Document:

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                                                                   Exhibit 10.15

                               License Agreement

This Agreement is made this 4th December 2000, by and between:

MediaSec Technologies LLC, a Delaware Limited Liability Company, with its
business office at 321 South Main Street, Suite 100, Providence, Rhode Island
02903, and MediaSec Technologies GmbH with its business office at Berliner Platz
6-8 45127 Essen, Germany ("LICENSOR"),

and

Spectra Science Corporation, with its business office at 321 South Main Street,
Suite 102, Providence, Rhode Island 02903 ("LICENSEE").

1. LICENSE

1.1. LICENSOR grants, and LICENSEE accepts, a set of licenses as specified in
     Schedule A ("Scope of Licenses") to use LICENSOR's patents and products as
     specified in Schedule A ("Patent" and "Software") subject to all the terms
     conditions of this Agreement.

1.2. The Patent and Software are licensed for use solely for LICENSEE's product
     ("Product") as specified in Schedule A.

1.3. LICENSEE has rights to sublicense the Software and the Patent to
     third-parties ("Sublicensee"). No sublicense will grant the right to
     further sublicense the Software or the Patent. LICENSEE may freely transfer
     all or any portion of its license rights under this Agreement to any
     subsidiary of LICENSEE or to any affiliated entity upon receiving written
     approval by LICENSOR.

1.4. Any sublicense requires a written approval by LICENSOR.

1.5. All rights not specifically granted to LICENSEE by this Agreement shall
     remain in LICENSOR.

1.6. LICENSEE has right of first refusal to license new patents owned or
     licensed by the LICENSOR relating or applicable to the applications
     described in Schedule A "Scope of Licenses" during the license period.

1.7. LICENSOR agrees that it shall not compete or interfere with LICENSEE with
     respect to any contract (including any extensions to any contract) or
     commercial relationship held or developed by LICENSEE.

1.8. LICENSEE shall not clone (except as necessary for archival and back-up
     purposes and for the purposes of this Agreement), reverse assemble, or
     reverse compile any part of the Software or adopt any part of the Software
     as its own.

                    For LICENSEE /s/ Nabil M. Lawandy For LICENSOR /s/ Jian Zhao
                                 --------------------              -------------

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                                     2 of 9

1.9. LICENSEE is licensed to use only the binary format of the Software under
     this Agreement.

1.10. In the event of either of the LICENSOR's bankruptcy or cessation of
     business, LICENSOR shall ensure that LICENSEE shall receive the identical
     license rights under this Agreement from the right holder of the Patent and
     Software.

1.11. LICENSOR agrees to provide reasonable technical support to LICENSEE.
     LICENSEE shall pay LICENSOR for the effort to significantly enhance or
     change the Software and to develop new functions based on the Patent. This
     shall be agreed on the basis of a separate development or consulting
     contract.

1.12. LICENSEE shall not collaborate with any other competitor of LICENSOR in
     the related businesses.

1.13. Both parties agree to make public announcements on the license agreement
     and future milestones. The content of the announcements shall be agreed by
     both parties before they become public.

2.   CONFIDENTIALITY AND NON-DISCLOSURE

2.1. LICENSEE acknowledges that the Software is proprietary products of and
     shall remain the property of LICENSOR or its suppliers.

2.2. LICENSEE shall take appropriate action by instruction or signed agreements
     with employees, users and any third party who are provided access to the
     Software to satisfy LICENSEE's obligations under this Agreement.

2.3. If for any reason LICENSEE gains access to LICENSOR's manuals containing
     any confidential or proprietary marking, or LICENSOR's software source code
     to which LICENSEE does not have a right of access under a written agreement
     between LICENSEE and LICENSOR, LICENSEE agrees to net examine, use, copy,
     or keep such items, but shall return them promptly to LICENSOR. LICENSEE's
     obligations of confidentiality and nondisclosure shall apply to all forms
     of software received.

2.4  Provisions of this Article shall survive any termination of this Agreement.

3.   PATENT AND COPYRIGHT

3.1. LICENSOR will indemnify LICENSEE as to any rightful claim that the Patent
     and the Software, or any part thereof (except third party software provided
     to LICENSEE by LICENSOR), constitutes an infringement of any patent,
     copyright, or trade secret.

3.2. To qualify for this indemnity, however, LICENSEE must give LICENSOR prompt
     notice of any such claim and must cooperate fully with LICENSOR's defense
     or settlement, if the use of the Software, or any part thereof is enjoined,
     LICENSOR will, at its own expense and at its option, either (A) procure for
     LICENSEE the right to continue using the Software or the infringing part

                    For LICENSEE /s/ Nabil M. Lawandy For LICENSOR /s/ Jian Zhao
                                 --------------------              -------------

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                                     3 of 9

     thereof; (B) replace same with non-infringing substitutes; (C) modify it so
     that it becomes non-infringing; or (D) if LICENSOR finds no commercially
     reasonably solution under (A), (B), or (C) above, terminate the license of
     same at no cost to LICENSEE except for charges accrued to such time as use
     is enjoined; provided, however, that such amounts will be set off against
     LICENSOR's indemnification obligations under this Section 3.

3.3. LICENSOR shall not be liable to LICENSEE for any claim which is based upon
     the use of the Software, or any part of it, in connection with equipment,
     software, or devices not furnished or approved by LICENSOR, or in any
     manner for which the Software was not designed, or where the Software has
     been modified by or for LICENSEE.

3.4. Parts of the Software may have been patented or copyrighted by LICENSOR or
     its third-party providers. Patent or copyright notices have been included
     in the Software for protective purposes, and such notices shall not be
     construed as causing publication of the Software.

4.   FEES

4.1. LICENSEE agrees to pay LICENSOR royalties (including the minimum annual
     royalties) recited in Schedule A (the "Royalty") on the receipt of payment
     for Product.

4.2. The Royalty owed LICENSOR shall be calculated on a quarterly calendar basis
     ("Royalty Period") and shall be payable no later than 30 days after March
     31, June 30, September 30 and December 31 of each year during the term of
     this Agreement, except that the first and last calendar quarters may be
     "short," depending on the effective date of this Agreement.

4.3. For each Royalty Period, LICENSEE shall provide LICENSOR with a written
     royalty statement in a form acceptable to LICENSOR. Such royalty statement
     shall be certified as accurate by a duly authorized officer of LICENSEE
     reciting the quantity of each Product used, sold, leased or otherwise
     disposed of by LICENSEE or LICENSEE's affiliates, gross invoice and amount
     billed customers less discounts for each Product, or other information
     which is reasonably necessary to LICENSOR to understand LICENSEE's
     calculation of the royalty due under this Agreement. Such statements shall
     be furnished to LICENSOR regardless of whether and the Product was sold
     during the Royalty Period or whether any actual Royalty was owed.

4.4. The receipt by LICENSOR of the Royalty shall not prevent LICENSOR from
     subsequently challenging the validity or accuracy of such payment provided
     that LICENSOR shall not challenge any Royalty payable for a period ended
     more than 3 years as of the date of such challenge.

4.5. The Royalty shall be based on "Net Sales" which are LICENSEE's gross sales
     (the gross invoice amount billed customers) of the Product, less sales,
     tariff duties and/or use taxes directly imposed and with reference to
     particular sales, and, further less amounts allowed or credited to returns.

                    For LICENSEE /s/ Nabil M. Lawandy For LICENSOR /s/ Jian Zhao
                                 --------------------              -------------

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                                     4 of 9

4.6. Late payments shall incur interest at the rate of One Percent(1%)per month
     from the date such payment were originally due.

4.7. All payments due LICENSOR shall be made in U.S. currency by check drawn on
     a U.S. bank, or by bank wire transfer to the bank account ("Bank
     Account") provided in Appendix A, unless otherwise specified by LICENSOR.

5.   WARRANTY

5.1. LICENSOR warrants that when it delivers the Software, the Software will
     conform in all material respects to LICENSOR's published specifications.
     LICENSOR reserves the right to correct manuals due to typographical or
     clerical error. LICENSOR represents that this Agreement provides LICENSEE
     with sufficient rights to use the Software free of violation of LICENSOR or
     any third party's rights.

5.2. In the event of any breach of these warranty, provided notice of the breach
     of is given in writing to LICENSOR within thirty (30) days after the
     delivery of the Software, LICENSOR will, at its option, repair or replace
     the Software.

5.3. LICENSOR will provide LICENSEE with technical and other qualified experts
     for the purpose of using the Software via phone, fax and email at no
     additional charge. In case that LICENSEE requires on-the-spot
     assistance. LICENSEE agrees to pay all related travel, out-of-pocket
     expenses and labor cost incurred by any such LICENSOR personnel. In case
     that LICENSEE requires significant changes on Software's functionality, a
     separate development agreement shall be agreed between LICENSOR and
     LICENSEE on a case-by-case basis.

5.4. Neither LICENSOR nor any of its suppliers warrants or guarantees the
     results from use of the Software.

6.   IMPLIED WARRANTIES, DISCLAIMER, INDEMNIFICATION

6.1. EXCEPT AS OTHERWISE REQUIRED BY LAW, THE EXPRESS WARRANTY IN THE WARRANTY
     ARTICLE OF THIS AGREEMENT IS LICENSOR'S EXCLUSIVE WARRANTY AND IS IN LIEU
     OF ALL IMPLIED WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF
     MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND THE REMEDIES
     STATED THEREIN ARE THE EXCLUSIVE REMEDIES FOR ANY BREACH OF WARRANTY.
     LICENSOR WILL NOT BE LIABLE IN ANY EVENT FOR ANY CONSEQUENTIAL, SPECIAL,
     INCIDENTAL, OR INDIRECT DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS
     AGREEMENT, THE PERFORMANCE OF THE SOFTWARE OR ITS USE IN ANY AND ALL CASES.
     LICENSOR DOES NOT WARRANT OR GUARANTEE THAT THE SOFTWARE WILL ACCURATELY
     READ ALL CHARACTERS OR MARKS. LICENSEE AGREES TO ASSUME ALL RISK AND
     LIABILITY FOR DAMAGES RESULTING FROM THE FAILURE OF THE SOFTWARE TO
     CORRECTLY IDENTIFY SUCH CHARACTERS OR MARKS. LICENSOR'S MAXIMUM LIABILITY
     IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT SHALL BE THE AMOUNT
     PAID BY THE LICENSEE TO

                    For LICENSEE /s/ Nabil M. Lawandy For LICENSOR /s/ Jian Zhao
                                 --------------------              -------------

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                                     5 of 9

     LICENSOR, FOR THE SOFTWARE EXCEPT AS OTHERWISE PROVIDED THEREIN.

