INDEMNIFICATION AGREEMENT

This Agreement (this “Agreement”) is entered into as of this        day of
      , 20      by and between SCM Microsystems, Inc., a Delaware corporation
(the “Company”), and      (“Indemnitee”).

RECITALS

WHEREAS, the Board of Directors has determined that the inability to attract and
retain qualified persons as directors and officers is detrimental to the best
interests of the Company’s stockholders and that the Company should act to
assure such persons that there shall be adequate certainty of protection through
insurance and indemnification against risks of claims and actions against them
arising out of their service to and activities on behalf of the Company;

WHEREAS, the Company has adopted provisions in its Bylaws providing for
indemnification and advancement of expenses of its directors and officers to the
fullest extent authorized by the General Corporation Law of the State of
Delaware, and the Company wishes to clarify and enhance the rights and
obligations of the Company and Indemnitee with respect to indemnification and
advancement of expenses;

WHEREAS, the Company’s Bylaws and the General Corporation Law of the State of
Delaware contemplate that separate contracts may be entered into between the
Company and its directors and officers, employees and other agents with respect
to their indemnification by the Company, which contracts may provide greater
protection than is afforded by the Bylaws;

WHEREAS, in order to induce and encourage highly experienced and capable persons
such as Indemnitee to serve and continue to serve as directors and officers of
the Company and in any other capacity with respect to the Company, and to
otherwise promote the desirable end that such persons shall resist what they
consider unjustified lawsuits and claims made against them in connection with
the good faith performance of their duties to the Company, with the knowledge
that certain costs, judgments, penalties, fines, liabilities and expenses
incurred by them in their defense of such litigation are to be borne by the
Company and they shall receive the maximum protection against such risks and
liabilities as may be afforded by law, the Board of Directors of the Company has
determined that the following Agreement is reasonable and prudent to promote and
ensure the best interests of the Company and its stockholders; and

WHEREAS, the Company desires to have Indemnitee continue to serve as a director
or officer of the Company and in such other capacity with respect to the Company
as the Company may request, as the case may be, free from undue concern for
unpredictable, inappropriate or unreasonable legal risks and personal
liabilities by reason of Indemnitee acting in good faith in the performance of
Indemnitee’s duty to the Company; and Indemnitee desires to continue so to serve
the Company, provided, and on the express condition, that he or she is furnished
with the indemnity set forth hereinafter.

AGREEMENT

NOW, THEREFORE, in consideration of Indemnitee’s continued service as a director
or officer of the Company, the parties hereto agree as follows:

1. Service by Indemnitee. Indemnitee shall serve and/or continue to serve as a
director or officer of the Company faithfully and to the best of Indemnitee’s
ability so long as Indemnitee is duly elected or appointed and until such time
as Indemnitee is removed as permitted by law or tenders a resignation in
writing.

2. Indemnification and Advancement of Expenses. The Company shall indemnify and
hold harmless Indemnitee and, subject to the provision of the undertaking
required by Section 15 shall pay to Indemnitee in advance of the final
disposition of any Proceeding all Expenses incurred by Indemnitee, to the
fullest extent authorized by the General Corporation Law of the State of
Delaware, as the same exists or may hereafter be amended (but, in the case of
any such amendment, only to the extent that such amendment permits the Company
to provide broader rights than said law permitted the Company to provide prior
to such amendment). Without diminishing the scope of the rights provided by this
Section, the rights of Indemnitee to indemnification and advancement of Expenses
provided hereunder shall include but shall not be limited to those rights
hereinafter set forth, except that no indemnification or advancement of Expenses
shall be paid to Indemnitee:

(a) to the extent expressly prohibited by Delaware law or the Certificate of
Incorporation and Bylaws of the Company;

(b) for which payment is actually made to Indemnitee under a valid and
collectible insurance policy or under a valid and enforceable indemnity clause,
provision of the certificate of incorporation or by-laws, or agreement of the
Company or any other company or other enterprise where Indemnitee is or was
serving at the request of the Company, except in respect of any indemnity
exceeding the payment under such insurance, indemnity clause, provision of the
certificate of incorporation or by-laws, or agreement; or

(c) in connection with an action, suit or proceeding, or part thereof (including
claims and counterclaims) initiated by Indemnitee, except (i) if such
indemnification or advancement of expenses is expressly required to be made by
law, (ii) the action, suit or proceeding (or part thereof) was authorized or
ratified by the Board of Directors of the Company, (iii) such indemnification or
advancement of expenses is provided by the Company, in its sole discretion,
pursuant to the powers vested in the Corporation under the Delaware General
Corporation Law, or (iv) the action, suit or proceeding (or part thereof) is
brought to establish or enforce a right to indemnification pursuant to
Section 10 to enforce rights under this Agreement.

