 5 remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have caused this AMENDMENT to be duly executed by their authorized representatives, in duplicate originals as of the day and year written hereunder.


For and on behalf of				For and on behalf of

SAGEM SA				HEIMANN BIOMETRIC SYSTEMS
Francois PERRACHON				Dr. Bernd REINHOLD
Managing Director,				President
Identity Systems

Date: ____._______________ 2002				Date: ____._______________ 2002

Page 8

Appendix A

The Appendix A contains the technical part of the request for tender issued by the Land Sachsen-Anhalt and includes SAGEM answers.

Page 9

Amendment no. 7

to the Agreement no DDS/65/413/Pse

(hereinafter referred to as « the AGREEMENT »)

between

SAGEM SA, a French corporation having its registered office at 27 rue Leblanc, 75115 Paris, France, represented by Mr. François PERRACHON, Managing Director, Identification Systems,

(hereinafter referred to as « SAGEM »),

and

HEIMANN BIOMETRIC SYSTEMS, a German corporation having its registered office at Unstrutweg 4, 07743 Jena, Germany, represented by Dr. Bernd REINHOLD, President,

(hereinafter referred to as « HBS »),

THE PARTIES HEREBY AGREE AS FOLLOWS:

ARTICLE 1

The Parties agree to replace the exhibit 8 “SAGEM’s Customers” of the Agreement n° DDS/65/413/Pse by the new exhibit 8 “SAGEM’s customers” attached.

ARTICLE 2

Unless modified by this Amendment, all articles and exhibits of the AGREEMENT and amendments 1, 2, 3, 4, 5 and 6 remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have caused this AMENDMENT to be duly executed by their authorized representatives, in duplicate originals as of the day and year written hereunder.


For and on behalf of		For and on behalf of

SAGEM SA		HEIMANN BIOMETRIC SYSTEMS

François PERRACHON		Dr. Bernd REINHOLD
Managing Director,		President
Identity Systems,

Date:__ ._____ .2002		Date:_______________ 2002

Appendix A

Exhibit 8

SAGEM’s customers

Page 1

Exhibit 8

SAGEM’s customers

[****]

Amendment no. 8

to the Agreement no. DDS/65/413/Pse

between

SAGEM SA, a French corporation having its registered office at 27 rue Leblanc, 75115 Paris, France, represented by Mr. Jean-Paul JAINSKY, Managing Director, Security Division of SAGEM.

(hereinafter referred to as “ SAGEM ”),

and

HEIMANN BIOMETRIC SYSTEMS GMBH, a German corporation having its registered office at Unstrutweg 4, 07743 Jena, Germany, represented by Henry STEGER, Vice President Marketing & Sales,

(hereinafter referred to as “ HBS ”),

PREAMBLE

WHEREAS, SAGEM SA and Heimann Biometrics Systems GmbH signed the Agreement no DS/65/413/Pse on December 30, 1998, (hereinafter referred to as “ the AGREEMENT ”),

WHEREAS, the AGREEMENT is valid until December 30, 2003 and is automatically renewable for successive one year periods unless one of the party notifies its intention not to renew the AGREEMENT with a six months written notice prior to the date of renewal as defined in article 16.3 of the AGREEMENT,

WHEREAS, SAGEM SA and Heimann Biometrics Systems GmbH signed an Amendment No4 to the AGREEMENT on April 12, 2002. In Article 1 of this Amendment No4 SAGEM commits to order [****] products (amongst LS1/P+ and/or LS1/P++ and/or LS1/T+ products) by the end of the term of the AGREEMENT (December 30, 2003).

SAGEM has ordered more than [****] products by December 2002 and consecutively SAGEM has fulfilled the frame order as per Article 1.

WHEREAS, in Article 2 of this Amendment No4 SAGEM commits to order [****] Cabinet products by the end of the term of the AGREEMENT (December 31, 2003).

SAGEM has ordered more than [****] products by December 2002 and consecutively SAGEM has fulfilled the frame order as per Article 2.

THE PARTIES HEREBY AGREE AS FOLLOWS:

ARTICLE 1

SAGEM and HBS agree to modify as follows the article 16.2 of the AGREEMENT : “The term of the AGREEMENT shall commence as of the EFFECTIVE DATE and shall remain valid during 6 years unless extended in accordance with article 16.3 of this AGREEMENT, stating the end of the term of the AGREEMENT on 31^st, December 2004.”


		HBS

Page 1/7

The parties agree to start negotiations in the event of specific projects with special requirements.

ARTICLE 2

Frame Order for [****] products LS1/P++

SAGEM (including its subsidiaries) commits to order from HBS at least a total of [****] LS1/P++ products at the following prices from March 21^st, 2003 to the term of the AGREEMENT.

SAGEM (including its subsidiaries) will do its best effort to propose LS1/P++ product in place of the LS1/P+ product. The price for LS1/P+ is given in article 7.


	*Description of the product*	*Frame Order Price*
1	LS1/P++ OEM/DLL	[****]
	LS1/P++ scanner block with IEEE interface
	IEEE interface cable
	Foot pedal incl. Cable
	Software license for HBS “Capture DLL” software module
2	LS1/P++/PAD OEM/DLL	[****]
	LS1/P++ scanner block with IEEE interface
	and integrated signature PAD
	IEEE interface cable
	Foot pedal incl. Cable
	Software license for HBS “Capture DLL” software module

SAGEM will afterwards issue valid Purchase Orders from time to time to release the shipment of the specified Products to be delivered in said time period. HBS will confirm Purchase Orders in writing.

SAGEM shall send to HBS in the first week of each semester a rolling forecast for the expected call order quantity and product version for the next 6 months.

At the end of the frame order period, HBS shall establish the total number of Products LS1/P++ ordered by SAGEM (including its subsidiaries). A quantity of [****] LS1/P+ products maximum, if ordered, will be accounted in the computation of the total number of products. The price for these LS1/P+ will be, in difference to ARTICLE 7, [****] EUR per piece.

•

If the quantity ordered is higher or equal to [****] then SAGEM has fulfilled the frame order.

•

If the quantity ordered is less than [****], then SAGEM must pay at the end of the frame order period a sum corresponding to [****] of the unit price of the LS1/P++ product for each product of the Frame Order not ordered (i.e . [****] less the products ordered by the end of the frame order).


		HBS

Page 2/7

ARTICLE 3

Frame Order for [****] LS1_CABINET products or any new cabinet provided by HBS.

SAGEM (including its subsidiaries) commits to order from HBS at least a total of [****] LS1_CABINET_V115 and/or LS1_CABINET_V230 products at the following prices from March 21^st, 2003 to the term of the AGREEMENT.

The unit price for LS1_CABINET_V115 and LS1_CABINET_V230 products is:

3. Price: [****]

The unit price for New CABINET products is:

Price: TBD per New Cabinet

SAGEM will afterwards issue valid Purchase Orders specifying the Voltage version of the Products in order to release the shipment of the Products to be delivered in the said frame order period. HBS will confirm Purchase Orders in writing.

At the end of the frame order period, HBS shall establish the total number of Products ordered by SAGEM (including its subsidiaries). If a new Cabinet version will be available before end of the frame order period, then the sold quantity of this new Cabinet will be included in the total quantity.

•

If the quantity ordered is higher or equal to [****], then SAGEM has fulfilled the frame order.

•


		HBS

Page 3/7

ARTICLE 4

Frame Order for [****] products LS1/LITE-X

SAGEM (including its subsidiaries) commits to order from HBS at least a total of [****] LS1/LITE-X products from March 21^st, 2003 to the term of the AGREEMENT.

