EXHIBIT 10.12

# [LETTERHEAD OF IMAGIS
TECHNOLOGIES INC.]

November 1, 2002

|Intacta Technologies, Inc.
Resurgens Plaza South
945 E. Paces Ferry Road, N.E.
Suite 1445
Atlanta, Georgia
30326 | Intacta Labs Ltd. and
Gad Naaman
c/o Intacta Technologies, Inc.
|---------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------

Attention:  Noel Bambrough

Dear Sirs/Mesdames:

Intacta Technologies, Inc.
(Intacta) has developed or owns the rights to certain data compression
technologies which have been patented in various jurisdictions. Imagis Technologies Inc.
(Imagis) wishes to acquire the patents owned by Intacta (the Intacta
Patents) listed in the attached Exhibit A. Imagis also wishes to acquire an
exclusive license from Intacta Labs Ltd. (Labs), former Fontech Ltd., a
wholly-owned subsidiary of Intacta, certain patents (the Labs Patents) listed
in the attached Exhibit B. Certain of the Intacta Patents are registered in the name of
Labs. Gad Naaman (Naaman), an employee of Labs, is the holder of certain of
the Labs Patents which he has assigned to Labs.

1.     Acquisition

In consideration for US$50,000 (the
Purchase Price),

|(a) |  | Intacta
and Labs hereby grant, sell, assign, transfer and convey to Imagis, its
          successors and assigns, the entire right, title and interest in and to
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i) | the
Intacta Patents and all rights in respect thereof,
| | --- | ------------------------------------------------------

| | (ii) | all
income, royalties, damages and payments now and hereafter due or payable           under
and with respect to the Intacta Patents, and
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------

| | (iii) | the
right to sue for past, present and future infringements of the Intacta           Patents;
and
| | ----- | -------------------------------------------------------------------------------------------------

|(b) |  | Labs
hereby grants to Imagis a fully paid-up license to use the Labs Patents           (the
License) with a further right to acquire the Labs Patents at           any
time for nominal consideration.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The License is exclusive to Imagis
(even to the exclusion of Intacta), royalty-free and has a term that expires on the latest
expiry date of a Labs Patent.

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The Purchase Price will be payable as
to US$33,000 (the Initial Payment) on the execution of this Agreement, with
the balance of the Purchase Price will be payable on the verification of the Data (as
defined in paragraph 2) and the delivery to Imagis of any documents Imagis requires in
order to transfer the Intacta Patents. Imagis and Intacta confirm that US$33,000 has been
advanced by Imagis to Intacta and that this amount will be credited towards the Initial
Payment. Notwithstanding these payment terms, the sale of the Intacta Patents will be
effective from the date the Initial Payment is made.

2.     Source Code

Intacta will provide to Imagis, as
soon as practicable after the execution of this Agreement, a copy of the source code,
software listings, functional specifications and all other written and/or magnetic
material and related documentation necessary (together, the Data) to practice
the Intacta Patents. Intacta will be required to provide any updates of the Data to
Imagis. Imagis will have no limitations on its use of the Data.

3.     Intacta Employees

Nothing herein will restrict Imagis
from offering employment to any persons employed by Intacta or Labs, nor will Imagis be
required to hire any Intacta or Labs personnel.

4.     Representations, Warranties and Indemnity

Intacta and Labs jointly and
severally represent and warrant to Imagis that the Intacta Patents and Labs Patents are
free and clear of all encumbrances, and that the Intacta Patents and Labs Patents
represent all patents and patent applications of Intacta, Labs and their affiliates,
except for certain U.S. patents of Intacta.

Intacta, Labs and Imagis each
represent to the other that all necessary consents have been obtained to enter into this
Agreement and complete the sale of the Intacta Patents and the licensing of the Labs
Patents to Imagis. Intacta also represents that the transactions contemplated under this
Agreement will not constitute a disposition of all or substantially all of the assets of
Intacta.

