Document:

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                                                                    EXHIBIT 10.3

                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT, dated as of the 1st day of January, 2000, is by
and between CARDXX, INC., a Nevada corporation (hereinafter called the
"Company"), and HARRY J. TIFFANY, III (hereinafter called the "Employee").

                                R E C I T A L S :
                                -----------------

     The Company has determined that it is in the best interests of the Company
and its shareholders to employ the Employee as President and Chief Operating
Officer, or upon the direction of the Board of Directors as Chief Technology
Officer, and the Employee is willing to accept such employment on the terms and
conditions described below. Certain provisions to pay Employee for uncompensated
past services are contained herein.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of and subject to the agreements, terms
and conditions contained herein, the parties hereto agree as follows:

                                    ARTICLE I
                                   EMPLOYMENT

     Section 1.1. Employment of the Employee. The Company hereby employs the
Employee, and the Employee hereby accepts employment by the Company, upon the
terms and conditions hereinafter set forth, for the "Initial Term" of this
Agreement and any "Renewal Term", as such terms are defined in Section 1.2. The
term "Period of Employment" as used herein shall mean the period from the date
of this Agreement until the first to occur of the end of the term of this
Agreement (either the Initial Term or, if applicable, any Renewal Term) as
provided in Section 1.2 or the date of the Employee's termination as provided
herein.

     Section 1.2. Term. The Initial Term of this Agreement shall be three (3)
years commencing on the date of this Agreement and ending December 31, 2002. At
the expiration of the Initial Term, this Agreement shall be renewed
automatically for successive one-year terms (each such one-year term being
referred to herein as a Renewal Term) unless on or prior to ninety (90) days
preceding the date this Agreement would otherwise expire, either the Employee or
the Company notifies the other party that this Agreement shall not be renewed.

                                   ARTICLE II
                                     DUTIES

     Section 2.1. Duties. During the Period of Employment, the Employee shall,
subject to the authority of the Board of Directors of the Company (the "Board"),
be employed as President and Chief Operating Officer, with such duties,
responsibilities and authority as are consistent with such employment including,
but not limited to, all matters involving research and development of the
Company's products and services, and with such additional responsibilities and

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duties as may be reasonably assigned to him by the Board, which in each case he
shall faithfully and diligently perform.

     Section 2.2. Time to be Devoted to Employment, Etc. Except for vacations,
which in no event shall be more than three (3) weeks each year, and absences due
to temporary illness or disability, the Employee shall devote such time as
necessary to the business of the Company.

                                   ARTICLE III
                                  COMPENSATION

     Section 3.1. Base Salary. The Company shall pay to the Employee a base
annual salary equal to One Hundred Twenty Thousand Dollars ($120,000.00) (the
"Base Salary"), payable bi-monthly in arrears. The Base Salary may be adjusted
as determined by the Board, but shall not be decreased below the Base Salary in
existence immediately prior to such adjustment.

     Section 3.2. Reimbursement for Expenses. The Company shall reimburse the
Employee for all reasonable and necessary travel expenses and other reasonable
disbursements made by him for or on behalf of the Company in the performance of
his duties hereunder on the Company's business, upon presentation by the
Employee to the Company of appropriate vouchers or other substantiation.

     Section 3.3. Employee Benefit Plans. During the Period of Employment, the
Employee shall be entitled to participate, on terms no less favorable than those
available to any other senior executive officer of the Company in all employee
benefit plans adopted by the Company to which senior executive officers and
their immediate families are entitled to participate.

                                   ARTICLE IV
                       DISABILITY OR DEATH OF THE EMPLOYEE

     Section 4.1. Disability. If the Employee is incapacitated or disabled by
accident, sickness or otherwise so as to render him mentally or physically
incapable of performing the services required to be performed by him under this
Agreement for a period of one hundred eighty (180) consecutive days or for a
total of two hundred sixty (260) days in any twelve (12) month period, the
Company may, at its option, at that time or any time thereafter, terminate the
Period of Employment immediately upon giving him notice to that effect. Until
the Company shall have terminated the Employee's employment in accordance with
the foregoing, the Employee shall be entitled to receive his compensation,
pursuant to Article III notwithstanding any such physical or mental disability.
Nothing herein shall limit the Employee's right to receive any amounts to be
paid to the Employee under any disability or employee benefit plan of the
Company, if any, or under any other disability insurance policy or plan covering
the Employee.