SAGEM (including its subsidiaries) will do its best effort to propose LS1/LITE-X product in place of the LS1/T+ product.

The price for LS1/T+ are given in article 7.


	*Description of the product*	*Frame Order Price*
3	LS1/LITE-X OEM/DLL	[****]
	LITE-X scanner block with IEEE interface
	Interface cable to Laptop
	Foot pedal incl. Cable
	Software license for HBS “Capture DLL” software module
4	LS1/LITE-X Suitcase	[****]
	Transport case for portable use

SAGEM will afterwards issue valid Purchase Orders from time to time to release the shipment of the specified Products to be delivered in said frame order period. HBS will confirm Purchase Orders in writing.

SAGEM shall send to HBS a rolling forecast for the expected call order quantity and product version for the next 6 months in the first week of each semester.

At the end of the frame order period, HBS shall establish the total number of Products LS1/LITE-X ordered by SAGEM (including its subsidiaries). A quantity of twenty (20) LS1/T+ products maximum, if ordered, will be accounted in the computation of the total number of products.

•

If the quantity ordered is higher or equal to [****], then SAGEM has fulfilled the frame order.

•

If the quantity ordered is less than [****], then SAGEM must pay at the end of the frame order period a sum corresponding to [****] of the unit price of the LS1/LITE-X product for each product of the Frame Order not ordered (i.e. [****] less the products ordered the end of the frame order).


		HBS

Page 4/7

ARTICLE 5

In the case, that SAGEM will place one Purchase Order about [****]. LS2/CHECK OEM/DLL, the price for this special PO will be [****] per unit. In that case SAGEM will pay an upfront deposit about 20% of the total ordered amount with placing PO. The unit price of [****] for LS2/CHECK OEM/DLL product will valid until the term of the AGREEMENT, after this special PO will be executed.

ARTICLE 6

The Parties agree to add the HBS scanner product LS1/LITE and ACCO to the list of products offered by HBS to SAGEM.

The LS1/LITE and ACCO1394 products will be handled as a separate product according to the attached price list.


	*Description of the product*	List price
5	ACCO1394 subsystem	[****]
	ACCO1394 scanner block with IEEE interface
	interface cable for laptop
	Software license for HBS “Capture DLL” software module
6	LS1/LITE OEM/DLL	[****]
	LS1/LITE scanner block with IEEE interface
	Interface cable for Laptop
	Foot pedal incl. cable
	Software license for HBS “Capture DLL” software module
7	LS1/LITE Suitcase	[****]
	Transport case for portable use
8	LS2/F OEM/DLL	[****]
	LS2/F scanner block with IEEE interface
	IEEE interface cable to Laptop
	Foot pedal incl. Cable
	Software license for HBS “Capture DLL” software module
9	LS2/CHECK OEM/DLL	[****]
	LS2/CHECK scanner block with IEEE interface
	IEEE interface cable to laptop
	Software license for HBS “Capture DLL” software module

Each system, ordered by SAGEM (including including its subsidiaries) until the term of the AGREEMENT, will be provided with [****] discount on the above mentioned list price per scanner system.


		HBS

Page 5/7

ARTICLE 7

Price for products, which are not included in the ARTICLEs above, but which SAGEM commits to order to HBS based upon availability and need, are listed in the table below.


	*Description of the product*	*Price*
10	LS1/P+ OEM/DLL	[****]
	LS1/P+ scanner block (ILM2)
	DSCI interface board W2T
	Cable Scanner block – DSCI
	Foot pedal incl. cable
	Software license for HBS “Capture DLL” software module

11	LS1/T+ OEM/DLL	[****]
	LS1/T+ scanner block (ILM3)
	DSCI interface board W2T
	Cable Scanner block – DSCI
	Foot pedal incl. cable
	Software license for HBS “Capture DLL” software module

*)	except [****] pieces, conditions see ARTICLE 2.

The prices are valid independent from the ordered quantity.

ARTICLE 8

For SAGEM’s subsidiary SMI the payment period remains with 30 days. The order prices for the products listed above in this Amendment if ordered by SMI will be included in the price table, Exhibition 1 to this Amendment.

ARTICLE 9

For the products mentioned in ARTICLEs above of this amendment the following terms and conditions are applicable.


Terms of delivery:	For LS scanner products

	Ex Work HBS Jena /Incoterms 2000

	• max. 10 pieces	lead time 4 weeks A.R.O.,

	• max. 25 pieces per month	lead time 8 weeks A.R.O.,

	• max. 25 pieces per week	lead time 16 weeks A.R.O.

This delivery time will be valid only in the event that SAGEM has fulfilled it’s obligations regarding a rolling forecast, included in ARTICLEs 2 and 4. If SAGEM does not send a forecast in time, the lead time will increase by 2 weeks.


		For LS1-Cabinet products

		Ex Work HBS Jena/Incoterms 2000

		• max. 10 pieces		lead time 6 weeks A.R.O.,

		• max. 25 pieces per month		lead time 10 weeks A.R.O.,

		• max. 25 pieces per week		lead time 18 weeks A.R.O.,


		HBS

Page 6/7


Terms of payment:		Payment 60 days after date of Invoice

Except for SMI, which will pay within 30 days after the date of invoice as defined in ARTICLE 8.

Issuing of invoices:		Invoices will be always issued on the date when the equipment ordered is ready for pick up at the HBS location in Jena / Germany.

Payments:		Each invoice shall be paid without deduction, deferment, set-off, counter claim or other withholding whatsoever. All bank charges will be paid by SAGEM.

Account:		All payments to the account of HBS at: [****]

ARTICLE 10

Unless modified by this Amendment, all articles and exhibits of the AGREEMENT and amendments 1, 2, 3, 4, 5, 6 and 7 remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have caused this AMENDMENT to be duly executed by their authorized representatives, in duplicate originals as of the day and year written hereunder.


For and behalf of		For and behalf of

SAGEM SA		Heimann Biometric Systems GmbH

Jean Paul JAINSKY Managing Director, Security Division		Henry STEGER Vice President Marketing & Sales

Date: 15.04.2003		Date: 21.03.2003

Exhibitions: 1. Price table


		HBS

Page 7/7

Conditions for SAGEM/SMI, valid from date of signature Amendment 8 until December 31^st, 2004


	*Description of the product*	Order Price SAGEM (60 days)	Order Price SMI (30 days)	HSL SAGEM*	HSL SMI*
	Frame order about [] pieces P++ incl. delivery to German Police forces

1	LS1/P++ OEM/DLL	[****]	[****]	10098	10250

1a	LS1/P+ OEM/DLL For [****] pcs. only, see ART. 2	[****]	[****]	10024	10036

2	LS1/P++/PAD OEM/DLL	[****]	[****]	10251	10252

3	Frame order about [] pieces LS1_CABINET	[****]	[****]	10017	10018

	Frame order about [] pieces LITE-X

4	LS1/LITE-X OEM/DLL	[****]	[****]	10264	10262

5	LS1/LITE-X Suitcase	[****]	[****]	10142	10142

6	One PO about [] pieces LS2/CHECK Further remarks s. ART. 5	[****]	[****]	10096	10127

7	ACCO1394	[****]	[****]

8	LS1/LITE OEM/DLL	[****]	[****]	10095	10132

9	LS1/LITE/SUITCASE	[****]	[****]	10119	10119

10	LS2/F OEM/DLL	[****]	[****]	10047	10128

11	LS2/CHECK OEM/DLL	[****]	[****]	10096	10127

	Products w/o discounts

12	LS1/P+ OEM/DLL	[****]	[****]	10024	10036

13	LS1/T+ OEM/DLL	[****]	[****]	10069	10068

*	Remarks for HBS only

Conditions for SAGEM/SMI, valid from date of signature Amendment 8 until December 31^st, 2004