7.   TERMINATION

7.1. This Agreement is valid for the period as defined in Schedule A ("Valid
     Period"), from the effective date thereof, and thereafter, shall be
     automatically renewable for successive 1-year periods, unless 60 days prior
     to the termination any party hereto gives written notice to the other party
     of its election not to renew this Agreement for an additional 1-year
     period, in which event this Agreement shall terminate at the end of the
     period in which such notice was given.

7.2. The Licensee reserves the right to terminate this agreement if any of the
     two patents as described in Schedule A ("Patent") do not issue in the
     United States within two (2) years from the effective date of this
     Agreement or when any significant "independent" claims are rejected in
     final by the United States Patent and Trademark Office.

7.3. Termination of part of the licenses as described in "Scope of Licenses" of
     Schedule A shall not change other terms and conditions of this agreement.

7.4. Termination of this Agreement shall not relieve LICENSEE of any of its
     obligations under any due royalties and other fees.

8.   GENERAL

8.1. This Agreement is governed by the laws of the State of Delaware of the
     United States, without giving force and effect to its choice of law
     provisions.

8.2. Any legal action in connection with this Agreement must be filed within
     two (2) years after the cause for such action has accrued.

8.3. Notwithstanding the termination or completion of this Agreement, all
     indemnities, warranties, and duties of non-disclosure in this Agreement
     will continue in full force and affect to the extent required for their
     full observance and performance.

8.4. The rights and obligations under this Agreement shall not be assigned or
     transferred to the third party without written consent of both parties
     except LICENSOR's transfer to its parent company, provided that LICENSOR
     shall remain secondarily liable for the obligations set forth in this
     Agreement in the event of such a transfer.

                    For LICENSEE /s/ Nabil M. Lawandy For LICENSOR /s/ Jian Zhao
                                 --------------------              -------------

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                                     6 of 9

This Agreement constitutes the entire understanding of the parties, and revokes
and supersedes all prior agreements between the parties and is intended as a
final expression of their Agreement. It shall not be modified or amended except
in writing signed by the parties hereto and specifically referring to this
Agreement. This Agreement shall take precedence over any other documents that
therewith.

LICENSEE:
Spectra Science Corporation

By /s/ Nabil M. Lawandy
   --------------------

Name  Nabil M. Lawandy

Title Chairman, CEO, President

Date  4th of Dec. 2000

LICENSOR:
MediaSec Technologies LLC
MediaSec Technologies GmbH

By  /s/ JIAN ZHAO                    By /s/ Illegible
    -------------                       ----------------

Name  JIAN ZHAO                      Name  Illegible

Title President                      Title Managing Partner

Date  12/4/2000                      Date  20th Dec. 2000

                    For LICENSEE /s/ Nabil M. Lawandy For LICENSOR /s/ Jian Zhao
                                 --------------------              -------------

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                                     7 of 9

                                   SCHEDULE A

A1.  Scope of License

A1.1. Worldwide exclusive license rights to the patents listed in "Patent" of
     Schedule A for [***]:
     .    [***]
     .    [***]

A1.2. Exclusive rights in North America (USA, Canada and Mexico) for all uses
     with the following one (1) collected application in government-issued
     documents:
     .    [***]
     .    [***]
     .    [***]
     .    [***]
     .    [***]
     .    [***]
     .    [***]
     .    [***]

A1.3. Non-exclusive rights [***]:
     .    [***]
     .    [***]
     .    [***]
     .    [***]
     .    [***].

A1.4. Non-exclusive rights:
     .    [***]

A2.  Patent

A2.1. [***]
     Patent References: [***]

A2.2. [***]
     Patent [***].
     [***]

A.2.3 [***]
                               For LICENSEE           For LICENSOR /s/ Jian Zhao
                                            ---------              -------------

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

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                                     8 of 9

A3.  Software

The Software includes:
     .    [***]
     .    [***]
     .    [***]
     .    All upgrades above by LICENSOR during the life of this Agreement.

A4.  Product

A4.1. LICENSEE's Product is software that incorporates the LICENSOR's patent or
     LICENSOR's software.

A4.2. The value of the Product shall be significantly added by LICENSEE based on
     LICENSOR's Software and Patent. LICENSEE product functionality must equal
     or exceed 50% of LICENSOR's software. Otherwise, it shall be considered as
     sublicenses.

A5.  Royalty

A5.1. The royalties to LICENSOR is [***] of the Net Sales of LICENSEE's Product
     that incorporates the LICENSOR's software or includes the patent and that
     will accrue against the minimum annual royalty in each specific application
     area as specified in Al.1, A1.2, and A1.3. Application area as specified in
     A1.4 will not carry a minimum annual royalty.

A5.2. LICENSEE agrees to pay LICENSOR [***] of all revenues that LICENSEE
     receives when LICENSEE sublicenses the Patent to a sublicensee or sells the
     Software.

A5.3. The first royalty payment will be made upon completion of a working
     demonstration that adequately shows the printing, rescanning and detection
     of watermark information on a PC windows platform and windows user
     interface.

A6.  Minimum Annual Royalty

A6.1. [***] to maintain worldwide exclusivity for each application identified
     in Item Al.l of Schedule A through the life of the Patent.

A6.2. [***] to maintain exclusivity in North America for each application
     identified in Item A1.2 of Schedule A through the life of the Patent.

A6.3. [***] to prevent LICENSOR from licensing exclusive rights to other party
     and, provided that no other party has non-exclusive license rights or the
     LICENSOR has the ability to cancel those rights, to maintain a provision
     for LICENSEE for a conversion of the non-exclusive rights to exclusive
     rights for each application identified in Item A1.3 of Schedule A through
     the life of the Patent.

A6.4. LICENSEE agrees to pay to LICENSOR within thirty (30) days after the
     expiration of each Royalty Period the difference, if any, between such
     minimum royalties and the total royalties received by LICENSOR under this
     agreement during such Royalty Period.

                               For LICENSEE           For LICENSOR /s/ Jian Zhao
                                            ---------              -------------

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

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                                     9 of 9

A6.5. LICENSEE agrees to pay LICENSOR [***], [***], [***] of the minimum annual
     royalties above during the first, second, and the third license year,
     respectively. After a period of three (3) years from the effective date of
     this Agreement, LICENSEE agrees to pay LICENSOR the full annual Minimum
     Annual Royalty as described above.

A6.6. Within 90 days after the effective date of this agreement, LICENSOR has an
     option to exchange the first two-year annual minimum royalties as described
     above into [***] shares, issued within 15 days of written request,
     LICENSEE's Preferred Stock Series D with the current estimated value of
     [***].

A7.  Valid Period

The valid period for the worldwide exclusive licenses as defined in Al.1 is one
(1) year. The valid period for the exclusive licenses for North America as
defined in A1.2 is two (2) years. The valid period for the non-exclusive
licenses as defined in A1.3 is one (1) year. The valid period for the
non-exclusive licenses as defined in Al.4 is one (1) year.

A8.  Bank Account

     MediaSec Technologies LLC
     Checking Account Number: 9395390082
     Routing Number: 011500
     Fleet National Bank
     111 Westminstreet
     Providence, RI 02903, USA

                               For LICENSEE           For LICENSOR /s/ Jian Zhao
                                            ---------              -------------

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

MediaSec Technologies
PROVIDENCE, RI                                                         [GRAPHIC]
USA

================================================================================

[***]

     Prepared for:

     Spectra Systems Corporation
     321 South Main Street, Suite 102
     Providence, RI 02903

     Date: July 5, 2001

     Prepared by:

     Dr. Jian Zhao
     MediaSec Technologies LLC
     321 South Main Street, Suite 100
     Providence, RI 02903
     Phone:(+1)401-831-2479
     FAX:  (+1)401-861-3750
     EMAIL:jzhao@mediasec.com
     URL:  http://www.mediasec.com

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

                              COMPANY CONFIDENTIAL

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MediaSign Customization and Porting for PocketEye

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[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

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                              COMPANY CONFIDENTIAL

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Spectra Systems Corporation                  MediaSec Technologies LLC

/s/ Nabil M. Lawandy                         /s/ Jian Zhao
----------------------------------           -----------------------------------
7/11/2001                                    7/11/2001
                                             Jian Zhao
----------------------------------           -----------------------------------

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

                                       3<PAGE>

                                                                   Exhibit 10.16

                     TECHNOLOGY LICENSE AND SUPPLY AGREEMENT

     THIS TECHNOLOGY LICENSE AND SUPPLY AGREEMENT (this "Agreement"), dated as
of May 28, 2002 (the "Effective Date"), is between Spectra Systems Corporation,
a corporation organized under the laws of the State of Delaware ("Spectra"), and
De La Rue International Limited, a corporation organized under the laws of
England ("Licensee").

     WHEREAS, Spectra is and warrants that it is the owner of rights in certain
technology and certain patent rights relating thereto and

     WHEREAS, Spectra is willing to grant to the Licensee and Licensee desires
to acquire from Spectra an exclusive license to such technology and under such
patent rights for the purpose of allowing Licensee to develop and market
Products within the Field and within the Territory,

     NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Spectra and Licensee hereby agree as follows:

1.   Definitions.

     1.1. Definitions. As used herein, capitalized terms shall have the
          respective meanings set forth below.

          1.1.1.    "Affiliate" of a Person shall mean a Person that directly,
                    or indirectly through one or more intermediaries, controls,
                    is controlled by or is under common control with such
                    Person. "Control" (and, with correlative meanings, the terms
                    "controlled by" and "under common control with") shall mean
                    the possession of the power to direct or cause the direction
                    of the management and policies of such Person, whether
                    through the ownership of voting stock, by contract or
                    otherwise. In the case of a corporation "control" shall
                    mean, among other things, the direct or indirect ownership
                    of more than fifty percent (50%) of its outstanding voting
                    stock.

          1.1.2.    "Bit" shall mean an electromagnetic radiation emitting and
                    amplifying multiphase optical gain material for providing a
                    laser-like emission being characteristic for this particular
                    material in accordance with the Licensed Technology.

          1.1.3.    "Bit Fibers" shall mean fibers suitable for incorporation
                    into [***] consisting of polymeric material being
                    doped with a Bit or Bits.

          1.1.4.    "Bit Material" shall mean a printing ink or coating
                    formulation for application to security threads and foil
                    transfers to be incorporated into [***] being doped with
                    a Bit or Bits.

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

          1.1.5.    "Confidential Information" shall mean all non-public
                    Technology or other information or documents that are of a
                    confidential nature disclosed by Spectra to Licensee or by
                    Licensee to Spectra, and shall include, without limitation,
                    the Licensed Technology.

