FORM OF INTERNATIONAL UNDERWRITING AGREEMENT

EXHIBIT 1.2

R&W Draft
9/3/97

750,000 Shares

SCM MICROSYSTEMS, INC.

Common Stock

INTERNATIONAL UNDERWRITING AGREEMENT


_____________, 1997

COWEN INTERNATIONAL L.P.
HAMBRECHT & QUIST LLC
WESTDEUTSCHE LANDESBANK GIROZENTRALE
As Lead Managers of the several International Managers


c/o Cowen International L.P.
One Angel Court
London EC2R 7HJ


Dear Sirs:

1 Introductory. SCM Microsystems, Inc., a Delaware corporation (the
"Company"), and the selling stockholders named in Schedule B hereto
(the "Selling Stockholders") propose to sell, pursuant to the terms
of this Agreement, to the several International Managers named in
Schedule A hereto (the "International Managers," or, each, an
"International Manager"), an aggregate of 750,000 shares of Common
Stock, $0.001 par value per share (the "Common Stock"), of the
Company. The aggregate of 750,000 shares so proposed to be sold is
hereinafter referred to as the "Firm Stock." The Company also
proposes to sell to the International Managers, upon the terms and
conditions set forth in Section 3 hereof, up to an additional
112,500 shares of Common Stock (the "Optional Stock"). The Firm
Stock and the Optional Stock are hereinafter collectively referred
to as the "Stock." Cowen International L.P. ("Cowen"), Hambrecht &
Quist LLC and Westdeutsche Landesbank Girozentrale are acting as
Lead Managers of the several International Managers and in such
capacity are hereinafter referred to as the "Lead Managers."

It is understood by all parties that the Company and the Selling
Stockholders are concurrently entering into an agreement dated the
date hereof (the "U.S. Underwriting Agreement") providing for the
sale by the Company and the Selling Stockholders of an aggregate of
2,620,000 shares of Common Stock (the "U.S. Stock") through
arrangements with certain U.S. Underwriters in the United States
and Canada (the "U.S. Underwriters"), for whom Cowen & Company and
Hambrecht & Quist LLC are acting as Representatives (the
"Representatives"). The International Managers and the U.S.
Underwriters simultaneously are entering into an agreement among
the International and U.S. underwriting syndicates (the "Agreement
Among U.S. Underwriters and International Managers") which
provides for, among other things, the transfer of shares of


1

Common Stock between the two syndicates. Two forms of prospectus
are to be used in connection with the offer and sale of shares of
Common Stock contemplated by the foregoing, one relating to the
Stock and the other relating to the U.S. Stock. In addition, the
International version of the prospectus will be translated into
German for purposes of the application to list the International
Stock on the Neuer Markt of the Frankfurt Stock Exchange. Except as
used in the first paragraph hereof and in Section 3 and 8 herein,
and except as the context may otherwise require, references herein
to the Stock shall include all the shares of Common Stock which may
be sold pursuant to both this Agreement and the U.S. Underwriting
Agreement, and references herein to any prospectus whether in
preliminary or final form, and whether as amended or supplemented,
shall include the U.S. and the International versions thereof and
the German translation version of the International version.

2a. Representations and Warranties of the Company and its Subsidiaries.
The Company hereby represents and warrants to, and agrees with, the
several International Managers that:

(a) A registration statement on Form S-1 (File No.
333-29073) in the form in which it became or becomes
effective and also in such form as it may be when any
post-effective amendment thereto shall become
effective with respect to the Stock, including any
pre-effective prospectuses included as part of the
registration statement as originally filed or as part
of any amendment or supplement thereto, or filed
pursuant to Rule 424 under the Securities Act of 1933,
as amended (the "Securities Act"), and the rules and
regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission")
promulgated thereunder, copies of which have
heretofore been delivered to you, has been prepared by
the Company in conformity with the requirements of the
Securities Act and has been filed with the Commission
under the Securities Act; one or more amendments to
such registration statement, including in each case an
amended pre-effective prospectus, copies of which
amendments have heretofore been delivered to you, have
been so prepared and filed. If it is contemplated, at
the time this Agreement is executed, that a
post-effective amendment to the registration statement
will be filed and must be declared effective before
the offering of the Stock may commence, the term
"Registration Statement" as used in this Agreement
means the registration statement as amended by said
post-effective amendment. The term "Registration
Statement" as used in this Agreement shall also
include any registration statement relating to the
Stock that is filed and declared effective pursuant to
Rule 462(b) under the Securities Act. The term
"Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration
Statement, or, (A) if the prospectus included in the
Registration Statement omits information in reliance
on Rule 430A under the Securities Act and such
information is included in a prospectus filed with the
Commission pursuant to Rule 424(b) under the
Securities Act, the term "Prospectus" as used in this
Agreement means the prospectus in the form included in
the Registration Statement as supplemented by the
addition of the Rule 430A information contained in the
prospectus filed with the Commission pursuant to Rule
424(b) and (B) if prospectuses that meet the
requirements of Section 10(a) of the Securities Act
are delivered pursuant to Rule 434 under the
Securities Act, then (i) the term "Prospectus" as used
in this Agreement means the "prospectus subject to
completion" (as such term is defined in Rule 434(g)
under the Securities Act) as supplemented by (a) the
addition of Rule 430A information or other information
contained in the form of prospectus delivered pursuant
to Rule 434(b)(2) under the Securities Act or (b) the
information contained in the term sheets described in
Rule 434(b)(3) under the Securities Act, and (ii) the
date of such prospectuses shall be deemed to be the
date of the term sheets. The term "Pre-effective
Prospectus" as used in this Agreement means the


2

prospectus subject to completion dated September __,
1997, and as such prospectus shall have been amended
from time to time prior to the date of the Prospectus.

(b) The Commission has not issued or, to the Company's
knowledge, threatened to issue any order preventing or
suspending the use of any Pre-effective Prospectus, and,
at its date of issue, each Pre-effective Prospectus
complied in all material respects with the applicable
provisions of the Securities Act and did not contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not
misleading, other than any noncompliance, untrue
statement or omission in a Pre-effective Prospectus that
has been corrected in the Prospectus; and, when the
Registration Statement becomes effective and at all
times subsequent thereto up to and including each of the
Closing Dates (as hereinafter defined), the Registration
Statement and the Prospectus and any amendments or
supplements thereto contained and will contain all
material statements and information required to be
included therein by the Securities Act and complied and
will comply in all material respects with the applicable
provisions of the Securities Act and neither the
Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, contained or will
contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein
or necessary in order to make the statements therein, in
light of the circumstances under which they were made,
not misleading; provided, however, that the foregoing
representations and warranties shall not apply to
information contained in or omitted from any
Pre-effective Prospectus or the Registration Statement
or the Prospectus or any such amendment or supplement
thereto in reliance upon, and in conformity with,
written information furnished to the Company by the Lead
Managers on behalf of the several International
Managers, directly or through you, specifically for use
in the preparation thereof. With respect to the
preceding sentence, the Company acknowledges that the
only information furnished in writing by the Lead
Managers on behalf of the several International Managers
for use in the Pre-effective Prospectus, the
Registration Statement and the Prospectus is the
paragraph with respect to stabilization on the inside
front cover page of the Prospectus and the statements
contained under the caption "Underwriting" in the
Prospectus.

(c) The Registration Statement is effective under the
Securities Act and no stop order suspending
effectiveness of the Registration Statement or
suspending or preventing the use of the Prospectus has
been issued and no proceedings for that purpose have
been instituted or, to the Company's knowledge, are
threatened under the Securities Act; any required filing
of the Prospectus and any amendment or supplement
thereto pursuant to Rule 424(b) of the Rules and
Regulations has been or will be made in the manner and
within the time period required by Rule 424(b).

(d) There is no document, contract or other agreement of a
character required to be described in the Registration
Statement or Prospectus or to be filed as an exhibit to
the Registration Statement which is not described or
filed as required by the Securities Act or the Rules and
Regulations. Each agreement described in the
Registration Statement and the Prospectus or listed in
the Exhibits to the Registration Statement is in full
force and effect and is valid and enforceable by and
against the Company or its subsidiaries in accordance
with its terms, except to the extent that rights to
indemnity and contribution hereunder may be limited by
applicable bankruptcy, insolvency and other similar laws
affecting conditions, rights and rules of law governing
specific performance, injunctive relief and other
equitable remedies. Neither the Company nor any
subsidiary is in default in the


3

observance or performance of any material term or
obligation to be performed by it under any such
agreement, and no event has occurred which, with notice
or lapse of time or both, would constitute such a
default, in any such case which default or event would
have a material adverse effect on the Company and its
subsidiaries taken as a whole. No default exists, and,
to the knowledge of the Company, no event has occurred
which, with notice or lapse of time or both would
constitute a default, in the due performance and
observance of any term, covenant or condition, by the
Company or any of its subsidiaries of any other
agreement or instrument to which the Company or any of
its subsidiaries is a party or by which any of them or
their respective properties or businesses may be bound
or affected, in any case which default or event could
reasonably be expected to have a material adverse effect
on the operations of the Company and its subsidiaries
considered as a whole.

(e) None of the Company or its subsidiaries is in violation
of any franchise, license, permit, judgment, decree,
order, statute or rule or regulation, which could
reasonably be expected to have a material adverse effect
on the operations of the Company and its subsidiaries
considered as a whole, or any term or provision of its
certificate of incorporation or by-laws.

(f) Subsequent to the respective dates as of which
information is given in the Registration Statement and
Prospectus, and except as set forth or contemplated in
the Prospectus, neither the Company nor any of its
subsidiaries has incurred any material liabilities or
obligations, direct or contingent, nor entered into any
transactions not in the ordinary course of business, and
there has not been any material adverse change in the
condition (financial or otherwise), properties,
business, management, net worth or results of operations
of the Company and its subsidiaries considered as a
whole, or any change in the capital stock, short-term or
long-term debt of the Company and its subsidiaries
considered as a whole, except for issuances of Common
Stock pursuant to the Company's 1997 Stock Plan, 1997
Employee Stock Purchase Plan, 1997 Director Option Plan,
1997 Stock Option Plan for French Employees and the 1997
Employee Stock Purchase Plan for Non-U.S. Employees
(collectively, the "1997 Plans").

