Document:

ex10-1.htm

    EXHIBIT
10.1

     

    SEPARATION
AGREEMENT AND GENERAL RELEASE

     

    This
Separation Agreement and General Release (this “Agreement”) is made
and entered into effective as of the 3rd day of  April, 2008, by and
between Southern Connecticut Bancorp, Inc., and its subsidiary, The Bank of
Southern Connecticut, Inc., having their principal place of business in New
Haven, Connecticut (collectively, the “Company”) and Michael
M. Ciaburri, an individual residing in Guilford, Connecticut (the “Employee”).

     

    W I T N E
S S E T H :

     

    WHEREAS,
the Employee has been a long-time employee of the Company, most recently serving
as its President and Chief Executive Officer pursuant to that certain Employment
Agreement by and between the Employee and the Company dated February 27, 2008
(the “Employment
Agreement”); and

     

    WHEREAS,
the Employee and the Company have agreed that the Employee will resign from his
employment with the Company, and the Employment Agreement will be terminated,
all pursuant to the terms of this Agreement.

     

    NOW,
THEREFORE, in consideration of the promises and the mutual covenants herein
contained, the parties hereto, intending to be legally bound, do hereby mutually
covenant and agree as follows:

     

    1. Consideration and
Benefits.

     

    (a) Separation
Payment.  The Company will pay the Employee a separation
payment of Three Hundred Thousand Dollars ($300,000) less all applicable
federal, state and local taxes and withholdings (the “Separation
Payment”).  The Company will pay the Separation Payment to the
Employee upon the later of (a) the Company’s receipt of this Agreement,
fully-executed by Employee; and (b) the expiration of the Revocation Period (as
defined below).

     

    (b) Restricted
Stock.  The Employee and the Company acknowledge and agree that
(i) the Employee was entitled to Seven Thousand Five Hundred (7,500) shares of
restricted stock of the Company (the “Shares”), vesting
over a three year period under the terms of the Employment Agreement; (ii) Three
Thousand (3,000) of the Shares were vested as of December 31, 2007; and (iii)
Four Thousand Five Hundred (4,500) of the Shares remain unvested as of the date
of this Agreement and shall be forfeited by the Employee.

     

    (c) Health
Insurance.  In the event that the Employee elects to continue
his group medical, dental and vision (collectively referred to hereinafter as
“health”) insurance pursuant to COBRA and timely completes and delivers all
documents necessary for such health insurance continuation, the Company agrees
to directly pay the COBRA premium payments until the earlier of: (i) the date on
which the Employee first becomes eligible to obtain group health insurance
through another employer; or (ii) March 31, 2009.  If the Employee
still has not secured alternate health insurance as of March 31, 2009, he may
continue group health insurance in accordance with COBRA at his own
expense.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d) 401(k)
Plan.  The Employee shall be entitled to the vested portion of
his account in the Company’s 401(k) Plan, in accordance with the terms and
conditions of the 401(k) Plan.

     

    (e) No
Entitlement.  The Employee understands, acknowledges and agrees
that he would not be entitled to the Separation Payment described in Section
1(a) or the payment of COBRA premiums described in Section 1(c) in the absence
of this Agreement.

     

    2. Termination of Employment
Agreement.  The Employment Agreement is terminated effective as
of April 3, 2008.  The Employee shall voluntarily resign from all
positions he holds for the Company and its subsidiaries including, without
limitation, his position as an officer and director of the Company, effective as
of April 3, 2008.  Except as provided in this Agreement, the Employee
shall have no right to any further compensation or benefits from the Company,
whether pursuant to the Employment Agreement or otherwise.

     