Intacta and Labs will indemnify,
defend (or at Intactas option and expense but only with the consent of Imagis)
settle, and hold Imagis and each of its affiliates and their officers, directors,
employees, agents, distributors and licensees (the Imagis Indemnified Parties)
harmless from and against any judgement, claim, action, proceeding, losses, deficiencies,
damages, liabilities, costs and expenses (including reasonable attorneys fees and
expenses), that may be incurred by an Imagis Indemnified Party in any connection with any
claim, demand, suit, action or proceeding arising as a result of an allegation that any of
the Intacta Patents or Labs Patents infringe on the intellectual property rights of
another party.

5.     Right to Acquire Labs

Intacta grants to Imagis the right to
acquire all outstanding shares of Labs held (directly or indirectly) by Intacta (the
Intacta Labs Shares) in consideration for an amount equal to the fair market
value of such shares (the Labs Option). If Labs has no business or assets

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other than the Labs Patents, the fair
market value of the Intacta Labs Shares will be deemed to be $1.00. The Labs Option will
expire on the latest expiry date of the Labs Patents.

6.     Further Assurances

Imagis, Intacta and Labs will, at
their own expense and without expense to the other, execute and deliver such further
agreements and other documents and do such further acts and things as the other party
reasonably requests to evidence, carry out or give full force and effect to the intent of
this Agreement, including all documents required, if applicable, to transfer the Intacta
Patents, Labs Patents and the Lab Shares to Imagis. Intacta hereby irrevocably grants to
Imagis a power of attorney to transfer the Intacta Patents and the Lab Shares.

7.     Fees and Expenses

Imagis, Intacta and Labs each
represents and warrants that it has not incurred any liability for any finders fee
or brokers commission in connection with the execution of this Agreement. Imagis,
Intacta and Labs each agree they will pay their own and their representatives fees and
expenses, including any fee for advice or opinions incurred in connection with the
negotiation, preparation, execution and delivery of Agreement and any other agreements
contemplated thereby.

8.     Publicity

None of Imagis, Intacta or Labs will
make any press release, public announcement or public statement about the transactions
contemplated herein which has not been previously approved by the other, except that
either party may make a press release or filing with a regulatory authority if counsel for
such party advises that such press release or filing is necessary (in which case such
party will first make a reasonable effort to obtain the approval of the other).

9.     Assignment

This Agreement may not be assigned by
Intacta or Labs without the written consent of Imagis. Imagis may assign this Agreement at
any time to any party without prior notice to, or the need to obtain the consent of,
Intacta or Labs.

10.    Acknowledgement by Naaman

Naaman acknowledges the agreements
and covenants of Labs in this Agreement and, if required, consents to the grant of the
License by Labs.

11.  Entire Agreement

This Agreement constitutes the entire
agreement between the parties and supersedes every previous agreement, communication,
expectation, negotiation, representation or understanding, whether oral or written,
express or implied, statutory or otherwise, between the parties with respect to the
subject matter of this Agreement. No director, officer, employee or agent of any

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party has any authority to make any
representation or commitment not contained in this Agreement, and each party has executed
this Agreement without reliance upon any such representation or commitment.

12.    Governing Law

This Agreement is and will be deemed
to be made in British Columbia, Canada, for all purposes will be governed exclusively by
and construed and enforced in accordance with the domestic laws prevailing in British
Columbia, Canada, and the rights and remedies of Imagis and Intacta will be determined in
accordance with those domestic laws.

13.    Attornment

Imagis, Intacta and Labs irrevocably
and exclusively attorns to the jurisdiction of the courts of British Columbia, Canada and
all courts having appellate jurisdiction thereover, and any proceeding commenced or
maintained by a party in respect of or arising because of this Agreement will be commenced
or maintained only in such of those courts as is appropriate.

14.    Counterparts

This Agreement may be executed in any
number of counterparts with the same effect as if Imagis, Intacta and Labs had signed the
same document, and all counterparts will be construed together and constitute one and the
same instrument.

Yours very truly,

# IMAGIS TECHNOLOGIES INC.

Per:  signed Wayne Smith 
        Authorized Signatory

Acknowledged, accepted and agreed to
November 4th, 2002.