(g) The financial statements, together with the related
notes and schedules, set forth in the Prospectus and
elsewhere in the Registration Statement fairly present,
the financial position and the results of operations and
changes in financial position of the Company and its
consolidated subsidiaries at the respective dates or for
the respective periods therein specified. Such
statements and related notes and schedules have been
prepared in accordance with generally accepted
accounting principles applied on a consistent basis
except as may be set forth in the Prospectus. The
summary and selected financial and statistical data set
forth in the Prospectus under the captions "Summary
Consolidated Financial Data," "Selected Consolidated
Financial Data," "Management's Discussion and Analysis
of Financial Condition and Results of Operations--
Results of Operations" and "-- Quarterly Results of
Operations" fairly present, on the basis stated in the
Registration Statement, the information set forth
therein as at the respective dates and for the
respective periods specified, and such data have been
presented on a basis consistent with the financial
statements so set forth in the Prospectus and other
financial information.

(h) To the Company's knowledge, KPMG Peat Marwick LLP, who
have expressed their opinions on the audited financial
statements and related schedules included in the


4

Registration Statement and the Prospectus are
independent public accountants as required by the
Securities Act and the Rules and Regulations.

(i) The Company and each of its subsidiaries have been duly
organized and are validly existing and in good standing
as corporations under the laws of their respective
jurisdictions of organization, with power and authority
(corporate and other) to own or lease their properties
and to conduct their businesses as described in the
Registration Statement and the Prospectus; each of the
Company and its subsidiaries is in possession of and
operating in compliance with all material franchises,
grants, authorizations, licenses, permits, easements,
consents, certificates and orders required for the
conduct of its business, all of which are valid and in
full force and effect; and each of the Company and its
subsidiaries is duly qualified to do business and in
good standing as a foreign corporation in all other
jurisdictions where its ownership or leasing of
properties or the conduct of its businesses requires
such qualification, except where failure to so qualify
would not have a material adverse effect on the Company
and its subsidiaries considered as a whole. The Company
has and each of its subsidiaries have all requisite
power and authority, and all necessary consents,
approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all
public regulatory or governmental agencies and bodies to
own, lease and operate its properties and conduct its
business as now being conducted and as described in the
Registration Statement and the Prospectus, and no such
consent, approval, authorization, order, registration,
qualification, license or permit contains a materially
burdensome restriction not adequately disclosed in the
Registration Statement and the Prospectus. The Company
owns or controls, directly or indirectly, only the
corporations, associations or other entities named in
Schedule C hereto.

(j) The Company's authorized and outstanding capital stock
is on the date hereof, and will be on the Closing Dates,
as set forth under the heading "Capitalization" in the
Prospectus; the outstanding shares of Common Stock of
the Company conform to the description thereof in the
Prospectus and have been duly authorized and validly
issued and are fully paid and nonassessable; and have
been issued in compliance with all federal and state
securities laws and were not issued in violation of or
subject to any pre-emptive rights or similar rights to
subscribe for or purchase securities. Except as
disclosed in and or contemplated by the Prospectus and
the consolidated financial statements of the Company and
related notes thereto included in the Prospectus, the
Company does not have outstanding any options or
warrants to purchase, or any pre-emptive rights or other
rights to subscribe for or to purchase any securities or
obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital
stock or any such options, rights, convertible
securities or obligations, except for options granted
subsequent to the date of information provided in the
Prospectus pursuant to the Company's employee and stock
option plans as disclosed in the Prospectus. The
description of the Company's stock option and other
stock plans or arrangements, and the options or other
rights granted or exercised thereunder, as set forth in
the Prospectus, accurately and fairly presents the
information required to be shown with respect to such
plans, arrangements, options and rights. All outstanding
shares of capital stock of each subsidiary have been
duly authorized and validly issued, and are fully paid
and nonassessable and are owned directly by the Company
or by another wholly owned subsidiary of the Company
free and clear of any liens, encumbrances, equities or
claims.



5

(k) The Stock to be issued and sold by the Company to the
International Managers hereunder and the U.S Stock to be
issued and sold by the Company to the U.S. Underwriters
under the U.S. Underwriting Agreement has been duly and
validly authorized and, when issued and delivered
against payment therefor as provided herein and therein,
will be duly and validly issued, fully paid and
nonassessable and free of any pre-emptive or similar
rights and will conform to the description thereof in
the Prospectus and the International Managers and the
U.S. Underwriters will receive good title to the Stock
and the U.S. Stock, respectively, free and clear of all
liens, security interests, pledges, charges, claims and
encumbrances.

(l) Except as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of
which any property of the Company or any subsidiary is
subject, which, if determined adversely to the Company
or any such subsidiary, could individually or in the
aggregate be reasonably expected to (i) prevent or
adversely affect the transactions contemplated by this
Agreement, (ii) suspend the effectiveness of the
Registration Statement, (iii) prevent or suspend the use
of the Pre-effective Prospectus in any jurisdiction or
(iv) result in a material adverse change in the
condition (financial or otherwise), properties,
business, management, net worth or results of operations
of the Company and its subsidiaries considered as a
whole and the Company is not aware of any valid basis
for any such legal or governmental proceeding; and, to
the Company's knowledge, no such proceedings are
threatened or contemplated against the Company or any
subsidiary by governmental authorities or others.
Neither the Company nor any subsidiary is a party nor
subject to the provisions of any material injunction,
judgment, decree or order of any court, regulatory body
or other governmental agency or body. The description of
the Company's litigation under the heading "Legal
Proceedings" in the Prospectus is true and correct and
complies with the Rules and Regulations and no other
suit or proceeding before any court or governmental
authority known to the Company is required to be
disclosed in the Prospectus that is not so disclosed.

(m) The execution, delivery and performance of this
Agreement and the U.S. Underwriting Agreement and the
consummation of the transactions herein and therein
contemplated (A) will not result in any violation of the
provisions of the certificate of incorporation, by- laws
or other organizational documents of the Company or its
subsidiary, or any law, order, rule or regulation of any
court or governmental agency or body having jurisdiction
over the Company or its subsidiaries or any of their
respective properties or assets, and (B) will not
conflict with or result in a breach or violation of any
of the terms or provision of or constitute a default
under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by
which it or any of their respective properties is or may
be bound nor will such delivery and performance result
in the creation of a security interest, lien,
encumbrance, charge or claim.

(n) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance of this Agreement
and the U.S. Underwriting Agreement by the Company or
its subsidiaries and the consummation of the
transactions contemplated hereby and thereby (including
the issuance, sale and delivery of the Stock), except
such as may be required by the National Association of
Securities Dealers, Inc. (the "NASD"), the Neuer Markt
of the Frankfurt Stock Exchange or under the Securities
Act or the Securities Exchange Act of 1934, as amended
(the "Exchange


6

Act") or the securities or "Blue Sky" laws of any
jurisdiction in connection with the purchase and
distribution of the Stock by the International Managers
and the U.S. Stock by the U.S. Underwriters.

(o) The Company has the full corporate power and authority
to enter into this Agreement and the U.S. Underwriting
Agreement and to perform its obligations hereunder and
thereunder (including to issue, sell and deliver the
Stock and the U.S. Stock), and this Agreement and the
U.S. Underwriting Agreement have each been duly and
validly authorized, executed and delivered by the
Company and each constitutes a valid and binding
obligation of the Company, enforceable against the
Company in accordance with their respective terms,
except to the extent that rights to indemnity and
contribution hereunder may be limited by federal or
state securities laws or the public policy underlying
such laws and except as may be limited by applicable
bankruptcy, insolvency and other similar laws affecting
conditions, rights and rules of law governing specific
performance, injunctive relief and other equitable
remedies.

(p) The Company and its subsidiaries are in all material
respects in compliance with, and conduct their
respective businesses in conformity with, all applicable
federal, state, local and foreign laws, rules and
regulations or any court or governmental agency or body;
to the knowledge of the Company, otherwise than as set
forth in the Registration Statement and the Prospectus,
no prospective change in any of such federal or state
laws, rules or regulations has been adopted which, when
made effective, could reasonably be expected to have a
material adverse effect on the operations of the Company
and its subsidiaries considered as a whole.

(q) The Company and its subsidiaries have filed all
necessary federal, state, local and foreign income,
payroll, franchise and other tax returns and have paid
all taxes shown as due thereon or with respect to any of
their properties, and there is no tax deficiency that
has been or to the knowledge of the Company is
reasonably likely to be, asserted against the Company or
any of its subsidiaries or any of their respective
properties or assets that would materially and adversely
affect the financial position, business or operations of
the Company and its subsidiaries considered as a whole.

(r) No person or entity has the right to require
registration of shares of Common Stock or other
securities of the Company because of the filing or
effectiveness of the Registration Statement or
otherwise, except for persons and entities who have
expressly waived such right or who have been given
proper notice and have failed to exercise such right
within the time or times required under the terms and
conditions of such right.

(s) Neither the Company nor any of its officers, directors
or affiliates has taken or will take, directly or
indirectly, any action designed or intended to stabilize
or manipulate the price of the Common Stock in violation
of Regulation M of the Exchange Act, or which caused or
resulted in, or which might in the future reasonably be
expected to cause or result in, stabilization or
manipulation of the price of the Common Stock in
violation of Regulation M of the Exchange Act.

(t) Each of the Company and each of its subsidiaries owns,
or possesses adequate and enforceable rights, either as
owner or licensee, to use all patents, trademarks
(including "SwapBox(TM)," "SwapSmart(TM),"
"SwapAcces(TM)" and "SmartOS(TM)"), trademark
registrations, service marks, service mark
registrations, trade names, copyrights, licenses,


7

inventions, trade secrets, know-how and other similar
rights described in the Prospectus as being owned or
licensed by them and except as described in the
Prospectus the Company is not aware of any claim to the
contrary or any challenge by any other person to the
rights of the Company and its subsidiaries with respect
to the foregoing. The Company's business as now
conducted and as proposed to be conducted does not and
will not infringe or conflict with in any material
respect any patents, trademarks, service marks, trade
name, copyright, trade secrets, know-how, licenses or
other intellectual property or franchise right of any
person. Except as described in the Prospectus, no claim
has been made against the Company alleging the
infringement by the Company of any patent, trademark,
service mark, trade name, copyright, trade secret,
know-how, license in or other intellectual property
right or franchise right of any person.