     Section 4.2. Death. If the Employee dies during the Period of Employment,
his employment hereunder and the Period of Employment shall terminate on the
date of this death.

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                                    ARTICLE V
                              TERMINATION FOR CAUSE

     The Company may, by summary notice in writing, terminate the Period of
Employment for cause. For the purposes of this Agreement, the term "cause" shall
mean:

        (a) a material breach or any continued default by the Employee in the
performance of his duties under this Agreement (other than resulting from his
disability) for a 30-day period after a demand for performance is delivered to
the Employee by the Company, which demand specifies and identifies the manner in
which the Employee has not performed his duties;

        (b) misconduct by the Employee which is injurious to himself or the
Company, provided that conduct will not be deemed misconduct if it was engaged
in by the Employee in good faith in the belief that it was in, or not opposed
to, the interests of the Company, or was engaged in at the direction of the
Board; or

        (c) the intentional commission by the Employee of either:

            (i) a business crime the intended purpose of which was to enrich the
Employee at the expense of the Company; or

            (ii) a felony of which the Employee is convicted or to which he
pleads guilty or nolo contendere.

                                   ARTICLE VI
                            TERMINATION WITHOUT CAUSE

     Section 6.1. Company Termination. The Company may terminate the Period of
Employment without cause at any time by giving the Employee written notice, upon
which the Period of Employment shall terminate.

     Section 6.2. Employee Termination. For purposes of this Agreement, the
Period of Employment shall be deemed to have been terminated without cause if
the Employee resigns under any of the following conditions:

        (a) upon the continued default (including a material reduction in the
duties, responsibilities and authority of the Employee as set forth in Article
II) by the Company in the substantial performance of its obligations hereunder
for a thirty (30) day period after a demand for substantial performance is
delivered to the Company by the Employee, which demand specifies and identifies
the manner in which the Company has not substantially performed its obligations;
or

        (b) upon the Employee being directed by the Board to engage in any
activity which the Employee, based upon written advice of competent legal
counsel, believes would

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constitute criminal activity, provided that the Employee gives notice to the
Company providing it with a copy of the written advice of his legal counsel and
the Company does not, within five (5) business days after its receipt of such
notice, withdraw its request that the Employee engage in the activity in
question.

                                   ARTICLE VII
                  EFFECT OF TERMINATION OF PERIOD OF EMPLOYMENT

     Section 7.1. Termination upon Death, Disability, for Cause or Voluntarily.
Upon termination of the Period of Employment pursuant to Articles IV or V or
voluntarily by the Employee for any reason (except under the conditions set
forth in Section 6.2), neither the Employee nor his beneficiaries or estate
shall have any further rights or claims against the Company under this Agreement
except to receive:

        (a) the unpaid portion of the Employee's Base Salary provided for in
Section 3.1, computed on a pro rata basis to the date of termination;

        (b) reimbursement for any expenses for which the Employee shall not have
theretofore been reimbursed as provided in Section 3.3; and

        (c) any benefits, including the right to continued coverage under the
Company's health plans, which are mandated by law for terminated employees.

     Section 7.2. Termination Without Cause. Upon the termination of the Period
of Employment pursuant to Article VI, neither the Employee nor his beneficiaries
or estate shall have any further rights or claims against the Company under this
Agreement except to receive:

        (a) compensation at the then applicable Base Salary rate through the
term of this Agreement as provided in Section 1.2;

        (b) reimbursement for any expenses for which the Employee shall not have
theretofore been reimbursed as provided in Section 3.3;

        (c) any benefits, including the right to continued coverage under the
Company's health plans, which are mandated by law for terminated employees.

     Section 7.3. Other Company Obligations. The provisions of this Article VII
shall in no way limit any rights or claims which the Employee may have by virtue
of any other agreements entered into with the Company.