	*Description of the product*	Order Price SAGEM (60 days)	Order Price SMI (30 days)	Order code SHB for SAGEM*	Order code SHB for SMI*
	Frame order about [] pieces P++ incl. delivery to German Police forces

1	LS1/P++ OEM/DLL Order code	[****]	[****]	10098	10250
	SAGEM/SMI	188132728-01	2202-129000-1

1a	LS1/P+ OEM/DLL For [****] pcs. only, see ART. 2 Order code	[****]	[****]	10024	10036
	SAGEM/SMI	187664747-01	[****]

2	LS1/P++/PAD OEM/DLL Order code SAGEM/SMI	[****]	[****]	10251	10252

3	Frame order about [] pieces LS1_CABINET Order code	[****]	[****]	10017	10018
	SAGEM/SMI	187725996-01	6301-900008-0

	Frame order about [] pieces LITE-X

4	LS1/LITE-X OEM/DLL Order code SAGEM/SMI	[****]	[****]	10264	10262

5	LS1/LITE-X Suitcase Order code SAGEM/SMI	[****]	[****]	10142	10142

6	One PO about [] pieces LS2/CHECK Further remarks s. ART. 5 Order code SAGEM/SMI	[****]	[****]	10096	10127

7	ACCO1394 Order code SAGEM/SMI	[****]	[****]	10274	10274

8	LS1/LITE OEM/DLL Order code SAGEM/SMI	[****]	[****]	10095	10132

9	LS1/LITE/SUITCASE Order code SAGEM/SMI	[****]	[****]	10119	10119

10	LS2/F OEM/DLL Order code SAGEM/SMI	[****]	[****]	10047	10128

Conditions for SAGEM/SMI, valid from date of signature Amendment 8 until December 31^st, 2004


11	LS2/CHECK OEM/DLL Order code SAGEM/SMI	[****]	[****]	10096	10127

	Products w/o discounts

12	LS1/P+ OEM/DLL Order code SAGEM/SMI	[****]	[****]	10024	10036
13	LS1/T+ OEM/DLL Order code	[****]	[****]	10069	10068
	SAGEM/SMI		2202-129001-1

*	Remarks for SHB only

AMENDMENT no. 9

to the Agreement no. DDS/65/413/Pse

(hereinafter referred to AS “the AGREEMENT”)

[NEVER EXECUTED AND

INTENTIONALLY OMITTED]

Page 1

Amendment no. 10

to the Agreement no DDS/65/413/Pse

between

SAGEM SA, a French corporation having its registered office at 27 rues Leblanc, 75115 Paris, France, represented by Mr. Jean-Paul JAINSKY, Managing Director, Security Division of SAGEM.

(hereinafter referred to as “SAGEM”),

and

SMITHS HEIMANN BIOMETRICS GMBH, a German corporation having its registered office at Unstrutweg 4, 07743 Jena, Germany, represented by Henry STEGER, Vice President Marketing & Sales,

(hereinafter referred to as “SHB”),

PREAMBLE

WHEREAS, SAGEM SA and Heimann Biometrics Systems GmbH signed the Agreement no DS/65/413/Pse setting force the terms and conditions relative to the sale of hardware and software described hereinafter of one company to the other on December 30, 1998, (hereinafter referred to as “ the AGREEMENT”),

WHEREAS, SAGEM and SHB, the former Heimann Biometric Systems GmbH , signed the Amendment n° 8 on April 4^th, 2003 (hereinafter referred to as “Amendment 8”), which is valid until December 31^st, 2004,

WHEREAS SHB has included new products in its portfolio and SAGEM is willing to include these products in its business,

WHEREAS SHB has phased out LS1 products and SAGEM didn’t place an last order for these products,

THE PARTIES HEREBY AGREE AS FOLLOWS:

ARTICLE 0

SAGEM and SHB agree to modify as follows the article 16.2 of the AGREEMENT: “The term of the AGREEMENT shall commence as of the EFFECTIVE DATE and shall remain valid during 7 years unless extended in accordance with article 16.3 of this AGREEMENT, stating the end of the term of the AGREEMENT on 31st, December 2005.”


		SAGEM				SHB

Page 1/7

ARTICLE 1

The Amendment 10 is valid up from signature by both Parties and will expired December 31^st, 2005.

ARTICLE 2

The Amendment 10 includes the new products LITE-Ue, LITE-X/Xe, LITE CABINET, LITE CABINET w/o TFT, LSCAN 1000P, acco 1394 and new accessories in the AGREEMENT and shows the prices for LS1 products, which valid up from January 1^st 2005.

ARTICLE 3

Frame Order for [****] products LITE-Ue

SAGEM (including its subsidiaries) commits to order from SHB at least a total of [****] LITE-Ue products at the following prices in accordance to the terms of the AGREEMENT.


	*Description of the product*	*Frame Order Price*
1	LITE-Ue CE LITE-Ue scanner block with IEEE interface IEEE interface cable to PC* Software license for SHB “CAPTURE_ESSENTIALS” software	[****]
2	LITE-Ue Suitcase Transport case for portable use of LITE-Ue	[****]

*	If SAGEM/SMI will use IEEE cable to laptop, they have to note in theirs PO the remark “with CAB/IEEE/LT”.

SAGEM will afterwards issue valid Purchase Orders from time to time to release the shipment of the specified Products to be delivered in said time period. SHB will confirm Purchase Orders in writing.

SAGEM shall send to SHB in the first week of each semester a rolling forecast for the expected call order quantity and product version for the next 6 months.

At the end of the frame order period, SHB shall establish the total number of Products LITE-Ue, ordered by SAGEM (including its subsidiaries).

•

If the quantity ordered is higher or equal to [****] then SAGEM has fulfilled the frame order.

•

If the quantity ordered is less than [****], then SAGEM must pay at the end of the frame order period a sum corresponding to [****] of the unit price of the LITE-Ue product for each product of the Frame Order not ordered (i.e. [****] less the products ordered by the end of the frame order).

ARTICLE 4

Frame Order for[****] LITE CABINET products

SAGEM (including its subsidiaries) commits to order from SHB at least a total of [****] LITE CABINET products at the following prices to the terms of the AGREEMENT.


		SAGEM				SHB

Page 2/7


	*Description of the product*	*Frame Order Price*
3	LITE CABINET Cabinet for the LITE-Ue or LITE-X/Xe with 17” TFT screen, integrated cabel set and foot pedal, no different between 230V and 115V)	[****]
	LITE CABINET Options :
4	LITE CAB Touch Screen	[****]
5	LITE CAB Mugshoot Arm	[****]
6	LITE CAB Bracket, 1 pair, more in Exhibit 1	[****]

SAGEM will afterwards issue valid Purchase Orders in order to release the shipment of the Products to be delivered in the said frame order period. SHB will confirm Purchase Orders in writing.

At the end of the frame order period, SHB shall establish the total number of Products ordered by SAGEM (including its subsidiaries).

•

If the quantity ordered is higher or equal to [****], then SAGEM has fulfilled the frame order.

•

If the quantity ordered is less than [****], then SAGEM agrees to pay at the end of the frame order period a sum of [****] of the unit price of the LITE CABINET product for each LITE CABINET product not ordered by the end of the frame order.

ARTICLE 5

Frame Order for [****] products LITE-X and/or LITE-Xe

This ARTICLE replaces ARTICLE no. 4 in Amendment 8.

