Document:

<PAGE>

EXHIBIT 10.3

                                PLAN OF EXCHANGE

      THIS PLAN OF EXCHANGE is made and entered into as of August ___, 2003
      (this "Plan of Exchange") by and between iSecureTrac Corp., a Delaware
      corporation (the "Buyer"), and Tracking Systems Corporation, a
      Pennsylvania corporation (the "Company"). Buyer and the Company are
      collectively referred to as the "Parties."

            WHEREAS, the Parties hereto desire to enter into a plan of exchange
      pursuant to which the Buyer shall acquire all of the issued and
      outstanding capital stock of the Company (the "Exchange").

            WHEREAS, the Board of Directors of the Company has adopted
      resolutions approving this Plan of Exchange in accordance with the
      Pennsylvania Business Corporation Law of 1988 and directing that it be
      submitted to the shareholders of the Company for approval.

            NOW, THEREFORE, in consideration of the premises and the mutual
      covenants contained herein and other valuable consideration, the receipt
      and adequacy of which are hereby acknowledged, the parties do hereby
      covenant and agree as follows:

      1.0 THE EXCHANGE

            1.1 Conversion. At the Effective Time of the Exchange (as such term
      is hereinafter defined), in accordance with the provisions of applicable
      law and the terms of this Plan of Exchange, each share of capital stock of
      the Company issued and outstanding immediately prior thereto shall
      automatically be converted into and shall be exchanged for that number of
      shares of Buyer's common stock, par value $0.001 per share (the "Buyer's
      Shares"), as listed, by Company stockholder, on the schedule attached
      hereto as Exhibit "A".

            1.2 Buyer's Share Value. The total number of Buyer's Shares shall be
      based on $2,300,000 worth of Buyer's common stock at a per share price of
      $0.52 ("Share Value"), or 4,423,077 shares. In the event the average
      closing price of Buyer's common stock for the twenty trading days
      preceding the Effective Time of Exchange ("Average Closing Price") exceeds
      $0.62 or becomes less than $0.42, the parties shall determine a new Share
      Value based on such Average Closing Price. Provided that the Share Value
      remains at $0.52 accordingly, each share of the Company's common stock,
      after conversion of all preferred stock at the conversion ratios described
      on Exhibit "A", shall convert to 5.8645865 Buyer's Shares (the "Exchange
      Ratio").

            1.3 No Other Stock Issued. Buyer hereby represents and warrants that
      the Buyer's Shares listed on Exhibit "A" hereto are the only shares of
      Buyer's stock it will issue in exchange for the capital stock of the
      Company and Buyer shall not issue further stock or any

<PAGE>

      options, warrants, subscriptions or any other rights to its stock in
      exchange for any shares of the capital stock of the Company.

            1.4 Effective Time of the Exchange. The Exchange shall not become
      effective until, subject to the terms and conditions of this Plan of
      Exchange, 5:00 o'clock p.m. Eastern Daylight Savings Time on the day on
      which the following actions shall have in all respects been completed:

                  1. This Plan of Exchange shall have been approved by the
            respective board of directors of each of the Parties in accordance
            with the requirements of the laws of the states under which each
            Party is organized;

                  2. This Plan of Exchange shall have been approved by the
            requisite holders of each class of the Company's capital stock in
            accordance with the Company's bylaws and the Pennsylvania Business
            Corporation Law;

                  3. Holders of more than 5% of the outstanding shares of the
            Company's capital stock (on an as-if-converted basis) shall not have
            exercised, nor shall they have any continued right to exercise,
            appraisal, dissenters' or similar rights under Pennsylvania law with
            respect to their shares by virtue of the Exchange;

                  4. Articles of Exchange (which shall be satisfactory in form
            to counsel for the Parties) shall have been executed and filed with
            the Department of State of the Commonwealth of Pennsylvania.

      The date and time when the Exchange shall become effective as aforesaid is
      herein referred to as "Effective Time of the Exchange."

            1.5 Shareholders Release. It shall be a condition of each
      shareholder of record of the Company who elects to exchange his or her
      Tracking Systems Corporation share certificates for shares of Buyer
      pursuant to this Plan of Exchange, that each shareholder execute a General
      Release (in the form attached hereto as Annex A) whereby such shareholder
      will relinquish all claims against the Company and the Controlling
      Shareholders.

      2.0   DIRECTORS AND OFFICERS

            The directors and officers of the Company from and after the
      Effective Time of the Exchange shall be as set forth below, and each shall
      hold his or her respective office or offices from and after the Effective
      Time of the Exchange until his or her successor shall have been elected
      and qualified or as otherwise provided in the bylaws of the Company.

         Directors:        John Sciortino
                           Donna Reynolds Sciortino
                           Michael May
                           James Stark
                           John Heida

                                        2
<PAGE>

         Officers:         John Sciortino            President
                           James Stark               Treasurer
                           John Heida                Secretary

      3.0 CONVERSION METHOD

            3.1 At the Exchange. At the Effective Time of the Exchange:

                  a.    All shares of capital stock of the Company (except
                        Dissenting Shares, as defined below) that shall be
                        issued and outstanding immediately prior to the
                        Effective Time of the Exchange shall, by virtue of the
                        Exchange, be converted and exchanged for the right of
                        the shareholders of the Company to receive Buyer's
                        Shares in accordance with Exhibit "A" hereto.

                  b.    Any shares of capital stock of the Company held in the
                        treasury of the Company prior to the Effective Time of
                        the Exchange shall be canceled.

                  c.    The Buyer shall automatically become the holder of all
                        shares of capital stock of the Company issued and
                        outstanding immediately prior to the Effective Time of
                        the Exchange.

                  d.    All options, warrants, rights, subscriptions and similar
                        agreements to purchase shares of the Company's capital
                        stock (or securities convertible into or exchangeable
                        for shares of the Company's capital stock) shall be
                        canceled and extinguished.

            3.2 Rights. From and after the Effective Time of the Exchange, the
            holders of certificates representing shares of capital stock of the
            Company shall cease to have any rights with respect to such
            certificates except as provided in this Plan of Exchange.

            3.3 Fractions. No fraction of a share of Buyer's Shares will be
            issued, but in lieu thereof, each holder of shares of the Company's
            capital stock who would otherwise be entitled to a fraction of a
            share of Buyer's Shares (after aggregating all fractional shares of
            Buyer's Shares to be received by such holder) shall be entitled to
            receive from Buyer a rounded-up whole share.

      4.0   DISSENTING SHARES

            4.1 No Conversion. Notwithstanding any provision of this Plan of
      Exchange to the contrary, any shares of Company capital stock held by a
      holder who has demanded and perfected appraisal or dissenters' rights for
      such shares in accordance with Pennsylvania law and who, as of the
      Effective Time of the Exchange, has not effectively withdrawn or lost such
      appraisal or dissenters' rights ("Dissenting Shares") shall not be
      converted into or represent a right to receive Buyer Shares pursuant to
      Paragraph D, but the holder thereof shall only be entitled to such rights
      as are granted by Pennsylvania law.

                                        3
<PAGE>

            4.2 Automatic Conversion. Notwithstanding the provisions of the
      above, if any holder of shares of Company capital stock who demands
      appraisal of such shares under Pennsylvania law shall effectively withdraw
      or lose (through failure to perfect or otherwise) the right to appraisal,
      then, as of the later of the Effective Time of the Exchange and the
      occurrence of such event, such holder's shares shall automatically be
      converted into and represent only the right to receive Buyer Shares upon
      surrender of the certificate representing such shares.

            4.3 Notice to Buyer. Company shall give Buyer (i) prompt notice of
      any written demands for appraisal of any shares of Company capital stock,
      withdrawals of such demands, and any other instruments served pursuant to
      Pennsylvania law and received by Company and (ii) the opportunity to
      participate in all negotiations and proceedings with respect to demands
      for appraisal under Pennsylvania law. Company shall not, except with the
      prior written consent of Buyer, voluntarily make any payment with respect
      to any demands for appraisal of capital stock of Company or offer to
      settle or settle any such demands.

      5.0   CERTIFICATE EXCHANGE

            5.1 Buyer's Shares Certificates. As soon as practicable after the
      Effective Time of the Exchange and after the surrender to Buyer, at the
      principal place of business of Buyer, or such other place as Buyer may
      designate, of all certificates that immediately prior to the Effective
      Time of the Exchange represented issued and outstanding shares of the
      capital stock of the Company (the "Closing"), Buyer shall issue to the
      person or entity in whose name such certificates shall have been
      registered the appropriate number of Buyer's Shares.

            5.2 Lost Company Certificates.If any certificate representing shares
      of the Company's capital stock shall have been lost, stolen or destroyed,
      upon the making of an affidavit of that fact by the person claiming such
      certificate to be so lost, stolen or destroyed and, if required by Buyer,
      the posting by such person of a bond or other collateral security in such
      reasonable amount as Buyer may direct as indemnity against any claim that
      may be made against it with respect to such certificate, Buyer will
      deliver in exchange for such lost, stolen or destroyed certificate the
      applicable number of Buyer's Shares with respect to the shares formerly
      represented thereby.

      6.0   SECURITIES MATTERS

            6.1 Company Shareholder Acknowledgements. The Company hereby
      represents and warrants that it has obtained the following
      acknowledgements from each of its shareholders who is surrendering and
      exchanging certificates representing shares of the Company's capital stock
      pursuant to this Plan of Exchange and that each holder of such shares (an
      "Exchanging Shareholder") acknowledges and confirms that:

                  a. Such Exchanging Shareholder has been advised that the
            Buyer's Shares have not been registered under the Securities Act of
            1933, as amended, or any state securities act in reliance on
            exemptions therefrom.

                                        4
<PAGE>

                  b. Such Exchanging Shareholder is:

                        (i) An accredited investor within the meaning of Rule
                        501(a) under the Securities Act; or,

                        (ii)If such Exchanging Shareholder is not an accredited
                        investor, either alone or with such Exchanging
                        Shareholder's purchaser representative(s) has such
                        knowledge and experience in financial and business
                        matters that he, she or it is capable of evaluating the
                        merits and risks of the prospective investment in the
                        Buyer's Shares.

                  c. If such Exchanging Shareholder is a natural person, such
            Exchanging Shareholder resides in the state or province identified
            in the Company's books and records.

                  d. If such Exchanging Shareholder is other than a natural
            person:

                        (i) Such Exchanging Shareholder has not been formed,
                        reformed or recapitalized for the specific purpose of
                        acquiring the Buyer's Shares;

                        (ii)The principal executive office or offices of such
                        Exchanging Shareholder in which its investment decision
                        was made is located at the address or addresses of such
                        Exchanging Shareholder set forth in the Company's books
                        and records; and,

                        (iii) Such Exchanging Shareholder has been duly formed
                        and is validly existing in good standing under the laws
                        of the jurisdiction of its formation, with full power
                        and authority to enter into the transactions
                        contemplated in this Plan of Exchange.

            6.2 Legend on Stock Certificates. The certificate or certificates
      representing the Buyer's Shares to be received by the Exchanging
      Shareholder will be inscribed with substantially the following legend:

                        "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
                        SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
                        SECURITIES LAW. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
                        OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
                        STATEMENT THEN IN EFFECT WITH RESPECT TO THE SECURITIES
                        UNDER SUCH ACT OR AN OPINION OF COUNSEL REASONABLY
                        SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
                        NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULES 144 AND
                        145 OF SUCH ACT."

                                        5
<PAGE>

      7.0   FURTHER COMPANY REPRESENTATIONS AND WARRANTIES

            7.1 Information Provided Company Shareholders. The Company has
      caused each Exchanging Shareholder to be provided with each of the
      following documents filed by Buyer with the Securities and Exchange
      Commission ("Buyer's SEC Filings"):

            a.    Buyer's annual report under Form 10-KSB for the period ending
                  December 31, 2002;

            b.    Buyer's quarterly report under Form 10-QSB for the period
                  ending March 31, 2003;

            c.    Buyer's definitive proxy statement under Schedule 14A with
                  respect to the annual meeting of Buyer's stockholders held on
                  May 30, 2003.

d.                Buyer's offering memorandum, dated August 11, 2003.

            7.2 No Representations by Buyer. The Company acknowledges that no
      representation has been made to the Exchanging Shareholder by
      representatives of the Buyer regarding its business, assets or prospects
      other than that set forth in such filings or this Plan of Exchange.

            7.3 Additional Representations. The Company hereby also represents
      and warrants that:

            a. Each Exchanging Shareholder is and will be at the Effective Time
      of the Exchange the record and beneficial owner and holder of the Buyer's
      Shares free and clear of all encumbrances.

            b. No consents are required to be obtained and no registrations or
      declarations are required to be filed in connection with the execution and
      delivery of this Plan of Exchange by such Exchanging Shareholder and its
      acquisition of the Buyer's Shares, except such as has been duly and
      validly obtained or filed, or with respect to any filings that must be
      made after the consummation of the Exchange, as will be filed in a timely
      manner.

            c. Each such Exchanging Shareholder is not, and will not by virtue
      of performing the transactions contemplated hereunder be, in conflict with
      or in violation or default of any term of its charter documents (if
      applicable), or of any provision of any material mortgage, indenture,
      contract, agreement, instrument, contract judgment or decree to which it
      is party or by which it is bound, and is not, and will not by virtue of
      performing the transactions contemplated hereunder be, in violation of any
      order addressed specifically to such Exchanging Shareholder, nor, to the
      best of such Exchanging Shareholder's knowledge, any material order,
      statute, rule or regulation applicable to such Exchanging Shareholder
      other than any violations that would not, considered individually or in
      the aggregate, have a material adverse effect on such Exchanging
      Shareholder's ability to perform its obligations under this Plan of
      Exchange.

                                        6
<PAGE>

      8.0   THE COMPANY'S STOCK REGISTER

            The stock transfer books of the Company shall be closed as of the
      Effective Time of the Exchange and thereafter no transfer of shares of the
      Company's capital stock will be made.

      9.0   REGISTRATION RIGHTS.

            8.1 Application for Registration. The Buyer shall prepare, and, as
      soon as practicable, but in no event later than the date which is 30 days
      after the Effective Time of the Exchange, file with the Securities and
      Exchange Commission (the "SEC") a Registration Statement or Registration
      Statements (as necessary) on Form S-4, or other appropriate form, covering
      the resale of all of the Buyer's Shares delivered to the Exchanging
      Shareholders (the "Registrable Securities").

            8.2 Exchanging Shareholder Cooperation.The Company shall use its
      best efforts to elicit the cooperation of each Exchanging Shareholder in
      providing the Buyer with information necessary to complete the
      Registration Statement in a timely manner.

                                        7
<PAGE>

         IN WITNESS WHEREOF, each of the Parties has caused this Plan of
Exchange to be executed as of the date first written above.

ISECURETRAC CORP.                             TRACKING SYSTEMS CORPORATION

By:  /s/  John M. Heida                       By:  /s/  John A. Sciortino
     ------------------                            ----------------------

                                        8
<PAGE>

                                                                         ANNEX A

                                 GENERAL RELEASE

         In consideration of the terms and conditions of the Plan of Exchange by
and between iSecureTrac Corp. and Tracking Systems Corporation dated as of
August __, 2003, I, a shareholder of Tracking Systems Corporation owning
__________ shares, hereby fully and forever release and discharge each of
Tracking Systems Corporation and the Controlling Shareholders, and each of their
directors, officers, employees, spouses, shareholders, members, partners,
attorneys, accountants, agents, successors, assigns, heirs, legatees and
representatives (the "Released Parties"), and each of them, of and from all
manner of actions, causes of action, claims, demands, costs, damages,
liabilities, losses, obligations, expenses and compensation of any nature
whatsoever in law or in equity, known and unknown, including, but not limited
to, those asserted or which could have been asserted against each other with
respect to all claims, disputes and differences between them, including, but not
limited to, those asserted or which could have been asserted in connection with
the Tracking Systems Corporation shares or otherwise (the "Released Claims").

         This General Release is and shall be, a release of all claims, whether
known or unknown. I acknowledge that I may hereafter discover facts in addition
to or different from those which I now believe to be true with respect to the
subject matter of the disputes and other matters herein released, but agree that
the releases herein given shall be and remain in effect as full and complete
general releases notwithstanding the discovery or existence of any such
additional or different facts, of which I expressly assume the risk.

         It is understood and agreed that this General Release constitutes a
compromise of disputed claims, and that neither this General Release nor any
consideration given hereunder, concurrently herewith, or pursuant hereto, is to
be advocated or construed as an admission of any liability on the part of any
party hereto.

         I hereto acknowledge and represent that I: (i) have fully and carefully
read this General Release prior to its execution, (ii) have been, or have had
the opportunity to be, fully appraised by my attorney of the legal effect and
meaning of this document and all the terms and conditions hereof, (iii) have had
the opportunity to make whatever investigation or inquiry deemed necessary or
appropriate in connection with the subject matter of this General Release, (iv)
have been afforded the opportunity to negotiate as to any and all terms hereof,
and (v) am executing this General Release as a free and voluntary act.

Date
     ----------------------                          ---------------------------
                                                     Signature

                                                     ---------------------------
                                                     Signature

                                        9
<PAGE>

                                                     ---------------------------
                                                     Print Name(s)

                                                     ---------------------------
                                                     Print Name(s)

                                       10
<PAGE>EXHIBIT 10.18

                     INTELLECTUAL PROPERTY LICENSE AGREEMENT

                                     BETWEEN

                               INTELLI-CHECK, INC.

                                       AND

                                  CARDCOM, INC.

                         EFFECTIVE AS OF MARCH 12, 2003

                      RELATING TO AGE VERIFICATION PRODUCTS

<PAGE>

INTELLI-CHECK - CARDCOM

                            PATENT LICENSE AGREEMENT

                                TABLE OF CONTENTS

ARTICLE I - GRANTS OF LICENSES

1.01   Grant
1.02   Duration
1.03   Publicity

ARTICLE II - ROYALTY AND PAYMENTS

2.01   Royalty Calculation
2.02   Accrual
2.03   Records and Adjustments
2.04   Reports and Payments

ARTICLE III - TERMINATION

3.01   Breach
3.02   Voluntary Termination
3.03   Survival

ARTICLE IV - MISCELLANEOUS PROVISIONS

4.01   Disclaimer
4.02   Nonassignability
4.03   Addresses
4.04   Taxes
4.05   Choice of Law
4.06   Integration
4.07   Releases
4.08   Acknowledgment of Validity
4.09   Counterparts

DEFINITIONS APPENDIX

                                        i
<PAGE>

INTELLI-CHECK - CARDCOM

                     INTELLECTUAL PROPERTY LICENSE AGREEMENT

Effective as of March 12, 2003, Intelli-Check Inc., a Delaware corporation,
("INTELLI-CHECK"), having an office at 246 Crossways Park West, Woodbury, New
York 11797 and Cardcom, Inc., a California corporation ("the CORPORATION"),
having an office at 6301 Beach Blvd Ste 216, Buena Park, CA 90621 agree as
follows*:

                                    ARTICLE I

                               GRANTS OF LICENSES

1.01 GRANT

(a) INTELLI-CHECK grants to the CORPORATION under INTELLI-CHECK's PATENTS
personal, nonexclusive and nontransferable licenses to make, have made, use,
sell, offer to sell, lease and import AGE VERIFICATION PRODUCTS in THE
TERRITORY.

(b) The licenses granted in this Section 1.01 extend only to AGE VERIFICATION
products and not to other products.

1.02 DURATION

All licenses granted herein shall commence on the effective date and continue
for the LICENSE PERIOD. At the expiration of the LICENSE PERIOD, all licenses
granted herein shall terminate. Notwithstanding the foregoing, if the
CORPORATION desires that the licenses granted herein continue after the
expiration of the LICENSE PERIOD, the CORPORATION shall notify INTELLI-CHECK in
writing of this desire at least ninety (90) days prior to the end of the LICENSE
PERIOD. Upon receiving such notice, the parties agree to enter into good faith
negotiations for the terms and conditions of a "New Agreement" which would be
effective upon the expiration of the LICENSE PERIOD and under which the licenses
and rights granted by INTELLI-CHECK to the CORPORATION herein would continue.
However, it is understood that all negotiations relative to this New Agreement
shall be concluded by the end of the LICENSE PERIOD and INTELLI-CHECK shall have
no obligations to continue negotiations with the CORPORATION after the end of
the LICENSE PERIOD.

-----------------------
*ANY TERM IN CAPITAL LETTERS WHICH IS DEFINED IN THE DEFINITIONS  APPENDIX SHALL
HAVE THE MEANING SPECIFIED THEREIN.

                                       1
<PAGE>

INTELLI-CHECK - CARDCOM

1.03 PUBLICITY

Nothing in this Agreement shall be construed as conferring upon the CORPORATION
any right to include in advertising, packaging or other commercial activities
related to any product or service, any reference to INTELLI-CHECK, its trade
names, trademarks or service marks in a manner which would be likely to cause
confusion or to indicate that such product or service is in any way certified by
INTELLI-CHECK.

Upon EXECUTION, the CORPORATION agrees to cease all advertisements that state or
imply that any of its products provide document verification, or document
authentication, or the like. It shall be permissible for the CORPORATION to
advertise that any product provides age verification so long as such
advertisement does not claim that such product provides document verification or
document authentication.

                                   ARTICLE II
                              ROYALTY AND PAYMENTS

2.01 ROYALTY CALCULATION

(a) In consideration of the rights granted herein under Section 1.01, the
CORPORATION agrees to pay INTELLI-CHECK a royalty equal to the lesser of:

        (i) ten percent (10%) applied to the NET SALES PRICE of each AGE
VERIFICATION PRODUCT which is sold, leased or put into use by the CORPORATION.

        (ii) One hundred and thirty-five United States dollars (U.S. $135.00)
for each AGE VERIFICATION PRODUCT which is sold, leased or put into use by the
CORPORATION.

(b) In further consideration of the licenses and rights granted in this
Agreement, the CORPORATION agrees to provide contract manufacturing and product
development for INTELLI-CHECK under terms and conditions to be incorporated in a
written "Contract Manufacturing Agreement". This written Contract Manufacturing
Agreement shall include a provision allowing for termination in the event of a
material breach and further including "notice and cure provisions" The notice
provision shall provide that if a party considers the other party to be in
material breach of its obligations under the Contract Manufacturing Agreement,
such party ("the notifying party") shall inform the other party of this position
in a writing which shall specify the nature of the breach. The cure provision
shall then give such other party a period of not less than forty-five (45) days
from the date of the notice to cure the breach and if the breach is not cured
within the forty-five day

                                       2
<PAGE>

INTELLI-CHECK - CARDCOM

period, the notifying party may hold the other party to be in default of its
obligations under the Contract Manufacturing Agreement. Any such manufacturing
and/or product development shall arise only upon INTELLI-CHECK's election, such
election being communicated in writing to the CORPORATION. INTELLI-CHECK shall
have no liability to the CORPORATION if INTELLI-CHECK decides not to use the
CORPORATION for contract manufacturing and/or product development.

2.02 ACCRUAL

(a) Royalty shall accrue on any AGE VERIFICATION PRODUCT upon its manufacture
and shall become payable upon the first sale, lease or putting into use of such
product. (Rebuilding or enlarging any product, but not repair, shall be deemed
to be a first putting into use of such product Repair of an AGE VERIFICATION
PRODUCT is the replacement of a worn out or broken part in such product or the
replacement of this entire product such that (i) there is no change in the
functionality or capability of the product from that originally provided by the
CORPORATION and (ii) there is no charge for such service other than shipping
and/or taxes. Rebuilding or enlarging of an AGE VERIFICATION PRODUCT is a change
to such product other than repair.) Obligations to pay accrued royalties shall
survive termination of licenses and rights pursuant to Article III.

(b) Notwithstanding any other provisions hereunder, royalty shall accrue and be
payable only to the extent that enforcement of the CORPORATION's obligation to
pay such royalty would not be prohibited by applicable law.

2.03 RECORDS AND ADJUSTMENTS

The CORPORATION shall keep full, clear and accurate records with respect to all
AGE VERIFICATION PRODUCTS and shall furnish any information which INTELLI-CHECK
may reasonably prescribe from time to time to enable INTELLI-CHECK to ascertain
the proper royalty due hereunder on account of products sold, leased and put
into use by the CORPORATION. The CORPORATION shall retain such records with
respect to each AGE VERIFICATION PRODUCT for at least five (5) years from the
sale, lease or putting into use of such product. After 14 days' notice,
INTELLI-CHECK shall have the right through its accredited auditors to make an
examination, during normal business hours, of all records and accounts bearing
upon the amount of royalty payable to it hereunder. Prompt adjustment shall be
made to compensate for any errors or omissions disclosed by such examination.
All documents, materials and information provided by the CORPORATION to the
auditors shall be kept confidential. INTELLI-CHECK will pay for the costs of any
audit unless such audit reveals underpayment by the CORPORATION of ten percent
(10%) or more, in which case the CORPORATION shall reimburse INTELLI-CHECK for
the costs of any audit.

                                       3
<PAGE>

INTELLI-CHECK - CARDCOM

2.04 REPORTS AND PAYMENTS

(a) Within fifteen (15) days after the end of each quarter ending on March 31st,
June 30th, September 30th and December 31st of each calendar year, beginning
with the quarter in which this Agreement is executed by the CORPORATION, the
CORPORATION shall furnish to INTELLI-CHECK at the address specified in Section
4.03 a statement certified by a responsible official of the CORPORATION showing
in a reasonable manner:

        (i) all AGE VERIFICATION PRODUCTS which were sold, leased or put into
use during such quarter;

        (ii) the NET SALES PRICE of each such product; and

        (iii) the amount of royalty payable thereon.

If no AGE VERIFICATION PRODUCT has been so sold, leased or put into use, the
statement shall show that fact. The first quarterly report shall include an
accounting and royalties for AGE VERIFICATION PRODUCTS in that quarter as well
as an accounting and royalty payment for such products from the effective date
of this Agreement to the beginning of that quarter. All such statements shall be
kept confidential.

(b) No later than fifteen (15) days after the end of each quarter, the
CORPORATION shall pay in United States dollars to INTELLI-CHECK at the address
specified in Section 4.03 the royalties payable in accordance with such
statement.

(c) Overdue payments hereunder shall be subject to a late payment charge
calculated at an annual rate of three percentage points (3%) over the prime rate
or successive prime rates (as posted in New York City) during delinquency. If
the amount of such late payment charge exceeds the maximum permitted by law,
such charge shall be reduced to such maximum.

                                   ARTICLE III

                                   TERMINATION

3.01 BREACH

(a) In the event of a material breach of this Agreement by the CORPORATION,
INTELLI-CHECK may, in addition to any other remedies that it may have, at any
time terminate all licenses and rights granted by it hereunder by not less than
one (1) month's written notice specifying such breach, unless within the period
of such notice all breaches specified therein shall have been remedied. If a
written

                                       4
<PAGE>

INTELLI-CHECK - CARDCOM

Contract Manufacturing Agreement, as referenced in Section 2.01(b) is executed
by both parties and the CORPORATION then materially breaches any of its
obligations under the Contract Manufacturing Agreement, then INTELLI-CHECK, at
its sole option, shall have the right to terminate all licenses and rights that
it has granted to the CORPORATION under this Agreement.

(b) In the event of any material breach of this Agreement by INTELLI-CHECK or of
any loss or injury to the CORPORATION arising out of this Agreement, for which
INTELLI-CHECK is liable to the CORPORATION, INTELLI-CHECK's total cumulative
liability to the CORPORATION for all such breaches, losses and injuries shall be
the lesser of (i) the actual value of the injury or loss to the CORPORATION or
(ii) the total royalties paid to INTELLI-CHECK.

3.02 VOLUNTARY TERMINATION

Upon EXECUTION, the CORPORATION shall have no right to voluntarily terminate its
licenses and rights under this Agreement unless:

        (i) all claims of U.S. Patent No. 6,463,416 are declared to be invalid
by a final judgment of a U.S. Federal Court; or

        (ii) this Agreement is not terminated by INTELLI-CHECK pursuant to the
provisions of this Agreement and nevertheless INTELLI-CHECK brings suit against
the CORPORATION alleging infringement of INTELLI-CHECK'S PATENTS during the
LICENSE PERIOD.

3.03 SURVIVAL

Any termination of licenses and rights of the CORPORATION under the provisions
of this Article III shall not affect the CORPORATION's licenses, rights and
obligations with respect to any AGE VERIFICATION PRODUCT made prior to such
termination.

                                   ARTICLE IV

                            MISCELLANEOUS PROVISIONS

4.01 DISCLAIMER

INTELLI-CHECK MAKES NO REPRESENTATIONS, EXTENDS ANY WARRANTIES OF ANY KIND,
ASSUMES ANY RESPONSIBILITY OR OBLIGATIONS WHATEVER, OR CONFERS ANY RIGHT BY
IMPLICATION, ESTOPPEL OR OTHERWISE, OTHER THAN THE LICENSES AND RIGHTS HEREIN
EXPRESSLY GRANTED.

                                       5
<PAGE>

INTELLI-CHECK - CARDCOM

4.02 NONASSIGNABILITY

(a) INTELLI-CHECK has entered into this Agreement in contemplation of personal
performance by the CORPORATION and it is INTELLI-CHECK's intention that a
transfer of the CORPORATION's licenses or rights not occur without
INTELLI-CHECK's express written consent and any such transfer without
INTELLI-CHECK's written consent shall be null and void. INTELLI-CHECK shall be
under no obligation whatsoever to grant its consent.

(b) The licenses and rights granted by INTELLI-CHECK to the CORPORATION shall
immediately terminate if there is a change in ownership of a majority of the
shares of the CORPORATION at any time during the LICENSE PERIOD.

4.03 ADDRESSES

(a) Any notice or other communication hereunder shall be sufficiently given to
the CORPORATION when sent by certified mail addressed to Mitch Shin at the
CORPORATION's office above specified, or to INTELLI-CHECK addressed to Ed
Winiarz at INTELLI-CHECK's office above specified. Changes in such addresses may
be specified by written notice.

(b) Payments by the CORPORATION shall be made by check to INTELLI-CHECK at its
offices above specified, Attention: Ed Winiarz. Changes in such address or
account may be specified by written notice.

4.04 TAXES

The CORPORATION shall pay any tax, duty, levy, customs fee, or similar charge
("taxes"), including interest and penalties thereon, however designated, imposed
as a result of the operation or existence of this Agreement except for
INTELLI-CHECK's U.S. income taxes (both federal and state). The provisions of
Section 4.04 shall only apply to the CORPORATION's business activities.

4.05 CHOICE OF LAW AND VENUE

The parties are familiar with the principles of New York commercial law, and
desire and agree that the law of New York shall apply in any dispute arising
with respect to this Agreement. Further, any proceeding brought by either party
arising from this agreement shall be venued in New York City.

4.06 INTEGRATION

This Agreement sets forth the entire agreement and understanding between the
parties as to the subject matter hereof and merges all prior discussions between
them. Neither of the parties shall be bound by any warranties, understandings or
representations with respect to such subject matter other than as expressly

                                       6
<PAGE>

INTELLI-CHECK - CARDCOM

provided herein or in a writing signed with or subsequent to execution hereof by
an authorized representative of the party to be bound thereby.

4.07 RELEASES

Effective upon EXECUTION, INTELLI-CHECK hereby releases the CORPORATION,
including its officers, employees and shareholders, and all customers
(purchasers and users), suppliers and distributors of products of the kinds
herein licensed as of the effective date hereof to the CORPORATION, from all
claims, demands and rights of action which INTELLI-CHECK may have on account of
any infringement or alleged infringement of the patents licensed herein by
reason of the manufacture or any past or future use, lease, sale, offer to sell
or importation of any of such products which, prior to the effective date
hereof, were made, sold, used, offered for sale, leased or imported by the
CORPORATION. Effective upon EXECUTION, the CORPORATION hereby releases
INTELLI-CHECK, including its officers, employees and shareholders, and all
customers (purchasers and users), suppliers and distributors of any product or
service used or furnished by INTELLI-CHECK, from all claims, demands and rights
of action which the CORPORATION may have on account of any infringement or
alleged infringement of any patent by reason of the manufacture or any past or
future use, lease, sale, offer to sell or importation of any of product or
service, which, prior to the effective date hereof, were used or furnished by
INTELLI-CHECK.

4.08 ACKNOWLEDGMENT OF VALIDITY

The CORPORATION hereby expressly acknowledges in all respects the validity and
enforceability of INTELLI-CHECK's PATENTS and the CORPORATION's obligations to
pay royalties as specified herein for the LICENSE PERIOD shall continue
notwithstanding the fact that INTELLI-CHECK's PATENTS are held invalid and/or
unenforceable in any proceeding after EXECUTION, except that the CORPORATION's
royalty obligations shall terminate if the CORPORATION's licenses and rights are
terminated in accordance with Section 3.02. The CORPORATION also agrees that it
shall not in any way challenge, or assist others in challenging, the validity or
enforceability of INTELLI-CHECK's PATENTS. The provisions of this Section 4.09
shall survive (i) any termination of the licenses and rights granted under this
Agreement as provided for in this Agreement or (ii) the expiration of the
LICENSE PERIOD.

4.09 COUNTERPARTS.

This Agreement may be executed in multiple counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.

                                       7
<PAGE>

INTELLI-CHECK - CARDCOM

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
in duplicate originals by its duly authorized representatives on the respective
dates entered below.

             INTELLI-CHECK, INC.

             By:
                 --------------------------------------------------------------

             Title:         CHAIRMAN - CEO
                    -----------------------------------------------------------

             Date:          6/19/2003
                   ------------------------------------------------------------

             CARDCOM, INC.

             By:
                 --------------------------------------------------------------

             Title:         PRESIDENT
                    -----------------------------------------------------------

             Date:          6/19/2003
                   ------------------------------------------------------------

              THIS AGREEMENT DOES NOT BIND OR OBLIGATE EITHER PARTY
                IN ANY MANNER UNLESS DULY EXECUTED BY AUTHORIZED
                        REPRESENTATIVES OF BOTH PARTIES.

                                       8
<PAGE>

INTELLI-CHECK - CARDCOM

                              DEFINITIONS APPENDIX

GENERAL DEFINITIONS:

AGE VERIFICATION PRODUCTS means any product that reads information on a
document, such information being in human recognizable and/or machine readable
form, and then performs an age calculation based on the information read. AGE
VERIFICATION PRODUCTS may provide additional functionality but in no event shall
such products include DOCUMENT VERIFICATION OR AUTHENTICATION PRODUCTS. In
addition to the foregoing, AGE VERIFICATION PRODUCTS may provide the following
functions (i) calculate a checksum on all three tracks of any examined document
for the purpose of verifying that the magnetic track data bits have been
correctly inputted, (ii) read the Issuer Identification Number or "IIN" or other
jurisdiction identifying data from any document and (iii) determine the total
number of bytes on a bar code or on track 2 of a document having a magnetic
stripe, provided that (ii) and (iii) are used for the purpose of age
verification and not document verification. The term "product" in this
definition is not limited to form and includes, but is not limited to, hardware,
software, firmware, and any combination of the foregoing. An AGE VERIFICATION
PRODUCT may be embodied in either a unitary structure or a combination of
separate structures. Further, for purposes of calculating royalties under this
Agreement, AGE VERIFICATION PRODUCTS includes any attachment or ancillary
device, product, or system intended for connection or use with one or more AGE
VERIFICATION PRODUCTS.

DOCUMENT VERIFICATION OR AUTHENTICATION PRODUCTS means any product that reads
information on a document, such information being in human recognizable and/or
machine readable form, and makes a determination of whether the document is
valid or authentic. A DOCUMENT VERIFICATION OR AUTHENTICATION PRODUCT may
provide additional functionality and may encompass an AGE VERIFICATION PRODUCT.

EXECUTION means the date the last party signs this Agreement.

INTELLI-CHECK'S PATENTS means U.S. Patent No. 6,463,416 ("the `416 Patent") and
any parent application and any continuation, continuation-in-part, divisional,
reissue of the `416 Patent and all foreign counterparts of any of the foregoing.
The inclusion of patents other than the `416 Patent in the definition of
INTELLI-CHECK's PATENTS are only to the extent that such other patents have
claims that cover AGE VERIFICATION PRODUCTS, there being no intent to grant any
licenses to the CORPORATION with respect to DOCUMENT VERIFICATION or
AUTHENTICATION PRODUCTS.

LICENSE PERIOD means a period of three (3) years commencing on the effective
date of this Agreement.

                                       9
<PAGE>

INTELLI-CHECK - CARDCOM

NET SALES PRICE means, with respect to any AGE VERIFICATION PRODUCT that is
made, have made, sold, offered for sale, leased or put into use in The
TERRITORY, the price received by the CORPORATION for each such product in the
form in which it is provided by the CORPORATION, whether or not assembled (and
without excluding therefrom any components or subassemblies thereof which are
included in such price). In determining "price" the following shall be excluded:

                (a) usual trade discounts actually allowed to unaffiliated
                persons or entities;
                (b) costs of insurance and shipping costs; and
                (c) export, sales and value added taxes, and customs duties.

Notwithstanding the foregoing, in the event that the purchasing or leasing of
any AGE VERIFICATION PRODUCT is from the CORPORATION to an "affiliated entity",
such entity being either an individual or a company, such that the transaction
is not an "arm's length" business transaction, NET SALES PRICE shall be the
greater of (i) the price as set forth in the preceding provisions of this
definition and (ii) that price which the CORPORATION would have realized from an
unaffiliated entity in an arm's length transaction of an identical item in the
same quantity and at the same time and place as the transaction to an affiliated
entity. Examples of affiliated entities include, but are not limited to, those
entities which are family members or personal friends of any officer or Director
of the Corporation or companies, regardless of form, in which any such persons
directly or indirectly own or control a substantial equitable interest as well
as those transactions in which AGE VERIFICATION PRODUCTS are provided for other
than money or money in combination with returned products or services.
INTELLI-CHECK, pursuant to Section 2.03, shall have the right to investigate
those transactions that it believes are to an "affiliated" entity".

THE TERRITORY means the United States of America and Canada.

                                       10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}]]