3. Action or Proceedings Other than an Action by or in the Right of the Company.
Except as limited by Section 2 above, Indemnitee shall be entitled to the
indemnification rights provided in this Section if Indemnitee was or is a party
or threatened to be made a party to, or was or is otherwise involved in, any
Proceeding (other than an action by or in the name of the Company) by reason of
the fact that Indemnitee, or a person for whom he or she is legal
representative, is or was a director, officer, employee, agent or trustee of the
Company or while a director, officer, employee, agent or trustee of the Company
is or was serving at the request of the Company as a director, officer,
employee, agent or trustee of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to an
employee benefit plan, or by reason of anything done or not done by Indemnitee,
whether the basis of such Proceeding is alleged action in an official capacity
as a director, officer, employee, agent or trustee or in any other capacity
while serving as a director, officer, employee, agent or trustee. Pursuant to
this Section, Indemnitee shall be indemnified against all expense, liability and
loss (including judgments, fines, ERISA excise taxes or penalties, amounts paid
in settlement by or on behalf of Indemnitee, and Expenses) actually and
reasonably incurred or suffered by Indemnitee in connection with such
Proceeding, if Indemnitee met any applicable standard of conduct set forth in
the General Corporation Law of the State of Delaware.

4. Indemnity in Proceedings by or in the Name of the Company. Except as limited
by Section 2 above, Indemnitee shall be entitled to the indemnification rights
provided in this Section if Indemnitee was or is a party or is threatened to be
made a party to, or was or is otherwise involved in, any Proceeding brought by
or in the name of the Company to procure a judgment in its favor by reason of
the fact that Indemnitee is or was a director, officer, employee, agent or
trustee of the Company or while a director, officer, employee, agent or trustee
of the Company is or was serving at the request of the Company as a director,
officer, employee, agent or trustee of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan, or by reason of anything done or not done by Indemnitee,
whether the basis of such Proceeding is alleged action in an official capacity
as a director, officer, employee, agent or trustee or in any other capacity
while serving as a director, officer, employee, agent or trustee. Pursuant to
this Section, Indemnitee shall be indemnified against all expense, liability and
loss (including judgments, fines, ERISA excise taxes or penalties, amounts paid
in settlement by or on behalf of Indemnitee, and Expenses) actually and
reasonably incurred or suffered by Indemnitee in connection with such Proceeding
if Indemnitee met the applicable standard of conduct set forth in the General
Corporation Law of the State of Delaware; provided, however, that no such
indemnification shall be made in respect of any claim, issue, or matter as to
which Delaware law expressly prohibits such indemnification by reason of any
adjudication of liability of Indemnitee to the Company, unless and only to the
extent that the Court of Chancery of the State of Delaware or the court in which
such Proceeding was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
Indemnitee is entitled to indemnification for such expense, liability and loss
as such court shall deem proper.

5. Indemnification for Costs, Charges and Expenses of Successful Party.
Notwithstanding any limitations of Sections 3 and 4 above, to the extent that
Indemnitee has been successful, on the merits or otherwise, in whole or in part,
in defense of any Proceeding, or in defense of any claim, issue or matter
therein, including, without limitation, the dismissal of any action without
prejudice, or if it is ultimately determined, after all appeals by a court of
competent jurisdiction, that Indemnitee is otherwise entitled to be indemnified
against Expenses, Indemnitee shall be indemnified against all Expenses
reasonably incurred or suffered by Indemnitee in connection therewith.

6. Partial Indemnification. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
expense, liability and loss (including judgments, fines, ERISA excise taxes or
penalties, amounts paid in settlement by or on behalf of Indemnitee, and
Expenses) actually and reasonably incurred or suffered in connection with any
Proceeding, or in connection with any judicial proceeding or arbitration
pursuant to Section 10 to enforce rights under this Agreement, but not, however,
for all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such expense, liability and loss actually and
reasonably incurred or suffered to which Indemnitee is entitled.

7. Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the maximum extent permitted by the General
Corporation Law of the State of Delaware, Indemnitee shall be entitled to
indemnification against all Expenses actually and reasonably incurred or
suffered by Indemnitee or on Indemnitee’s behalf if Indemnitee appears as a
witness or otherwise incurs legal expenses as a result of or related to
Indemnitee’s service as a director or officer of the Company, in any threatened,
pending or completed action, suit or proceeding, whether of a civil, criminal,
administrative, investigative, legislative or other nature, to which Indemnitee
neither is, nor is threatened to be made, a party.