SAGEM (including its subsidiaries) commits to order from SHB at least a total of one hundred twenty LITE-X and/or LITE-Xe products up from the date of signature of this document to the term of the AGREEMENT.


	*Description of the product*	*Frame Order Price*
7	LITE-X CE	Range of ordered quantity :
	LITE-X scanner block with IEEE interface	[****]
	Interface cable to Laptop*	[****]
	Software license for SHB “CAPTURE_ESSENTIALS” software	[****]
		[****]
		[****]
		[****]
8	LITE-Xe CE	Range of ordered quantity :
	LITE-Xe scanner block with IEEE interface	[****]
	Interface cable to Laptop*	[****]
	Software license for SHB “CAPTURE_ESSENTIALS” software	[****]
		[****]
		[****]
		[****]
9	LITE-Xe Suitcase	[****]
	Transport case for portable use of LITE-X or LITE-Xe

*	If SAGEM/SMI will use IEEE cable to PC, they have to note in theirs PO the remark“with CAB/IEEE/PC”.


		SAGEM				SHB

Page 3/7

SAGEM will afterwards issue valid Purchase Orders from time to time to release the shipment of the specified Products to be delivered in said frame order period. SHB will confirm Purchase Orders in writing.

SAGEM shall send to SHB a rolling forecast for the expected call order quantity and product version for the next 6 months in the first week of each semester.

If the quantity ordered is less than [****], then SAGEM must pay at the end of the frame order period a sum corresponding to [****] of the [****] price of the LS1 LITE Xe product for each product not ordered (i.e. [****] less the products ordered by the end of the frame order).

ARTICLE 6

Quantity Orders for LS2/CHECK CE


	*Description of the product*	*Price per piece by order:*
10	LS2/CHECK CE	[****]
	LS2/CHECK scanner block with IEEE1394 interface and power	[****]
	supply	[****]
	IEEE 1394 interface cable to Laptop*	[****]
	Software license for SHB “CAPTURE_ESSENTIALS” software	[****]

*	If SAGEM/SMI will use IEEE cable to PC, they have to note in theirs PO the remark “with CAB/IEEE/PC”.

ARTICLE 7

Quantity Orders for L SCAN 1000P


	*Description of the product*	*Price per piece by order:*
11	L SCAN 1000P	[****]
	LSCAN 1000P scanner block with IEEE1394 interface IEEE	[****]
	1394 interface cable to PC	[****]
	Software license for SHB “CAPTURE_ESSENTIALS” software	[****]
		[****]
		[****]
		[****]
		[****]

ARTICLE 8

Quantity Orders for LITE-Ue

Description of the product

Price
per
piece by
order:

LITE-Ue CE

LITE-^r e scanner block with IEEE interface

IEEE interface cable to PC*

Software license for SHB “CAPTURE_ESSENTIALS” software

[****]

*	If SAGEM/SMI will use IEEE cable to laptop, they have to note in theirs PO the remark “with CAB/IEEE/PC”.


		SAGEM		SHB

Page 4/7

ARTICLE 9

Quantity Orders for LITE-X/Xe


	*Description of the product*	*Price per piece by order:*

13	LITE-X CE LITE-X scanner block with IEEE interface IEEE interface cable to laptop* Software license for SHB “CAPTURE_ESSENTIALS” software	[**] [**]

14	LITE-Xe CE LITE-Xe scanner block with IEEE interface IEEE interface cable to laptop* Software license for SHB “CAPTURE_ESSENTIALS” software	[**] [**]

*	If SAGEM/SMI will use IEEE cable to PC, they have to note in theirs PO the remark “with CAB/IEEE/PC”.

ARTICLE 10

Additional items:


	*Description of the product*	*Price*

15	LITE CABINET w/o TFT Cabinet for the LS1 LITE-Ue or LSI LITE-X/Xe without 17” TFT screen, integrated cabel set and foot pedal no different between 230V and 115V option touchscreen not possible	[****]

16	LITE FSW 4* Foot switch for LITE_Ue or LITE-X/Xe	[****]

17	LS1_CARDPRINT_SERVER regular runtime license	[****]

18	Acco 1394 Single finger reader acco 1394 for rolled and flat finger IEEE interface cable for PC Software license for SHB “CAPTURE_ESSENTIALS” software module	[****]

19	L SCAN 100 Single finger reader for flat finger USB interface cable for PC Desk mounting kit Software license for SHB “CAPTURE_ESSENTIALS” software module	[****]

20	HINGE_KIT for LS1/P++	[****]

*	A PO for foot switches is applicable if the LITE products are used as desktop systems without cabinet.

The prices are valid independent from the ordered quantity.

ARTICLE 11

Prices for LS1 products valid up from January 1^st, 2005, minimum order quantity 5 pcs.


		SAGEM		SHB

Page 5/7


	*Description of the product*	*Frame Order Price*
21	LS1/P++ OEM/CE	[****]
	LS1/P++ scanner block with IEEE interface
	IEEE interface cable
	Foot pedal incl. cable
	Software license for HBS “CAPTURE_ESSENTIALS” software
	module
22	LS1/P++/PAD OEM/CE	[****]
	LS1/P++ scanner block with IEEE interface
	and integrated signature PAD
	IEEE interface cable
	Foot pedal incl. cable
	Software license for HBS “CAPTURE_ESSENTIALS” software
	module
23	LS1 Cabinet 115 or 230V	[****]

ARTICLE 12

For SAGEM’s subsidiary SMI the payment period remains within 30 days. The order prices for the products listed above in this Amendment, if ordered by SMI, is included in the price table, Exhibit 1 to this Amendment. The currency for SMI is USD, the exchange rate between EURO and USD is 1,1766 (middle exchange rate EURO Fixing, asking price, from December 2002 until November 2004).

ARTICLE 13

For the products mentioned in ARTICLEs above of this amendment the following terms and conditions are applicable.


Terms of delivery:	For LITE scanner products
	Ex Work SHB Jena /Incoterms 2000
	• max. 10 pieces	lead time 4 weeks A.R.O.,
	• max. 25 pieces per month	lead time 8 weeks A.R.O.,
	• max. 25 pieces per week	lead time 16 weeks A.R.O.

This delivery time will be valid only in the event that SAGEM has fulfilled it’s obligations regarding a rolling forecast, included in ARTICLEs 4 and 6. If SAGEM does not send a forecast in time, the lead-time will increase by 2 weeks.


		For LITE CABINET products
		Ex Work SHB Jena /Incoterms 2000 • max. 10 pieces		lead time 6 weeks A.R.O.,
		• max. 25 pieces per month		lead time 10 weeks A.R.O.,
		• max. 25 pieces per week		lead time 18 weeks A.R.O.,

ARTICLE 14

This Amendment 10 includes one attachment (Exhibit 1 to the Amendment 10), which includes the price table with the current prices in EURO and USD.


		SAGEM		SHB

Page 6/7

ARTICLE 15

Unless modified by this Amendment, all articles and exhibits of the AGREEMENT and Amendments 1, 2, 3, 4, 5, 6, 7, 8 and 9 remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have caused this EXHIBIT to be duly executed by their authorized representatives, in duplicate originals as of the day and year written hereunder.


For and behalf of		For and behalf of
SAGEM SA		Smiths Heimann Biometrics GmbH

Jean Paul JAINSKY Managing Director, Security Division		Henry STEGER Vice President Marketing & Sales

Date:		Date: 30^th November 2004

Attachment:

Exhibit 1: Price table for Amendment 10


		SAGEM		SHB

Page 7/7

Conditions for SAGEM/SMI, valid up from date of signature Amendment 10 until December 31st, 2005

prices in EUR

prices in USD, exchange rate 1,1766

no.