(u) The Company is not involved in any labor dispute nor, to
the knowledge of the Company, is any such dispute
threatened. Except as described in the Prospectus, the
Company is not aware that (A) any executive, key
employee or significant group of employees of the
Company or any subsidiary plans to terminate employment
with the Company or any such subsidiary or (B) any such
executive or key employee is subject to any noncompete,
nondisclosure, confidentiality, employment, consulting
or similar agreement that would be violated by the
present or proposed business activities of the Company
and its subsidiaries. Neither the Company nor any
subsidiary has or expects to have any liability for any
prohibited transaction or funding deficiency or any
complete or partial withdrawal liability with respect to
any pension, profit sharing or other plan which is
subject to the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), to which the Company or
any subsidiary makes or ever has made a contribution and
in which any employee of the Company or any subsidiary
is or has ever been a participant. With respect to such
plans, the Company and each subsidiary is in compliance
in all material respects with all applicable provisions
of ERISA.

(v) No transaction has occurred, and no relationship, direct
or indirect, exists, between or among the Company or its
subsidiaries, on the one hand, and any of its
stockholders, officers, directors, customers or
suppliers of the Company or its subsidiaries or any
affiliate or affiliates of any such stockholder,
officer, director, customer or supplier, on the other
hand, that is required to be described and is not so
described in the Prospectus.

(w) The Company and its subsidiaries have, and the Company
and its subsidiaries as of the Closing Dates will have,
good and marketable title to all personal property owned
by them which is material to the business of the Company
or of its subsidiaries, in each case free and clear of
all liens, encumbrances and defects except such as are
described in the Prospectus or such as would not have a
material adverse effect on the Company and its
subsidiaries considered as a whole; and any real
property and buildings held under lease by the Company
and its subsidiaries are, or will be as of each of the
Closing Dates, held by them under valid, subsisting and
enforceable leases with such exceptions as would not
have a material adverse effect on the Company and its
subsidiaries considered as a whole, in each case except
as described in or contemplated by the Prospectus.

(x) The Company and its subsidiaries are insured by insurers
of recognized financial responsibility against such
losses and risks and in such amounts as are customary in
the businesses in which they are engaged or propose to
engage after giving effect to the transactions described
in the Prospectus; and neither the Company nor any
subsidiary of the Company has any reason to believe that
it will not be able to renew its existing


8

insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may
be necessary to continue their business at a cost that
would not have a material adverse effect on the Company
and its subsidiaries considered as a whole, except as
described in or contemplated by the Prospectus.

(y) Other than as contemplated by this Agreement and the
U.S. Underwriting Agreement, there is no broker, finder
or other party that is entitled to receive from the
Company any brokerage or finder's fee or other fee or
commission as a result of any of the transactions
contemplated by this Agreement or the U.S. Underwriting
Agreement.

(z) The Stock has been duly authorized for (i) quotation on
the National Association of Securities Dealers Automated
Quotation ("NASDAQ") National Market System, subject to
official Notice of Issuance, and (ii) listing on the
Neuer Markt of the Frankfurt Stock Exchange, and a
registration statement has been filed on Form 8-A
pursuant to Section 12 of the Exchange Act, which
registration statement complies in all material respects
with the Exchange Act.

(aa) The books, records and accounts of the Company and its
subsidiaries accurately and fairly reflect, in all
material respects, the transactions in, and dispositions
of, the assets of, and the results of operation of, the
Company and its subsidiaries. The Company and each of
its subsidiaries maintains a system of internal
accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in
accordance with management's general or specific
authorization; (ii) transactions are recorded as
necessary to permit preparation of financial statements
in conformity with generally accepted accounting
principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance
with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and
appropriate action is taken with respect to any
differences.

(bb) To the Company's knowledge, neither the Company nor any
of its subsidiaries nor any employee or agent of the
Company or any of its subsidiaries has made any payment
of funds of the Company or any of its subsidiaries or
received or retained any funds in violation of any law,
rule or regulation, which payment, receipt or retention
of funds is of a character required to be disclosed in
the Prospectus.

(cc) Neither the Company nor any of its subsidiaries is or,
after application of the net proceeds of this offering
as described under the caption "Use of Proceeds" in the
Prospectus, will become an "investment company" or an
entity "controlled" by an "investment company" as such
terms are defined in the Investment Company Act of 1940,
as amended.

(dd) Each certificate signed by any officer of the Company
and delivered to the International Managers or counsel
for the International Managers shall be deemed to be a
representation and warranty by the Company as to the
matters covered thereby.

(ee) Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person
associated with or acting on behalf of the Company or
any of its subsidiaries, has used any corporate funds
for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity;
made any direct or indirect unlawful payment to any
foreign or domestic government official or employee


9

from corporate funds; or has violated or is in violation
of any provision of the Foreign Corrupt Practices Act of
1977.

(ff) An application for admission of the International Stock
(i) for trading on the regulated market ("Geregelter
Markt") of the Frankfurt Stock Exchange ("FSE") to be
submitted to the Admissions Committee of the FSE, and
(ii) to the "neuer Markt" of the FSE to be submitted to
the Executive Board of the Deutsche Borse AG, the
operator of the "Neuer Markt", copies of which have
heretofore been delivered to you (both of which
applications hereinafter referred to as the "Application
for Admission") have been [will be] prepared by the
Company in conformity with the requirements of the
German Securities Act ("BorsG"), the Regulations on
Admissions to the Stock Exchange ("BorsZulVO"), the
Regulations of the FSE ("BorsO"), and the rules and
regulations of the Neuer Markt segment of the FSE. All
representations and warranties set forth above (a)
through (ff) with regard to the registration and the
listing of the U.S.Stock with the SEC and at NASDAQ,
respectively, apply mutatis mutandis to the Company's
involvement in the listing of the International Stock
at the Neuer Markt of the FSE.


2b. Representations and Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder represents and warrants to,
and agrees with, the several International Managers that such
Selling Stockholder:

(a) Now has, and on the Closing Date will have, valid and
marketable title to the Stock and the U.S. Stock to be
sold by such Selling Stockholder, free and clear of any
lien, claim, security interest or other encumbrance,
including, without limitation, any restriction on
transfer, and has full right, power and authority to
enter into this Agreement, the Power of Attorney and the
Custody Agreement (each as hereinafter defined).

(b) Now has, and on the Closing Date will have, upon
delivery of and payment for each share of Stock
hereunder and U.S. Stock under the U.S. Underwriting
Agreement, full right, power and authority, and approval
required by law to sell, transfer, assign and deliver
the Stock being sold by such Selling Stockholder
hereunder and the U.S. Stock being sold by such Selling
Stockholder under the U.S. Underwriting Agreement, and
each of the several International Managers will acquire
valid and marketable title to all of the Stock being
sold to the International Managers by such Selling
Stockholder, free and clear of any liens, encumbrances,
equities claims, restrictions on transfer or other
defects whatsoever.

(c) For a period of 180 days after the date of this
Agreement, without the consent of Cowen & Company, such
Selling Stockholder will not offer, sell, assign,
transfer, encumber, contract to sell, grant an option to
purchase or otherwise dispose of any Stock or securities
convertible into or exchangeable for Stock, including,
without limitation Stock which may be deemed to be
beneficially owned by such Selling Shareholder in
accordance with the Rules and Regulations, except for
the Stock being sold hereunder and the U.S. Stock being
sold under the U.S. Underwriting Agreement.

(d) Has duly executed and delivered a power of attorney, in
substantially the form heretofore delivered by the Lead
Managers (the "Power of Attorney"), appointing
_________________ and __________________ and each of
them, as attorney-in-fact (the "Attorneys-in-fact") with
authority to execute and deliver this Agreement and the
U.S. Underwriting Agreement on behalf of


10

such Selling Stockholder, to authorize the delivery of
the shares of Stock to be sold by such Selling
Stockholder hereunder and the shares of U.S. Stock being
sold by such Selling Stockholder under the U.S.
Underwriting Agreement and otherwise to act on behalf of
such Selling Stockholder in connection with the
transactions contemplated by this Agreement and the U.S.
Underwriting Agreement.

(e) Has duly executed and delivered a custody agreement, in
substantially the form heretofore delivered by the Lead
Managers ( the "Custody Agreement"), with as custodian
(the "Custodian"), pursuant to which certificates in
negotiable form for the shares of Stock and the U.S.
Stock to be sold by such Selling Stockholder hereunder
and under the U.S. Underwriting Agreement have been
placed in custody for delivery under this Agreement and
the U.S. Underwriting Agreement.

(f) Has, by execution and delivery of each of this
Agreement, the U.S. Underwriting Agreement, the Power of
Attorney and the Custody Agreement, created valid and
binding obligations of such Selling Stockholder,
enforceable against such Selling Stockholder in
accordance with its terms, except to the extent that
rights to indemnity hereunder may be limited by federal
or state securities laws or the public policy underlying
such laws.

(g) The performance of this Agreement, the U.S. Underwriting
Agreement, the Custody Agreement and the Power of
Attorney, and the consummation of the transactions
contemplated hereby and thereby will not result in a
breach or violation by such Selling Stockholder of any
of the terms or provisions of, or constitute a default
by such Selling Stockholder under, any material
indenture, mortgage, deed of trust, trust (constructive
or other), loan agreement, lease, franchise, license or
other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling
Stockholder or any of its properties is bound, or any
judgement of any court or governmental agency or body
applicable to such Selling Stockholder or any of its
properties, or to such Selling Stockholder's knowledge,
any statute, decree, order, rule or regulation of any
court or governmental agency or body applicable to such
Selling Stockholder or any of its properties.