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                                  ARTICLE VIII
                             COVENANT NOT TO COMPETE

     Section 8.1. Covenant Not to Compete. During the Period of Employment and
for a period of (i) two years (2) thereafter if terminated by the Company with
cause or Employee terminates his employment without good reason and (ii) for a
period of twelve (12) months thereafter if Employee is terminated without cause,
or Employee terminates his employment due to a breach by the Company of its
obligations hereunder, Employee shall not, alone, together or in association
with others, as owner, shareholder, employee, officer, director, partner,
lender, investor, consultant, principal, agent, independent contractor,
co-venturer or in any other capacity, directly or indirectly, engage in, have a
financial interest in or be in any way connected or affiliated with, or render
advice or service, to, any person, firm or business or enterprise which is in
competition with the Company.

        (i) Competition with the Company. For purposes of this Agreement, (a)
the phrase "in competition with the Company" shall be deemed to include
competition with the Company, or their respective successors or assigns, or the
business of any of them, and (b) a business or enterprise shall be deemed to be
in competition with the Company if it is engaged in any business activity which
is the same or comparable to the business activities of the Company from time to
time in any geographic area in which the Company is conducting or has conducted
or solicited business at any time during the Period of Employment or for two (2)
years prior thereto. Notwithstanding the foregoing, nothing herein contained
shall prevent Employee from purchasing and holding for investment less than five
percent (5%) of the shares of any corporation, the shares of which are regularly
traded either on a national securities exchange or in the over-the-counter
market.

        (ii) Interpretation of Covenant. The parties hereto acknowledge and
agree that the duration and area for which the covenant not to compete set forth
in this Article VIII is to be effective are fair and reasonable and are
reasonably required for the protection of the Company, and Employee hereby
waives any objections to or defenses in respect thereof. In the event that any
court determines that the time period or the area, or both of them, are
unreasonable and that such covenant is to the extent unenforceable, the parties
hereto agree that this Article VIII shall be deemed amended to delete therefrom
such provisions or portions adjudicated to be unenforceable so that the covenant
shall remain in full force and effect for the greatest time period and in the
greatest area that would not render it unenforceable. The parties intend that
this covenant shall be deemed to be a series of separate covenants, one for each
and every county of each and every state of the United States of America and one
for each and every political subdivision of each and every other country where
the covenant not to compete is intended to be effective and is not proscribed by
law.

     Section 8.2. Covenant Regarding Disclosure or Use of Confidential
Information. Employee acknowledges that during his employment he will learn and
will have access to confidential and proprietary information regarding the
Company, its customers and its business. Employee hereby agrees that he shall at
all times during and after the Period of

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Employment keep and maintain Confidential Information (as defined below)
confidential, and Employee shall not, at any time, either during or subsequent
to the Period of Employment, either directly or indirectly, use any Confidential
Information for Employee's own benefit or to the benefit of any other person or
entity or divulge, disclose, communicate or otherwise reveal any Confidential
Information to any person or entity in any manner whatsoever other than
employees or agents of the Company having a need to know such Confidential
Information, and only to the extent necessary to perform their responsibilities
on behalf of the Company and other than in the performance of Employee's duties
hereunder, except to the extent otherwise required by court order. As used
herein, "Confidential Information" shall mean any and all information (excluding
information in the public domain) related to the business of the Company,
including, without limitation, any and all trade secrets, engineering designs or
concepts, computer programs, technical data, information concerning Company
policies, pricing policies, price lists, financial plans and special products,
marketing strategies and techniques, methods and manner of operations,
information relating to the identity and location of all parts, present and
prospective customers, suppliers, affiliates, debtors, distributors,
wholesalers, clients and others who have been dealing with the Company, patents
and patent applications, copyrights and copyright applications (in any such
case, whether registered or to be registered in the United States or any foreign
country) applied for, issued to or owned by the Company, each and all processes
inventions, computer programs, engineering or technical data, drawings or
designs, manufacturing techniques; and any other information known to Employee
to be confidential information. Upon the termination or expiration of this
Agreement, Employee shall leave with Company, without making or keeping copies
thereof, all documents such as memoranda, notes, records, reports, books,
letters, customer lists, manuals or other writings or documents whatsoever,
which reflect or deal with any secret, proprietary or confidential information
or material relating to the business or activities of the Company.