          1.1.6.    "Covered by" shall mean, with respect to any act, an act
                    which would, in the absence of a license provided hereunder,
                    infringe a claim of a pending patent application, if issued
                    as a patent, or a patent which has not been held invalid or
                    unenforceable by a court of competent jurisdiction.

          1.1.7.    "Demonstrate" and "Demonstration" shall mean the validation
                    by dates as set forth in the Milestone Payments and Dates
                    section of this agreement (Subsection 5.1) by Licensee
                    representatives of the Bit Fibers which will be incorporated
                    by Licensee into [***] and which will be detected
                    by the specifically applicable STS Sensors, mounted on a
                    DLR/CSI [***] automation machine [***], at the intended
                    rates, [***], with false positive rates not greater than one
                    in ten thousand parts.

          1.1.8.    "Development" shall mean the testing, production and
                    application engineering to be undertaken by Spectra set out
                    in Section 5.

          1.1.9.    "Field" shall mean the field of: (a) [***].

          1.1.10.   "Force Majeure" shall mean any circumstance or event beyond
                    the reasonable control of the party relying upon such
                    circumstance or event, including acts of God, any accident,
                    explosion, fire, storm, earthquake, flood, drought, peril of
                    the sea, riot, embargo, war or foreign, federal, state or
                    municipal order of general application, seizure, requisition
                    or allocation, any failure or delay of transportation,
                    shortage of or inability to obtain supplies, equipment, fuel
                    or labor.

          1.1.11.   "Improvements" shall mean any modifications of, upgrades to,
                    or enhancements of the Licensed Technology.

          1.1.12.   "Licensee Improvements" shall mean Improvements owned by
                    Licensee that have application in the Field and shall
                    include: (a) any patent application having one or more
                    claims covering such Improvements; (b) any patent
                    application constituting an equivalent, counterpart,
                    reissue, extension or continuation of any of the foregoing
                    applications (including, without limitation, a continuation
                    in part or division); or (c) any patent issued or issuing
                    upon any of the foregoing applications.

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

          1.1.13.   "Licensed Technology" shall mean, collectively: (a) the
                    Spectra Patent Rights; (b) Technology owned by Spectra that
                    relates to distributed laser like security features capable
                    of being used in relation to [***] and equipment that
                    sense this technology; and (c) the Spectra Improvements.

          1.1.14.   "Large Area Sensor" shall mean a device operating on a
                    [***] sorting machine for detecting Bit Fibers in
                    [***] based on stimulation by laser illumination over a
                    large area of detection.

          1.1.15.   "Person" shall mean any individual, partnership,
                    corporation, firm, association, unincorporated organization,
                    joint venture, trust or other entity.

          1.1.16.   "Product" shall mean any product or process in the Field
                    which utilizes, makes use of, is based upon or arises out of
                    the inventions and other rights and concepts described in
                    the Licensed Technology including without limitation
                    [***], Bit Material, Bit Fibers, sensors and quality
                    control equipment.

          1.1.17.   [***]

          1.1.18.   "Spectra Patent Rights" shall mean: (a) the patents and/or
                    patent applications listed on Schedule 1.1(a) to this
                    Agreement; (b) any patent application constituting an
                    equivalent, counterpart, reissue, division, extension or
                    continuation of any of the foregoing applications; (c) any
                    patent issued or issuing upon any of the foregoing
                    applications; and (d) any patent rights subsisting in
                    Spectra Improvements.

          1.1.19.   "Spectra Improvements" shall mean Improvements owned by
                    Spectra that have application in the Field including the
                    Development and shall include: (a) any patent application
                    having one or more claims covering such Improvements; (b)
                    any patent application constituting an equivalent,
                    counterpart, reissue, extension or continuation of any of
                    the foregoing applications (including, without limitation, a
                    continuation in part or division); or (c) any patent issued
                    or issuing upon any of the foregoing applications.

          1.1.20.   "STS Sensor" shall mean a device operating on a [***]
                    sorting machine for detecting Bit Fibers or Bit Material
                    with performance meeting the De La Rue General Requirement
                    Specification for Authentication Detectors attached at
                    Schedule 1.1.20 exploiting the Licensed Technology based
                    upon: (a) illumination with ultra violet radiation to cause
                    fluorescence in a Bit Fiber or Bit Material incorporated
                    within [***] and thus identification of the specific
                    location of said Bit Fiber or Bit Material within [***];
                    (b) the application of a timing mechanism to track the

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

                    movement of said identified Bit Fiber or Bit Material to a
                    specific position within the detector assembly; and (c)
                    activation of a pulse of laser illumination to stimulate
                    characteristic lasing action within the Bit Fiber or Bit
                    Material and thus authentication of the specific material.

          1.1.21.   "Technology" shall mean public and non-public technical or
                    other information, trade secrets, know-how, processes,
                    formulations, concepts, ideas, data and testing results,
                    experimental methods, or results, assays, descriptions,
                    trade marks, business or scientific plans, depictions,
                    customer lists, inks, planchettes, fibers, threads,
                    distributed laser technology, materials, sensors, and any
                    other written, printed or electronically stored materials,
                    and any and all other intellectual property, including
                    copyright, database rights, sui generis rights, rights of
                    extraction and reutilization, discoveries, inventions,
                    patents and patent applications, of any nature whatsoever,
                    whether registrable or not, and all equivalent rights
                    existing in any country throughout the world.

          1.1.22.   "Territory" shall mean all countries with the exception of
                    the United States and Canada.

          1.1.23.   "Unique Bits" shall mean the four (4) versions of the Bit
                    that Spectra will develop for the Licensee pursuant to
                    Section 4.2(b) and in respect of which the Licensee will
                    have unrestricted worldwide exclusive rights. Specifications
                    regarding the Unique Bits are set forth on Schedule 1.1.23,
                    attached hereto. If requested by the Licensee to meet market
                    demand and the initial four (4) versions of Unique Bits have
                    already been commercialized, Spectra will use commercially
                    reasonable efforts to develop additional versions of the
                    Bits for the Licensee and in respect of which the Licensee
                    will have unrestricted worldwide exclusive rights. Such
                    additional unique versions of the Bits shall constitute
                    additional Unique Bits.

     1.2. Singular and Plural. Singular and plural forms, as the case may be, of
          terms defined herein shall have correlative meanings.

2.   Grant of Licenses.

     2.1. Grant of Licenses to Licensee.

          2.1.1.    Licensed Technology. Subject to the terms and conditions of
                    this Agreement, Spectra hereby grants to Licensee an
                    exclusive right, license and authority (to the exclusion of
                    all others including Spectra, its licensees and sublicensees
                    other than the Licensee) within the Territory (and, in
                    respect of the Unique Bits, worldwide), terminable only as
                    set forth herein, solely within the Field (and, in respect
                    of the Unique Bits, within and outside the Field) to develop
                    or have developed, manufacture or have manufactured, market
                    or have marketed, use or have used, sell or

<PAGE>

                      have sold, copy and reproduce or have copied or
                      reproduced, distribute or have distributed, import or have
                      imported, supply or have supplied, any Products.

             2.1.2.   Sublicenses. Without limiting the generality of Section
                      2.1.1, Spectra agrees that Licensee's rights under this
                      Agreement shall include, without limitation, the exclusive
                      right to grant sublicenses to such Persons, within the
                      Territory and the Field (each a "Sublicensee"), and
                      provided that the Licensee ensures that all such
                      Sublicensees are bound by, and observe, the like
                      obligations and undertakings as are contained in this
                      Agreement, provided however, that Licensee shall pay to
                      Spectra [***] of all up front Sublicense fees and
                      royalties charged by Licensee in relation to the
                      Licensed Technology on the signing of the Sublicense, as
                      and when received from such Sublicensee.

             2.1.3.   Reservations. Spectra reserves the exclusive right to
                      employ the Licensed Technology for any use and any purpose
                      whatsoever, regardless of Field outside the Territory and
                      within the Territory outside the Field; except: (i)
                      Spectra shall not manufacture or employ the Unique Bits
                      for any purpose other than for sale to the Licensee and
                      (ii) as set forth in Section 4.2(b).

                      Nothing in this Section 2 shall restrict the Licensee
                      from, and the rights granted in this Section 2.1 shall
                      extend to entitling the Licensee and its Sublicensee to
                      manufacture, assemble and export equipment and parts
                      thereof that [***] in and from the United States of
                      America or Canada incorporating or which embodies or
                      makes use of the Licensed Technology.

      2.2.   Rights in Improvements.

             2.2.1    Spectra Improvements. The parties agree that all right,
                      title and interest in and with respect to Spectra
                      Improvements shall be owned by Spectra; provided, however,
                      that, subject to the terms and conditions of this
                      Agreement, Spectra shall, to the extent that it is not
                      prohibited by law, promptly notify the Licensee in
                      writing, giving details of it, and provide to the Licensee
                      such information as the Licensee may reasonably require to
                      be able to effectively utilize the Spectra Improvements
                      anticipated by the grant set out in Section 2.1, and
                      hereby grants to Licensee an exclusive, right and license,
                      terminable only as set forth herein, solely within the
                      Field, and solely within the Territory in respect of the
                      Spectra Improvements, to develop or have developed,
                      manufacture or have manufactured, market or have marketed,
                      use or have used, sell or have sold, copy and reproduce or
                      have copied or reproduced, distribute or have distributed,
                      import or have imported, supply or have supplied, any
                      Products.

             2.2.2    Licensee Improvements. If the Licensee shall at any time
                      devise, discover or acquire rights in any Licensee
                      Improvements, the Licensee shall, to the extent that it is
                      not prohibited by law,

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

               promptly notify Spectra in writing, giving details of it, and
               provide to Spectra such information as Spectra may reasonably
               require to be able to effectively utilize the Licensee
               Improvements, and the Licensee shall subject to Section 2.2.3
               grant an irrevocable, non-exclusive, royalty free (within the
               Field and royalty bearing outside the Field at such rates as the
               parties shall from time to time agree) license under all rights
               protecting such Licensee Improvements, throughout the world, for
               the purpose of manufacturing, using and selling any article
               throughout the world (but in relation to the Field only outside
               the Territory).

       2.2.3   Reservations. Except as set forth in Section 4.2(b),Spectra
               reserves the exclusive right to employ Improvements for any use
               and any purpose whatsoever, regardless of Field outside the
               Territory and within the Territory outside the Field.

2.3    Restrictions Upon Use of Licensed Technology. Except as expressly
       authorized by this Agreement or by the prior written consent of Spectra,
       Licensee shall not, directly or indirectly, use any of the Licensed
       Technology for any purpose whatsoever.