Description of the product

Order price SAGEM
(60 days) in EURO

Order Price SMI
(30 days) in USD

Article SAGEM

Description SMI

order code SHB
for SAGEM

order code SHB
for SMI

Frame order about [****] pcs. LITE-Ue

LITE-Ue CE

[****]

2202-129004-0

10022

LITE-Ue Suitcase

[****]

10119

Frame order about [****] pcs. LITE CABINET

LITE CABINET

[****]

6301-129000-0

10161

LITE CABINET OPTIONS

LITE CAB Touch Screen

[****]

2406-129000-0

10309

LITE CAB Mugshoot Arm

[****]

5001-129000-0

10310

LITE CAB Bracket

10312

[****]

Frame order about [****] pcs. LITE-X and/or LITE-Xe

LITE-X CE

2202-129003-0

10262

[****]

LITE-Xe CE

2202-129003-2

10284

[****]

LITE-X/Xe Suitcase

[****]

0799-129000-1

10142

Quantity orders for LS2/CHECK

LS2/CHECK CE

18813247-6

2202-129005-0

10096

10127

[****]

1 of 2

[****]

Quantity orders for LSCAN 1000P

LSCAN 1000P

[****]

evaluation price until 23/12/04

[****]

Quantity orders for LITE-Ue

LS1 LITE-Ue CE

2202-129004-0

10022

[****]

Quantity orders for LITE-X

LITE-X CE

2202-129003-0

10262

[****]

Quantity orders for LITE-Xe

LITE-Xe CE

2202-129003-2

10284

[****]

Additional items

LITE Cabinet w/o TFT

[****]

LITE FSW4

[****]

1002-129000-1

10303

LS1_CARDPRINT_SERVER

[****]

187742707-01

7004-900002-0

10052

acco 1394

[****]

10274

L SCAN 100

[****]

10297

HINGE_KIT

[****]

0999-900005-0

10044

LS1 products, valid up from January 1st, 2005, minimum order quantity [****] pcs.

LS1/P++ OEM/CE

[****]

188132728-01

2202-129000-1

10098

10250

LS1/P++/PAD OEM/CE

[****]

10251

10252

LS1_CABINET 230V/115V

[****]

187725996-01

6301-900008-1/-0

10017

10018

2 of 2

Amendment no. 11

to the Agreement n^o DDS/65/413/Pse

between

Sagem Défense Sécurité, coming to SAGEM SA’ rights and obligations under the AGREEMENT, a French corporation having its registered office at 27 rue Leblanc, 75115 Paris, France, represented by Mr. Jean-Paul JAINSKY, as Executive Vice President, Director Sécurity Division of Sagem Défense Sécurité (hereinafter referred to as “SAGEM”),

and

Cross Match Technologies GmbH, the former Smith Heimann Biometrics GmbH, a German corporation having its registered office at Unstrutweg 4, 07743 Jena, Germany, represented by Henry STEGER, Vice President International Sales,

(hereinafter referred to as “CMT Jena”),

PREAMBLE

WHEREAS, SAGEM SA and Heimann Biometrics Systems GmbH signed the Agreement n^o DS/65/413/Pse setting force the terms and conditions relative to the sale of hardware and software described hereinafter of one company to the other on December 30, 1998, (hereinafter referred to as “the AGREEMENT”),

WHEREAS, SAGEM and SHB signed the Amendment n^o 10 in December 2004 (hereinafter referred to as “Amendment 10”), which is valid until December 31^st, 2005,

WHEREAS, SHB is new registered as Cross Match Technologie GmbH after the merger with Cross Match Technologie Inc./USA and the AGREEMENT has been brought to Sagem Défense Sécurité on May 11, 2005.,

WHEREAS Cross Match agrees to grant Sagem Morpho and Sagem Australasia the conditions applied and described in the AGREEMENT and its amendments

WHEREAS, both Parties confirm that the new registration involve no change to the rights and obligations of any contracts between the Parties.

THE PARTIES HEREBY AGREE AS FOLLOWS:

ARTICLE 0

SAGEM and CMT Jena agree to modify as follows the article 16.2 of the AGREEMENT: “The term of the AGREEMENT shall commence as of the EFFECTIVE DATE and shall remain valid until 31st, December 2007 unless extended in accordance with article 16.3 of this AGREEMENT.”


		SAGEM		CMT Jena

Page 1/6

ARTICLE 1

The Amendment 11 is valid up from signature by both Parties and will expire December 31^st, 2007.

ARTICLE 2

The Amendment 11 includes the new products L SCAN 1000T and L SCAN 100R and shows the prices for the other current CMT Jena products, which are valid up from January 1^st 2006.

ARTICLE 3

Frame Order for [****] Palm Scanner products LITE-Ue CE or L SCAN 1000P K2 CE

SAGEM commits to order from CMT Jena at least a total of [****] Palm Scanner products at the following prices in accordance to the terms of the AGREEMENT.


	*Description of the product*	*Frame Order Price*
1	LITE-Ue CE LITE-Ue scanner block with IEEE interface IEEE interface cable to PC* Software license for CMT Jena “CAPTURE_ESSENTIALS” software	[****]

2	L SCAN 1000P K2 CE LSCAN 1000P K2 scanner block with IEEE 1394 interface IEEE 1394 interface cable to PC Software license for CMT Jena “CAPTURE_ESSENTIALS” software	[**] [] [**] Counted based on all palm scanner products ordered

3	Palm Scan Suitcase Transport case for portable use of LITE-Ue and L SCAN 1000P K2	[****]

*	If SAGEM will use IEEE cable to laptop, they have to note in theirs PO the remark “with CAB/IEEE/LT”.

SAGEM will issue valid Purchase Orders to release the shipment of the specified Products to be delivered according to the definition in ARTICLE 12. CMT Jena will confirm Purchase Orders in writing.

SAGEM shall send to CMT Jena in the first week of each semester a rolling forecast including the expected ordered quantities per product for the next 6 months.

At the end of the frame order period, CMT Jena shall summarize the total number of Palm Scanner products, ordered by SAGEM.

•

If the quantity ordered is higher or equal to [****] then SAGEM has fulfilled the frame order.

•

If the quantity ordered is less than [****], then SAGEM must pay at the end of the frame order period a sum corresponding to [****] of the unit price of the Palm Scan product for each product of the Frame Order not ordered (i.e. [****] less the products ordered by the end of the frame order).


		SAGEM		CMT Jena

Page 2/6

ARTICLE 4

Frame Order for 180 LITE CABINET products

SAGEM commits to order from CMT Jena at least a total of [****] LITE CABINET products at the following prices to the terms of the AGREEMENT.


	*Description of the product*	*Frame Order Price*
4	LITE CABINET Cabinet for the LITE-Ue, L SCAN 1000P K2 or LITE-Xe with 17” TFT screen, integrated cabel set and foot pedal, (no different between 230V and 115V)	[****]
	LITE CABINET Options:
5	LITE CAB Touch Screen	[****]
6	LITE CAB Mugshoot Arm	[****]
7	LITE CAB Bracket, 1 pair, more in Exhibit 1	[****]

SAGEM will issue valid Purchase Orders to release the shipment of the specified Products to be delivered according to the definition in ARTICLE 12. CMT Jena will confirm Purchase Orders in writing.

At the end of the frame order period, CMT Jena shall summarize the total number of Products ordered by SAGEM (including its subsidiaries).