Each Selling Stockholder agrees that the shares of Stock
and U.S. Stock represented by the certificates held in
custody under the Custody Agreement are for the benefit
of and coupled with and subject to the interests of the
International Managers, the U.S. Underwriters, the
Selling Stockholders, and the Company hereunder, and
that the arrangement for such custody and the
appointment of the Attorneys-in-fact are irrevocable;
that the obligations of such Selling Stockholder
hereunder shall not be terminated by operation of law,
whether by the death or incapacity, liquidation or
distribution of such Selling Stockholder, or any other
event, that if such Selling Stockholder should die or
become incapacitated or any other event occurs, before
the delivery of the Stock hereunder and the U.S. Stock
under the U.S. Underwriting Agreement, certificates for
the Stock and the U.S. Stock to be sold by such Selling
Stockholder shall be delivered on behalf of such Selling
Stockholder in accordance with the terms and conditions
of this Agreement, the U.S. Underwriting Agreement and
the Custody Agreement, and action taken by the
Attorneys-in-fact or any of them under the Power of
Attorney shall be as valid as if such death, incapacity,
or other event had not occurred, whether or not the
Custodian, the Attorneys-in-fact or any of them shall
have notice of such death, incapacity or other event.



11

3 Purchase by, and Sale and Delivery to, International
Managers--Closing Dates. The Company and the Selling Stockholders
agree, severally and not jointly, to sell to the International
Managers the Firm Stock with the number of shares to be sold by the
Company and each Selling Stockholder being the number of shares set
forth opposite his, her or its name in Schedule B, and on the basis
of the representations, warranties, covenants and agreements herein
contained, but subject to the terms and conditions herein set
forth, the International Managers agree, severally and not jointly,
to purchase the Firm Stock from the Company and the Selling
Stockholders, the number of shares of Firm Stock to be purchased by
each International Manager being set opposite its name in Schedule
A, subject to adjustment in accordance with Section 12 hereof. The
number of shares of Stock to be purchased by each International
Manager from each Selling Stockholder hereunder shall bear the same
proportion to the total number of shares of Stock to be purchased
by such International Manager hereunder as the number of shares of
stock being sold by each Selling Stockholder bears to the total
number of shares of Stock being sold by all Selling Stockholders,
subject to adjustment by the Lead Managers to eliminate fractions.

The purchase price per share to be paid by the International
Managers to the Company and the Selling Stockholders will be the
price per share set forth in the "Per Share" row of the table on
the cover page of the Prospectus under the heading "Proceeds to
Company" and "Proceeds to Selling Stockholders," respectively (the
"Purchase Price").

The Company and the Selling Stockholders will deliver the Firm Stock
to the Lead Managers for the respective accounts of the several
International Managers (in the form of definitive certificates,
issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company and
the Selling Stockholders given at or prior to 12:00 Noon, New York
Time, on the second full business day preceding the First Closing
Date (as defined below) or, if no such direction is received, in the
names of the respective International Managers or in such other
names as Cowen may designate (solely for the purpose of
administrative convenience) and in such denominations as Cowen may
determine), against payment of the aggregate Purchase Price
therefore by wire transfer in immediately available funds (same day
funds), to the Company and _________________________ as Custodian
for the Selling Stockholders, all at the offices of Wilson Sonsini
Goodrich & Rosati, 650 Page Mill Road, Palo Alto, California 94304.
The time and date of the delivery and closing shall be at 10:00
A.M., New York Time, on _________, 1997. The time and date of such
payment and delivery are herein referred to as the "First Closing
Date". The First Closing Date and the location of delivery of, and
the form of payment for, the Firm Stock may be varied by agreement
among the Company, Cowen and the Selling Stockholders. The First
Closing Date may be postponed pursuant to the provisions of Section
12.


The Company and the Selling Stockholders shall make the certificates
for the Stock available to the Lead Managers for examination on
behalf of the International Managers not later than 10:00 A.M., New
York time, on the business day preceding the First Closing Date at
the offices of Cowen & Company, Financial Square, New York, New York
10005.

It is understood that the Lead Managers, individually and not as
Lead Managers of the several International Managers, may (but shall
not be obligated to) make payment to the Company or to the Selling
Stockholders on behalf of any International Manager or International
Managers, for the Stock to be purchased by such International
Manager or International Managers. Any such payment by a Lead
Manager shall not relieve such International Manager or
International Managers from any of its or their other obligations
hereunder.



12

The several International Managers agree to make an initial public
offering of the Firm Stock at the initial public offering price set
forth on the cover page of the Prospectus as soon after the
effectiveness of the Registration Statement or the Application for
Admission as in their judgment is advisable. The Lead Managers
shall promptly advise the Company and the Selling Stockholders of
the making of the initial public offering.

For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Stock as contemplated by the
Prospectus, the Company hereby grants to the International Managers
an option to purchase, severally and not jointly, up to an
aggregate of 112,500 shares of Optional Stock. The price per share
to be paid for the Optional Stock shall be the Purchase Price. The
option granted hereby may be exercised as to all or any party of
the Optional Stock at any time, and from time to time, not more
than thirty (30) days subsequent to the effective date of this
Agreement. No Optional Stock shall be sold and delivered unless the
Firm Stock previously has been, or simultaneously is, sold and
delivered. The right to purchase the Optional Stock or any portion
thereof may be surrendered and terminated at any time upon notice
by the International Managers to the Company.

The option granted hereby may be exercised by the International
Managers by giving written notice from Cowen to the Company setting
forth the number of shares of the Optional Stock to be purchased by
them and the date and time for delivery of and payment for the
Optional Stock. Each date and time for delivery of and payment for
the Optional Stock (which may be the First Closing Date, but not
earlier) is herein called an "Option Closing Date" and shall in no
event be earlier than two (2) business days nor later than ten (10)
business days after written notice is given. (The Option Closing
Date and the First Closing Date are herein called the "Closing
Dates".) Optional Stock shall be purchased for the account of each
International Manager in the same proportion as the number of
shares of Firm Stock set forth opposite such International
Manager's name in Schedule A hereto bears to the total number of
shares of Firm Stock (subject to adjustment by the International
Managers to eliminate odd lots). Upon exercise of the option of the
International Managers, the Company agrees to sell to the
International Managers the number of shares of Optional Stock set
forth in the written notice of exercise and the International
Managers agree, severally and not jointly and subject to the terms
and conditions herein set forth, to purchase the number of such
shares determined as aforesaid.

The Company will deliver the Optional Stock to the International
Managers (in the form of definitive certificates, issued in such
names and in such denominations as the Lead Managers may direct by
notice in writing to the Company given at or prior to 12:00 Noon,
New York Time, on the second full business day preceding the Option
Closing Date or, if no such direction is received, in the names of
the respective International Managers or in such other names as
Cowen may designate (solely for the purpose of administrative
convenience) and in such denominations as Cowen may determine),
against payment of the aggregate Purchase Price therefor by wire
transfer in immediately available funds (same day funds), payable
to the Company, all at the offices of Wilson Sonsini Goodrich &
Rosati, 650 Page Mill Road, Palo Alto, California 94304. The
Company shall make the certificates for the Optional Stock
available to the International Managers for examination not later
than 10:00 A.M., New York Time, on the business day preceding the
Option Closing Date at the offices of Cowen & Company, Financial
Square, New York, New York 10005. The Option Closing Date and the
location of delivery of, and the form of payment for, the Option
Stock may be varied by agreement between the Company and Cowen. The
Option Closing Date may be postponed pursuant to the provisions of
Section 12.



13


4 Covenants and Agreements of the Company. The Company covenants and
agrees with the several International Managers that:

(a) The Company will (i) if the Company and the Lead
Managers have determined not to proceed pursuant to Rule
430A of the Rules and Regulations, use its best efforts
to cause the Registration Statement to become effective,
(ii) if the Company and the Lead Managers have
determined to proceed pursuant to Rule 430A of the Rules
and Regulations, use its best efforts to comply with the
provisions of and make all requisite filings with the
Commission pursuant to Rule 430A and Rule 424 of the
Rules and Regulations and (iii) if the Company and the
Lead Managers have determined to deliver Prospectuses
pursuant to Rule 434 of the Rules and Regulations, to
use its best efforts to comply with all the applicable
provisions thereof. The Company will advise the Lead
Managers promptly as to the time at which the
Registration Statement becomes effective, will advise
the Lead Managers promptly of the issuance by the
Commission of any stop order suspending the
effectiveness of the Registration Statement or of the
institution of any proceedings for that purpose, and
will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible the
lifting thereof, if issued. The Company will advise the
Lead Managers promptly of the receipt of any comments of
the Commission or any request by the Commission for any
amendment of or supplement to the Registration Statement
or the Prospectus or for additional information and will
not at any time file any amendment to the Registration
Statement or supplement to the Prospectus which shall
not previously have been submitted to the Lead Managers
a reasonable time prior to the proposed filing thereof
or to which the Lead Managers shall reasonably object in
writing or which is not in compliance with the
Securities Act and the Rules and Regulations.

(b) The Company will prepare and file with the Commission,
promptly upon the request of the Lead Managers, any
amendments or supplements to the Registration Statement
or the Prospectus which in the opinion of the Lead
Managers may be necessary to enable the several
International Managers to continue the distribution of
the Stock and the several U.S. Underwriters to continue
the distribution of the U.S. Stock and will use its best
efforts to cause the same to become effective as
promptly as possible.

(c) If, at any time after the effective date of the
Registration Statement when a prospectus relating to the
Stock is required to be delivered under the Securities
Act, any event relating to or affecting the Company or
any of its subsidiaries occurs as a result of which the
Prospectus or any other prospectus as then in effect
would contain any untrue statement of a material fact,
or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under
which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply
with the Securities Act, the Company will promptly
notify the Lead Managers thereof and will prepare an
amended or supplemented prospectus which will correct
such statement or omission; and in case any
International Manager is required to deliver a
prospectus relating to the Stock nine (9) months or more
after the effective date of the Registration Statement,
the Company upon the request of the Lead Managers and at
the expense of


14

such International Manager will prepare promptly such
prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of
the Securities Act.