    3. General Release of Claims;
by the Employee.  The Employee, on behalf of himself and his
heirs, legal representatives and assigns, hereby knowingly and voluntarily
waives, remises, releases and forever discharges, to the extent such releases
and discharges are permitted by applicable law, the Company and its officers,
directors, employees, agents, affiliates and the successors, assigns and legal
representatives of the foregoing (collectively, the “Released Parties”),
of and from all, and all manner of, action and actions, cause and causes of
action, suits, debts, dues, sums of money, accounts, reckoning, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, extents, executions, claims and
demands whatsoever, in law, in admiralty or in equity (collectively, “Claims”) which
against the Released Parties the Employee ever had, now has or which the heirs,
legal representatives or assigns of the Employee hereafter can, shall or may
have for, upon or by reason of any matter, cause or thing whatsoever, whether
known or unknown, asserted or unasserted, suspected or unsuspected, whether or
not related to his employment or separation from employment with the Company,
from the beginning of the world to the date the Employee signs this
Agreement.  Without limiting the generality of the foregoing, the
Employee specifically waives, remises, releases and forever discharges his right
to bring any Claims against the Released Parties (a) under Title VII of the
Civil Rights Act, the Age Discrimination in Employment Act (including the
amendments of the Older Workers Benefit Protection Act of 1990), the Employee
Retirement Income Security Act, the Americans with Disabilities Act, the Family
and Medical Leave Act, the Connecticut Fair Employment Practices Act, and any
other federal, state or local law dealing with discrimination on any basis,
including but not limited to sex, age, race, national origin, sexual
orientation, veteran status, marital status, religion, and physical and/or
mental disability; and (b) relating to or in connection with unpaid wages,
unpaid commissions, unpaid bonuses, unpaid overtime, accrued vacation pay,
breach of contract, breach of the implied covenant of good faith and fair
dealing, wrongful termination, violation of public policy, retaliation,
misrepresentation, defamation, infliction of emotional distress or any other
possible Claim under any statute or common law.

     

    4. General Release of Claims;
by the Company.  The Company, on behalf of itself and its
successors, assigns and legal representatives, hereby knowingly and voluntarily
waives, remises, releases and forever discharges, to the extent such releases
and discharges are permitted 

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    by
applicable law, the Employee and his heirs, legal representatives and assigns,
of and from all, and all manner of Claims which against the Employee and his
heirs, legal representatives and assigns the Company ever had, now has or which
the successors, assigns or legal representatives of the Company hereafter can,
shall or may have for, upon or by reason of any matter, cause or thing
whatsoever, whether known or unknown, asserted or unasserted, suspected or
unsuspected, whether or not related to his employment or separation from
employment with the Company, from the beginning of the world to the date the
Employee signs this Agreement.

     

    5. Revocation
Period.  Employee may revoke this Agreement within a seven (7)
day period following the day he executes this Agreement (the “Revocation
Period”).  To be effective, any such revocation must state, “I
hereby revoke my acceptance of my Separation Agreement with the Southern
Connecticut Bancorp, Inc., and its subsidiary, The Bank of Southern Connecticut,
Inc.” and must be submitted in writing and received by the Company (at the
address set forth immediately below) before the end of the Revocation
Period.  Any revocation notice must be delivered to:

     

    Mr. Elmer
F. Laydon, Chairman

    Southern
Connecticut Bancorp, Inc./The Bank of Southern Connecticut

    215
Church Street

    New
Haven, CT 06510

     

    This
Agreement shall not become effective or enforceable until the Revocation Period
has expired.  If the last day of the Revocation Period is a Saturday,
Sunday or legal holiday in Connecticut, then the Revocation Period shall not
expire until the next following day which is not a Saturday, Sunday or legal
holiday.

     

    6. Consultation with an
Attorney.  The Employee acknowledges that he has been advised
that this Agreement is a binding legal document and that he should consult with
an attorney regarding this Agreement.  The Employee represents that he
has read this Agreement, that he fully understands the terms and legal effect of
this Agreement, and that he is entering into this Agreement knowingly and
voluntarily.  The Employee acknowledges that he has received
sufficient time to consider this Agreement, and to retain and consult with an
attorney of his own choice regarding it.  The Employee also
acknowledges that he has had at least twenty-one (21) days to review and
consider this Agreement before signing it, or is knowingly and voluntarily
waiving the remainder of such twenty-one (21) day period on the advice of his
attorney.

     

    7. No Future Right to
Employment.  The Employee understands and agrees that the
Company shall have no obligation to employ him in any capacity after the
effective date of this Agreement.  Any offer of employment or
opportunity for consulting services provided to the Employee by the Company
subsequent to the effective date of this Agreement shall be solely in the
discretion of the Company.  The Employee agrees that if he seeks any
employment or consulting opportunities with the Company subsequent to the date
hereof, a rejection of his application or inquiry will not constitute a
violation of law in any manner whatsoever and he will not file any legal action
against the Company arising from or related to such events.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8. No
Solicitation.  The Employee agrees that from the date of this
Agreement until December 31, 2009, he shall not, personally or through others,
solicit, divert, or hire away any employee, supplier, customer or client of the
Company, nor shall the Employee encourage any employee, supplier, customer or
client to terminate his, her or its relationship with the Company, or otherwise
attempt to do any of the foregoing.  The Employee and the Company
expressly agree that a violation by the Employee of his covenants and agreements
contained in this Section 8 would cause irreparable injury to the Company which
injury would not be susceptible of monetary valuation and that, accordingly, in
addition to any other rights and remedies it may have at law or in equity, the
Company shall be entitled to seek and obtain an injunction enjoining and
restraining the Employee from doing or continuing to do any act and any other
violation or threatened violation of his covenants and agreements contained in
this Section 8.