•

If the quantity ordered is higher or equal to [****], then SAGEM has fulfilled the frame order.

•

ARTICLE 5

Frame Order for [****] products LITE-Xe CE and LSCAN100T CE

SAGEM commits to order from CMT Jena at least a total of [****] LITE-Xe CE products up from the date of signature of this document to the term of the AGREEMENT.


	*Description of the product*	*Frame Order Price*
8	LITE-Xe CE	[****]
	LITE-Xe scanner block with IEEE interface Interface cable to PC*
	Software license for CMT Jena “CAPTURE_ESSENTIALS” software
9	LITE-Xe Suitcase	[****]
	Transport case for portable use of LITE-Xe
10	L SCAN 1000T CE
	L SCAN 1000T scanner block with IEEE interface	[****]
	IEEE interface cable to PC*
	Power supply with EU power cable
	Foot switch FSW6
	Software license for CMT Jena “CAPTURE_ESSENTIALS” software


		SAGEM		CMT Jena

Page 3/6

*	If SAGEM will use IEEE cable to laptop, they have to note in theirs PO the remark “with CAB/IEEE/LT”.

SAGEM will issue valid Purchase Orders to release the shipment of the specified Products to be delivered according to the definition in ARTICLE 12. CMT Jena will confirm Purchase Orders in writing.

SAGEM shall send to CMT Jena in the first week of each semester a rolling forecast including the expected ordered quantities per product for the next 6 months.

If the quantity ordered is less than [****], then SAGEM must pay at the end of the frame order period a sum corresponding to [****] of the price of the LITE-Xe CE product for each product not ordered (i.e. [****] less the products ordered by the end of the frame order).

ARTICLE 6

Orders for LS2/CHECK CE


	*Description of the product*	*Price per piece by order:*
11	LS2/CHECK CE	[****]
	LS2/CHECK scanner block with IEEE 1394 interface and power	[****]
	supply	[****]
	IEEE 1394 interface cable to PC*	[****]
	Software license for CMT Jena “CAPTURE_ESSENTIALS” software	[****]

*	If SAGEM will use IEEE cable to laptop, they have to note in theirs PO the remark “with CAB/IEEE/LT”.

ARTICLE 7

Orders for L SCAN 100 CE


	*Description of the product*	*Price per piece by order:*
12	L SCAN 100 CE	[****]
	L SCAN 100 single finger scanner with USB 2.0 interface	[****]
	USB cable
	Quick snap desk holder
	Software license for CMT Jena “CAPTURE_ESSENTIALS” software

ARTICLE 8

Orders for L SCAN 100R CE


	*Description of the product*	*Price per piece by order:*
13	L SCAN 100R CE	[****]
	L SCAN 100R single finger scanner with USB 2.0 interface	[****]
	USB cable	[****]
	Quick snap desk holder	[****]
	Software license for CMT Jena “CAPTURE_ESSENTIALS” software


		SAGEM		CMT Jena

Page 4/6

*	If SAGEM will use IEEE cable to laptop, they have to note in theirs PO the remark “with CAB/IEEE/LT”.

ARTICLE 9

Additional items:


	*Description of the product*	*Price*
14	LITE FSW 4* Foot switch for LITE-Ue, L SCAN 1000P K2 or LITE-Xe	[****]

16	LS1_CARDPRINT_SERVER regular runtime license	[****]

*	A PO for foot switches is applicable if the LITE products or the L SCAN 1000P K2 are used as desktop systems without cabinet.

The prices are valid independent from the ordered quantity.

ARTICLE 10

For the SAGEM in France the payment period is sixty (60) days after date of invoice, and for SAGEM subsidiaries SMI and SAGEM Australasia the payment period remains thirty (30) days. Their order price is included in the price table, Exhibit 1 to this Amendment.

ARTICLE 11

For the products mentioned in ARTICLES above of this amendment the following terms and conditions are applicable.


Terms of delivery:	For LITE and L SCAN products
	Ex Work CMT Jena /Incoterms 2000

	• max. 10 pieces	lead time 4 weeks A.R.O.,

	• max. 25 pieces per month	lead time 8 weeks A.R.O.,

	• max. 25 pieces per week	lead time 16 weeks A.R.O.

	For LITE CABINET product

	Ex Work CMT Jena /Incoterms 2000

	• max. 10 pieces	lead time 6 weeks A.R.O.,

	• max. 25 pieces per month	lead time 10 weeks A.R.O.,

	• max. 25 pieces per week	lead time 18 weeks A.R.O.,

This delivery time will be valid only in the event that SAGEM has fulfilled its obligations regarding a rolling forecast, included in ARTICLES 4 and 6. If SAGEM does not send a forecast in time, the lead-time can increase by two (2) weeks.


		SAGEM		CMT Jena

Page 5/6

ARTICLE 12

In case of project orders SAGEM is able to order smaller quantities of products (in maximum 15% of the ordered project volume) for the project price in a time range of three (3) months after the last delivery of the project volume.

ARTICLE 13

This Amendment 11 includes one attachment (Exhibit 1 to the Amendment 11), which includes the price table with the current prices in €.

ARTICLE 14

Unless modified by this Amendment, all articles and exhibits of the AGREEMENT and its valid Amendments remain in full force and effect.

IN WITNESS WHEREOF, the Parties hereto have caused this EXHIBIT to be duly executed by their authorized representatives, in duplicate originals as of the day and year written hereunder.


For and behalf of				For and behalf of

SAGEM DÉFENSE SEĆURITÉ				Cross Match Technologies GmbH

Jean Paul JAINSKY Executive Vice President ,Director Security Division				Henry STEGER Vice President International Sales
Date:				Date:

Attachment:

Exhibit 1: Price table for Amendment 11


		SAGEM				CMT Jena

Page 6/6

Conditions for SAGEM, valid up from date of signature Amendment 11 until December 31st, 2007

prices in €

no.

Description of the product

Order price
SAGEM (60 days)
in €

Order Price SMI
/ SAGEM
Austr.(30 days)
in €

Article SAGEM

Description SMI

order code SHB

Frame order about [****] pcs. Palm Scanner

LITE-Ue CE

[****]

2202-129004-0

10022

L SCAN 1000P K2 CE

10412

[****]

Palm Scan Suitcase

[****]

10119

Frame order about [****] pcs. LITE CABINET

LITE CABINET

[****]

6301-129000-0

10161

LITE CABINET OPTIONS

LITE CAB Touch Screen

[****]

2406-129000-0

10309

LITE CAB Mugshoot Arm

[****]

5001-129000-0

10310

LITE CAB Bracket

10312

1 pcs.

[****]

10 pcs.

[****]

20 pcs.

[****]

Frame order about [****] pcs. Tentprint Scanner

LITE-Xe CE

[****]

2202-129003-2

10284

LITE-Xe Suitcase

[****]

0799-129000-1

10142

L SCAN 1000T CE

[****]

10421

Orders for LS2/CHECK CE

LS2/CHECK CE

18813247-6

2202-129005-0

10096

up from [****] pcs.

[****]

no.