(d) The Company will deliver to each of the Lead Managers,
at or before the Closing Dates, one signed copy of the
Registration Statement, as originally filed with the
Commission, and one signed copy of all amendments
thereto including all financial statements and exhibits
thereto and will deliver to the Lead Managers such
number of unsigned copies of the Registration Statement,
including such financial statements but without
exhibits, and all amendments thereto, as the Lead
Managers may reasonably request. The Company will
deliver or mail to or upon the order the Lead Managers,
from time to time until the effective date of the
Registration Statement, as many copies of the
Pre-effective Prospectus as the Lead Managers may
reasonably request. The Company will deliver or mail to
or upon the order of the Lead Managers on the date of
the initial public offering, and thereafter from time to
time during the period when delivery of a prospectus
relating to the Stock is required under the Securities
Act, as many copies of the Prospectus, in final form or
as thereafter amended or supplemented as the Lead
Managers may reasonably request; provided, however, that
the expense of the preparation and delivery of any
prospectus required for use nine (9) months or more
after the effective date of the Registration Statement
shall be borne by the International Managers required to
deliver such prospectus.

(e) The Company will use its best efforts to cause, and
provide all information, documentation, and other
materials (whether contained or to be provided in the
German Prospectus or otherwise) to the FSE and the Lead
Managers as may be required or appropriate for, the
Application for Admission to become and remain
effective.

(f) The Company will make generally available to its
stockholders as soon as practicable, but not later than
fifteen (15) months after the effective date of the
Registration Statement, an earnings statement which will
be in reasonable detail (but which need not be audited)
and which will comply with Section 11(a) of the
Securities Act, covering a period of at least twelve
(12) months beginning after the "effective date" (as
defined in Rule 158 under the Securities Act) of the
Registration Statement.

(g) The Company will cooperate with the Lead Managers to
enable the Stock to be registered or qualified for
offering and sale by the International Managers and by
dealers under the securities laws of such jurisdictions
as the Lead Managers may designate and at the request of
the Lead Managers will make such applications and
furnish such consents to service of process or other
documents as may be required of it as the issuer of the
Stock for that purpose; provided, however, that the
Company shall not be required to qualify to do business
or to file a general consent (other than that arising
out of the offering or sale of the Stock) to service of
process in any such jurisdiction where it is not now so
subject. The Company will, from time to time, prepare
and file such statements and reports as are or may be
required of it as the issuer of the Stock to continue
such qualifications in effect for so long a period as
the Lead Managers may reasonably request for the
distribution of the Stock. The Company will advise the
Lead Managers promptly after the Company becomes aware
of the suspension of the qualifications or registration
of (or any such exception relating to) the Common Stock
of the Company for offering, sale or trading in any
jurisdiction or of any initiation or threat of any
proceeding for any such purpose, and in the event of the
issuance of any orders suspending such


15

qualifications, registration or exception, the Company
will, with the cooperation of the Lead Managers use its
best efforts to obtain the withdrawal thereof.

(h) The Company will furnish to its stockholders annual
reports containing financial statements certified by
independent public accountants.

(i) The Company will maintain a transfer agent and registrar
for its Common Stock.

(j) For a period of one year after the date hereof, prior to
filing its quarterly statements on Form 10-Q, the
Company will have its independent auditors perform a
limited quarterly review of its quarterly numbers.

(k) The Company will not offer, sell, assign, transfer,
encumber, contract to sell, register for sale, grant an
option to purchase or otherwise dispose of, other than
by operation of law, gifts, pledges or dispositions by
estate representatives, any shares of Common Stock or
securities convertible into or exercisable or
exchangeable for Common Stock (including, without
limitation, Common Stock of the Company which may be
deemed to be beneficially owned by the Company in
accordance with the Rules and Regulations) during the
180 days following the date on which the price of the
Common Stock to be purchased by the International
Managers is set, other than (i) the Company's sale of
Common Stock hereunder, (ii) issuances of Common Stock,
stock options, stock purchase rights or other similar
rights issued pursuant to the 1997 Plans as described in
the Prospectus, and (iii) any Common Stock or preferred
stock issued by the Company in any transaction of the
type described in Rule 145 under the Securities Act or
otherwise issued by the Company in exchange for
technology or other non-cash assets of any third party.

(l) The Company will file with the Commission any reports on
Form SR required pursuant to Rule 463 of Rules and
Regulations, and will deliver promptly to the
Representatives a signed copy of each report on Form SR
filed by it with the Commission.

(m) The Company will apply the net proceeds from the sale of
the Stock as set forth in the description under "Use of
Proceeds" in the Prospectus.

(n) The Company will supply you with copies of all
correspondence to and from, and all documents issued to
and by, the Commission in connection with the
registration of the Stock under the Securities Act and
the Neuer Markt of the Frankfurt Stock Exchange in
connection with the sale of the Stock pursuant to this
Agreement.

(o) Prior to each of the Closing Dates the Company will
furnish to you, as soon as they have been prepared,
copies of any unaudited interim consolidated financial
statements of the Company and its subsidiaries for any
periods subsequent to the periods covered by the
financial statements appearing in the Registration
Statement and the Prospectus.

(p) Prior to the Closing Dates the Company will issue no
press release or other public communications directly or
indirectly and hold no press conference with respect to
the Company (other than customary product related sales
and marketing communications) or any of its
subsidiaries, the financial condition, results of
operations, business, prospects, assets or liabilities
of the Company any of them, or the offering of the
Stock, without your prior written consent, which shall
not be unreasonably withheld.


16

(q) During the period of five (5) years hereafter, the
Company will furnish to the Lead Managers, and upon
request of the Lead Managers, to each of the
International Managers: (i) as soon as practicable after
the end of each fiscal year, copies of the Annual Report
of the Company containing the balance sheet of the
Company as of the close of such fiscal year and
statements of income, stockholders' equity and cash
flows for the year then ended and the opinion thereon of
the Company's independent public accountants; (ii) as
soon as practicable after the filing thereof, copies of
each proxy statement, Annual Report on Form 10-K,
Quarterly Report on Form 10-Q, Report on Form 8-K or
other report filed by the Company with the Commission,
or the NASD or any securities exchange; (iii) as soon as
available, copies of any report or communication of the
Company mailed generally to holders of its Common Stock;
and (iv) from time to time such other information
concerning the Company as you may reasonably request.

(r) The covenants and agreements set forth above (a) through
(d) and (f) through (q) apply mutatis mutandis to the
Company's involvement in the listing of the Stock at the
FSE.

(s) The Company will adopt the German Code for Mergers and
Acquisitions ("Ubernahmekodex").

(t) The Company will maintain a Securities Caretaker
("Betreuer") as long as the International Stock is
listed at the Neuer Markt of the FSE.

(u) The Selling Stockholders will comply with the holding
requirements for their Stock established by the FSE for
securities listed at the Neuer Markt.

5 Payment of Expenses.

(a) The Company will pay (directly or by reimbursement) all
costs, fees and expenses incurred in connection with the
performance of the obligations of the Company and of the
Selling Stockholders under this Agreement and the U.S.
Underwriting Agreement and in connection with the
transactions contemplated hereby, including but not
limited to (i) all expenses and taxes incident to the
issuance and delivery of the Stock to the Lead Managers;
(ii) all expenses incident to the registration of the
Stock and the U.S. Stock under the Securities Act; (iii)
the costs of preparing stock certificates (including
printing and engraving costs); (iv) all fees and
expenses of the registrar and transfer agent of the
Stock and the U.S. Stock; (v) all necessary issue,
transfer and other taxes in connection with the issuance
and sale of the Stock to the International Managers;
(vi) fees and expenses of the Company's counsel and the
Company's independent accountants; (vii) all costs and
expenses incurred in connection with the preparation,
printing, filing, shipping and distribution of the
Registration Statement, each Pre-effective Prospectus
and the Prospectus (including all exhibits and financial
statements) and all amendments and supplements provided
for herein, the Selling Stockholders' Power of Attorney,
the Custody Agreement, the "Agreement Among U.S.
Underwriters and International Managers" between the
Lead Managers and the Representatives, the "Agreement
Among U.S. Underwriters" between the Representatives and
the U.S. Underwriters, the Master Selected Dealers'
Agreement, the U.S. Underwriters' Questionnaire and the
Blue Sky memoranda (including related fees and expenses
of counsel to the Underwriters) and this Agreement;
(viii) all filing fees, attorneys' fees and expenses
incurred by the Company or the U.S. Underwriters in
connection with exemptions from the qualifying or
registering (or obtaining qualification or registration
of) all or any part of the Stock for offer and sale


17

and determination of its eligibility for investment
under the Blue Sky or other securities laws of such
jurisdictions as the Representatives may designate; (ix)
all fees and expenses paid or incurred in connection
with filings made with the NASD and the listing of the
Stock on the Neuer Markt of the FSE; and (x) all other
costs and expenses incurred by the Company and the
Selling Stockholders incident to the performance of
their obligations hereunder which are not otherwise
specifically provided for in this Section.

(b) In addition to their other obligations under Section
6(a) hereof, the Company and the Selling Stockholders
agree that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other
proceeding arising out of or based upon (i) any
statement or omission or any alleged statement or
omission by the Company or the Selling Stockholders or
(ii) any breach or inaccuracy in their representations
and warranties contained in this Agreement, they will
reimburse each International Manager on a quarterly
basis for all reasonable legal or other expenses
incurred in connection with investigating or defending
any such claim, action, investigation, inquiry or other
proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of
the Company's and each Selling Stockholder's obligation
to reimburse each International Manager for such
expenses and the possibility that such payments might
later be held to have been improper by a court of
competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been
improper, each International Manager shall promptly
return it to the Company or such Selling Stockholder, as
the case may be, together with interest, compounded
daily, determined on the basis of the prime rate (or
other commercial lending rate for borrowers of the
highest credit standing) announced from time to time by
Citibank, N.A., New York, New York (the "Prime Rate").
Any such interim reimbursement payments which are not
made to an International Manager in a timely manner as
provided below shall bear interest at the Prime Rate
from the due date for such reimbursement. This expense
reimbursement agreement will be in addition to any other
liability which the Company or any Selling Stockholder
may otherwise have. The request for reimbursement will
be sent to the Company with a copy to each Selling
Stockholder.