8. Determination of Entitlement to Indemnification. To receive indemnification
under this Agreement, Indemnitee shall submit a written request to the Secretary
of the Company. Such request shall include documentation or information which is
necessary for such determination and which is reasonably available to
Indemnitee. Upon written request by Indemnitee for indemnification pursuant to
Sections 3, 4, 5, 6 or 7 the entitlement of Indemnitee to indemnification, to
the extent not provided pursuant to the terms of this Agreement, shall be
determined by the following person or persons who shall be empowered to make
such determination: (a) the Board of Directors of the Company by a majority vote
of Disinterested Directors, whether or not such majority constitutes a quorum;
(b) a committee of Disinterested Directors designated by a majority vote of such
directors, whether or not such majority constitutes a quorum; (c) if there are
no Disinterested Directors, or if the Disinterested Directors so direct, by
Independent Counsel in a written opinion to the Board of Directors, a copy of
which shall be delivered to Indemnitee; (d) the stockholders of the Company; or
(e) in the event that a Change in Control has occurred, by Independent Counsel
in a written opinion to the Board of Directors, a copy of which shall be
delivered to Indemnitee. Such Independent Counsel shall be selected by the Board
of Directors and approved by Indemnitee, except that in the event that a Change
in Control has occurred, Independent Counsel shall be selected by Indemnitee.
Upon failure of the Board of Directors so to select such Independent Counsel or
upon failure of Indemnitee so to approve (or so select, in the event a Change in
Control has occurred), such Independent Counsel shall be selected upon
application to a court of competent jurisdiction. The determination of
entitlement to indemnification shall be made, and such indemnification shall be
paid in full by the Company, not later than 90 calendar days after receipt by
the Company of a written request for indemnification. Any amounts incurred by
Indemnitee in connection with a request for indemnification or payment of
Expenses hereunder, under any other agreement, any provision of the Company’s
Bylaws or any directors’ and officers’ liability insurance, shall be borne by
the Company. The Company hereby indemnifies Indemnitee for any such amounts and
agrees to hold Indemnitee harmless therefrom irrespective of the outcome of the
determination of Indemnitee’s entitlement to indemnification. If the person
making such determination shall determine that Indemnitee is entitled to
indemnification as to part (but not all) of the application for indemnification,
such person shall reasonably prorate such partial indemnification among the
claims, issues or matters at issue at the time of the determination.

9. Presumptions and Effect of Certain Proceedings. The Secretary of the Company
shall, promptly upon receipt of Indemnitee’s written request for
indemnification, advise in writing the Board of Directors or such other person
or persons empowered to make the determination as provided in Section 8 that
Indemnitee has made such request for indemnification. If the person or persons
so empowered to make such determination shall have failed to make the requested
determination with respect to indemnification within 90 calendar days after
receipt by the Company of such request, a requisite determination of entitlement
to indemnification shall be deemed to have been made and Indemnitee shall be
absolutely entitled to such indemnification, absent actual and material fraud in
the request for indemnification. The termination of any Proceeding described in
Sections 3 or 4 by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself: (a) create a
presumption that Indemnitee has not met the applicable standard of conduct set
forth in the General Corporation Law of the State of Delaware; or (b) otherwise
adversely affect the rights of Indemnitee to indemnification except as may be
provided herein.