# INTACTA TECHNOLOGIES,
INC.

Per:  signed Ross Wilmot
        Authorized Signatory

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# INTACTA LABS LIMITED

Per:  signed Naaman Gad
        Authorized Signatory

|Signed, Sealed and Delivered
by Gad Naaman |  | ) |  |                     | 
|------------------------------------------ |  | - |  | ------------------- | 
|in the presence of:                        |  | ) |  |                     | 
|                                           |  | ) |  |                     | 
|                                           |  | ) |  |                     | 
|signed "Ilia Saveliev"                     |  | ) |  | Signed "Gad Naaman" | 
|                                           |  | ) |  |                     | 
|Witness (Signature)                        |  | ) |  | Gad Naaman          | 
|                                           |  | ) |  |                     | 
|ILIA SAVELIEV                              |  | ) |  |                     | 
|                                           |  | ) |  |                     | 
|Name (please print)                        |  | ) |  |                     | 
|                                           |  | ) |  |                     | 
|KLATCHKIN 17L3                             |  | ) |  |                     | 
|                                           |  | ) |  |                     | 
|Address                                    |  | ) |  |                     | 
|                                           |  | ) |  |                     | 
|BEERSHEVA, ISRAEL                          |  | ) |  |                     | 
|                                           |  | ) |  |                     | 
|City, Country                              |  | ) |  |                     | 

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Exhibit A
List of Intacta Patents

|Jurisdiction or
Country | Patent No. or
Application No. | Date Granted or
Date Filed      | Description of Patents
|----------------------- | ----------------------------- | ------------------------------- | ----------------------
|                       
|Canada                  |                               | Application No. 2,046,835       |                       
|                       
|South Africa            |                               | Patent No. 91/5410              |                       
|                        |                               |                                 |                       
|                        |                               |                                 |                       
|                       
|Australia               |                               | Patent No. 642508               |                       
|                       
|Europe                  |                               | Patent No. 0466146              |                       
|                       
|United Kingdom          |                               | Patent No. 0466146              |                       
|                       
|Canada                  |                               | Application No.                 |                       
|                       
|Europe                  |                               | Application No. 
99914740.8     |                       
|                       
|France                  |                               | Application No. 
99914740.8     |                       
|                       
|Germany                 |                               | Application No. 
99914740.8     |                       
|                       
|International Procedure |                               | Application No. 
PCT/IL99/00208 |                       
|                       
|Japan                   |                               | Application No. 
2000-545279    |                       
|                       
|United Kingdom          |                               | Application No. 
99914740.8     |                       
|                        |                               |                                 |                       
|                       
|Canada                  |                               | Application No. 
2,102,952      |                       
|                       

|Jurisdiction or
Country | Patent No. or
Application No. | Date Granted or
Date Filed | Description of Patents
|----------------------- | ----------------------------- | -------------------------- | ----------------------
|                       
|Japan                   |                               | Application No.
5-285375   |                       
|                       
|Germany                 |                               | Patent No. 0598357         |                       
|                        |                               |                            |                       
|                       
|France                  |                               | Patent No. 0598357         |                       
|                        |                               |                            |                       
|                       
|United Kingdom          |                               | Patent No. 0598357         |                       
|                        |                               |                            |                       
|                       
|Europe                  |                               | Patent No. 0598357         |                       
|                        |                               |                            |                       
|                       

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Exhibit B
List of Labs Patents

|Jurisdiction
or Country | Patent No. or
Application No. | Date Granted or
Date Filed | Description of Patents
|----------------------- | ----------------------------- | -------------------------- | ----------------------
|                       
|Israel                  |                               | Patent No. 96118           |                       
|                        |                               |                            |                       
|                       
|Israel                  |                               | Patent No. 96969           |                       
|                        |                               |                            |                       
|                        |                               |                            |                       
|                       
|Israel                  |                               | Patent No. 96973           |                       
|                        |                               |                            |                       
|                        |                               |                            |                       
|                       
|Israel                  |                               | Patent No. 103755          |                       
|                        |                               |                            |                       
|                       
|Israel                  |                               | Patent No. 105493          |                       
|                        |                               |                            |                       
|                       
|Israel                  |                               | Application No.
124152     |                       
|