     

    9. Public
Disclosure.  The Employee and the Company shall mutually agree
on a public announcement describing the Employee’s separation from employment
pursuant to this Agreement.  The Employee acknowledges that this
Agreement and any related public announcement may be filed with the Securities
Exchange Commission and other federal, state or local regulatory bodies, in
accordance with applicable law or administrative practice.

     

    10. Non-Disparagement.  Neither
the Company nor the Employee will make disparaging remarks, orally or in
writing, about each other to any person or entity, regarding any aspect of
Employee’s employment at the Company or any other matter related to the
employment relationship that existed between the Company and the
Employee.

    

    11. Entire
Agreement.  This Agreement sets forth the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes any and all prior agreements, representations or understandings,
written or oral, between the parties with respect thereto.  The
Employee acknowledges that he has not relied on any representations, promises,
or agreements of any kind made to him in connection with his decision to sign
this Agreement, except for those set forth in this Agreement.  No
modification or amendment of this Agreement shall be binding unless in writing
and signed by the parties hereto.

     

    12. Governing Law and
Enforcement.  This Agreement shall be governed by and construed
and enforced in accordance with the substantive laws of the State of Connecticut
without regard for its conflicts of law rules.  The Employee and the
Company hereby agree to be subject to the personal jurisdiction of the state and
federal courts of Connecticut should any dispute arise relating to or in
connection with this Agreement.  In any such action, both parties
hereby waive their right to a trial by a jury and consent to a trial by a
judge.

     

    13. Binding
Effect.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns.

     

    14. Severability.  Should
any provision of this Agreement be deemed illegal or unenforceable by any court
of competent jurisdiction, the parties hereby jointly request that such
provision be modified to the least extent necessary to render it legal and
enforceable.  If such provision cannot be modified to be legal and
enforceable, then such provision shall immediately become null and void, leaving
the remainder of this Agreement in full force and effect.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    15. Counterparts.  This
Agreement may be executed in one or more counterparts and exchanged by facsimile
or other electronic means.  Each counterpart will be deemed to be an
original copy of this Agreement and all of which, when taken together, will be
deemed to constitute one and the same agreement.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    By
Signing this Agreement, the Employee Waives Any Right that He Has, Ever Had or
Ever Will Have to Bring or Maintain a Lawsuit or Make Any Claims Against the
Company Involving Any Matter Arising Prior to the Signing of this
Agreement.  This Additional Notice Regarding the Effect of this
Agreement Is Provided Solely as a Reminder and Does Not Lessen, Modify or Alter
in Any Way the Scope, Meaning and Effect of the Release of Claims Set Forth
Above.

     

    EMPLOYEE:

     

    

     

    /s/ Michael M.
Ciaburri

     

    Michael
M. Ciaburri

     

    STATE OF
CONNECTICUT                                                                           :

    :           ss:           New
Haven

    COUNTY OF
NEW
HAVEN                                                                           :

     

    On this 27th day of March, 2008, before
me personally appeared Michael M. Ciaburri, to me known to be the person
described in the foregoing Separation Agreement, who in my presence executed the
same, acknowledging such execution to be her free act and deed.

     

    /s/  Danielle
Bonewicz

     

    Notary
Public

     

    My
Commission Expires: March 31,
2009

     

    

     

    SOUTHERN
CONNECTICUT BANCORP, INC.,

    THE BANK
OF SOUTHERN CONNECTICUT, INC.

    

    By: /s/ Elmer F.
Laydon

    Elmer F. Laydon

    Its Chairman

    

    STATE OF
CONNECTICUT                                                                           :

    :           ss:           New
Haven

    COUNTY OF
NEW
HAVEN                                                                           :

     

    On this 26 day of March, 2008, before
me personally appeared Elmer F. Laydon, who in my presence executed the
foregoing Separation Agreement, acknowledging such execution to be his free act
and deed on behalf of Southern Connecticut Bancorp, Inc. and The Bank of
Southern Connecticut, Inc.