2.4    [***]

2.5    [***]

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

3.     Sensors, Equipment and Maintenance. Within seventeen (17) months of the
       Effective Date, Spectra shall supply and install an STS Sensor operating
       on a Licensee sorting machine and authenticating and processing Bit
       Fiber-laden [***] at standard machine rates and with performance
       meeting the De La Rue General Requirement Specification for
       Authentication Detectors attached at Schedule 1.1.20, to be mutually
       agreed by the parties prior to commencement of detailed detector
       development. At that time, Spectra shall also confirm the price and
       schedule of delivery of production STS sensor units. The price target for
       each STS Sensor shall be $8,200 and shall not exceed $16,200 (both
       figures to be exclusive of royalty). The STS Sensors shall be delivered
       in lots of ten (10). These prices shall be firm until March 31, 2004, and
       thereafter should the prices for the STS Sensors become commercially
       unreasonable for either the Licensee or Spectra, the parties agree to
       review the prices for the STS sensors in good faith. In the event that
       Spectra is not able to develop and offer for sale the STS Sensors for the
       price of $10,200 (excluding royalty) then as an additional requirement to
       the fifth milestone should this occur before the completion of the fifth
       milestone and at any time thereafter should this occur later Spectra
       shall at its cost develop a complete set of development and manufacturing
       drawings and fully document such Technology as exists in the STS Sensor
       and should the Licensee decide after a review of Spectra's manufacturing
       activity that it may make or have made the STS Sensor provide one hard
       copy and one electronic copy in such form as the Licensee shall
       reasonably require to the Licensee, and provide to the Licensee such
       additional information and assistance as the Licensee may reasonably
       require to be able to effectively utilize the STS Sensor anticipated by
       the grant set out in Section 2.1 including for the avoidance of doubt the
       ability to manufacture and have manufactured by others the STS Sensors.

3.1    [***] License. In connection with the development of the STS sensors,
       Licensee agrees to grant a royalty free, non-exclusive, limited license
       to Spectra to use a [***] model solely for the purpose of developing the
       STS sensor. The Licensee further agrees to loan to Spectra part or parts
       of one (1) [***] at the Licensee's own expense as and when required,
       starting within sixty (60) days of the Effective Date of this Agreement
       and lasting for as long as reasonably necessary for the purpose of
       developing the STS sensors. Licensee also agrees to provide Spectra's
       personnel with training and instruction concerning the operation and use
       of the [***] at

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

         Spectra's facility at Licensee's own expense. Further, Licensee agrees
         to make available, at its own expense, appropriate [***] at mutually
         convenient times and locations as necessary for the development of the
         STS sensors.

4. Obligations of the Parties.

   4.1.  Obligations of Licensee.

                (a)  Licensee shall use reasonable efforts consistent with sound
         and reasonable business practices and judgment to effect introduction
         of Products as soon as reasonably practicable.

                (b)  If the Licensee in competition with Spectra in the
         Territory, actively promotes for use in relation to [***] alone
         a new [***] which compete with the Products, Spectra may, by
         notice, convert the license and right given to the Licensee under
         Section 2.1 into a non-exclusive license and right. In such event, it
         shall be under no obligation to license any Spectra Improvements made
         subsequent to the date of conversion.

         Nothing in this Section 4.1(b) shall restrict or limit the right of the
         Licensee to sell or promote any [***] (or any enhancements
         or revisions thereof) in the Field that exist as at the date of this
         Agreement.

                (c)  Within three (3) months of completion of all of the
         milestones set forth in this Agreement and thereafter, the Licensee
         shall furnish to Spectra, on a semi-annual basis a non binding forecast
         of its projected requirements for Products from Spectra which is not
         binding upon the Licensee but enables Spectra to plan Product
         production. Spectra undertakes to supply the Licensee with up to the
         amount of Products identified in the Licensee's forecast referred to in
         this Section.

                (d)  In the event that specific Bit Fibers or Bit Material are
         manufactured by a party other than Spectra where this is requested by a
         particular end user or the quality or price or lead time on Bit Fibers
         or Bit Materials supplied by Spectra is not reasonably satisfactory to
         the Licensee, Licensee will arrange for and Spectra shall use its
         commercially reasonable efforts to train and transfer know-how to local
         personnel of the manufacturer with respect to the manufacture of the
         Bit Fibers or Bit Material, at Licensee's own expense, including but
         not limited to reimbursement for travel expenses.

                (e)  Licensee, at its own expense, shall provide reasonable
         assistance to Spectra in testing the Bit Fibers and Bit Material, as
         made available by Spectra from time to time during the Development,
         into [***].

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

           (f) [***].

4.2    Obligations of Spectra. Spectra shall use diligent and commercially
       reasonable efforts consistent with sound and reasonable business
       practices and judgment to satisfy the following obligations:

           (a) Spectra shall Demonstrate one fully operational Large Area
       Sensor installed on a [***] within 8 months of the Effective Date for
       detecting the Bit Fibers in [***] processed at standard machine rates of
       no less than [***] per second and with performance meeting the De La Rue
       General Requirement Specification for Authentication Detectors attached
       at Schedule 1.1.20. (The Large Area Sensor, based on a larger and more
       costly laser, is currently being used by a Spectra customer and will be
       modified, in optics and in software, to detect the authentication
       signatures falling under the purview of this Agreement.) The price of the
       Large Area Sensor shall be $65,000 and shall be available for
       demonstration units within eight (8) months of the Effective Date of this
       Agreement. Additional copies of this modified and configured Large Area
       Sensor may also be purchased at prices to be agreed between the parties,
       in lots of ten (10), for authentication sensing in place of the STS
       (Search, Time and Shoot) sensor. Spectra shall use commercially
       reasonable good faith efforts to ensure that the price of the Large Area
       Sensor does not exceed $65,000. Should the price for the Large Area
       Sensor become commercially unreasonable for either the Licensee or
       Spectra, the parties agree to review the prices for the Large Area Sensor
       in good faith.

           (b) Spectra shall employ its commercially reasonable efforts to
       provide as many different versions of Bit Fibers as is necessary for the
       commercialization of the Licensed Technology by the Licensee. Within six
       (6) months of the Effective Date of this Agreement, Spectra shall give
       all reasonable assistance to Licensee in embedding Bit Fibers into [***].
       Although Spectra reserves the right to use the Licensed Technology in
       relation to [***], it shall take all commercially reasonable steps and
       precautions, in the same manner as it now does for [***], so as to ensure
       that the security of Licensee's customers will not be compromised. In any
       case, any other uses of the Licensed Technology shall have different
       embodiments than are used in the [***]. It is agreed that Spectra may
       employ the Licensed Technology other than in the form of Bit material or
       Bit fibers (which for the purposes of this Section shall include threads
       doped with or containing Bits) for use outside the Field but such use
       shall not include the application of the Licensed Technology in relation
       to

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

       [***] and in so far as Spectra intends to use the licensed Technology
       in other fields it will advise the Licensee of its intentions in a
       timely manner and where Spectra contemplates using the Licensed
       Technology other than in relation to [***] it will apprise Licensee
       prior to such use and shall have due regard to and give proper
       consideration to any concerns that the Licensee shall raise should the
       Licensee reasonably believe the proposed use may prejudice the actual
       or perceived security, reliability marketability or reputation of the
       Licensed Technology in the Field.

           (c) Spectra shall employ its commercially reasonable efforts to
       provide as many different versions of Bit Material as is necessary for
       the commercialization of the Licensed Technology by the Licensee and to
       meet market demand.

           (d) Spectra shall be responsible for absorbing the cost of the
       variable amounts of Bit Fibers necessary per [***] in order to satisfy
       the detection reliability of not more than [***]. Spectra shall not be
       accountable for the waste that may be incurred in incorporating the Bit
       Fibers into [***].

           (e) Spectra undertakes to supply the Licensee with the amounts of
       Products as per the Licensee's forecast, referred to in Subsection
       4.1(c).

           (f) Spectra will make available for sale, by eight (8) months of
       the Effective Date, at a price of $175,000 per unit, for verification and
       test purposes, an on-line Verifier-Densitometer (the specifications of
       which are set forth in Schedule 4.2(f)), for purposes of testing
       delivered Bit Fibers during incorporation into [***]. An off-line
       verifier (the specifications of which are set forth in Schedule 4.2(f))
       shall also be made available to Licensee at the same time and at the same
       price. The on-line device shall take Bit Fiber density measurements every
       [***] seconds and provide feedback to [***] process control system for
       real-time decision making. Both devices shall be network-ready.

           (g) Upon achievement of each relevant milestone as set forth in
       Subsection 5.1, the relevant Bit Fibers and Bit Material will be
       available for sale in mass production quantity within six (6) months of
       the applicable milestone date. Spectra undertakes to supply Licensee with
       a sufficient amount of Bit Fibers and Bit Material within such period of
       time that Licensee is able to fulfill any particular contract for the
       production of Products for any customer.

           (h) Upon achievement of the relevant milestone as set forth in
       Subsection 5.1, the STS Sensors will be available for sale in mass
       production quantity within six (6) months of the applicable milestone
       date.

5.     Payments.

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

       5.1    Milestone Payments and Dates. In consideration of the completion
              by Spectra of the Development and its achievement of the
              Milestones set forth in this Agreement, Licensee shall pay Spectra
              the following milestone-based amounts. Milestone payments shall be
              made on or before the fifteenth (15/th/) day following the
              occurrence of an event giving rise to a payment obligation
              hereunder. All payments shall be made by wire transfer in United
              States Dollars to the credit of such bank account as may be
              designated by Spectra in writing to Licensee. Any payment which
              falls due on a date which is a legal holiday in the State of Rhode
              Island may be made on the next succeeding day which is not a legal
              holiday in the State of Rhode Island.

                     (a)    $125,000 on or before 7 days of the signing of this
              Agreement, for specific engineering development purposes.

                     (b) $125,000 before July 31, 2002, contingent upon a
              successful [***] with the successful incorporation of Bit Fibers
              into Licensee [***]. A successful trial shall be one in which the
              Bit Fiber embedding process conforms with the [***] process at the
              [***] and yields [***] with typical physicals expected under
              industry standards and which when run on the Spectra test
              transport and sensor bed are able to identify the Bit Fibers. The
              sensor portion of the demonstration shall consist of a sample of
              Bit Fiber-embedded [***]. Details of this acceptance test are
              titled Bit Fiber-Acceptance Trial and set out in Schedule 5.1.