(c) In addition to its other obligations under Section 6(b)
hereof, each International Manager severally agrees
that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission,
described in Section 6(b) hereof which relates to
information furnished to the Company pursuant to Section
6(c) hereof, it will reimburse the Company (and, to the
extent applicable, each officer, director, controlling
person or Selling Stockholder) on a quarterly basis for
all reasonable legal or other expenses incurred in
connection with investigating or defending any such
claim, action, investigation, inquiry or other
proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of
the International Managers' obligation to reimburse the
Company (and, to the extent applicable, each officer,
director, controlling person or Selling Stockholder) for
such expenses and the possibility that such payments
might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been
improper, the Company (and, to the extent applicable,
each officer, director, controlling person or Selling
Stockholder) shall promptly return it to the
International Managers together with interest,
compounded daily, determined on the basis of the Prime
Rate. Any such interim reimbursement payments which are
not made to the Company within thirty (30) days of a
request for reimbursement shall bear interest at the
Prime Rate from the


18

date of such request. This indemnity agreement will be
in addition to any liability which such International
Manager may otherwise have.

(d) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set
forth in paragraph (b) and/or (c) of this Section 5,
including the amounts of any requested reimbursement
payments and the method of determining such amounts,
shall be settled by arbitration conducted under the
provisions of the Constitution and Rules of the Board of
Governors of the New York Stock Exchange, Inc. or
pursuant to the Code of Arbitration Procedure of the
NASD. Any such arbitration must be commenced by service
of a written demand for arbitration or written notice of
intention to arbitrate, therein electing the arbitration
tribunal. In the event the party demanding arbitration
does not make such designation of an arbitration
tribunal in such demand or notice, then the party
responding to said demand or notice is authorized to do
so. Such an arbitration would be limited to the
operation of the interim reimbursement provisions
contained in paragraph (b) and/or (c) of this Section 5
and would not resolve the ultimate propriety or
enforceability of the obligation to reimburse expenses
which is created by the provisions of Section 6.

6 Indemnification and Contribution.

(a) The Company and SCM Microsystems GmbH jointly
and severally agree to indemnify and hold harmless each
International Manager and each person, if any, who
controls such International Manager within the meaning
of the Securities Act and the respective officers,
directors, partners, employees, representatives and
agents of each of such International Manager
(collectively, the "Manager Indemnified Parties" and,
each, a "Manager Indemnified Party"), against any
losses, claims, damages, liabilities or expenses
(including the reasonable cost of investigating and
defending against any claims therefor and counsel fees
incurred in connection therewith), joint or several,
which may be based upon the Securities Act, or any
Federal, state or foreign statute, regulation or at
common law, (i) on the ground or alleged ground that any
Pre-effective Prospectus, the Registration Statement,
the Application for Admission or the Prospectus (or any
Pre-effective Prospectus, the Registration Statement or
the Prospectus as from time to time amended or
supplemented) includes or allegedly includes an untrue
statement of a material fact or omits to state a
material fact required to be stated therein or necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not
misleading, unless such statement or omission was made
in reliance upon, and in conformity with, written
information furnished to the Company by any
International Manager, directly or through the Lead
Managers, specifically for use in the preparation
thereof and provided that the foregoing indemnity
agreement with respect to any Pre- effective Prospectus
shall not inure to the benefit of any International
Manager from whom the person asserting any such losses,
claims, damages or liabilities purchased Stock, or any
person controlling such International Manager, if a copy
of the Prospectus (as then amended or supplemented if
the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on
behalf of such International Manager to such person, if
required by law so to have been delivered, at or prior
to the written confirmation of the sale of the Stock to
such person, and the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to
such losses, claims, damages or liabilities, unless such
failure to deliver the Prospectus (as so amended or
supplemented) resulted from the Company's failure to
perform its obligations pursuant to Section 4(c) above
or (ii) for any act or failure to act or any alleged act
or failure to act


19

by any International Manager in connection with, or
relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or
expense arising out of or based upon matters covered by
clause (i) above (provided that the Company shall not be
liable under this clause (ii) to the extent that it is
determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, or liability
or expense resulted directly from any such acts or
failures to act undertaken or omitted to be taken by
such International Manager through its gross negligence
or willful misconduct). The Company will be entitled to
participate at its own expense in the defense or, if it
so elects, to assume the defense of any suit brought to
enforce any such liability, but if the Company elects to
assume the defense, such defense shall be conducted by
counsel chosen by it and reasonably acceptable to the
International Managers. In the event the Company elects
to assume the defense of any such suit and retain such
counsel, any Manager Indemnified Parties, defendant or
defendants in the suit, may retain additional counsel
but shall bear the fees and expenses of such counsel
unless (i) the Company shall have specifically
authorized the retaining of such counsel or (ii) the
parties to such suit include both any such Manager
Indemnified Party and the Company, and such Manager
Indemnified Parties have been advised by counsel to the
International Managers that one or more legal defenses
may be available to it or them which may not be
available to the Company, in which case the Company
shall not be entitled to assume the defense of such suit
without the written consent of the Manager Indemnified
Parties party to such suit notwithstanding its
obligation to bear the fees and expenses of such
counsel. In circumstances where the Company does not
assume the defense of a suit for which indemnification
is sought by one or more Manager Indemnified Parties,
the Company will be obligated to bear the fees and
expenses of only one firm on behalf of all Manager
Indemnified Parties (plus local counsel, if, in the
judgment of the primary counsel to the Manager
Indemnified Parties use of such local counsel is
necessary). This indemnity agreement is not exclusive
and will be in addition to any liability which the
Company might otherwise have and shall not limit any
rights or remedies which may otherwise be available at
law or in equity to each Manager Indemnified Party.

(b) Each Selling Stockholder severally and not jointly
agrees to indemnify and hold harmless each Manager
Indemnified Party against any losses, claims, damages,
liabilities or expenses (including, unless such Selling
Stockholder elects to assume the defense, the reasonable
cost of investigating and defending against any claims
therefor and counsel fees incurred in connection
therewith), joint or several, which may be based upon
the Securities Act, or any Federal, state or foreign
statute, regulation or at common law, on the ground or
alleged ground that any Pre-Effective Prospectus, the
Registration Statement, the Application for Admission or
the Prospectus (or any Pre-Effective Prospectus, the
Registration Statement or the Prospectus, as from time
to time amended and supplemented) includes an untrue
statement of a material fact or omits to state a
material fact required to be stated therein or necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not
misleading, unless such statement or omission was made
in reliance upon, and in conformity with, written
information furnished to the Company by any
International Manager, directly or through the Lead
Managers specifically for use in the preparation
thereof; provided however that with respect to any
untrue statement or omission or alleged untrue statement
or omission made in any Pre-Effective Prospectus, the
indemnity agreement contained in this subsection (b)
shall not inure to the benefit of any Manager
Indemnified Party from whom the person asserting any
such losses, claims, damages or liabilities purchased
the shares


20

of Stock concerned to the extent that any such loss,
claim, damage or liability of such Manager Indemnified
Party results from the fact that a copy of the
Prospectus was not sent or given to such person at or
prior to the written confirmation of the sale of such
shares of Stock, as required by the Securities Act, and
if the untrue statement or omission concerned has been
corrected in the Prospectus. Such Selling Stockholder
shall be entitled to participate at his own expense in
the defense, or, if he so elects, to assume the defense
of any suit brought to enforce any such liability, but,
if such Selling Stockholder elects to assume the
defense, such defense shall be conducted by counsel
chosen by him. In the event that any Selling Stockholder
elects to assume the defense of any such suit and retain
such counsel, the Manager Indemnified Parties, defendant
or defendants in the suit, may retain additional counsel
but shall bear the fees and expenses of such counsel
unless (i) such Selling Stockholder shall have
specifically authorized the retaining of such counsel or
(ii) the parties to such suit include both such Manager
Indemnified Parties and such Selling Stockholder and
such Manager Indemnified Parties have been advised by
counsel that one or more legal defenses may be available
to it or them which may not be available to such Selling
Stockholder, in which case such Selling Stockholder
shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and
expenses of such counsel. This indemnity agreement is
not exclusive and will be in addition to any liability
which such Selling Stockholder might otherwise have and
shall not limit any rights or remedies which may
otherwise be available at law or in equity to each
Manager Indemnified Party. The Company and the Selling
Stockholders may agree, as among themselves and without
limiting the rights of the International Managers under
this Agreement, as to their respective amounts of such
liability for which they each shall be responsible.

Notwithstanding any other provision of this Agreement or
the U.S. Underwriting Agreement, the liability of each
Selling Stockholder to the International Managers and
U.S. Underwriters under this Agreement, the U.S.
Underwriting Agreement or otherwise shall be limited to
an amount equal to the aggregate initial public offering
price of the shares of Common Stock sold by such Selling
Stockholder in the initial public offering.