     Section 8.3. Covenants Regarding Other Employees. Employee agrees that so
long as he is an employee of the Company and for the period described in Section
8.1, except when acting on behalf of the Company, he shall not, directly or
indirectly, induce or attempt to induce any person in the employment of the
Company to (i) terminate such employment, or (ii) interfere with the business of
the Company.

     Section 8.4. Intellectual Property. During and throughout the Period of
Employment, Employee agrees to disclose in writing to the Company all ideas,
improvements, inventions, developments, discoveries, trade secrets and business
plans ("Intellectual Property") developed, conceived, made, devised, discovered,
acquired or acquired knowledge of, by Employee, either by himself or in
conjunction with any other person or persons during such period, which relate
to, directly or indirectly, or may be useful in the business of the Company
(including any lines of business which are in the development or planning stage)
including, without limitation, any process, product, operation or improvement,
whether or not they may be patentable or copyrightable. Employee hereby agrees
that the Intellectual Property shall become and remain the sole and exclusive
property of the Company and that Employee will, at the Company's request and
cost, do whatever the Company deems necessary or desirable to secure the rights
thereto by patent, copyright or otherwise to the Company, including without
limitation the assignment, transfer and conveyance

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of all Employee's right, title and interest in and to the Intellectual Property.
Subject to the terms of an Intellectual Property Agreement of even date,
Employee acknowledges and agrees that any intellectual property concerning
"SmartCards" or any other use of technology related to SmartCards created by
Employee is the property of the Company. Such intellectual property includes
ideas, inventions, development involving other SmartCard-like devices including
"tags", as well as the equipment and processes to manufacture the same. Employee
shall execute such patents and copyrights and assignments as requested by the
Company from time to time. Adequate consideration for this intellectual property
has been received.

     Section 8.5. Equitable Relief. Employee hereby acknowledges and agrees that
his obligations contained in this Article VIII are of special, unique and
personal character which gives them a peculiar value to the Company, and the
Company cannot be reasonably or adequately compensated in money damages in an
action at law in the event Employee breaches such obligations. Employee
therefore expressly agrees that, in addition to any other rights or remedies
which the Company may have at law or in equity or by reason of any other
agreement, the Company shall be entitled to injunctive and other equitable
relief in the form of preliminary and permanent injunctions without bond or
other security in the event of any actual or threatened breach of such actual
damages, and to discontinue any salary, bonus and/or insurance continuation
provided hereunder.

     Section 8.6. Nullification of Non-Competition Covenant. Notwithstanding any
provision contained herein to the contrary, should the Company fail to pay to
the Employee amounts due under the parties' Exclusive License Agreement and
Assignment of even date (the "License Agreement"), the Employee shall be
relieved of all restrictions or obligations under this Article 8 and such
covenants contained in Section 8.1 through 8.5 shall be null and void. In such
case, unless he remains employed by the Corporation, the Employee shall be free
to accept employment or otherwise compete with the Company and exercise such
other rights as may be available to the Employee under the License Agreement.

                                   ARTICLE IX
                                   ARBITRATION

     Section 9.1. Arbitration. If a dispute arises between the Company and the
Employee as to the interpretation of this Agreement, the Company and the
Employee agree to submit the matter to binding arbitration in accordance with
the American Arbitration Association, as modified herein, by a sole arbitrator,
in Denver, Colorado, selected in accordance with the provisions of Section 9.2.
The arbitration shall be governed by the Uniform Arbitration Act, and judgment
upon the award rendered by the arbitrator may be entered by any court having
jurisdiction thereof.

     Section 9.2. Selection of Arbitrator. The parties shall have ten (10) days
from the date when written notice is provided to either party by the other party
of a request for arbitration to agree upon a mutually acceptable neutral person
not affiliated with either of the parties to act as arbitrator. If no arbitrator
has been selected within such time, the parties agree jointly to request the
American Arbitration Association or another mutually agreed-upon organization to
supply within

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ten (10) days a list of potential arbitrators with qualifications as specified
by the parties in the joint request. Within five (5) days of receipt of the
list, the parties shall independently rank the proposed candidates, shall
simultaneously exchange rankings, and shall select as the arbitrator the
individual receiving the highest combined ranking who is available to sere.