                     (c)    $125,000 for installation of the Large Area Sensor
              on a [***] within eight (8) months of the Effective Date, for
              detecting the Bit Fibers in both [***] processed at standard
              machine rates, providing signals to the [***] machine to direct
              the [***] into the correct accept or reject pocket,. Details of
              the acceptance test are titled Large Area Acceptance Test and set
              out in Schedule 5.1.

                     (d)    $125,000 for demonstration, within 8 months of the
              Effective Date, of a prototype STS Sensor authenticating [***]
              with Bit Fibers traveling on a Spectra test transport and sensor
              bed operating at speeds consistent with the highest performing
              [***]. The test bed will be a transport system that emulates a
              [***] traveling on a typical [***]. The test of the prototype
              sensor will concern detection of the Bit Fiber signature at
              standard [***] transport speeds. Details of the acceptance test
              are titled STS Sensor Acceptance Test and are set out in
              Schedule 5.1.

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

                     (e)    $125,000 for the demonstration, within 17 months of
              the Effective Date, of an STS Sensor operating on a [***] and
              authenticating and processing both [***] at standard [***]
              machine rates, providing signals to the sorting machine to direct
              the [***] into the correct accept or reject pocket, and
              exhibiting performance as per the De La Rue General Requirement
              Specification for Authentication Detectors attached at Schedule
              1.1.20 varied as mutually agreed by the parties prior to
              commencement of detailed detector development. Details of the
              acceptance test are titled STS Sensor Acceptance Test and are set
              out in Schedule 5.1.

                     (f)    $125,000 for, within 17 months of the Effective
              Date, confirmation of the STS Sensor price, not exceeding $18,000
              and targeting $10,000 (both figures being inclusive of royalty);
              schedule of delivery of production STS Sensor units; and proof of
              the manufacturability of the STS Sensor. Such manufacturability
              proof shall be achieved by a detailed review, by Licensee's
              manufacturing representatives at Spectra's manufacturing facility,
              of Spectra's planned manufacturing process for the STS Sensor. The
              Licensee's manufacturing representatives shall use customary
              methods that are mutually acceptable and reasonable within the
              industry for the purpose of determining that the STS Sensor can be
              manufactured in mass quantity.

       5.2    Royalty. During the term of this Agreement the Licensee shall pay
              to Spectra royalties at the rate set out in Part 1 of Schedule 5.4
              in respect of each [***] as the case may be that it sells to its
              customers that constitute or contain Products. During the term of
              this Agreement the Licensee shall pay to Spectra royalties at the
              rate set out in Part 3 of Schedule 5.4 in respect of each STS
              Sensor delivered to, by or on behalf of the Licensee.

       5.3    Annual Minimum Royalty. For the period commencing on the date
              hereof through December 31, 2006 (the "Initial Period"), Licensee
              agrees to pay or have paid to Spectra a minimum royalty of
              [***]. Payment for or on account of royalties for the Initial
              Period shall be made by April 15, 2004. In so far as any royalty
              payment made by April 15, 2004 is in advance this advance payment
              shall be credited against obligations to pay royalties on sales
              made up to and including December 31, 2006 pursuant to Section
              5.2. In so far as royalties due under Section 5.2 fall short of
              the minimum royalty for the Initial Period then in discharge of
              the Licensee's obligation Spectra shall retain the initial payment
              made by April 15, 2004. For subsequent years, the minimum royalty
              shall be as follows: [***] for the calendar year 2007; [***]
              for the calendar year 2008; [***] for the calendar year 2009;
              and [***] for the calendar year 2010. The minimum annual
              royalty for subsequent years shall thereafter increase annually
              over the prior year's dollar amount, based upon the then most
              recent Consumer Price Index for the Boston metropolitan area, as
              published by the United States Bureau of Labor Statistics. Once
              Licensee

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

              pays royalties of [***] (the "Target Royalty") in or in respect
              of any given year, all future annual minimum royalties shall be
              deemed achieved and paid. If the minimum royalty is not achieved
              in any period by the payment of royalties pursuant to Section 5.2,
              Licensee shall have the option to top this up by a payment, to be
              made by the Licensee to Spectra by no later than January 31st of
              the immediately following calendar year an amount equal to the
              minimum royalty less the amount of royalties actually paid during
              the course of the preceding period pursuant to Section 5.2;
              however, the amount of such cash payment used to achieve a minimum
              royalty shall not be counted towards the achievement of the Target
              Royalty.

       5.4    Price of Bit Fibers and Bit Material. During the term of this
              Agreement, if required by Licensee, Spectra will supply to the
              Licensee Bit Fibers and Bit Material from Spectra at prices as set
              forth in Part 2 of Schedule 5.4 attached hereto. The prices shall
              remain firm until March 31, 2004, and thereafter shall increase
              annually based upon the then most recent Consumer Price Index for
              the Boston metropolitan area, as published by the United States
              Bureau of Labor Statistics but in no event shall the increase in
              any year exceed 3%. he prices for the Bit Fibers Bit Material
              become commercially u or Bit Material in good faith.

       5.5    Timing of Royalty Payments; Withholding. (a) Any royalties payable
              pursuant to this Section shall be due on or before the sixtieth
              (60th) day following the close of each calendar quarter,
              commencing on June 30, 2002.

                     (b)    In the event that Licensee or any Sublicensee
              manufactures or has manufactured locally the Bit Fibers, the Bit
              material or the STS Sensors then the Licensee will pay royalties
              to Spectra at the rate set out in Part 1 of Schedule 5.4 in
              respect of [***] as the case may be and at the rate set out
              in Part 3 of Schedule 5.4 in respect of each STS Sensor that
              Sublicensee sells to its customers that constitute or contain
              Products. Royalties will be payable within 30 days of the receipt
              by the Licensee of royalty payments to it from its Sublicensee.

                     (c)    Any income or other taxes which Licensee is required
              by law to pay or withhold on behalf of Spectra with respect to
              royalties payable to Spectra under this Agreement shall be
              deducted from the amount of such royalties due and paid or
              withheld, as appropriate, by Licensee on behalf of Spectra. Any
              such tax required to be paid or withheld shall be an expense of,
              and borne solely by, Spectra. Licensee will furnish Spectra with
              reasonable evidence of such withholding payment, in electronic or
              written form, as soon as practicable after such payment is made.
              The parties hereto will reasonably cooperate in completing and
              filing documents required under the provisions of any applicable
              tax laws or under any other applicable law in connection with the
              making of any required withholding payment, or any claim to a
              refund of any such payment.

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

       5.6    Currency. All payments hereunder shall be made in U.S. Dollars. If
              at any time legal restrictions prevent the prompt remittance of
              any payments with respect to any country where the Product is
              sold, Licensee or its Affiliates or Sublicensees shall, with the
              prior approval of Spectra, have the right and option to make such
              payments by depositing the amount thereof in local currency to
              Spectra's account in a bank or depository in such country, but
              failure to make any payment required hereunder by reason of the
              operation of any such legal restriction and Spectra's refusal to
              approve payment in local currency shall not be deemed a breach of
              this Agreement.

       5.7    Audit. Licensee shall keep and shall cause to be kept accurate
              records in sufficient detail to enable the amounts due hereunder
              to be determined and to be verified as herein after appearing.
              Upon the written request of Spectra, at Spectra's expense and not
              more than once in or in respect of any calendar year, Licensee
              shall permit unless prohibited by law or contract an independent
              accountant of prominence in the United States and/or the
              applicable country selected by Spectra, and approved by Licensee
              (which approval shall not be unreasonably withheld), to have
              access during normal business hours to those records of Licensee
              as may be reasonably necessary to verify the accuracy of the
              reports furnished by Licensee pursuant to Section 4.1(b), in
              respect of any calendar year ending not more than twelve (12)
              months prior to the date of such notice. Any report prepared
              or made by the independent accountant, a copy of which shall be
              sent or otherwise provided to Licensee at the same time it is sent
              or otherwise provided to Spectra, shall contain the conclusions of
              such independent accountant regarding the audit, only specifying
              that the amounts paid to Spectra pursuant thereto were correct or,
              if incorrect, the amount of any underpayment or overpayment. All
              other confidential information of Licensee learned by the
              independent accountant in the course of the audit will be held in
              confidence and not disclosed. If the independent accountant's
              report shows any underpayment, Licensee shall remit or shall cause
              its Affiliates or Sublicensees to remit to Spectra within thirty
              (30) days after Licensee's receipt of such report: (i) the amount
              of such underpayment; and (ii) if such underpayment exceeds ten
              percent (10%) of the total amount payable for the calendar year
              then being audited, the reasonable and necessary fees and expenses
              of the independent accountant performing the audit, subject to
              reasonable substantiation thereof. Any overpayments shall be fully
              creditable against amounts payable in subsequent payment periods
              or remitted to Licensee, at Licensee's request. Spectra agrees
              that all information subject to review under this Section 5 is
              confidential and that Spectra shall retain and cause its
              accountant to retain all such information in confidence. Licensee
              shall cause all Sublicensees to comply with the provisions of this
              section.

6.     Representations and Warranties.

       6.1    Representations, Warranties and Covenants of Spectra. Spectra
              represents, warrants and covenants to Licensee as follows:

<PAGE>

              6.1.1. Spectra is a corporation duly organized, validly existing
                     and in good standing under the laws of the State of
                     Delaware with corporate power to execute and deliver, and
                     perform its obligations under, this Agreement;

              6.1.2. the execution, delivery and performance of this Agreement
                     have been duly authorized by all necessary corporate action
                     on the part of Spectra;

              6.1.3. this Agreement has been duly executed and delivered by
                     Spectra and is a legal, valid and binding obligation of
                     Spectra, enforceable against Spectra in accordance with its
                     terms; and

              6.1.4. the execution, delivery and performance of this Agreement
                     do not and will not conflict with or contravene any
                     provision of the charter documents or by-laws of Spectra or
                     any agreement, document, instrument, indenture or other
                     obligation of Spectra.

       6.2    Representations, Warranties and Covenants of Licensee. Licensee
              represents, warrants and covenants to Spectra as follows:

              6.2.1. Licensee is a corporation duly organized, validly existing
                     and in good standing under the laws of England with
                     corporate power to execute and deliver, and perform its
                     obligations under, this Agreement;

              6.2.2  the execution, delivery and performance of this Agreement
                     have been duly authorized by all necessary corporate action
                     on the part of Licensee;

              6.2.3. this Agreement has been duly executed and delivered by
                     Licensee and is a legal, valid and binding obligation of
                     Licensee, enforceable against Licensee in accordance with
                     its terms; and

              6.2.4. the execution, delivery and performance of this Agreement
                     do not and will not conflict with or contravene any
                     provision of the charter documents or by-laws of Licensee
                     or any agreement, document, instrument, indenture or other
                     obligation of Licensee.

7.     Patents.

       7.1.   Prosecution and Enforcement of Patents. All right, title, and
              interest in the Licensed Technology shall remain in Spectra, and
              Spectra shall subject to the provisions of Section 8.2, have the
              exclusive right to prepare, prosecute and maintain patent
              applications, and to maintain and enforce patents issued thereon
              with respect to Licensed Technology.

       7.2.   Cooperation. Licensee shall, at Spectra's request and cost,
              cooperate with Spectra regarding the prosecution of patent cases,
              and shall take all reasonable steps necessary to assist Spectra
              with the maintenance of the Licensed Technology, including causing
              each of its employees and agents to take all actions and to
              execute, acknowledge and deliver all instruments

<PAGE>

                    or agreements reasonably requested by Spectra, and necessary
                    for the perfection, maintenance, enforcement or defense of
                    Spectra's rights as set forth above.

             7.3.   Confidential Information. Any party receiving Confidential
                    Information shall maintain the confidential and proprietary
                    status of such Confidential Information, keep such
                    Confidential Information and each part thereof within its
                    possession or under its control sufficient to prevent any
                    activity with respect to the Confidential Information that
                    is not specifically authorized by this Agreement, use
                    commercially reasonable efforts, in each case, to prevent
                    the disclosure of any Confidential Information to any other
                    Person, and use commercially reasonable efforts to ensure
                    that such Confidential Information is used only for those
                    purposes specifically authorized herein; provided, however,
                    that such restrictions shall not apply to any Confidential
                    Information which is: (a) independently developed by the
                    receiving party or which is outside the scope of this
                    Agreement; (b) in the public domain at the time of its
                    receipt or thereafter becomes part of the public domain
                    through no fault of the receiving party; (c) received
                    without an obligation of confidentiality from a third party
                    having the right to disclose such information; (d) released
                    from the restrictions of this Section 7.3 by the express
                    written consent of the other party hereto; (e) disclosed to
                    any permitted assignee, permitted Sublicensee or permitted
                    subcontractor of either Spectra or Licensee hereunder (if
                    such assignee, Sublicensee or subcontractor is subject to
                    the provisions of this Section 7.3 or comparable provisions
                    of other documents); or (f) required by law, statute, rule
                    or court order to be disclosed (the disclosing party shall,
                    however, use commercially reasonable efforts to obtain
                    confidential treatment of any such disclosure).

             7.4.   Permitted Disclosures. Notwithstanding the provisions of
                    Section 7.3 hereof, Spectra and Licensee may, to the extent
                    necessary, disclose and use Confidential Information,
                    consistent with the rights of Spectra and Licensee otherwise
                    granted hereunder: (a) for the purpose of securing
                    institutional or governmental approval to engage in
                    research, development, validation, sale, trial, importation,
                    commercialization or marketing of any Product; (b) for the
                    purpose of either party securing patent protection for an
                    invention within the scope of the Licensed Technology or for
                    any Improvement; or (c) to the extent necessary or useful in
                    the commercialization of any Products, if the party hereto
                    disclosing such Confidential Information uses commercially
                    reasonable efforts to obtain an agreement from any Person to
                    whom such Confidential Information is disclosed to preserve
                    the confidentiality thereof upon terms reasonably equivalent
                    to those set forth herein; provided, however, that in each
                    such instance the other party hereto shall have been
                    notified of the permitted disclosure.

       8.    Patent Infringement.

             8.1    Notification of Infringement. Each party shall notify the
                    other of any infringement by any Person of any patent rights
                    forming part of the Licensed Technology ("Patent Rights") of
                    which it becomes aware and

<PAGE>

                    shall provide the other with the available evidence, if any,
                    of such infringement.

             8.2    Enforcement of Patent Rights. If Spectra or Licensee has
                    actual notice of infringement by any Person of Patent
                    Rights, the respective officers of Spectra and Licensee
                    shall confer to determine in good faith an appropriate
                    course of action to enforce such Patent Rights or otherwise
                    abate the infringement thereof. If Spectra determines that
                    enforcement of Patent Rights is appropriate, Spectra shall
                    have the right, but not the obligation, at its own expense,
                    to take appropriate action to enforce such Patent Rights;
                    provided, however, that, if Spectra elects to so act,
                    Licensee shall have the right to participate in the
                    enforcement of such Patent Rights by agreeing to bear a
                    percentage of the costs of such enforcement in such amount
                    as the parties shall determine. All amounts recovered in any
                    action to enforce Patent Rights undertaken by Spectra and
                    Licensee, whether by judgment or settlement, shall be
                    retained by Spectra and Licensee pro rata according to the
                    respective percentages of expenses borne by them in
                    enforcing such Patent Rights. If, within six (6) months
                    after notice of infringement, Spectra has not commenced
                    action to enforce such Patent Rights or thereafter ceases to
                    diligently pursue such action, Licensee shall have the right
                    but not the obligation, at its expense, to take appropriate
                    action to enforce such Patent Rights as its sole remedy
                    hereunder. Spectra and Licensee shall fully cooperate with
                    each other in the planning and execution of any action to
                    enforce Patent Rights. Neither Spectra nor Licensee shall
                    enter into any settlement that includes the grant of a
                    license under, agreement not to enforce, or any statement
                    prejudicial to the validity or enforceability of any Patent
                    Rights without the consent of the other, which consent shall
                    not be withheld unreasonably.

             8.3    Disclaimer of Warranty; Consequential Damages.

                    8.3.1.   Spectra warrants that it is the sole beneficial
                             owner of the Licensed Technology and that Spectra
                             does not know of any impediment or potential
                             impediment to the full exercise of the right and
                             license therein and herein granted.

                    8.3.2    Spectra warrants that Schedule 1.1(a) hereto sets
                             out full details of all patents owned by Spectra
                             relating to the Bits and the Licensed Technology.

                    8.3.3.   Nothing in this Agreement shall be construed as a
                             representation made or warranty given by either
                             party hereto that any patents will issue based on
                             pending applications within the Patent Rights, or
                             that any such Patent Rights which do issue will be
                             valid, or that the practice by the other party
                             hereto of any license granted hereunder, or that
                             the use of any Licensed Technology licensed
                             hereunder, will not infringe the patent or
                             proprietary rights of any other Person. In
                             addition, once Licensee or Sublicensee has accepted
                             the Bit Fibers security threads and foil transfers
                             or security borne Bit Material as in compliance
                             with agreed

<PAGE>

                             standards, as defined later in this section, or, in
                             the case where Bit Fibers are manufactured by a
                             party other than Spectra or an Affiliate of
                             Spectra, once the know-how and training has been
                             transferred to the other manufacturer for local
                             production of Bit Fibers security threads and foil
                             transfers or security borne Bit Material, Licensee
                             acknowledges that the Licensed Technology is
                             licensed to Licensee as is, and Licensee expressly
                             disclaims and hereby waives, releases and renounces
                             any warranty, express or implied, with respect to
                             such licensed technology, including, without
                             limitation, any warranty of merchantability or
                             fitness for a particular purpose. With respect to
                             the Licensee's acceptance of delivered Bit Fibers
                             security threads and foil transfers or security
                             borne Bit Material from Spectra, Licensee shall
                             have fifteen (15) days to refuse the material as
                             not in compliance with standard material, at the
                             expiration of which time the material shall save in
                             respect of latent defects be deemed accepted. The
                             standards for acceptable material shall be
                             materials that are consistent with that
                             demonstrated to and accepted by Licensee as ready
                             for production at the time of the milestone
                             demonstrations set forth in Section 5.1. To
                             determine that the material meets standards upon
                             receipt, the Licensee or Sublicensee shall use
                             Spectra Quality Control equipment, including
                             verifiers, for testing the Bit Fibers or security
                             borne Bit Material.

                    8.3.4.   NEITHER PARTY TO THIS AGREEMENT SHALL BE ENTITLED
                             TO RECOVER FROM THE OTHER ANY SPECIAL, INCIDENTAL,
                             CONSEQUENTIAL OR PUNITIVE DAMAGES

       9.    Term, Termination and Breach.

             9.1.   Term. This Agreement shall be effective as of the date
                    hereof and shall in relation to each Product and each
                    country in the Territory continue in full force and effect
                    until the expiry of the last to expire Spectra Patent Rights
                    in relation to that Product and in that country unless
                    terminated by the mutual agreement of the parties or as
                    otherwise provided herein.

             9.2.   Termination. Either party shall have the right to terminate
                    this Agreement effective immediately upon written notice of
                    termination to the other party in the event that:

                    9.2.1    the other party fails to perform or observe or
                             otherwise breaches any of its material obligations
                             under this Agreement (which for the avoidance of
                             doubt would include the failure of the Licensee to
                             pay the minimum royalty set out in Section 5.3) and
                             such failure or breach continues unremedied for a
                             period of sixty (60) days after receipt by such
                             party of written notice thereof from the
                             non-breaching party in which notice it states it is
                             served pursuant to this section and details the
                             alleged material breach and requires its remedy;

<PAGE>

                    9.2.2.   the other party shall: (i) seek the liquidation,
                             reorganization, dissolution or winding-up of itself
                             (other than for the purpose of solvent
                             reorganization, amalgamation or reconstruction) or
                             the composition or readjustment of its debts; (ii)
                             apply for or consent to the appointment of, or the
                             taking of possession by, a receiver, custodian,
                             trustee or liquidator of itself or of all or a
                             substantial part of its assets; (iii) make a
                             general assignment for the benefit of its
                             creditors; (iv) commence a voluntary case under the
                             bankruptcy laws of the United States; (v) file a
                             petition seeking to take advantage of any other law
                             relating to bankruptcy, insolvency, reorganization,
                             winding-up or composition or readjustment of debts;
                             or (vi) adopt any resolution of its Board of
                             Directors or stockholders for the purpose of
                             effecting any of the foregoing;

                    9.2.3    a proceeding or case shall be commenced without the
                             application or consent of the other party and such
                             proceeding or case shall continue undismissed, or
                             an order, judgment or decree approving or ordering
                             any of the following shall be entered and continue
                             unstayed and in effect, for a period of forty-five
                             (45) days from and after the date service of
                             process is effected upon the other party, seeking:
                             (i) the other party's liquidation, reorganization,
                             dissolution or winding-up, or the composition or
                             readjustment of its debts; (ii) the appointment of
                             a trustee, receiver, custodian, liquidator or the
                             like of the other party or of all or any
                             substantial part of its assets; or (iii) similar
                             relief in respect of the other party under any law
                             relating to bankruptcy, insolvency, reorganization,
                             winding up or the composition or readjustment of
                             debts; or

                    9.2.4    anything analogous to any of the foregoing under
                             the law of any jurisdiction occurs in relation to
                             either party.

             9.3.   Effect of Termination. If Spectra properly terminates this
                    Agreement, Sections 2, 3, 4, 5, 7.2, 8.1 and 8.2 shall
                    terminate, all other provisions of this Agreement shall
                    survive, and automatically and without any other action by
                    the parties, all rights granted hereunder in and to the
                    Licensed Technology shall revert to Spectra, save that the
                    Licensee and its Sublicenses shall be entitled to take all
                    such steps and the license under Section 2.1 and Spectra's
                    obligations under Section 4.2(e) shall (provided that the
                    Licensee meets and continues to meet it obligations to pay
                    royalties under Section 5.2) continue for a period of ten
                    (10) years from the date that this Agreement terminates for
                    whatever reason in so far as it is necessary to enable the
                    Licensee to fulfill any contracts with its customers or
                    Sublicensee then signed but not completely fulfilled and to
                    supply STS Sensors, [***] containing Bit Fibers and Bit
                    Material in respect of further orders where this has
                    previously been provided to the customer or Sublicensee
                    under earlier contracts

             If the Licensee properly terminates this Agreement, Sections, 2, 3,
             4, 5, 7.2, 8.1 and 8.2 shall terminate, all other provisions of
             this Agreement shall survive and automatically and without any
             other action by the parties all

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

                    rights granted hereunder in and to the Licensee Improvements
                    shall revert to the Licensee.

             9.3    Breach. Without prejudice to the Licensee's rights under
                    Section 9.2 or any other rights of the Licensee, if Spectra
                    fails to perform or observe or otherwise breaches any of its
                    material obligations under this Agreement (which for the
                    avoidance of doubt would include the failure of Spectra to
                    supply Product pursuant to Section 4.2(b)) and such failure
                    or breach continues unremedied for a period of sixty (60)
                    days after receipt by Spectra of written notice thereof from
                    the Licensee in which notice it states it is served pursuant
                    to this section and details the alleged material breach and
                    requires its remedy, the Licensee's obligations to pay
                    annual minimum royalties pursuant to Section 5.3 and to
                    license Licensee Improvements to Spectra pursuant to Section
                    2.2.2 shall cease.

             9.4    Escrow. At each milestone and thereafter as Improvements are
                    made Spectra shall lodge with a law firm selected by Spectra
                    full details containing any secret formulation,
                    manufacturing know how, details of all materials, processes
                    employed and manufacturing techniques and equipment
                    necessary to produce Unique Bits, Bit Fibers, Bit Materials
                    and STS Sensors pursuant to the escrow agreement attached
                    hereto.

       10.   No Implied Waivers; Rights Cumulative. No failure on the part of
             Spectra or Licensee to exercise and no delay in exercising any
             right, power, remedy or privilege under this Agreement, or provided
             by statute or at law or in equity or otherwise, including, without
             limitation, the right or power to terminate this Agreement, shall
             impair, prejudice or constitute a waiver of any such right, power,
             remedy or privilege or be construed as a waiver of any breach of
             this Agreement or as an acquiescence therein, nor shall any single
             or partial exercise of any such right, power, remedy or privilege
             preclude any other or further exercise thereof or the exercise of
             any other right, power, remedy or privilege.

       11.   Force Majeure. Spectra and Licensee shall each be excused for any
             failure or delay in performing any of its respective obligations
             under this Agreement, if such failure or delay is caused by Force
             Majeure

       12.   Notices. All notices, requests and other communications to Spectra
             or Licensee hereunder shall be in writing (including facsimile or
             similar electronic transmissions), shall refer specifically to this
             Agreement and shall be personally delivered or sent by facsimile or
             similar electronic transmission (provided that in the case of a
             notice sent by facsimile or other electronic transmission, a copy
             of the notice is sent within three (3) days thereof by first class
             or equivalent prepaid mail) or by registered mail or certified
             mail, return receipt requested, postage prepaid, in each case to
             the respective address specified below (or to such address as may
             be specified in writing to the other party hereto):

                    Spectra Systems Corporation
                    321 South Main Street
                    Providence, RI 02903
                    USA
                    Attention: President

<PAGE>

                    Fax No.:          (401) 274-3127
                    Email Address:    nlawandy@spectrasystemscorp.com

                    De La Rue International Limited
                    De La Rue House, Jays Close
                    Basingstoke
                    Hampshire RG22 4BS, England
                    Attention: Jonathan Ward, Managing Director - Centres
                               [***]

                    Fax No.           +44 1256 605 336
                    Email Address:    jonathan.ward@uk.delarue.com

             Any notice or communication given in conformity with this Section
             12 shall be deemed to be effective when received by the addressee,
             if delivered by hand. Notices sent by facsimile or other electronic
             transmission will be deemed sent and received at the time stated in
             any transmission report and three (3) days after mailing, if
             mailed.

       13.   Further Assurances. Each of Spectra and Licensee agrees to duly
             execute and deliver, or cause to be duly executed and delivered,
             such further instruments and do and cause to be done such further
             acts and things, including, without limitation, the filing of such
             additional assignments, agreements, documents and instruments, that
             may be necessary in connection with this Agreement

       14.   Successors and Assigns. The terms and provisions of this Agreement
             shall inure to the benefit of, and be binding upon, Spectra,
             Licensee, and their respective successors and assigns; provided,
             however, that neither Spectra nor Licensee may assign or otherwise
             transfer any of its rights and interests, nor delegate any of its
             respective obligations hereunder, without the prior written consent
             of the other party hereto; provided further, however, that either
             party may without consent fully assign its rights and interests,
             and delegate its obligations, hereunder, effective upon written
             notice thereof: (a) to an Affiliate if such Affiliate assumes all
             of the obligations of the assigning party hereunder; or (b) to any
             Person which acquires all or substantially all of the assets of the
             assigning party or which is the surviving Person in a merger or
             consolidation with the assigning party. Any attempt to assign or
             delegate any portion of this Agreement in violation of this Section
             14 shall be null and void. Subject to the foregoing, any reference
             to Spectra and Licensee hereunder shall be deemed to include the
             successors thereto and assigns thereof.

       15.   Amendments. No amendment, modification, waiver, termination or
             discharge of any provision of this Agreement, nor consent to any
             departure by Spectra or Licensee therefrom, shall in any event be
             effective unless the same shall be in writing specifically
             identifying this Agreement and the provision intended to be
             amended, modified, waived, terminated or discharged and signed by
             Spectra and Licensee, and each such amendment, modification,
             waiver, termination or

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

             discharge shall be effective only in the specific instance and for
             the specific purpose for which given. No provision of this
             Agreement shall be varied, contradicted or explained by any oral
             agreement, course of dealing or performance or any other matter not
             set forth in an agreement in writing and signed by Spectra and
             Licensee.

       16.   Governing Law. This Agreement shall be governed by and construed in
             accordance with the laws of the State of Delaware without regard to
             internal principles of conflicts of laws.

       17.   Severability. If any provision hereof should be held invalid,
             illegal or unenforceable in any respect in any jurisdiction, then,
             to the fullest extent permitted by law: (a) all other provisions
             hereof shall remain in full force and effect in such jurisdiction
             and shall be liberally construed in order to carry out the
             intentions of the parties hereto as nearly as may be possible; and
             (b) such invalidity, illegality or unenforceability shall not
             affect the validity, legality or enforceability of such provision
             in any other jurisdiction. To the extent permitted by applicable
             law, Spectra and Licensee hereby waive any provision of law that
             would render any provision hereof prohibited or unenforceable in
             any respect.

       18.   Headings. Headings used herein are for convenience only and shall
             not in any way affect the construction of, or be taken into
             consideration in interpreting, this Agreement.

       19.   Execution in Counterparts. This Agreement may be executed in any
             number of counterparts, each of which counterparts, when so
             executed and delivered, shall be deemed to be an original, and all
             of which counterparts, taken together, shall constitute one and the
             same instrument.

                            [Signature page follows]

<PAGE>

       IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed under seal and delivered as of the date first above written.

                                            SPECTRA SYSTEMS CORPORATION

                                            By: /s/ Dr. Nabil M. Lawandy
                                                -------------------------------
                                            Name:  Dr. Nabil M. Lawandy
                                            Title: President & CEO

                                            DE LA RUE INTERNATIONAL LIMITED

                                            By: /s/ illegible
                                                -------------------------------
                                            Name:  [***]
                                            Title: [***]

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

                     TECHNOLOGY LICENSE AND SUPPLY AGREEMENT

                                 SCHEDULE 1.1(a)

                              SPECTRA PATENT RIGHTS

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

                                     [***]

(*)  Covered under European application
(++) Request to publish approved 2/23/01 under [***]

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

                     TECHNOLOGY LICENSE AND SUPPLY AGREEMENT

                                 SCHEDULE 1.1.23

                            BIT FIBERS SPECIFICATION

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

                     TECHNOLOGY LICENSE AND SUPPLY AGREEMENT
                                  SCHEDULE 2.5

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

                                 SCHEDULE 1.1.20

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

     CONTENTS

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
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the Commission.

<PAGE>

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
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the Commission.

<PAGE>

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
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the Commission.

<PAGE>

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
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the Commission.

<PAGE>

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
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the Commission.

<PAGE>

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
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the Commission.

<PAGE>

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
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the Commission.

<PAGE>

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
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the Commission.

<PAGE>

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
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the Commission.

<PAGE>

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
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the Commission.

<PAGE>

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
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the Commission.

<PAGE>

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
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the Commission.

<PAGE>

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

                                  SCHEDULE 5.1
                                Acceptance Trials

Bit Fibers

1. Spectra shall provide an agreed quantity of fibers comprising 2 different
Bits for incorporation into approximately [***] of a typical furnish and
specification in accordance with standard [***] practice for [***]. The
introduction of the fibers will not result in any non-standard process
requirement or cost, other than the purchase cost of the fibers, including the
processes required to [***] and treatment of effluent.

2. Introduction of the Spectra fibers will not significantly (in the reasonable
judgment of Licensee consistent with [***] industry standards) alter the
physical properties [***] (other than the optical properties conforming to the
Licensed Technology).

3. The resultant [***] shall be processed in one of the Licensee's factories.
Approximately [***] containing each Bit type shall be processed at standard
production speeds through the standard [***]. A representative quantity shall
also be processed though the additional operations of [***]. During these
processes, the Spectra fibers shall not become detached from [***], contaminate
the [***], cause a requirement for additional wash-ups, reduce the transfer or
adhesion of any [***] or otherwise reduce the manufacturing speed and throughput
compared to standard [***] of a similar type with similar type fibers embedded.

4. Licensee will make available to Spectra representative samples of [***] of
both Bit types for authentication tests utilizing a Large Area Detector. The
samples will include [***] that have been subjected to the mechanical and
chemical durability tests defined in the Annex. All samples shall be accepted on
the authentication system, or enough samples shall be detected such that
Licensee shall feel satisfied with the robustness of feature. Spectra shall also
demonstrate that the authentication system is not impaired by the presence of
[***].

Spectra shall demonstrate the performance of the authentication system against
the tests defined in this clause 4 at Spectra's premises to a nominee of the
Licensee.

5. Licensee shall provide to Spectra samples comprising materials that in
Licensee's opinion may be used by [***]. Spectra shall demonstrate to Licensee's
satisfaction and judgment that sufficient samples are rejected by the
authentication system at the same sensitivity setting used for the tests
conducted under clause 4. The [***] analysis shall include an assessment of the
ease with which genuine Bit Fibers can be removed from [***] and affixed to

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

[***] such that they are accepted by the authentication system.

6. ACCEPTANCE MILESTONE. Subject to a fully satisfactory performance under
clauses 1-5, Licensee shall deem acceptance of the Bit Fibers.

7. In the event that Licensee accepts the FiberLase system as inherently sound
under clause 6 and wishes to progress the Development but requires improved
performance, Licensee shall provide tests and samples to guide Spectra's further
development.

8. Subsequent to the initial acceptance tests, fibers conforming to the Licensed
Technology comprising subsequent batches of the approved Bits and/or
new/additional Bits developed in accordance with this Agreement, or as
subsequently agreed between Spectra and Licensee, shall conform to the
performance criteria defined in the above clauses. There shall be a maximum
variation of [***] in the peak wavelength and [***] peak amplitude/emission
intensity between batches of fibers when measured in [***]. No changes
shall be made to the polymeric base of the Bit Fibers, nor to other physical and
chemical properties of the Bit Fibers (other than to meet agreed characteristic
lasing performance) without prior written agreement with Licensee.

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

Bit Material (to be activated as and when necessary)

1. Spectra will provide Licensee with an agreed quantity of Bit Material
suitable for application to polymeric film (including but not limited to
polyester) by means of [***] or other process as agreed between Spectra and
Licensee's Affiliates [***].

2. [***] will manufacture sufficient [***] to produce [***] and supply the [***]
or De La Rue factory as appropriate.

3. Licensee will incorporate the security thread into a [***]. The introduction
of the security thread will not result in any non-standard process requirement
or cost, other than the purchase cost of the Bit Material and consequent
security thread, including the processes required to [***].

4. The resultant paper shall be processed in one of the Licensee's factories.
Approximately [***] shall be processed at standard production speeds through the
standard [***] processes of [***]. A representative quantity shall also be
processed though the additional operations of [***].

Throughout these processes, the thread incorporating the Bit Material shall not
reduce the manufacturing speed and throughput compared to [***] of a similar
type.

5. The Licensee will make available to Spectra representative samples of [***]
incorporating the security thread comprising the Bit Material for authentication
tests utilizing an STS Sensor. The samples will include [***] that have been
subjected to the mechanical and chemical hazard tests defined in the Annex. All
samples shall be accepted on the STS Sensor, or enough samples shall be detected
such that Licensee shall feel satisfied with the robustness of feature. Spectra
shall also demonstrate that the authentication system is not impaired by the
presence of [***]. Spectra shall demonstrate the performance of the STS Sensor
against the tests defined in this clause 5 at Spectra's premises to a nominee of
the Licensee.

6. The Licensee shall provide to Spectra samples comprising materials that in
Licensee's opinion may be used by counterfeiters to simulate the salient
properties of the Bit Materials as applied to a [***]. Spectra shall demonstrate
to Licensee's satisfaction and judgment that sufficient samples are rejected by
the STS Sensor at the same sensitivity setting used for the tests conducted
under clause 5.

7. ACCEPTANCE MILESTONE. Subject to a fully satisfactory performance under
clauses 1-6, Licensee shall deem acceptance of the Bit Materials.

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

8. Subsequent to the initial acceptance tests, Bit Material conforming to the
Licensed Technology comprising new/additional Bits developed in accordance with
this Agreement, or as subsequently agreed between Spectra and Licensee, shall
conform to the performance criteria defined in the above clauses. No changes
shall be made to the formulation of the Bit Material, nor to other physical and
chemical properties of the Bit Material (other than to meet agreed
characteristic lasing performance) without prior written agreement with
Licensee.

<PAGE>

 Annex                     Durability tests

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

Large Area Sensor

1. Spectra shall, if so required by Licensee, install one of its Large Area
Sensors on a [***] to be specified by [***] for detecting the Bit Fibers in
[***].

2. The Large Area Sensor shall authenticate [***] processed at standard machine
rates of no less than [***] per second and linear transport speed of up to [***]
per second.

3. The Large Area Sensor shall conform to the De La Rue General Requirement
Specification for Spectra FiberLase Detectors issue 21.5.2002.

4. Fitment and operation of the Large Area Sensor shall not reduce the operating
speed or throughput of the [***] machine, other than for reasons of correct
rejection of [***] that do not contain the correct Bit or Bits.

5. The Large Area Sensor shall not incorrectly reject genuine [***] containing
the correct Bit at a rate of more than [***].

6. The Large Area Sensor shall not incorrectly accept [***] not containing
the correct Bit at a rate of more than [***] not containing the relevant Bit.

7. The Large Area Sensor shall reject Bits which do not conform to the specific
Bit utilized for any given [***]. Maximum coding misclassification [***].

8. Spectra shall demonstrate correct operation of the Large Area Sensor fitted
to a [***] to a nominee of the Licensee. Acceptance testing shall require
processing of [***], in a range of conditions, to be provided by Licensee as
follows:

Licensee will provide [***]. These will be passed a minimum of [***] through the
[***].

Licensee will provide a pack of chemically and mechanically abused [***] and
[***]. These will be passed a minimum of [***] through the [***].

Spectra shall demonstrate that the function of the Large Area Sensor is not
impaired by the presence of [***].

9. ACCEPTANCE MILESTONE. Subject to a fully satisfactory performance under
clauses 1-8, Licensee shall deem acceptance of the Large Area Sensor.

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

10. Additional copies of the Large Area Sensor conforming to the approved
initial unit will be made available by Spectra, at prices to be agreed between
the parties, in lots of ten. No change to the specification or construction of
the sensors shall be made by Spectra unless agreed in writing with Licensee.

11. Spectra shall provide for each unit purchased a full technical manual to
Licensee detailing operational specification, drawings for dimensions,
cleaning/maintenance schedule, diagnostic procedures and interface protocol.

<PAGE>

STS Sensor

1.  Spectra shall develop a prototype STS sensor capable of authentication of
[***] containing Bit Fibers when fitted to a test transport at Spectra's
premises.

2.  The STS prototype shall be capable of authenticating [***] at a linear
transport speed of up to [***] per second.

3.  Spectra shall demonstrate that the signal processing function is capable of
accommodating a feed rate of [***] per second.

4.  Spectra shall demonstrate to Licensee's satisfaction and judgment correct
operation of the STS prototype to a nominee of the Licensee. Acceptance testing
shall require processing of [***], in a range of conditions, to be provided by
Licensee as follows:

Licensee will provide [***] which will be passed at least once through the
prototype system.

Licensee will provide a pack of chemically and mechanically [***] and [***].
These will be passed a minimum of once through the prototype sensor test bed.

5.  Spectra shall demonstrate to Licensee's satisfaction and judgment that the
STS sensor is capable of rejecting any Bit which does not conform to the
specific correct Bit utilized for a given currency or denomination.

6.  ACCEPTANCE MILESTONE. Subject to a fully satisfactory performance under
clauses 1-5, Licensee shall deem acceptance of the design principles of the STS
prototype sensor.

7.  Spectra shall install one fully developed STS Sensor on a [***] to be
specified by [***] for detecting the Bit Fibers in [***].

8.  The STS Sensor shall authenticate [***] processed at standard machine
rates of no less than [***] per second and linear transport speed
of up to [***] per second.

9.  The STS Sensor shall conform to the De La Rue General Requirement
Specification for Spectra FiberLase Detectors issue 23.5.2002.

10. Fitment and operation of the STS Sensor shall not reduce the operating speed
or throughput of the [***] machine, other than for reasons of correct
rejection of [***] that do not contain the correct Bit.

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

11. The STS Sensor shall not incorrectly reject [***] containing the
correct Bit at a rate of more than [***].

12. The STS Sensor shall not incorrectly accept [***] not containing the
correct Bit at a rate of more than [***].

13. The STS sensor shall reject Bits which do not conform to the specific Bit
utilized for any given [***]. Maximum coding misclassification [***].

14. Spectra shall demonstrate to Licensee's satisfaction and judgment correct
operation of the STS Sensor fitted to a [***] to a nominee of the Licensee.
Acceptance testing shall require processing of genuine and simulated documents,
in a range of conditions, to be provided by Licensee as follows:

Licensee will provide [***]. These will be passed a minimum of [***] through the
[***].

Licensee will provide a pack of chemically and mechanically abused [***] and
[***]. These will be passed a minimum of [***] through the [***].

Spectra shall demonstrate that the function of the STS Sensor is not impaired by
the presence of [***].

15. ACCEPTANCE MILESTONE. Subject to a fully satisfactory performance under
clauses 7-14, Licensee shall deem acceptance of the STS Sensor.

16. Additional copies of the STS Sensor conforming to the approved initial unit
will be made available by Spectra, at prices to be agreed between the parties,
in lots of ten. No change to the specification or construction of the sensors
shall be made by Spectra unless agreed in writing with Licensee.

17. Spectra shall provide for each unit purchased a full technical manual to
Licensee detailing operational specification, drawings for dimensions,
cleaning/maintenance schedule, diagnostic procedures and interface protocol.

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

                                 SCHEDULE 4.2(f)

Specification for the On-Line and Off-Line Verifier-Densitometer

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

<PAGE>

                     TECHNOLOGY LICENSE AND SUPPLY AGREEMENT

                                  SCHEDULE 5.4

               SUPPLY TERMS AND BIT FIBER AND BIT MATERIAL PRICES

                                     Part 1

                                     [***]

[*] = Information redacted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with
the Commission.

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