     

    /s/ Rosemarie A.
Romano

     

    Notary
Public

     

    My
Commission Expires: January 12,
2012Exhibit 4.1

THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE
TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT") SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii)
RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN
CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE
STATE SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN
EXCHANGE FOR THIS NOTE.

                          SecureCARE Technologies, Inc.

                               6% Promissory Note

PP Note No. _____                                             ____________, 2007

         FOR VALUE RECEIVED, SecureCARE Technologies, Inc., a Nevada corporation
(the "Company") with its principal executive office at 3755 Capitol of Texas
Highway - Suite 160E, Austin, Texas 78704, promises to pay to the order of
____________________ (the "Holder" or "Payee") or registered assigns the
principal amount of __________ ($________) (the "Principal Amount") on December
31, 2008 (the "Maturity Date"); provided, however, that notwithstanding anything
to the contrary provided herein or elsewhere, the Company, shall have the sole
right to extend the Maturity Date (the "Extension") to December 31, 2009 (the
"Extension Period"). To effectuate the Extension, the Company shall provide
written notice to the Holder of the Extension no later than five (5) business
days prior to the Maturity Date. In the event this Note is extended pursuant to
the Extension, interest on the unpaid balance on this Note shall accrue at the
rate of 9% per annum during the Extension Period. The Principal Amount and all
accrued interest hereon is payable in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.

         This Note and other identical Notes in the aggregate principal amount
of up to $1,500,000 (a "Note" and collectively the "Notes") is issued to the
Payee in connection with a private placement (the "Offering") , of units (the
"Units"), each Unit consisting of a Note and shares of Common Stock, par value
$.001 per share of the Company at the rate of one share of Common Stock for each
$2.50 Principal Amount of Note for a maximum of 600,000 shares (the "Common
Stock") pursuant to a Subscription Agreement by and between the Company and the
Payee (the "Subscription Agreement"), a copy of which Subscription Agreement is
available for inspection at the Company's principal office. Notwithstanding any
provision to the contrary contained herein or elsewhere, this Note is subject
and entitled to certain terms, conditions, covenants and agreements contained in
the Subscription Agreement. Any transferee of this Note, by its acceptance
hereof, assumes the obligations of the Payee in the Subscription Agreement with

<PAGE>

respect to the conditions and procedures for transfer of this Note. Reference to
the Subscription Agreement shall in no way impair the absolute and unconditional
obligation of the Company to pay both the Principal Amount and accrued interest
thereon as provided herein. The Company must extend the Maturity Date of all of
the Notes if it extends the Maturity Date of any of the Notes.

         Interest on this Note shall accrue on the Principal Amount outstanding
from time to time at a rate per annum computed in accordance with Section 2
hereof and shall be payable in accordance with Section 2 hereof. All payments by
the Company hereunder shall be applied first to pay any interest which is due,
but unpaid, then to reduce the Principal Amount.

         The Company (i) waives presentment, demand, protest or notice of any
kind in connection with this Note and (ii) agrees, in the event of an Event of
Default (as defined below), to pay to the Payee, on demand, all costs and
expenses (including reasonable legal fees) incurred in connection with the
enforcement and collection of this Note.

         1.       Prepayment. The Principal Amount of this Note may be prepaid
in part and/or in full, together with all accrued but unpaid interest due
thereon through the date of prepayment, without penalty upon ten (10) days'
prior written notice to the Holder.

         2.       Computation of Interest.

                  (a)      Base Interest Rate. Subject to Section 2(b) and
Section 2(c) below, the outstanding Principal Amount shall bear interest at the
rate of 6.0% per annum calculated on the basis of a year of three hundred sixty
(360) days.

                  (b)      Increasing Interest Rate. In the event (i) the
Maturity Date is extended pursuant to the Extension, the rate of interest
applicable to the unpaid Principal Amount automatically shall increase to 9.0%
per annum commencing on the day immediately following the Maturity Date, and
(ii) this Note is not repaid on (a) the Maturity Date if this Note is not
extended pursuant to the Extension, or (b) on the date immediately following the
last day of the Extension Period if this Note is extended pursuant to the
Extension, then the rate of interest applicable to the unpaid Principal Amount
automatically shall be adjusted to twelve (12%) percent per annum through and
including the date of repayment; provided, that in no event shall the interest
rate exceed the Maximum Rate provided in Section 2(c) below.