(c) Each International Manager severally and not jointly
agrees to indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed
the Registration Statement and each person, if any, who
controls the Company within the meaning of the
Securities Act (collectively, the "Company Indemnified
Parties") and each Selling Stockholder (the "Selling
Stockholder Indemnified Parties") against any losses,
claims, damages, liabilities or expenses (including,
unless the International Manager or International
Managers elect to assume the defense, the reasonable
cost of investigating and defending against any claims
therefor and counsel fees incurred in connection
therewith), joint or several, which arise out of or are
based in whole or in part upon the Securities Act, the
Exchange Act or any other federal, state, local or
foreign statute or regulation, or at common law, on the
ground or alleged ground that any Pre-effective
Prospectus, the Registration Statement, the Application
for Admission, or the Prospectus (or any Pre-effective
Prospectus, the Registration Statement or the
Prospectus, as from time to time amended and
supplemented) includes an untrue statement of a material
fact or omits to state a material fact required to be
stated therein or necessary in order to make the
statements therein, in light of the circumstances in
which they were made, not misleading, but only insofar
as any such statement or omission was made in reliance
upon, and in conformity with, written information
furnished to the Company by such International Manager,
directly or through the Lead Managers, specifically for
use in the


21

preparation thereof. Such International Manager shall be
entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of
any suit brought to enforce any such liability, but, if
such International Manager elects to assume the defense,
such defense shall be conducted by counsel chosen by it.
In the event that any International Manager elects to
assume the defense of any such suit and retain such
counsel, the Company Indemnified Parties or Selling
Stockholders Indemnified Parties and any other
International Manager or International Managers or
controlling person or persons, defendant or defendants
in the suit, shall bear the fees and expenses of any
additional counsel retained by them, respectively. The
International Manager against whom indemnity may be
sought shall not be liable to indemnify any person for
any settlement of any such claim effected without such
International Manager's consent. This indemnity
agreement is not exclusive and will be in addition to
any liability which such International Manager might
otherwise have and shall not limit any rights or
remedies which may otherwise be available at law or in
equity to any Company Indemnified Party or Selling
Stockholder Indemnified Party.

(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an
indemnified party under subsection (a), (b) or (c) above
in respect of any losses, claims, damages, liabilities
or expenses (or actions in respect thereof) referred to
herein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as
a result of such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling
Stockholders on the one hand and the International
Managers on the other from the offering of the Stock.
If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law,
then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the
Company and the Selling Stockholders on the one hand and
the International Managers on the other in connection
with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses (or
actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits
received by the Company and the Selling Stockholders on
the one hand and the International Managers on the other
shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling
Stockholders bear to the total underwriting discounts
and commissions received by the International Managers,
in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a
material fact relates to information supplied by the
Company, the Selling Stockholders or the International
Managers and the parties' relative intent, knowledge,
access to information and opportunity to correct or
prevent such statement or omission. The Company, the
Selling Stockholders and the International Managers
agree that it would not be just and equitable if
contribution were determined by pro rata allocation
(even if the International Managers were treated as one
entity for such purpose) or by any other method of
allocation which does not take account of the equitable
considerations referred to above. The amount paid or
payable by an indemnified party as a result of the
losses, claims, damages, liabilities or expenses (or
actions in respect thereof) referred to above shall be
deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with
investigating, defending, settling or compromising any
such


22

claim. Notwithstanding the provisions of this subsection
(d), no International Manager shall be required to
contribute any amount in excess of the amount by which
the total price at which the shares of the Stock
underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages
which such International Manager has otherwise been
required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The
International Managers' obligations to contribute are
several in proportion to their respective underwriting
obligations and not joint. No person guilty of
fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act or the equivalent
legal provision under German law) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.

(e) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of the
commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection,
notify the indemnifying party in writing of the
commencement thereof; but the omission to so notify the
indemnifying party shall not relieve the indemnifying
party from any liability that it may have to any
indemnified party except to the extent that any such
delay results in the loss of the ability to assert any
affirmative or negative defense the loss of which is
materially prejudicial to the disposition of this
matter.

7 Survival of Indemnities, Representations, Warranties, etc. The
respective indemnities, covenants, agreements, representations,
warranties and other statements of the Company and its
subsidiaries, the Selling Stockholders and the several
International Managers, as set forth in this Agreement or made by
them respectively, pursuant to this Agreement, shall remain in full
force and effect, regardless of any investigation made by or on
behalf of any International Manager, the Selling Stockholders, the
Company or any of its officers or directors or any controlling
person, and shall survive delivery of and payment for the Stock
until all applicable statutes of limitation have expired.

8 Conditions of International Managers Obligations. The respective
obligations of the several International Managers hereunder shall
be subject to the accuracy, at and (except as otherwise stated
herein) as of the date hereof and at and as of each of the Closing
Dates, of the representations and warranties made herein by the
Company and the Selling Stockholders to compliance at and as of
each of the Closing Dates by the Company and the Selling
Stockholders with their covenants and agreements herein contained
and other provisions hereof to be satisfied at or prior to each of
the Closing Dates, and to the following additional conditions:

(a) The Registration Statement and the Application for
Admission shall have become effective and no stop order
suspending the effectiveness thereof shall have been
issued and no proceedings for that purpose shall have
been initiated or, to the knowledge of the Company or
the Lead Managers, shall be threatened by the
Commission, and any request for additional information
on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise)
shall have been complied with to the reasonable
satisfaction of the Lead Managers. Any filings of the
Prospectus, or any supplement thereto, required pursuant
to Rule 424(b) or Rule 434 of the Rules and Regulations,
shall have been made in the manner and within the time
period required by Rule 424(b) and Rule 434 of the Rules
and Regulations, as the case may be.



23

(b) The Lead Managers shall have been satisfied that there
shall not have occurred any change prior to each of the
Closing Dates, in the condition (financial or
otherwise), properties, business, management, net worth
or results of operations of the Company and its
subsidiaries considered as a whole, or any change in the
capital stock, short-term or long-term debt of the
Company and its subsidiaries considered as a whole, such
that (i) the Registration Statement or the Prospectus,
or any amendment or supplement thereto, contains an
untrue statement of fact which, in the reasonable
opinion of the Lead Managers, is material, or omits to
state a fact which, in the reasonable opinion of the
Lead Managers, is required to be stated therein or is
necessary to make the statements therein not misleading
or (ii) it is impracticable in the reasonable judgment
of the Lead Managers to proceed with the public offering
or purchase the Stock as contemplated hereby.

(c) The Lead Managers shall be satisfied that no legal or
governmental action, suit or proceeding affecting the
Company which is material and adverse to the Company or
which affects or may affect the Company's or the Selling
Stockholders' ability to perform their respective
obligations under this Agreement shall have been
instituted or threatened and there shall have occurred
no material adverse development in any existing such
action, suit or proceeding.

(d) At the time of execution of this Agreement, the Lead
Managers shall have received from KPMG Peat Marwick LLP,
independent certified public accountants, a letter,
dated the date hereof, in form and substance
satisfactory to the International Managers to the effect
set forth in Exhibit I hereto.

(e) The Lead Managers shall have received from KPMG Peat
Marwick LLP, independent certified public accountants,
letters, dated each of the Closing Dates, to the effect
that such accountants reaffirm, as of each of the
Closing Dates, and as though made on each of the Closing
Dates, the statements made in the letter furnished by
such accountants pursuant to paragraph (d) of this
Section 8.

(f) The Lead Managers shall have received (i) from Wilson
Sonsini Goodrich & Rosati, Professional Corporation,
United States securities counsel for the Company; (ii)
from ______________, German counsel for the Company; and
(iii) from ____________, intellectual property counsel
to the Company, an opinion, dated each of the Closing
Date, to the effect set forth in Exhibits II, III and
IV hereto, respectively.

(g) The Lead Managers shall have received from Rogers &
Wells, counsel for the International Managers, their
opinion dated each of the Closing Dates with respect to
the incorporation of the Company, the validity of the
Stock, the Registration Statement and the Prospectus and
such other related matters as it may reasonably request,
and the Company shall have furnished to such counsel
such documents as they may request for the purpose of
enabling them to pass upon such matters.

(h) The Lead Managers shall have received from ___________,
counsel for the Selling Stockholders, an opinion dated
the Closing Date, to the effect set forth in Exhibit V.

(i) The Lead Managers shall have received a certificate or
certificates, dated each of the Closing Dates, of the
chief executive officer or the President and the chief
financial or accounting officer of the Company to the
effect that:


24

(i) No stop order suspending the effectiveness
of the Registration Statement has been
issued, and, to the knowledge of the
signers, no proceedings for that purpose
have been instituted or are pending or
contemplated under the Securities Act;

(ii) Neither any Pre-effective Prospectus, as of
its date, nor the Registration Statement nor
the Prospectus, nor any amendment or
supplement thereto, as of the time when the
Registration Statement became effective and
at all times subsequent thereto up to the
delivery of such certificate, contained any
untrue statement of a material fact or
omitted to state any material fact required
to be stated therein or necessary to make
the statements therein, in light of the
circumstances under which they were made,
not misleading;

(iii) The representations and warranties of the
Company in this Agreement are true and
correct at and as of each of the Closing
Dates, and the Company has complied with all
the agreements and performed or satisfied
all the conditions on its part to be
performed or satisfied at or prior to the
Closing Dates; and

(iv) Since the respective dates as of which
information is given in the Registration
Statement and the Prospectus, and except as
disclosed in or contemplated by the
Prospectus, (i) there has not been any
material adverse change or a development
involving a material adverse change in the
condition (financial or otherwise),
properties, business, management, net worth
or results of operations of the Company and
its subsidiaries considered as a whole; (ii)
the business and operations conducted by the
Company and its subsidiaries have not
sustained a loss by strike, fire, flood,
accident or other calamity (whether or not
insured) of such a character as to interfere
materially with the conduct of the business
and operations of the Company and its
subsidiaries considered as a whole; (iii) no
legal or governmental action, suit or
proceeding is pending or to the knowledge of
the signers threatened against the Company
which is material to the Company, whether or
not arising from transactions in the
ordinary course of business, or which may
materially and adversely affect the
transactions contemplated by this Agreement;
(iv) since such dates and except as so
disclosed, the Company has not incurred any
material liability or obligation, direct,
contingent or indirect, made any change in
its capital stock (except pursuant to the
1997 Plans), made any material change in its
short-term or funded debt or repurchased or
otherwise acquired any of the Company's
capital stock; and (v) the Company has not
declared or paid any dividend, or made any
other distribution, upon its outstanding
capital stock payable to stockholders of
record on a date prior to the Closing Date.

(j) The Selling Stockholders shall have furnished to the
Lead Managers certificates as to the accuracy, at and as
of each of the Closing Dates, of the representations and
warranties made herein by them and as to compliance at
and as of each of the Closing Dates by them with their
covenants and agreements herein contained and other
provisions hereof to be satisfied at or prior to each of
the Closing Dates, and as to satisfaction of the other
conditions to the obligations of the International
Managers hereunder.