     Section 9.3. Cost of Arbitration. The costs of arbitration shall be
apportioned between the Company and the Employee as determined by the arbitrator
in such manner as the arbitrator deems reasonable taking into account the
circumstances of the case, the conduct of the parties during the proceeding and
the result of the arbitration.

                                    ARTICLE X
                                  MISCELLANEOUS

     Section 10.1. Necessary Acts. All parties to this Agreement shall perform
any and all acts as well as execute any and all documents that may be reasonably
necessary to fully carry out the provisions and intent of this Agreement.

     Section 10.2. Notices. All notices, demands, requests or other
communications required or permitted by this Agreement or by law to be served
on, given to or delivered to any party hereto by any other party to this
Agreement shall be in writing and shall be deemed duly served, given, received
and delivered (a) on the date of service if served personally on the party to
whom notice is given, (b) on the day of transmission if sent via facsimile
transmission to the facsimile number given below, provided telephonic
confirmation of receipt is obtained promptly after completion of transmission,
(c) on the business day after delivery to an overnight courier service or the
Express Mail service maintained by the United States postal service, provided
receipt of delivery has been confirmed or (d) five (5) days after being sent by
registered or certified mail, provided receipt of delivery is confirmed, first
class, postage prepaid, properly addressed to the respective parties as follows:

         If to the Company:          CardXX, Inc.
                                     701 Automation Drive
                                     Windsor, Colorado 80550
                                     Phone: (970) 686-2444
                                     Fax: (970) 686-2422

         With a copy to:             Larry D. Harvey, Esq.
                                     5290 DTC Parkway, Suite 150
                                     Englewood, Colorado 80111
                                     Phone: (303) 220-7810
                                     Fax: (303) 850-7115

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                                     James M. Piro, Esq.
                                     PIRO, ZINNA, CIFELLI & PARIS
                                     360 Passaic Avenue
                                     Nutley, New Jersey 07110-2787
                                     Phone: (973) 661-0710
                                     Fax: (973) 661-5157

                                     Frank A. Leo
                                     44 Minebrook Road
                                     Colts Neck, New Jersey 07722
                                     Fax: (732) 462-7840

         If to the Employee:         Harry J. Tiffany, III
                                     14247 Road X
                                     Weldona, Colorado 80653
                                     Fax: 970-645-2382

         With a copy to:             Michael E. Lindsay, Esq.
                                     BALLARD SPAHR ANDREWS &
                                       INGERSOLL, LLP
                                     1225 17th Street, Suite 2300
                                     Denver, Colorado 80202
                                     Phone: (303) 292-2400
                                     Fax: (303) 296-3956

or to such other address as may be designated by any such addressees by a notice
given in conformity herewith.

     Section 10.3. Binding on Successors. This Agreement shall inure to the
benefit of and be binding on the parties hereto and on each of their respective
heirs, executors, administrators, personal representatives, successors and
assignees.

     Section 10.4. Choice of Law and Forum. This Agreement shall be construed
and governed by the laws, commercial usages and customs of the State of
Colorado, without giving effect to the principles of conflict of laws thereof.
In the event that any dispute, action, proceeding or litigation arises between
the parties based on or arising out of this Agreement, or any agreement or
instrument delivered pursuant to this Agreement, subject to the arbitration
provisions of Article IX, the parties agree to submit themselves to and
irrevocably consent to the jurisdiction of the courts of the State of Colorado,
and any federal court located in the State of Colorado.

     Section 10.5. Headings. The headings of the articles and sections of this
Agreement have been inserted solely for convenience of reference and shall in no
way restrict or modify any of the terms or provisions hereof.

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     Section 10.6. Sole and Only Agreement. This Agreement and the agreements
referred to herein constitute the only agreements of the parties hereto relating
to the subject matter hereof. Any prior agreements, promises, negotiations or
representations concerning the subject matter of this Agreement not expressly
set forth in this Agreement shall have no force or effect.