                  (c)      Maximum Rate. In the event that it is determined
that, under the applicable laws relating to usury applicable to the Company or
the indebtedness evidenced by this Note ("Applicable Usury Laws"), the interest
charges and fees payable by the Company in connection herewith or in connection
with any other document or instrument executed and delivered in connection
herewith (collectively, the "Effective Interest Rate") cause the Effective
Interest Rate applicable to the indebtedness evidenced by this Note to exceed
the maximum rate allowed by law (the "Maximum Rate"), then such interest shall
be recalculated for the period in question and any excess over the Maximum Rate
paid with respect to such period shall be credited, without further agreement or
notice, to the Principal Amount outstanding hereunder to reduce said balance by
such amount with the same force and effect as though the Company had
specifically designated such extra sums to be so applied to principal and the

                                      -2-
<PAGE>

Payee had agreed to accept such extra payment(s) as a premium-free prepayment.
All such deemed prepayments shall be applied to the principal balance payable at
maturity.

                  (d)      Payment of Interest. All accrued but unpaid interest
on the Principal Amount shall be due and payable on the Maturity, unless
extended by the Company, in which case all accrued interest on this Note shall
be due upon the completion of the Extension (the "Interest Payment Date").

         3.       Covenants of Company.The Company covenants and agrees that, so
long as this Note shall be outstanding, it will perform and each of its
Subsidiaries (as defined in the Subscription Agreement) perform the obligations
set forth in this Section 3 (the term "Company" as used in this Section 3 shall
be deemed to refer to all Company Subsidiaries):

                           (i)      Taxes and Levies. The Company will promptly
pay and discharge all material taxes, assessments, and governmental charges or
levies imposed upon the Company or upon its income and profits, or upon any of
its property, before the same shall become delinquent, as well as all claims for
labor, materials and supplies which, if unpaid, might become a lien or charge
upon such properties or any part thereof; provided, however, that the Company
shall not be required to pay and discharge any such tax, assessment, charge,
levy or claim so long as the validity thereof shall be contested in good faith
by appropriate proceedings and the Company shall set aside on its books adequate
reserves in accordance with generally accepted accounting principles ("GAAP")
with respect to any such tax, assessment, charge, levy or claim so contested;

                           (ii)     Maintenance of Existence. The Company will
do or cause to be done all things reasonably necessary to preserve and keep in
full force and effect its corporate existence, rights and franchises and comply
with all laws applicable to the Company, except where the failure to comply
would not have a material adverse effect on the Company;

                           (iii)    Maintenance of Property. The Company will at
all times maintain, preserve, protect and keep its property used or useful in
the conduct of its business in good repair, working order and condition, and
from time to time make all needful and proper repairs, renewals, replacements
and improvements thereto as shall be reasonably required in the conduct of its
business;

                           (iv)     Books and Records. The Company will at all
times keep true and correct books, records and accounts reflecting all of its
business affairs and transactions in accordance with GAAP. Such books and
records shall be open at reasonable times and upon reasonable notice to the
inspection of the Payee or its agents;

                           (v)      Notice of Certain Events. The Company will
give prompt written notice (with a description in reasonable detail) to the
Payee of:

                                    (A)      the occurrence of any Event of
Default or any event which, with the giving of notice or the lapse of time,
would constitute an Event of Default; and

                                    (B)      the delivery of any notice to the
Company effecting the acceleration of any indebtedness of the Company in excess
of $100,000.

                                      -3-
<PAGE>

         4.       Events of Default.

                  (a)      The term "Event of Default" shall mean any of the
events set forth in this Section 4(a):

                           (i)      Non-Payment of Obligations. The Company
shall default in the payment of the Principal Amount or accrued interest on this
Note as and when the same shall become due and payable, whether by acceleration
or otherwise.

                           (ii)     Non-Performance of Covenants. The Company
shall default in the due observance or performance of any covenant set forth in
Section 3, which default shall continue uncured for five (5) days.