Description of the product

Order price
SAGEM (60 days)
in €

Order Price SMI
/ SAGEM
Austr.(30 days)
in €

Article SAGEM

Description SMI

order code SHB

[****]

Orders for L SCAN 100 CE

L SCAN 100 CE

10297

[****]

Orders for L SCAN 100R CE

L SCAN 100R CE

10302

[****]

Additional items

LITE FSW4

[****]

1002-129000-1

10303

LS1 CARDPRINT SERVER

[****]

187742707-01

7004-900002-0

10052

Amendment No. 12

to the Agreement No. DDS/65/413/Pse

between

Sagem Défense Sécurité a French corporation having its registered office at 27 rues Leblanc, 75115 Paris, France, together with its subsidiaries SAGEM Morpho Inc./USA, SAGEM South Africa and SAGEM Australasia/Australia, represented by Mr. Jean-Paul JAINSKY, Executive Vice President, Director Security Division of Sagem Défense Sécurité (hereinafter referred to as “SAGEM”), and

Cross Match Technologies GmbH a German corporation having its registered office at Unstrutweg 4, 07743 Jena, Germany, represented by Gerhart Ernst, Managing Director, and Henry STEGER, Senior Vice President International Sales and Marketing, (hereinafter referred to as “CMT Jena”),

PREAMBLE

WHEREAS, SAGEM SA and CMT Jena (as successor in interest to Heimann Biometrics Systems GmbH) signed the Agreement No. DS/65/413/Pse dated December 30, 1998 setting forth the terms and conditions relative to the sale of hardware and software of certain products (hereinafter referred to as (“AGREEMENT”);

WHEREAS, SAGEM and CMT Jena signed the Amendment No. 11 in May 2006 (hereinafter referred to as “Amendment 11”), which extended the Agreement until December 31^st, 2007;

WHEREAS, CMT Jena has notified SAGEM that it will discontinue the products LITE-Xe and LS2/CHECK, and has introduced their new substitute products Guardian and Guardian Ro to the market;

WHEREAS, SAGEM has agreed to purchase the new products as provided herein;

THE PARTIES HEREBY AGREE AS FOLLOWS:

ARTICLE 1

Effective as of this 23rd day of February, 2007 (“Effective Date”), SAGEM and CMT Jena agree to modify as follows the article 16.2 of the AGREEMENT: “The term of the AGREEMENT shall commence as of the EFFECTIVE DATE and shall remain valid until 31 December 2010 unless extended in accordance with article 16.3 of this AGREEMENT.”


		SAGEM		CMT Jena

Page 1 of 7

ARTICLE 2

This Amendment 12 includes prices for new CMT Jena products Guardian, Guardian USB and Guardian Ro and other current CMT Jena products. All prices set forth in this Amendment No. 12 shall be valid from the Effective Date of this Amendment until 31 December 2010.

ARTICLE 3

Frame Order for[****] Palm Scanner products LITE-Ue CE or L SCAN 1000P K2 CE

SAGEM shall order from CMT Jena at least [****] Palm Scanner products during the Frame Order Period at the following prices:


	*Description of the product*	*Frame Order Price*
1	LITE-Ue CE	[****]
	LITE-Ue scanner block with IEEE interface IEEE interface cable to PC* Software license for CMT Jena “CAPTURE_ESSENTIALS” software
2	L SCAN 1000P K2 CE	[****]
	LSCAN 1000P K2 scanner block with IEEE 1394 interface IEEE 1394 interface cable to PC Software license for CMT Jena “CAPTURE_ESSENTIALS” Software
3	Palm Scan Suitcase	[****]
	Transport case for portable use of LITE-Ue and L SCAN 1000P K2

*	If SAGEM uses IEEE cable to laptop, the Purchase Order must note the remark “with CAB/IEEE/LT”.

The prices above apply to all Purchase Orders up to [****] pieces.

SAGEM will issue valid Purchase Orders to release the shipment of the specified Products to be delivered as provided in ARTICLE 11. CMT Jena will confirm Purchase Orders in writing.

SAGEM shall send to CMT Jena in the first week of each calendar quarter a rolling forecast including the expected ordered quantities per product for the next six months.

At the end of the Frame Order Period (hereinafter defined as the period beginning on the Effective Date and ending December 31, 2010), CMT Jena shall calculate the total number of Palm Scanner products ordered by SAGEM.

•

If the quantity ordered is equal to [****] then SAGEM has fulfilled the frame order. Up from [****] units the Parties agree to open a new negotiation.

•

If the quantity ordered is less than [****], then SAGEM must pay at the end of the Frame Order Period a sum equal to [****] of the unit price of the Palm Scan product for each product of the Frame Order not ordered (i.e. [****] less the products ordered by the end of the frame order).


		SAGEM		CMT Jena

Page 2 of 7

ARTICLE 4

Frame Order for [****] LITE CABINET products

SAGEM shall order from CMT Jena at least [****] LITE CABINET products over the term of this Amendment at the following prices:


	*Description of the product*	*Frame Order Price*
4	LITE CABINET Cabinet for the LITE-Ue or L SCAN 1000P K2 with 17” TFT screen, integrated cabel set and foot pedal, (no different between 230V and 115V)	[****]
	LITE CABINET Options:
5	LITE CAB Touch Screen	[****]
6	LITE CAB Mugshoot Arm	[****]
7	LITE CAB Bracket, 1 pair, more in Exhibit 1	[****]

The prices above apply to all Purchase Orders up to [****] pieces.

SAGEM will issue valid Purchase Orders to release the shipment of the specified Products to be delivered as provided in ARTICLE 11. CMT Jena will confirm Purchase Orders in writing.

SAGEM shall send to CMT Jena in the first week of each calendar quarter a rolling forecast including the expected ordered quantities per product for the next 6 months.

At the end of the Frame Order Period, CMT Jena shall calculate the total number of Products ordered by SAGEM.

•

If the quantity ordered is equal to [****], then SAGEM has fulfilled the frame order. Up from [****] units the Parties agree to open a new negotiation

•

If the quantity ordered is less than [****], then SAGEM agrees to pay at the end of the Frame Order Period a sum of [****] of the unit price of the LITE CABINET product for each LITE CABINET product not ordered by the end of the frame order.

ARTICLE 5

Quantity order for Tenprint Scanner products L SCAN 1000T CE

Description of the product

Price per quantity

L SCAN 1000T CE

L SCAN I 000T scanner block with IEEE interface

IEEE interface cable to PC*

Power supply with EU power cable

Foot switch FSW6

Software license for CMT Jena “CAPTURE_ESSENTIALS” software

[****]

*	If SAGEM uses IEEE cable to laptop, the Purchase Order must note the remark “with CAB/IEEE/LT”.


		SAGEM		CMT Jena

Page 3 of 7

ARTICLE 6

Quantity order for L SCAN Guardians


	*Description of the product*	*Price per quantity:*
9	L SCAN Guardian LS Guardian scanner block for flat capturing with mounting base and IEEE 1394 interface IEEE 1394 interface cable to PC* Software license for CMT Jena “LSCAN_ESSENTIALS” software	[**] [] [**]
10	L SCAN Guardian USB LSE Guardian scanner block for flat capturing with mounting base and USB 2.0 interface USB 2.0 interface cable Software license for CMT Jena “LSCAN_ESSENTIALS” software	[**] [] [**]
11	L SCAN Guardian Ro LSE Guardian scanner block for flat and rolled capturing with mounting base and IEEE 1394 interface IEEE 1394 interface cable to PC* Software license for CMT Jena “LSCAN_ESSENTIALS” software	[**] [] [**]
12	L SCAN Guardian USB Ro LSE Guardian scanner block for flat and rolled capturing with mounting base and USB 2.0 interface USB 2.0 interface cable Software license for CMT Jena “LSCAN_ESSENTIALS” software	[**] [] [**]
13	L SCAN Guardian AC LSE Guardian scanner block for flat capturing with mounting base and IEEE 1394 interface IEEE 1394 interface cable to PC* AutoCapture functionality Software license for CMT Jena “LSCAN_ESSENTIALS” software	[**] [] [**]
14	L SCAN Guardian USB AC LSE Guardian scanner block for flat capturing with mounting base and USB 2.0 interface USB 2.0 interface cable AutoCapture functionality Software license for CMT Jena “LSCAN_ESSENTIALS” software	[**] [] [**]
15	L SCAN Guardian Ro AC LSE Guardian scanner block for flat and rolled capturing with mounting base and IEEE 1394 interface IEEE 1394 interface cable to PC* AutoCapture functionality Software license for CMT Jena “LSCAN_ESSENTIALS” Software	[**] [] [**]

*	If SAGEM uses IEEE cable to laptop, the Purchase Order must note the remark “with CAB/IEEE/LT”.