(k) Cowen & Company shall have received, on behalf of the
several International Managers, the written agreements,
substantially in the form of Exhibit V hereto, of the
officers, directors and certain holders of Common Stock
that each will not offer, sell, assign,


25

transfer, encumber, contract to sell, register for sale,
grant an option to purchase or otherwise dispose of,
other than by operation of law, gifts, pledges or
dispositions by estate representatives, any shares of
Common Stock (including, without limitation, Common
Stock which may be deemed to be beneficially owned by
such officer, director or holder in accordance with the
Rules and Regulations) during the 180 days following the
date of the final Prospectus except as provided therein.

(l) The Nasdaq National Market shall have approved the U.S.
Stock for listing, subject only to official notice of
issuance.

(m) The International Stock to be issued and sold by the
Company and the Selling Stockholders shall have been
duly authorized for listing on the Neuer Markt of the
Frankfurt Stock Exchange.

(n) The Closing under the U.S. Underwriting Agreement shall
have occurred concurrently with the Closing hereunder on
the Closing Date.

All opinions, certificates, letters and other documents will be in
compliance with the provisions hereunder only if they are
reasonably satisfactory in form and substance to the Lead Managers.
The Company will furnish to the Lead Managers conformed copies of
such opinions, certificates, letters and other documents as the
Lead Managers shall reasonably request. If any of the conditions
hereinabove provided for in this Section shall not have been
satisfied when and as required by this Agreement, this Agreement
may be terminated by the Lead Managers by notifying the Company of
such termination in writing or by telegram at or prior to each of
the Closing Dates, but [Cowen], on behalf of the Lead Managers,
shall be entitled to waive any of such conditions.

9 Effective Date. This Agreement shall become effective immediately
as to Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16 and 17 and, as to
all other provisions, at 11:00 a.m. New York City time on the first
full business day following the effectiveness of the Registration
Statement or at such earlier time after the Registration Statement
becomes effective as the Lead Managers may determine on and by
notice to the Company or by release of any of the Stock for sale to
the public. For the purposes of this Section 9, the Stock shall be
deemed to have been so released upon the release for publication of
any newspaper advertisement relating to the Stock or upon the
release by you of notices (i) advising International Managers that
the shares of Stock are released for public offering or (ii)
offering the Stock for sale to securities dealers, whichever may
occur first.

10 Termination. This Agreement (except for the provisions of Section
5) may be terminated by the Company at any time before it becomes
effective in accordance with Section 9 by notice to the Lead
Managers and may be terminated by the Lead Managers at any time
before it becomes effective in accordance with Section 9 by notice
to the Company. In the event of any termination of this Agreement
under this or any other provision of this Agreement, there shall be
no liability of any party to this Agreement to any other party,
other than as provided in Sections 5, 6 and 11 and other than as
provided in Section 12 as to the liability of defaulting
International Managers.

This Agreement may be terminated after it becomes effective by the
Lead Managers by notice to the Company (i) if at or prior to the
First Closing Date trading in securities on any of the New York
Stock Exchange or the Nasdaq National Market System shall have been
suspended (other than any short term suspension of trading pursuant
to any "circuit breaker" provisions of


26

the New York Stock Exchange) or minimum or maximum prices shall
have been established on any such exchange or market, or a banking
moratorium shall have been declared by New York or United States
authorities; (ii) trading of any securities of the Company shall
have been suspended on any U.S. or foreign exchange or in any U.S.
or foreign over-the-counter market; (iii) if at or prior to the
First Closing Date there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign
power or of any other insurrection or armed conflict involving the
United States or (B) any material change in financial markets or
any calamity or crisis which, in the reasonable judgment of the
Lead Managers, makes it impractical or inadvisable to offer or sell
the Stock on the terms contemplated by the Prospectus; (iv) if
there shall have been any development or prospective development
involving particularly the business or properties or securities of
the Company or any of its subsidiaries or the transactions
contemplated by this Agreement, which, in the reasonable judgment
of the Lead Managers, makes it impracticable or inadvisable to
offer or deliver the Stock on the terms contemplated by the
Prospectus; (v) if there shall be any litigation or proceeding,
pending or threatened, which, in the reasonable judgment of the
Lead Managers, makes it impracticable or inadvisable to offer or
deliver on the terms contemplated by the Prospectus; or (vi) if
there shall have occurred any of the events specified in the
immediately preceding clauses (i) - (v) together with any other
such event that makes it, in the reasonable judgment of the Lead
Managers, impractical or inadvisable to offer or deliver the Stock
on the terms contemplated by the Prospectus.

11 Reimbursement of International Managers. Notwithstanding any other
provisions hereof, if this Agreement shall not become effective by
reason of any election of the Company or the Selling Stockholder
pursuant to the first paragraph of Section 10 or shall be
terminated by the Lead Managers under Section 8 (excluding Section
8(g)) or Section 10, the Company will bear and pay the expenses
specified in Section 5 hereof and, in addition to their obligations
pursuant to Section 6 hereof, the Company will reimburse the
reasonable out-of-pocket expenses of the several International
Managers (including reasonable fees and disbursements of counsel
for the International Managers) incurred in connection with this
Agreement and the proposed purchase of the Stock, and promptly upon
demand the Company will pay such amounts to you as Lead Managers.

12 Substitution of International Managers. If any International
Manager or International Managers shall default in its or their
obligations to purchase shares of Stock hereunder and the aggregate
number of shares which such defaulting International Manager or
International Managers agreed but failed to purchase does not
exceed ten percent (10%) of the total number of shares
underwritten, the other International Managers shall be obligated
severally, in proportion to their respective commitments hereunder,
to purchase the shares which such defaulting International Manager
or International Managers agreed but failed to purchase. If any
International Manager or International Managers shall so default
and the aggregate number of shares with respect to which such
default or defaults occur is more than ten percent (10%) of the
total number of shares underwritten and arrangements satisfactory
to the Lead Managers and the Company for the purchase of such
shares by other persons are not made within forty-eight (48) hours
after such default, this Agreement shall terminate.

If the remaining International Managers or substituted
International Managers are required hereby or agree to take up all
or part of the shares of Stock of a defaulting International
Manager or International Managers as provided in this Section 12,
(i) the Company and the Selling Stockholders shall have the right
to postpone the Closing Dates for a period of not more than five
(5) full business days in order that the Company may effect
whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus or in any other documents or


27

arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the
Prospectus which may thereby be made necessary, and (ii) the
respective numbers of shares to be purchased by the remaining
International Managers or substituted International Managers shall
be taken as the basis of their underwriting obligation for all
purposes of this Agreement. Nothing herein contained shall relieve
any defaulting International Manager of its liability to the
Company, the Selling Stockholders or the other International
Managers for damages occasioned by its default hereunder. Any
termination of this Agreement pursuant to this Section 12 shall be
without liability on the part of any non-defaulting International
Manager, the Selling Stockholders or the Company, except for
expenses to be paid or reimbursed pursuant to Section 5 and except
for the provisions of Section 6.

13 Notices. All communications hereunder shall be in writing and, if
sent to the International Managers shall be mailed, delivered or
facsimilied and confirmed to you, as their Lead Managers c/o Cowen
& Company at Financial Square, New York. New York 10005 except that
notices given to an International Manager pursuant to Section 6
hereof shall be sent to such International Manager at the address
furnished by the Lead Managers or, if sent to the Company, shall be
mailed, delivered or facsimilied and confirmed c/o SCM
Microsystems, Inc., 131 Albright Way, Los Gatos, California 95030,
Attention: President.

14 Successors. This Agreement shall inure to the benefit of and be
binding upon the several International Managers, the Company and
the Selling Stockholders and their respective successors and legal
representatives. Nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or equitable
right, remedy or claim under or in respect of this Agreement, or
any provisions hereby contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no
other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company and the
Selling Stockholders contained in this Agreement shall also be for
the benefit of the person or persons, if any, who control any
International Manager or International Managers within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange
Act, and the indemnities of the several International Managers
shall also be for the benefit of each director of the Company, each
of its officers who has signed the Registration Statement and the
person or persons, if any, who control the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act.

15 Applicable Law. This Agreement shall be governed by and construed
in accordance with the substantive laws of the State of New York.

16 Authority of Lead Managers. In connection with this Agreement, you
will act for and on behalf of the several International Managers,
and any action taken under this Agreement by Cowen, as Lead
Manager, will be binding on all the International Managers; and
any action taken under this Agreement by any of the
Attorneys-in-fact will be binding all the Selling Stockholders.

17 Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect
the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes
(and only such minor changes) as are necessary to make it valid and
enforceable.



28

18 General. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral
and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.

In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section
headings in this Agreement are for the convenience of the parties
only and will not affect the construction or interpretation of this
Agreement. This Agreement may be amended or modified, and the
observance of any term of this Agreement may be waived, only by a
writing signed by the party or parties to this Agreement directly
affected by such amendment, modification or waiver.

19 Counterparts. This Agreement may be signed in two (2) or more
counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.




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If the foregoing correctly sets forth our understanding, please indicate your
acceptance thereof in the space provided below for that purpose, whereupon this
letter and your acceptance shall constitute a binding agreement between us.

Very truly yours,

SCM MICROSYSTEMS, INC.


By:_____________________________________
Name:
Title:


For purposes of agreeing to the indemnification provisions set forth in Section
6 of this agreement:

SCM MICROSYSTEMS GmbH

By:_____________________________________
Name:
Title:


Accepted and delivered in SELLING STOCKHOLDERS
- as of LISTED IN SCHEDULE B
the date first above written.

COWEN INTERNATIONAL L.P. By:_____________________________________
HAMBRECHT & QUIST LLC
WESTDEUTSCHE LANDESBANK
GIROZENTRALE
Acting on their own behalf
and as Lead Managers of
the several International By:_____________________________________
Managers referred to in Attorney-in-fact
the foregoing Agreement.


By: COWEN INTERNATIONAL L.P.

By:___________________________________
Its general partner

By:_____________________________
Name:
Title:


30

SCHEDULE A

INTERNATIONAL MANAGERS