10. Remedies of Indemnitee in Cases of Determination Not to Indemnify or to
Advance Expenses; Right to Bring Suit. In the event that a determination is made
that Indemnitee is not entitled to indemnification hereunder or if payment has
not been timely made following a determination of entitlement to indemnification
pursuant to Sections 8 and 9, or if Expenses have not been timely paid pursuant
to Section 15, and at least ninety (90) days have passed after receipt by the
Company of a written request for indemnification, Indemnitee may, at any time
thereafter, bring suit against the Company in a court of competent jurisdiction
in the State of Delaware of entitlement to such indemnification or payment.
Alternatively, Indemnitee at Indemnitee’s option may seek an award in an
arbitration to be conducted by a single arbitrator pursuant to the rules of the
American Arbitration Association, such award to be made within 60 calendar days
following the filing of the demand for arbitration. The Company shall not oppose
Indemnitee’s right to seek any such adjudication or award in arbitration or any
other claim. In (a) any suit or arbitration brought by Indemnitee to enforce a
right to indemnification hereunder (but not in a suit or arbitration brought by
Indemnitee to enforce a right to an advancement of Expenses) it shall be a
defense that, and (b) any suit brought by the Company to recover an advancement
of Expenses pursuant to the terms of an undertaking, the Company shall be
entitled to recover such Expenses in the event of a final judicial decision from
which there is no further right to appeal that, Indemnitee has not met the
applicable standard for indemnification set forth in the General Corporation Law
of the State of Delaware. Neither the failure of the Company (including the
Disinterested Directors, a committee of Disinterested Directors, Independent
Counsel, or its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of Indemnitee is proper in the
circumstances because Indemnitee has met the applicable standard of conduct set
forth in the General Corporation Law of the State of Delaware, nor an actual
determination by the Company (including the Disinterested Directors, a committee
of Disinterested Directors, Independent Counsel, or its stockholders) that
Indemnitee has not met such applicable standard of conduct shall create a
presumption that Indemnitee has not met the applicable standard of conduct or,
in the case of such a suit brought by Indemnitee, be a defense to such suit. If
a determination is made or deemed to have been made pursuant to the terms of
Section 8 or 9 that Indemnitee is entitled to indemnification, the Company shall
be bound by such determination and is precluded from asserting that such
determination has not been made or that the procedure by which such
determination was made is not valid, binding and enforceable. The Company
further agrees to stipulate in any court or before any arbitrator pursuant to
this Section 10 that the Company is bound by all the provisions of this
Agreement and is precluded from making any assertions to the contrary. If the
court or arbitrator shall determine that Indemnitee is entitled to any
indemnification or payment of Expenses hereunder, the Company shall pay all
Expenses actually and reasonably incurred by Indemnitee in connection with such
adjudication or award in arbitration (including, but not limited to, any
appellate Proceedings), and in any suit brought by the Company to recover an
advancement of Expenses pursuant to the terms of an undertaking, the Company
shall pay all Expenses actually and reasonably incurred by Indemnitee in
connection with such suit to the extent Indemnitee has been successful, on the
merits or otherwise, in whole or in part, in defense of such suit.

11. Non-Exclusivity of Rights. The rights to indemnification and to the
advancement of Expenses provided by this Agreement shall not be deemed exclusive
of any other right which Indemnitee may now or hereafter acquire under any law,
agreement, vote of stockholders or Disinterested Directors, provisions of the
Certificate of Incorporation or Bylaws or otherwise.

12. Expenses to Enforce Agreement. In the event that Indemnitee is subject to or
intervenes in any action, suit or proceeding in which the validity or
enforceability of this Agreement is at issue or seeks an adjudication or award
in arbitration to enforce Indemnitee’s rights under, or to recover damages for
breach of, this Agreement, Indemnitee, if Indemnitee prevails in whole or in
part in such action, suit or proceeding, shall be entitled to recover from the
Company and shall be indemnified by the Company against any Expenses actually
and reasonably incurred by Indemnitee.

13. Continuation of Indemnity. All agreements and obligations of the Company
contained herein shall continue during the period Indemnitee is a director,
officer, employee, agent or trustee of the Company or is serving at the request
of the Company as a director, officer, employee, agent or trustee of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan, and shall continue
thereafter with respect to any possible claims based on the fact that Indemnitee
was a director, officer, employee, agent or trustee of the Company or was
serving at the request of the Company as a director, officer, employee, agent or
trustee of another corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to an employee benefit plan.
This Agreement shall be binding upon all successors and assigns of the Company
(including any transferee of all or substantially all of its assets and any
successor by merger or operation of law) and shall inure to the benefit of
Indemnitee’s heirs, executors and administrators.

14. Notification and Defense of Claim. Promptly after receipt by Indemnitee of
notice of any Proceeding, Indemnitee shall, if a claim in respect thereof is to
be made against the Company under this Agreement, notify the Company in writing
of the commencement thereof; but the omission so to notify the Company shall not
relieve it from any liability that it may have to Indemnitee. Notwithstanding
any other provision of this Agreement, with respect to any such Proceeding of
which Indemnitee notifies the Company:

(a) The Company shall be entitled to participate therein at its own expense; and

(b) Except as otherwise provided in this Section 14(b), to the extent that it
may wish, the Company, jointly with any other indemnifying party similarly
notified, shall be entitled to assume the defense thereof, with counsel
satisfactory to Indemnitee. After notice from the Company to Indemnitee of its
election so to assume the defense thereof, the Company shall not be liable to
Indemnitee under this Agreement for any expenses of counsel subsequently
incurred by Indemnitee in connection with the defense thereof except as
otherwise provided below. Indemnitee shall have the right to employ Indemnitee’s
own counsel in such Proceeding, but the fees and expenses of such counsel
incurred after notice from the Company of its assumption of the defense thereof
shall be at the expense of Indemnitee unless (i) the employment of counsel by
Indemnitee has been authorized by the Company, (ii) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company and Indemnitee in the conduct of the defense of such Proceeding or
(iii) the Company shall not within 60 calendar days of receipt of notice from
Indemnitee in fact have employed counsel to assume the defense of the
Proceeding, in each of which cases the fees and expenses of Indemnitee’s counsel
shall be at the expense of the Company. The Company shall not be entitled to
assume the defense of any Proceeding brought by or on behalf of the Company or
as to which Indemnitee shall have made the conclusion provided for in
(ii) above; and

(c) The Company shall not be liable to indemnify Indemnitee under this Agreement
for any amounts paid in settlement of any Proceeding effected without the
Company’s written consent, or for any judicial or arbitral award if the Company
was not given an opportunity, in accordance with this Section 14, to participate
in the defense of such Proceeding. The Company shall not settle any Proceeding
in any manner that would impose any penalty or limitation on or disclosure
obligation with respect to Indemnitee without Indemnitee’s written consent.
Neither the Company nor Indemnitee shall unreasonably withhold its consent to
any proposed settlement.

15. Advancement of Expenses. All Expenses incurred by Indemnitee in advance of
the final disposition of any Proceeding shall be paid by the Company at the
request of Indemnitee. To receive payment of Expenses under this Agreement,
Indemnitee shall submit a written request to the Secretary of the Company. Such
request shall reasonably evidence the Expenses incurred by Indemnitee and, if
the Indemnitee incurred such Expenses in his or her capacity as a director or
officer (and not in any other capacity in which service was so tendered by such
person while a director of officer, including, without limitation, service to an
employee benefit plan), shall also include or be accompanied by an undertaking,
by or on behalf of Indemnitee, to repay all amounts so advanced if it shall
ultimately be determined, by final judicial decision from which there is no
further right to appeal, that Indemnitee is not entitled to be indemnified for
such Expenses by the Company as provided by this Agreement or otherwise.
Indemnitee’s undertaking is not required to be secured. Each such payment of
Expenses shall be made within 90 calendar days after the receipt by the Company
of such written request. Indemnitee’s entitlement to such Expenses shall include
those incurred in connection with any action, suit or proceeding by Indemnitee
seeking a judgment in court or an adjudication or award in arbitration pursuant
to Section 10 of this Agreement (including the enforcement of this provision) to
the extent the court or arbitrator shall determine that Indemnitee is entitled
to payment of Expenses hereunder.

16. Insurance. The Company may maintain insurance against liability arising out
of this Agreement or otherwise.

17. Separability; Prior Indemnification Agreements. If any provision or
provisions of this Agreement shall be held to be invalid, illegal or
unenforceable for any reason whatsoever (a) the validity, legality and
enforceability of the remaining provisions of this Agreement (including without
limitation, all portions of any paragraphs of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that are not by
themselves invalid, illegal or unenforceable) shall not in any way be affected
or impaired thereby, and (b) to the fullest extent possible, the provisions of
this Agreement (including, without limitation, all portions of any paragraph of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
be construed so as to give effect to the intent of the parties that the Company
provide protection to Indemnitee to the fullest enforceable extent. This
Agreement shall supersede and replace any prior indemnification agreements
entered into by and between the Company and Indemnitee and any such prior
agreements shall be terminated upon execution of this Agreement.

18. Notices. All notices and other communications hereunder shall be in writing
and shall be deemed duly given (a) on the date of delivery if delivered
personally, or if by facsimile, upon written confirmation of receipt by
facsimile; (b) on the first (1st) Business Day following the date of dispatch if
delivered utilizing a next-day service by a recognized next-day courier (except
in the case of overseas delivery, in which case notice shall be deemed duly
given on the third (3rd) Business Day following the date of dispatch if
delivered utilizing an expedited service by a recognized international courier);
or (c) on the earlier of confirmed receipt or the fifth (5th) Business Day
following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid (except in the case of overseas
delivery, in which case notice shall be deemed duly given on confirmed receipt
if delivered by registered or certified mail, return receipt requested, postage
prepaid) on which it is so mailed:

(a) If to Indemnitee, to the address set forth below Indemnitee signature
hereto.