                           (iii)    Bankruptcy, Insolvency, etc. The Company
shall:

                                    (A)      admit in writing its inability to
pay its debts as they become due;

                                    (B)      apply for, consent to, or acquiesce
in, the appointment of a trustee, receiver, sequestrator or other custodian for
the Company or any of its property, or make a general assignment for the benefit
of creditors;

                                    (C)      in the absence of such application,
consent or acquiesce in, permit or suffer to exist the appointment of a trustee,
receiver, sequestrator or other custodian for the Company or for any part of its
property;

                                    (D)      permit or suffer to exist the
commencement of any bankruptcy, reorganization, debt arrangement or other case
or proceeding under any bankruptcy or insolvency law, or any dissolution,
winding up or liquidation proceeding, in respect of the Company, and, if such
case or proceeding is not commenced by the Company or converted to a voluntary
case, such case or proceeding shall be consented to or acquiesced in by the
Company or shall result in the entry of an order for relief; or

                                    (E)      take any corporate or other action
authorizing, or in furtherance of, any of the foregoing.

                           (iv)     Cross-Default. Any indebtedness of the
Company in an aggregate principal amount equal to or exceeding $100,000 shall be
duly declared to be or shall become due and payable prior to the stated maturity
thereof.

                  (b)      Action if Bankruptcy. If any Event of Default
described in clauses (iv)(a) through (d) of Section 4(a) shall occur, the
outstanding Principal Amount, all accrued but unpaid interest and all other
obligations under this Note shall automatically be and become immediately due
and payable, without notice or demand.

                                      -4-
<PAGE>

                  (c)      Action if Other Event of Default. If any Event of
Default (other than any Event of Default described in clauses (iv)(a) through
(d) of Section 4(a)) shall occur for any reason, whether voluntary or
involuntary, and be continuing, the Payee may, upon notice to the Company,
declare all or any portion of the outstanding Principal Amount, together with
interest accrued on this Note, to be due and payable and any or all other
obligations hereunder to be due and payable, whereupon the full unpaid Principal
Amount hereof, such accrued interest and any and all other such obligations
which shall be so declared due and payable shall be and become immediately due
and payable, without further notice, demand, or presentment.

         5.       Amendments and Waivers.

                  (a)      The provisions of this Note may from time to time be
amended, modified or waived, if such amendment, modification or waiver is in
writing and consented to in writing by the Company and the Holder. If any of the
Notes is modified or amended, the same modification shall be offered to all
other holders of the Notes.

                  (b)      No failure or delay on the part of the Payee in
exercising any power or right under this Note shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other power or right.
No notice to or demand on the Company in any case shall entitle it to any notice
or demand in similar or other circumstances. No waiver or approval by the Payee
shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.

                  (c)      To the extent that the Company makes a payment or
payments to the Payee, and such payment or payments or any part thereof are
subsequently for any reason invalidated, set aside and/or required to be repaid
to a trustee, receiver or any other party under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such recovery,
the obligation or part thereof originally intended to be satisfied, and all
rights and remedies therefor, shall be revived and continued in full force and
effect as if such payment had not been made or such enforcement or setoff had
not occurred.

         6.       Miscellaneous.

                  (a)      Parties in Interest. All covenants, agreements and
undertakings in this Note binding upon the Company or the Payee shall bind and
inure to the benefit of the successors and permitted assigns of the Company and
the Payee, respectively, whether so expressed or not.

                  (b)      Governing Law, Etc. This Note shall be governed by
and construed solely in accordance with the internal laws of the State of Texas
with respect to contracts made and to be fully performed therein, without regard
to the conflicts of laws principles thereof. The parties hereto hereby expressly
and irrevocably agree that any suit or proceeding arising under this Agreement
or the consummation of the transactions contemplated hereby, shall be brought
solely in a federal or state court located in the City of Austin, Texas. The
parties hereto expressly and irrevocably each waive any claim that any such
jurisdiction is not a convenient forum for any such suit or proceeding and any

                                      -5-
<PAGE>

defense or lack of in personam jurisdiction with respect thereto. In the event
of any such action or proceeding, the party prevailing therein shall be entitled
to payment from the other party hereto of its reasonable counsel fees and
disbursements.

                  (c)      Waiver of Jury Trial. THE PAYEE AND THE COMPANY
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS NOTE OR ANY OTHER DOCUMENT OR INSTRUMENT
EXECUTED AND DELIVERED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE PAYEE OR
THE COMPANY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PAYEE'S PURCHASING
THIS NOTE.

         IN WITNESS WHEREOF, this Note has been executed and delivered on the
date specified above by the duly authorized representative of the Company.

                                       SecureCARE Technologies, INC.

                                       By:______________________________________
                                          Name:  Neil Burley
                                          Title: Chief Financial Officer

                                      -6-

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