		SAGEM		CMT Jena

Page 4 of 7

ARTICLE 7

Orders for L SCAN 100 CE

The following prices apply to the products listed below during the term of the Agreement:

Description of the product

Price per piece by order:

L SCAN 100 CE

L SCAN 100 single finger scanner with USB 2.0 interface

USB cable

Quick snap desk holder

Software license for CMT Jena “CAPTURE_ESSENTIALS”

software

[****]

ARTICLE 8

Orders for L SCAN 100R CE

The following prices apply to the products listed below during the term of the Agreement:

Description of the product

Price per piece by order:

L SCAN 100R CE

L SCAN 100R single finger scanner with USB 2.0 interface

USB cable

Quick snap desk holder

Software license for CMT Jena “CAPTURE_ESSENTIALS”

software

[****]

ARTICLE 9

The following prices apply to the products listed below during the term of the Agreement:


	*Description of the product*	*Price per piece*
18	LITE FSW 4* Foot switch for LITE-Ue or L SCAN 1000P K2	[****]
19	LS1_CARDPRINT SERVER Regular runtime license	[****]
20	KIT, Supply-Guardian 20 silicone pads, 20 tape cleaner pads, 2 microfiber cloth	[****]
21	KIT, Small Supply-Guardian 5 silicone pads, 5 tape cleaner pads, 2 microfiber cloth	[****]

*	A PO for foot switches is applicable if the LITE products or the L SCAN 1000P K2 are used as desktop systems without cabinet.

The prices are valid independent from the ordered quantity.

ARTICLE 10

For SAGEM (France) the payment period is 60 calendar days after date of invoice. For the SAGEM subsidiaries SAGEM Morpho Inc./USA, SAGEM South Africa and SAGEM Australasia the payment period is thirty (30) calendar days after date of invoice. The order

prices for each of the SAGEM subsidiaries are included in the price table, Exhibit 1 to this Amendment.


		SAGEM		CMT Jena

ARTICLE 11

For all products ordered as provided herein the following terms and conditions are applicable.


Terms of delivery:	Ex Works (EXW) CMT Jena/Incoterms 2000

Lead time:	For LITE and L SCAN products
	• max. 10 pieces	lead time 4 weeks A.R.O.,
	• max. 25 pieces per month	lead time 8 weeks A.R.O.,
	• max. 25 pieces per week	lead time 16 weeks A.R.O.,

	For LITE CABINET products
	• max. 10 pieces	lead time 6 weeks A.R.O.,
	• max. 25 pieces per month	lead time 10 weeks A.R.O.,
	• max. 25 pieces per week	lead time 18 weeks A.R.O.,

The delivery time is valid for the accumulated number of each particular product ordered but not delivered. SAGEM has the right to prioritise individual purchase orders in terms of the sequence of delivery.

This delivery time will be valid only in the event that SAGEM has fulfilled its obligations regarding a rolling forecast, included in ARTICLES 3 and 4.

If CMT Jena is responsible for a delay in terms of the delivery date and SAGEM demonstrably suffers a loss therefrom, SAGEM may claim a compensation as liquidated damages of 0.5% for every completed week of Delay, but in no case more than a total of 5% of the price of that part of order volume, which because of the Delay could not be put to the intended use. Notwithstanding the foregoing, CMT Jena shall not be liable for any delay which is due to any cause beyond Force Major.

ARTICLE 12

During the Term, SAGEM and CMT Jena may enter into separate agreements concerning SAGEM’s issuance of purchase orders in connection with specific and discrete projects (each, a “Project Order”). The parties may agree in writing to special pricing for such Project Order(s) (the “Project Order Price”). Each Project Order shall expressly state the quantity of units (the “Project Unit Volume”), the Project Order Price and the applicable project time (the “Project Term”). At any time prior to the date three months after the expiration or termination of the Project Term, SAGEM may order an additional 15% of the Project Unit Volume at the Project Order Price; provided, however, that the project name must be included in the purchase order.


		SAGEM		CMT Jena

Page 6 of 7

ARTICLE 13

This Amendment 12 includes one attachment (Exhibit 1 to the Amendment 12), which includes the price table with the current prices in €.

ARTICLE 14

This Amendment 12 supercedes Amendment 11 in its entirety.

ARTICLE 15

Unless modified by this Amendment, all articles and exhibits of the AGREEMENT and its valid Amendments remain in full force and effect. If the terms and conditions of this Amendment No. 12 conflict with any term in the Agreement, this Amendment shall control.

IN WITNESS WHEREOF, the Parties hereto have caused this Amendment No. 12 to be duly executed by their authorized representatives, in duplicate originals as of the day and year written hereunder.


For and behalf of	For and behalf of
SAGEM DÉFENSE SÉCURITÉ	Cross Match Technologies GmbH
Jean Paul JAINSKY Executive Vice President, Director Security Division	Gerhart ERNST Managing Director	Henry STEGER Prokurist
Date: 30/3/2007	Date:

		23.2.2007

Attachment:

Exhibit 1: Price table for Amendment 12


		SAGEM		CMT Jena

Page 7 of 7

Conditions for SAGEM, valid up from date of effectiveness of Amendment 12 until December 31st, 2010

prices in €

no.

Description of the product

Order price per
piece SAGEM (60

days) in €

Order Price per

piece SMI/USA,

SAGEM/AU,

SAGEM/ZA (30

days) in €

Article SAGEM

Description SMI

order

code

CMT

Frame order about [****] pcs. Palm Scanner

LITE-Ue CE

[****]

2202-129004-0

10022

L SCAN 1000P K2 CE

[****]

10412

Palm Scan Suitcase

[****]

10119

Frame order about [****] pcs. LITE CABINET

LITE CABINET

[****]

6301-129000-0

10161

LITE CABINET OPTIONS

LITE CAB Touch Screen

[****]

2406-129000-0

10309

LITE CAB Mugshoot Arm

[****]

5001-129000-0

10310

LITE CAB Bracket

10312

[****]

Orders L SCAN 1000T

L SCAN 1000T CE

2202-129003-2

10421

[****]

Orders L SCAN Guardian

Guardian LSE

10448

[****]

Guardian USB LSE

10456

[****]

Guardian Ro LSE

10450

[****]

Guardian USB Ro LSE

10242

[****]

Guardian AC LSE

10449

[****]

Guardian USB AC LSE

10452

[****]

Guardian Ro AC LSE

10451

[****]

Orders for L SCAN 100 CE

L SCAN 100 CE

10297

[****]

Orders for L SCAN 100R CE

L SCAN 100R CE

10302

[****]

Additional Items

LITE FSW4

[****]

1002-129000-1

10303

LS1_CARDPRINT_SERVER

[****]

187742707-01

7004-900002-0

10052

KIT, Supply-Guardian

[****]

110071

KIT, Small Supply-Guardian

[****]

110072

Page 1 of 1