  (b)   If to the Company, to:

SCM Microsystems, Inc.
Oskar-Messter-Straße 13,
85737, Ismaning Germany

Attention: Secretary

or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.

19. Headings; References; Pronouns. The headings of the sections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.
References herein to section numbers are to sections of this Agreement. All
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural as appropriate.

20. Definitions. For purposes of this Agreement:

(a) “Change in Control” means a change in control of the Company occurring after
the date of this Agreement of a nature that would be required to be reported in
response to Item 5.01 of Current Report on Form 8-K (or in response to any
similar item on any similar schedule or form) promulgated under the Securities
Exchange Act of 1934, whether or not the Company is then subject to such
reporting requirement; provided, however, that, without limitation, a Change in
Control shall be deemed to have occurred if after the date of this Agreement
(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly,
of securities of the Company representing 30% or more of the combined voting
power of the Company’s then outstanding securities without the prior approval of
at least two-thirds of the members of the Board of Directors in office
immediately prior to such person attaining such percentage, (ii) the Company is
a party to a merger, consolidation, sale of assets or other reorganization, or a
proxy contest, as a consequence of which members of the Board of Directors in
office immediately prior to such transaction or event constitute less than a
majority of the Board of Directors thereafter or (iii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors (including for this purpose any new director whose
election or nomination for election by the Company’s stockholders was approved
by a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period) cease for any reason to constitute at
least a majority of the Board of Directors; provided that notwithstanding the
foregoing, a Change in Control shall not be deemed to occur as a result of the
consummation of the prospective merger between the Company and Hirsch
Electronics Corporation.

(b) “Disinterested Director” means a director of the Company who is not or was
not a party to the Proceeding in respect of which indemnification is being
sought by Indemnitee.

(c) “Expenses” includes, without limitation, expenses incurred in connection
with the defense or settlement of any and all investigations, judicial,
administrative or legislative proceedings and appeals, attorneys’ fees, witness
fees and expenses, fees and expenses of accountants and other advisors,
retainers and disbursements and advances thereon, the premium, security for, and
other costs relating to any bond (including cost bonds, appraisal bonds or their
equivalents), and any expenses of establishing a right to indemnification or
advancement under Sections 8, 10, 12 and 15 above but shall not include the
amount of judgments, fines, ERISA excise taxes or penalties actually levied
against Indemnitee or any amounts paid in settlement by or on behalf of
Indemnitee.

(d) “Independent Counsel” means a law firm or a member of a law firm that
neither is presently nor in the past five years has been retained to represent:
(i) the Company or Indemnitee in any matter material to either such party, or
(ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee’s right to indemnification under this Agreement.

(e) “Proceeding” means any action, suit, arbitration, alternative dispute
mechanism, inquiry, administrative or legislative hearing, investigation or any
other actual, threatened or completed proceeding, for which indemnification is
not prohibited under Sections 2(a)-(c), including any and all appeals, whether
civil, criminal, administrative or investigative, to which Indemnitee was or is
made a party or is threatened to be made a party or is otherwise involved by
reason of the fact that Indemnitee is or was a director, officer, employee,
agent or trustee of the Company or is or was serving at the request of the
Company as a director, officer, employee, agent or trustee of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan.

21. Other Provisions.

(a) This Agreement shall be interpreted and enforced in accordance with the laws
of Delaware.

(b) This Agreement may be executed in one or more counterparts, each of which
shall for all purposes be deemed to be an original but all of which together
shall constitute one and the same Agreement. Only one such counterpart signed by
the party against whom enforceability is sought needs to be produced as evidence
of the existence of this Agreement.

(c) This Agreement shall not be deemed an employment contract between the
Company and any Indemnitee who is an officer of the Company, and, if Indemnitee
is an officer of the Company, Indemnitee specifically acknowledges that
Indemnitee may be discharged at any time for any reason, with or without cause,
and with or without severance compensation, except as may be otherwise provided
in a separate written contract between Indemnitee and the Company.

(d) In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.

(e) This Agreement may not be amended, modified or supplemented in any manner,
whether by course of conduct or otherwise, except by an instrument in writing
specifically designated as an amendment hereto, signed on behalf of each party
No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.

[The remainder of this page is intentionally left blank]IN WITNESS WHEREOF, this
Indemnification Agreement has been duly executed and delivered to be effective
as of the date first above written.

COMPANY:

SCM Microsystems, Inc.,
a Delaware corporation

By

INDEMNITEE:

Name:
Address: