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    Exhibit 10.1

      
        NON-INSTITUTIONAL

      

      
        MEDICAID
          PROVIDER AGREEMENT

      

      
        

         

        The
          Provider agrees to participate in the Florida Medicaid program under the
          following terms and conditions:

      

      
         

        (1)  
           Discrimination. 
          The parties agree that the Agency for Health Care Administration (AHCA)
          may make
          payments for medical assistance and related services rendered to Medicaid
          recipients only to a person or entity who has a provider agreement in effect
          with AHCA; who is performing services or supplying goods in accordance
          with
          federal, state, and local law; and who agrees that no person shall, on
          the
          grounds of sex, handicap, race, color, national origin, other insurance,
          or for
          any other reason, be subjected to discrimination under any program or activity
          for which the provider receives payment from AHCA.

      

      
         

        (2)   
          Quality of
          Service.  The provider agrees that services or goods billed to the
          Medicaid program must be medically necessary, of a quality comparable to
          those
          furnished by the provider's peers, and within the parameters permitted
          by the
          provider's license or certification. The provider further agrees to bill
          only
          for the services performed within the specialty or specialties designated
          in the
          provider application on file with AHCA. The services or goods must have
          been
          actually provided to eligible Medicaid recipients by the provider prior
          to
          submitting the claim.

      

      
         

        (3) 
            Compliance. 
The
          provider agrees to comply with local, state, and federal laws, as well
          as rules,
          regulations, and statements of policy applicable to the Medicaid program,
          including the Medicaid Provider Handbooks issued by AHCA.

      

      
         

        (4)  
           Term and
          signatures.  The parties agree that this is a voluntary agreement
          between AHCA and the provider, in which the provider agrees to furnish
          services
          or goods to Medicaid recipients. Provided that all requirements for enrollment
          have been met, this agreement shall remain in effect for ten (10) years
          from the
          effective date of the provider's eligibility unless otherwise terminated.
          This
          agreement shall be renewable only by mutual consent. The provider understands
          and agrees that no AHCA signature is required to make this agreement valid
          and
          enforceable.

      

      
         

        (5) 
            Provider
          Responsibilities.  The Medicaid provider shall:

      

       

      
        (a)   
          Possess at the time of the signing of the provider agreement, and maintain
          in
          good standing throughout the period of the agreement's effectiveness, a
          valid
          professional, occupational, facility or other license appropriate to the
          services or goods being provided, as required by law.

      

      
        

        (b)   
          Keep, maintain, and make available in a systematic and orderly manner all
          medical and Medicaid-related records as AHCA requires for a period of at
          least
          five (5) years.

      

      
        

        (c)  
           Safeguard the use and disclosure of information pertaining to current or
          former Medicaid recipients as required by law.

      

      
         

        (d) 
            Send, at the provider's expense, legible copies of all
          Medicaid-related information to authorized state and federal employees,
          including their agents. The provider shall give state and federal employees,
          including their agents, access to all Medicaid patient records and to other
          information that can not be separated from Medicaid-related
          records.

      

      
         

        (e)  
           Bill other insurers and third parties, including the Medicare program,
          before billing the Medicaid program, if the recipient is eligible for payment
          for health care or related services from another insurer or
          person.

      

      
        

        (f)
              Refund any moneys received from the Medicaid program in error
          or in excess of the amount to which the provider is entitled within 90
          days of
          receipt.

      

      
         

        (g)  
           Be liable for and indemnify, defend, and hold AHCA harmless from all
          claims, suits, judgments, or damages, including court costs and attorney's
          fees,
          arising out of the negligence or omissions of the provider in the course
          of
          providing services to a recipient or a person believed to be a recipient
          to the
          extent allowed by in and accordance with section 768.28, F.S. (2001), and
          any
          successor legislation.

         

        
           

        

      

      
        Non-Institutional
          MPA (Revised June 2008)

      

      
        1
          of
          3

      

      
        
           
            

        

        
           
            

          
            

          

        

        
           
            

        

      

      
        (h)   
          Accept Medicaid payment as payment in full, and not bill or collect from
          the
          recipient or the recipient's responsible party any additional amount except,
          and
          only to the extent AHCA permits or requires, co-payments, coinsurance,
          or
          deductibles to be paid by the recipient for the services or goods provided.
          This
          includes situations in which the provider's Medicare coinsurance claims
          are
          denied in accordance with Medicaid's payment.

      

      
         

        (i)    
          Submit claims to AHCA electronically and to abide by the terms of the Electronic
          Claims Submission Agreement.

      

      
         

        (j)  
            Receive payment from AHCA by Electronic Funds Transfer (EFT). In the
          event that AHCA erroneously deposits funds to the provider's account, then
          the
          provider agrees that AHCA may withdraw the funds from the
          account.

      

      
         

        (k)   
          Comply with all of the requirements of Section 6032 (Employee Education
          About
          False Claims Recovery) of the Deficit Reduction Act of 2005, if the provider
          receives or earns five million dollars or greater annually under the State
          plan.

      

      
        

        (6)  
           AHCA
          Responsibilities.  The agency shall:

      

      
         

        (a) 
            Make timely payment at the established rate for services or goods
          furnished to a recipient by the provider upon receipt of a properly completed
          claim.

      

      
         

        (b)  
           Not seek repayment from the provider in any instance in which the Medicaid
          overpayment is attributable solely to error in the state's determination
          of
          eligibility of a recipient.

      

       

      
        (7)  
           Termination
          For
          Convenience.  This agreement may be terminated without cause upon
          thirty (30) days written notice by either party.

      

      
         

        (8)  
           Ownership. 
The
          provider agrees to give AHCA sixty (60) days written notice before making
          any
          change in ownership of the entity named in the provider agreement as the
          provider. The provider is required to maintain and make available to AHCA
          Medicaid-related records that relate to the sale or transfer of the business
          interest, practice, or facility in the same manner as though the sale or
          transaction had not taken place, unless the provider enters into an agreement
          with the purchaser of the business interest, practice, or facility to fulfill
          this requirement.

      

      
         

        (9)   
          Complete
          Information.  All statements and information furnished by the
          prospective provider before signing the provider agreement shall b= true
          and
          complete. The filing of a materially incomplete, misleading or false application
          will make the application and agreement voidable at the option of AHCA
          and is
          sufficient cause for immediate termination of the provider from the Medicaid
          program and/or revocation of the provider number.

      

       

      (10)
         Interpretation. 
        When interpreting this agreement, it shall be neither construed against either
        party nor considered which party prepared the agreement.

      
         

        (11) 
          Governing
          Law.  This agreement shall be governed by and construed in
          accordance with the laws of the State of Florida.

      

      
         

        (12) 
          Amendment. 
This
          agreement, application and supporting documents constitute the full and
          entire
          agreement and understanding between the parties with respect to their
          relationship. No amendment is effective unless it is in writing and signed
          by
          each party.

      

      
         

        (13) 
          Severability. 
          If one or more of the provisions contained in this agreement or application
          shall be invalid, illegal or unenforceable, the validity, legality and
          enforceability of the remaining provisions shall not in any way be affected
          or
          impaired.

      

      
         

        (14) 
          Agreement
          Retention.  The parties agree that AHCA may only retain the
          signature page of this agreement, and that a copy of this standard provider
          agreement will be maintained by the Director of Medicaid, or his designee,
          and
          may be reproduced as a duplicate original for any legal purpose and may
          also be
          entered into evidence as a business record.

      

      
         

        (15) 
          Funding. 
          This contract is contingent upon the availability of funds.

      

      
         

        (16) 
          Assignability. 
          The parties agree that neither may assign their rights under this agreement
          without the express written consent of the other.

         

         

      

      
        Non-Institutional
          MPA (Revised June 2008)

      

      
        2
          of
          3

      

      
        
           
            

        

        
           
            

          
            

          

        

        
           
            

        

      

      
        

      

      
        The
          parties concur that this agreement is a legal and binding document and
          is fully
          enforceable in a court of competent jurisdiction. The signatories hereto
          represent and warrant that they have read the agreement, understand it,
          and are
          authorized to execute it on behalf of their respective principals or co-owners.
          This agreement becomes null and void upon transfer of assets; change of
          ownership; or upon discovery by AHCA of the submission of a materially
          incomplete, misleading or false provider application unless subsequently
          ratified or approved by AHCA.

      

      
         

        All
          shareholders (with five percent or greater ownership interest), principals,
          partners and financial custodians are required to sign this agreement or,
          a
          chief executive officer (CEO) or president of an organization may sign
          this
          agreement in lieu of the above. Failure to sign the agreement will make
          this
          application, agreement and provider number voidable by AHCA.

      

      
         

        IN
          WITNESS WHEREOF, the undersigned have caused this agreement to be duly
          executed
          under the penalties of perjury, swear or affirm that the foregoing is true
          and
          correct.

      

      
         

      

      
        	
                Heath
                  Schiesser

              	 
                	
                President
                  and CEO

              	 
                	
                /s/
                  Heath Schiesser

              	 
                	 
                4/1/09
	
                 

                (legibly
                  print name of signatory)

              	 
                	
                 

                Title

              	 
                	
                 

                Signature

              	 
                	
                 

                Date

              
	 
                	 
                	 
                	 
                	 
                	 
                	 
                
	
                 

                
                  (legibly
                    print name of signatory)

                

              	 
                	
                 

                Title

              	 
                	
                 

                Signature

              	 
                	
                 

                Date

              
	 
                	 
                	 
                	 
                	 
                	 
                	 
                
	
                 

                
                  (legibly
                    print name of signatory)

                

              	 
                	
                 

                Title

              	 
                	
                 

                Signature

              	 
                	
                 

                Date

              
	 
                	 
                	 
                	 
                	 
                	 
                	 
                
	
                 

                
                  (legibly
                    print name of signatory)

                

              	 
                	
                 

                Title

              	 
                	
                 

                Signature

              	 
                	
                 

                Date

              
	 
                	 
                	 
                	 
                	 
                	 
                	 
                
	
                 

                
                  (legibly
                    print name of signatory)

                

              	 
                	
                 

                Title

              	 
                	
                 

                Signature

              	 
                	
                 

                Date

              

      

      
        

      

      
        

      

      
        (USE
          ADDITIONAL PAGES IF NECESSARY)

      

      
        

      

      
        Please
          complete the following information:

      

      
        

      

      
        	
                 

                Provider’s
                  Name:

              	
                 

                WellCare
                  of Florida, Inc.

              
	
                 

                DBA
                  Name:

              	
                 

                N/A

              
	
                 

                Tax
                  ID:

              	
                 

                59-2583622

              
	
                 

                Florida
                  Medicaid Provider ID:

              	
                 

                015016900

              
	
                 

                (For
                  new applicants, the Medicaid ID will be entered by the fiscal agent
                  upon
                  approval of the application.)

              

      

      
        

      

      
        Non-Institutional
          MPA (Revised June 2008)

      

      
        3
          of
          3

      

      
        
           
            

        

        
           
            

          
            

          

        

        
           
            

        

      

      
        Non-Institutional
          Provider Agreement Addendum

      

      
        Medicare
          Advantage Special Needs Plan (MA SNP)

      

      
        Crossover
          Providers

      

      
        

         

      

      
        The
          Medicare Advantage Special Needs Plan (MA SNP) Crossover Provider (provider)
          agrees to the following terms and conditions:

      

      
         

        Provider
          Responsibilities

      

      
         

        
          	
                  1.

                	
                  The
                    provider shall possess at the time of the signing of the provider
                    agreement, and maintain in good standing throughout the period
                    of the
                    agreement's effectiveness, (1) a valid health maintenance organization
                    certificate of authority issued by the State of Florida Department
                    of
                    Financial Services Office of Insurance Regulation and (2) approval
                    from
                    the Centers for Medicare and Medicaid Services of qualifying
                    as a MA
                    SNP.

                

        

      

      
        
          	
                  2.

                	
                  The
                    provider agrees to facilitate an integrated source of coverage
                    for
                    Medicare Advantage Special Needs eligible members by encouraging
                    enrollment in the Medicare Advantage Special Needs Program offered
                    by the
                    member's plan.

                

        

      

      
        
          	
                  3.

                	
                  The
                    provider agrees to send to the state on a monthly basis a file
                    of their MA
                    SNP members who are enrolled in the MA SNP operated by the entity.
                    This
                    file is to be submitted no later than the twentieth of the month
                    of the
                    enrollment.

                

        

      

      
        
          	
                  4.

                	
                  The
                    provider agrees to accept the Agency's monthly per member payment
                    for MA
                    SNP members as payment in full for covered
                    services.

                

        

      

      
        
          	
                  5.

                	
                  The
                    provider agrees to require in its credentialing with network
                    providers an
                    agreement that they will not file additional claims for Medicaid
                    deductibles or co-payment reimbursement and that they will not
                    balance
                    bill the member covered under this
                    agreement.

                

        

      

      
        
          	
                  6.

                	
                  The
                    provider agrees to assure that network providers serving the
                    MA SNP
                    members will be informed and educated to not file claims for
                    Medicaid
                    payment for persons covered under this
                    agreement.

                

        

      

      
         

        Payment
          Provisions

      

      
         

        
          	
                  1.

                	
                  The
                    Agency will establish for each calendar year, through negotiation
                    with the
                    participating MA SNP providers and actuarial consultation, the
                    monthly per
                    member payment for MA SNP members. The MA SNP provider will be
                    notified
                    each year of the amount payable for the forthcoming calendar
                    year. For CY
                    2008, for MA SNP members residing in AHCA Areas Nine, Ten, or
                    Eleven, the
                    monthly per member payment will be $15.00. For CY 2008, for MA
                    SNP members
                    residing in AHCA Areas One, Two, Three, Four, Five, Six, Seven,
                    or Eight,
                    the monthly per member payment will be
                    $50.00.

                

        

      

      
        
          	
                  2.

                	
                  Any
                    claims for copayments and deductibles processed by Medicaid for
                    MA SNP
                    members shall be deducted from future per member
                    payments.

                

        

      

      
        

      

      
        THE
          SIGNATORY BELOW REPRESENTS THAT HE OR SHE HAS READ THE AGREEMENT, UNDERSTANDS
          IT, AND IS AUTHORIZED TO EXECUTE IT ON BEHALF OF HIS OR HER RESPECTIVE
          PRINCIPALS

      

      
        

      

      
        IN
          WITNESS WHEREOF, the undersigned representative of the above executed this
          agreement under the penalty of perjury and now affirms that the foregoing
          is
          true and correct.

      

      
        

      

      
        	
                Heath
                  Schiesser

              	 
                	
                President
                  and CEO

              	 
                	
                /s/
                  Heath Schiesser

              	 
                	 
                4/1/09
	
                (legibly
                  print name of signatory)

                 

                 

              	 
                	
                Title

              	 
                	
                Signature

              	 
                	
                Date

              

      

      

      Please
        Complete The Following Information:

      
        	
                 

                Provider’s
                  Name:

              	
                 

                WellCare
                  of Florida, Inc.

              
	
                 

                DBA
                  Name:

              	
                 

                N/A

              
	
                 

                Tax
                  ID:

              	
                 

                59-2583622

              
	
                 

                Florida
                  Medicaid Provider ID:

              	
                 

                015016900

              
	
                 

                (For
                  new applicants, the Medicaid ID will be entered by the fiscal agent
                  upon
                  approval of the application.)

              

      

      
        

         

      

      
        MA
          SNP MPA
          Addendum 2008EX-10.1

SETTLEMENT AGREEMENT

This Settlement Agreement (the “Settlement Agreement”) is hereby entered into this 8th
day of April, 2009 (the “Effective Date”) between and among Secure Keyboards, Ltd., a
California Limited Partnership (“Secure Keyboards”); Secure Networks, Ltd., a California
Limited Partnership (“Secure Networks”); Luis Villalobos, an individual
(“Villalobos”); Howard B. Miller, an individual (“Miller”); Lawrence W. Midland, an
individual (“Midland”); Robert J. Parsons, an individual (“Parsons”); Hirsch
Electronics Corporation, a California corporation (“Hirsch”); SCM Microsystems, Inc., a
Delaware corporation (“SCM”); and Felix Marx, an individual (“Marx”) (each a
“Party” and collectively the “Parties”). Secure Keyboards, Villalobos and Miller
are also sometimes collectively referred to herein as “Plaintiffs,” and each as a
“Plaintiff.” SCM, Hirsch and Marx are also sometimes collectively referred to herein as
“Defendants,” and each as a “Defendant.”

RECITALS

WHEREAS, on November 14, 1994, Hirsch, Secure Keyboards and Secure Networks entered into a
settlement agreement (the “1994 Settlement Agreement”), whereby Hirsch agreed to make
certain payments to Secure Keyboards and Secure Networks, as set forth in the 1994 Settlement
Agreement; and

WHEREAS, on December 10, 2008, SCM, Hirsch and two-wholly-owned subsidiaries of SCM entered
into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which Hirsch
will become a new Delaware limited liability company and a wholly-owned subsidiary of SCM through a
two-step merger (the “Merger”); and

WHEREAS, in connection with or as a result of the Merger and the other transactions
contemplated by the Merger Agreement, SCM, Hirsch, certain subsidiaries of Hirsch and/or certain
officers, directors and shareholders of Hirsch and/or its subsidiaries entered into or will enter
into Ancillary Agreements (as defined in the Merger Agreement) and certain other agreements and
understandings and deliver or will deliver certain certificates, documents or other instruments
(any and all such Ancillary Agreements, agreements, certificates, documents or other instruments
together, the “Merger Documents”); and

WHEREAS, on December 10, 2008, Parsons and Midland, as two of the four general partners of
Secure Keyboards, delivered a letter of understanding to SCM, as such letter was amended and
restated on January 30, 2009 (the “Keyboards Letter of Understanding”), which letter was
intended to clarify the interpretation of the 1994 Settlement Agreement following the Merger; and

WHEREAS, the obligation of SCM to complete the Merger is subject to Miller’s and Villalobos’s
agreement to become parties to and be bound by the Keyboards Letter of Understanding and to consent
to the Merger; and

WHEREAS, Miller and Villalobos objected to, and indicated that they will not become parties to
and be bound by, the Keyboards Letter of Understanding; and

WHEREAS, a dispute has arisen among the Parties regarding what the revenue base subject to the
royalty arrangement under the 1994 Settlement Agreement would be following the Merger; and

WHEREAS, on March 18, 2009, Plaintiffs commenced an action against Defendants in the Superior
Court of the State of California in and for the County of Los Angeles entitled Secure
Keyboards, Ltd., Luis Villalobos, and Howard B. Miller v. SCM Microsystems, Inc., Felix Marx, and
Hirsch Electronics, Corporation, et al., Case No. SC102226 (the “Action”); and

WHEREAS, the Complaint filed in the Action (the “Complaint”) asserts a cause of action
against Hirsch for alleged breach of the 1994 Settlement Agreement, and causes of action against
SCM and Marx for alleged interference with the 1994 Settlement Agreement and the relationship
between Hirsch and Secure Keyboards; and

WHEREAS the summons and Complaint in the Action have not been served on any Defendant, but
Defendants nonetheless dispute all of the allegations set forth in the Complaint; and

WHEREAS, the Parties have independently concluded, with the benefit of advice of counsel, that
their respective self-interests would be best served by compromising, settling, and concluding all
disputes currently or potentially existing between them, including but not limited to all disputes
alleged or referred to in the Action, by entering into this Settlement Agreement and the releases
contained herein, and by ultimately dismissing the Action with prejudice, all on the terms and
conditions hereinafter set forth.

AGREEMENT

NOW, THEREFORE, the undersigned Parties to this Settlement Agreement hereby agree, for good
and valuable consideration, receipt of which is hereby acknowledged, as follows:

1. Incorporation of Recitals. The above Recitals are incorporated herein by
reference.

2. Settlement Terms.

(a) Dismissal of the Action without Prejudice. Within five (5) calendar days after
the Effective Date, Plaintiffs shall cause the Action to be dismissed without prejudice in its
entirety, and in no event shall Plaintiffs cause the Complaint to be served on any Defendant.

(b) Dismissal of the Action with Prejudice. Within five (5) calendar days after the
“Effective Time,” as such term is defined in the Merger Agreement, Plaintiffs shall cause
the Action to be dismissed with prejudice in its entirety, and in no event shall Plaintiffs cause
the Complaint to be served on any Defendant.

(c) Amendment and Restatement of the 1994 Settlement Agreement. Upon entry into this
Settlement Agreement, Secure Keyboards, Secure Networks, Villalobos, Miller, Midland, Parsons and
Hirsch shall execute an Amended and Restated 1994 Settlement Agreement (the “Amendment and
Restatement”), in substantially the form attached hereto as Exhibit A. The Amendment
and Restatement shall become effective and binding on the Effective Date hereof, provided
that sections 2 and 3 thereof shall not become effective until the Effective Time;
provided, further, that in the event of the termination of the Merger Agreement
prior to the Effective Time, the Amendment and Restatement shall be null and void.

(d) Presence in California Insufficient to Create Personal Jurisdiction. No Party
shall at any time attempt to construe, offer or use the presence in the State of California, at any
time and for any purpose whatsoever, of SCM or Marx or any of their respective Associates (as
defined below), as a basis for asserting that any federal, state or local court within the State of
California has or may exercise personal jurisdiction over Marx or any of his Associates.

(e) Guaranty of Periodic Payments Under Amendment and Restatement. Upon entry into
this Settlement Agreement and the execution of the Amendment and Restatement, SCM shall enter into
a Limited Guarantee of the payment obligations of Hirsch under the Amendment and Restatement in
substantially the form attached hereto as Exhibit B. The Limited Guarantee shall not
become effective until the Effective Time.

(f) Waiver of Closing Condition. Upon the entry into this Settlement Agreement and
the execution of the Amendment and Restatement, SCM shall execute and deliver to Hirsch a written
waiver to the closing conditions to the Merger set forth on Schedule 7.3(c) of the Merger Agreement
(other than the consent of the landlord), subject to the continued effectiveness and performance by
Keyboards and Networks and each of their respective general partners and Hirsch of this Settlement
Agreement and the Amendment and Restatement, with such waiver to become effective immediately prior
to the Effective Time of the Merger.

(g) Tolling of Statute of Limitations. In the event this Settlement Agreement is
terminated prior to the Effective Time and the releases in Section 8 do not become effective, and
only in that event, the Parties agree that the statute of limitations for any claims previously
alleged in the Action is tolled for the period between the original filing date of the Action and
the date of any termination of this Settlement Agreement.

3. No Admission of Fault or Liability. This Settlement Agreement is a compromise of
disputed claims, and nothing contained in this Settlement Agreement shall be construed to be an
admission of fault or liability on the part of any Party hereto, all such fault or liability being
expressly denied by each and every Party hereto.

4. No Assignment of Claims. Each Party represents and warrants to the other Parties
that it has not hypothecated or otherwise encumbered or assigned any claim or cause of action
released herein arising out of, from, or in connection with the Action, or any other matter which
is being released as part of this Settlement Agreement.

5. No Other Legal Proceedings. Each Party represents and warrants to the other
Parties that no legal proceeding other than the Complaint in the Action has been filed by it
against any other Party in any forum arising out of, from, or in connection with any of the matters
underlying the Action.

6. Authority to Enter Into Settlement Agreement. Each Party represents and warrants
to the other Parties that it has the power and authority to enter into, execute, deliver and
perform this Settlement Agreement, and that there are no other persons or entities whose consent to
this Settlement Agreement or whose joinder herein is necessary to make effective the provisions of
this Settlement Agreement.

7. Reliance on Independent Legal Advice. Each Party represents and warrants to the
other Parties:

(a) That it has received advice from his or its own respective, independent legal counsel
prior to its execution of this Settlement Agreement;

(b) That the legal nature and effect of this Settlement Agreement has been explained to it by
its respective counsel;

(c) That it fully understands the terms and provisions of this Settlement Agreement and the
nature and effect thereof;

(d) That it is relying solely on the advice of its own legal counsel in executing this
Settlement Agreement;

(e) That it has not relied upon any representation or statement of any other Party or counsel
for any other Party not contained in this Settlement Agreement;

(f) That it has carefully read this Settlement Agreement, knows the contents thereof, and is
executing the same freely and voluntarily; and

(g) That it is aware that it or its respective attorneys may hereafter discover facts
different from or in addition to the facts that they now know or believe to be true with respect to
the matters underlying the Action, but that its intention is to fully and finally release the
claims released herein to the full extent of the releases contained in this Settlement Agreement.

8. Releases of Claims and Waivers of Cal. Civ. Code § 1542.

(a) SCM Releasors’ Release of Secure Releasees. Upon the Effective Time, SCM and
Marx, on behalf of themselves and each of their respective Associates (which for the avoidance of
any doubt, does not include Hirsch or Midland or any person or entity claiming through either of
them) (collectively, the “SCM Releasors”), do hereby remise, release, waive, acquit, and
forever discharge Secure Keyboards, Secure Networks, Villalobos, Miller, Midland and Parsons and
each of their respective Associates (collectively, the “Secure Releasees”), of and from any
and all claims, debts, demands, actions, causes of action, suits, dues, sums of money, accounts,
reckonings, bonds, covenants, contracts, controversies, agreements, promises, judgments, acts,
omissions, variances, damages, executions, and liabilities, both in law and equity, federal and
state, known or unknown, suspected or unsuspected (collectively, “Claims”), which have
arisen, are arising, or may in the future arise, directly or indirectly, out of, from, or in
connection with any of the matters alleged in or referred to in the Action; provided,
however, that the SCM Releasors explicitly do not release the Secure Releasees of and from
any and all Claims which have arisen, are arising, or may in the future arise, directly or
indirectly, out of, from, or in connection with (i) the Merger, the Merger Agreement or the Merger
Documents, (ii) the business of Hirsch or the Secure Releasees’ business relationship with Hirsch,
(iii) the obligations of the Secure Releasees under the Amendment and Restatement or Limited
Guarantee, (iv) any breach or noncompliance by any Secure Releasee of this Settlement Agreement,
or(v) any matter not alleged in or referred to in the Action.

(b) Hirsch Releasors’ Release of Secure Releasees. Upon the Effective Time, Hirsch,
on behalf of itself and its Associates (which for the avoidance of any doubt, does not include SCM
or Marx or any person or entity claiming through either of them) (collectively, the “Hirsch
Releasors”), do hereby remise, release, waive, acquit, and forever discharge the Secure
Releasees of and from any and all Claims which have arisen, are arising, or may in the future
arise, directly or indirectly, out of, from, or in connection with any of the matters alleged in or
referred to in the Action; provided, however, that the Hirsch Releasors explicitly
do not release the Secure Releasees of and from any and all Claims which have arisen, are arising,
or may in the future arise, directly or indirectly, out of, from, or in connection with (i) the
Merger, the Merger Agreement or the Merger Documents, (ii) the business of Hirsch or the Secure
Releasees’ business relationship with Hirsch, (iii) the obligations of the Secure Releasees under
the Amendment and Restatement or Limited Guarantee, (iv) any breach or noncompliance by any Secure
Releasee of this Settlement Agreement, or (v) any matter not alleged in or referred to in the
Action.

(c) Secure Releasors’ Release of SCM/Hirsch Releasees. Upon the Effective Time,
Secure Keyboards, Secure Networks, Villalobos, Miller, Midland and Parsons, on behalf of themselves
and each of their respective Associates (which for the avoidance of any doubt, does not include SCM
or Hirsch) (collectively, the “Secure Releasors”), do hereby remise, release, waive,
acquit, and forever discharge SCM, Marx and Hirsch and each of their respective Associates
(collectively, the “SCM/Hirsch Releasees”) of and from any and all Claims which have
arisen, are arising, or may in the future arise, directly or indirectly, out of, from, or in
connection with any matter whatsoever, including but not limited to the 1994 Settlement Agreement,
the Merger, the Merger Agreement, the Merger Documents, any of the matters alleged in or referred
to in the Action, or any other matter at any time up to the Effective Time; provided,
however, that this release shall not release Hirsch from any of its obligations under the
Amendment and Restatement, SCM from any of its obligations under the Limited Guarantee or any
breach or noncompliance by any SCM/Hirsch Releasee of this Settlement Agreement.

(d) Hirsch Releasors’ Release of SCM Releasees. Upon the Effective Time, the Hirsch
Releasors do hereby remise, release, waive, acquit, and forever discharge SCM and Marx, and each of
their respective Associates (which for the avoidance of any doubt, does not include Hirsch or
Midland or any person or entity claiming through either of them) (collectively, the “SCM
Releasees”) of and from any and all Claims which have arisen, are arising, or may in the future
arise, directly or indirectly, out of, from, or in connection with the 1994 Settlement Agreement,
any of the matters alleged in or referred to in the Action, or any other matter relating in any way
to Hirsch’s business relationship with the Secure Releasees; provided, however,
that this release shall not release (i) any breach or noncompliance by any SCM Releasee of this
Settlement Agreement, the Merger, the Merger Agreement, or the Merger Documents; (ii) any rights to
earned but unpaid compensation related to employment by Hirsch for the last pay period prior to the
Effective Time of the Merger, which rights, in the case of individuals named in Schedule 3.31 of
Hirsch’s disclosure schedules to the Merger Agreement, are consistent with that schedule; or (iii)
any rights to accrued but unused benefits related to employment by Hirsch prior to the Effective
Time of the Merger pursuant to the benefit plans set forth in Schedule 3.14(a) of Hirsch’s
disclosure schedules to the Merger Agreement.

(e) Waiver of Cal. Civ. Code § 1542. The Parties to this Settlement Agreement further
warrant, represent and agree that they are fully aware of California Civil Code Section 1542, which
provides as follows:

SEC. 1542. GENERAL RELEASE. A general release does not extend to claims which
the creditor does not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have materially affected
his or her settlement with the debtor.

The Parties hereby waive and relinquish every right or benefit that they have or might have under
Section 1542 to the full extent that they may lawfully waive such right or benefit with regard to
the subject matter of this Settlement Agreement. In connection with such waiver and
relinquishment, the Parties acknowledge that they are aware that they might later discover facts in
addition to or different from those which they now know or believe to be true with respect to the
subject matter of this Settlement Agreement, but that it is their intention hereby fully, finally
and forever to settle and release the matters, known or unknown, suspected or unsuspected, which
now exist, or previously existed between the Parties, that are released in this Settlement
Agreement. This Settlement Agreement is intended to be and is final and binding, regardless of any
claims of misrepresentation, concealment of fact, or mistake of law or fact and shall be and remain
in effect as a full and complete release of all such matters, notwithstanding the discovery or
existence of any additional or different claims or facts relative thereto. In furtherance of such
intention, the releases given pursuant to this Settlement Agreement shall be in, and shall remain
in, effect as a full and complete release, notwithstanding the discovery or existence of any such
additional or different facts.

(f) Covenant Not To Sue. Except for the enforcement of this Settlement Agreement,
each releasing Party, for itself, and for all of its respective Releasors (defined in subparagraphs
8(a)-(d) above), hereby covenants not to sue each released Party or any of its respective Releasees
(defined in subparagraphs 8(a)-(d) above) based on any Claim covered by that releasing Party’s
release (set forth in subparagraphs 8(a)-(d) above).

(g) No Release of Obligations or Rights Under This Settlement Agreement.
Notwithstanding the foregoing, nothing herein shall operate to release any of the Parties’
obligations or rights under this Settlement Agreement, nor their rights to enforce the same.

(h) Associates. As used herein with respect to any Party, person or entity, the term
“Associates” means each of such Party’s person’s or entity’s past, present, and future
parents, subsidiaries, affiliates, partnerships, LLCs or other related business entities,
divisions, members, partners, shareholders, owners, investors, co-venturers, alter egos,
predecessors, successors and assigns, and each of their respective past, present, and future
officers, directors, members, partners, shareholders, owners, investors, co-venturers, alter egos,
employees, attorneys, consultants, experts, insurers, agents, representatives, spouses, heirs,
executors, administrators, predecessors, successors, and assigns.

9. Good Faith Settlement. The Parties hereby stipulate and agree that the settlement
memorialized in this Settlement Agreement is a good faith settlement between and among the Parties
within the meaning of California Code of Civil Procedure Section 877.6.

10. Governing Law. This Settlement Agreement shall be interpreted in accordance with
and governed by the law of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State of California,
exclusive of choice-of-law principles.

11. Integration. This Settlement Agreement, the Amendment and Restatement, and the
Limited Guarantee, constitute the full and entire understanding and agreement between the parties
with respect to the settlement of the Action, and supersedes all prior settlement conversations,
negotiations, and understandings between them with respect to the settlement of the Action.

12. Each Party to Bear Own Costs and Attorneys’ Fees. Each Party hereto shall bear
its own respective costs, expenses, and attorneys’ fees with respect to the Action and this
Settlement Agreement.

13. Jointly Drafted. This Settlement Agreement shall be deemed to have been
negotiated and drafted at the joint request, direction, and instruction of each of the Parties, at
arm’s length, with the advice and participation of counsel, and will be interpreted in accordance
with its terms without favor to any of the Parties.

14. Amendment Only In Writing. This Settlement Agreement may be amended only by a
written agreement executed by all Parties hereto.

15. Severability. In the event that any covenant, condition or other provision herein
contained is held to be invalid, void or illegal by any court of competent jurisdiction, the same
shall be deemed severable from the remainder of the Settlement Agreement and shall in no way
affect, impair or invalidate any other covenant, condition or other provision herein contained. If
such condition, covenant or other provision shall be deemed invalid due to its scope or breadth,
such covenant, condition or other provision shall be deemed valid to the extent of the scope or
breadth permitted by law.

16. Counterparts. This Settlement Agreement may be executed in counterparts, each of
which shall be deemed a duplicate original, but all of which together shall constitute one and the
same instrument. Facsimile and .pdf copies of this Agreement shall have the same force and effect
as an original.

17. Waiver. No breach of any provision hereof can be waived unless in writing.
Waiver of any one breach of any provision hereof shall not be deemed to be a waiver of any other
breach of the same or any other provision hereof.

19. Headings. Headings contained in this Settlement Agreement are for convenience of
reference only and are not intended to alter or vary the construction and meaning of this
Settlement Agreement.

20. Effect of Settlement Agreement if Merger Not Consummated. In the event the Merger
Agreement is terminated prior to its Effective Time, this Settlement Agreement shall terminate,
shall have no force or effect, and shall be null and void. This Settlement Agreement and any other
past, present, or future settlement communications shall be deemed confidential and shall not be
used for any purpose in this action or any other proceedings, including but not limited to any
purpose prohibited by California Evidence Code Section 1152.

[Signature Page Follows]

IN WITNESS WHEREOF, the Parties hereto have executed this Settlement Agreement as of
the Effective Date.

SECURE KEYBOARDS, LTD.

	 	 	 
	By:
	 	/s/ Robert J. Parsons

	 	 	 

	 	 	Robert J. Parsons,

Managing and General Partner

	By:
	 	/s/ Lawrence W. Midland

	 	 	 

	 	 	Lawrence W. Midland,

General Partner

	By:
	 	/s/ Howard Miller

	 	 	 

	 	 	Howard Miller,

General Partner

	By:
	 	/s/ Luis Villalobos

	 	 	 

	 	 	Luis Villalobos,

General Partner

1

	 	 	SECURE NETWORKS, LTD.

	 	 	 
	By:
	 	/s/ Robert J. Parsons

	 	 	 

	 	 	Robert J. Parsons,

Managing and General Partner

	By:
	 	/s/ Lawrence W. Midland

	 	 	 

	 	 	Lawrence W. Midland,

General Partner

2

	 	 	/s/ Luis Villalobos

	 	 	Luis Villalobos, individually

/s/ Howard Miller

	 	 	Howard B. Miller, individually

/s/ Larry Midland

	 	 	Larry Midland, individually

/s/ Robert Parsons

	 	 	Robert Parsons, individually

3

SCM MICROSYSTEMS, INC.

	 	 	 
	By:
	 	/s/ Dr. Manfred Mueller

	 	 	 

	 	 	Dr. Manfred Mueller

	 	 	Executive Vice President Strategic Sales &
Business Development

/s/ Felix Marx

	 	 	Felix Marx, individually

4

HIRSCH ELECTRONICS CORPORATION

	 	 	 
	By:
	 	/s/ Larry Midland

	 	 	 

	 	 	Larry Midland

President

5

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