     Section 10.7. Amendment and Extension. This Agreement may not be amended or
extended except by an instrument in writing signed on behalf of each of the
parties hereto.

     Section 10.8. Severability. Should any provision or portion of this
Agreement be held unenforceable or invalid for any reason, the remaining
provisions and portions of this Agreement shall be unaffected by such holding,
unless to do so would alter substantially the intended effect of this Agreement
or cause a substantial hardship for any party hereto.

     Section 10.9. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same agreement.

     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.

                                             Company:

                                             CARDXX, INC.

                                             By /s/ Frank Leo
                                                -------------------------------
                                                Frank Leo, President

                                             EMPLOYEE:

                                             /s/ Harry J. Tiffany, III
                                             -----------------------------------
                                             Harry J. Tiffany, III

                                       10<PAGE>

                                                                    EXHIBIT 10.4

                               SECURITY AGREEMENT
                            FOR INTELLECTUAL PROPERTY

                                                               Windsor, Colorado
                                                               January 27, 2000

     In order to induce Harry J. Tiffany, III ("Lender") whose address is 701
Automation Drive, Windsor, Colorado 80550 to assign certain assets and
intellectual property to Cardxx ("Borrower") in exchange for a promise by
Borrower to make payments to Lender as described herein, and in consideration
thereof and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Borrower hereby agrees as follows:

1.   DEFINITIONS.

     When used herein, the terms set forth below shall be defined as follows:

     (a) "Obligations" means all the indebtedness, obligations and liabilities
of the Borrower to Lender described in an Assignment of even date herewith
between Lender as Assignor and Borrower as Assignee (the "Assignment"). In
particular, the Obligations include the agreement of Borrower to pay Lender the
sum of $600,000 on or before March 31, 2000 and $200,000 on or before January 1,
2001 together with interest on such amounts from the date due until paid at the
rate of 10% per annum.

     (b) "Collateral" means the following property: the intellectual property
described on Exhibit A attached hereto and all additions thereto and
substitutions therefor and all cash proceeds thereof. The Collateral is
sometimes referred to herein as the "IP."

     (c) "Event of Default" means: (i) any default with respect to payment or
performance of any of the Obligations; or (ii) insolvency of the Borrower; or
(iii) the Borrower makes an assignment for the benefit of creditors or a
petition in bankruptcy or for reorganization or to effect a plan or arrangement
with creditors is filed by or against the Borrower; or (iv) the Borrower applies
for or permits the appointment of a receiver or trustee for any or all property
or assets of the Borrower, or any such receiver or trustee shall have been
appointed for any or all property or assets of the Borrower; or (v) any of the
above actions or proceedings whatsoever are commenced by or against the
Borrower; or (vi) a proceeding is filed or commenced by or against the Borrower
for dissolution or liquidation; or (vii) the Borrower voluntarily or
involuntarily terminates or dissolves or is terminated or dissolved; (viii) the
breach by Borrower of any provision of this Agreement which breach has not been
cured within 30 days after written notice from Lender to Borrower setting forth
such breach, provided that if such breach is of a nature which cannot reasonably
be cured within such 30 day period, Borrower shall have such time as shall be
reasonably necessary to cure such breach so long as it is making diligent
efforts to effect such cure.

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2.   PLEDGE OF COLLATERAL.

     To secure the payment and performance of the Obligations, the Borrower
hereby pledges, to Lender, and grants to Lender a continuing security interest
in and to, all of the Collateral.

3.   REPRESENTATIONS AND WARRANTIES.

     The Borrower agrees to reimburse Lender, on demand, for any amounts paid or
advanced by Lender after the occurrence of a breach by Borrower of any provision
of this Agreement, until cured for the purpose of preserving the Collateral or
any part thereof and any liabilities or expenses incurred by Lender as the
transferee or holder of the Collateral. Lender shall exercise reasonable care in
the custody and preservation of the Collateral to the extent required by
applicable statute and use its best efforts to take such actions as the Borrower
may reasonably request in writing but the failure to do any such act shall not
be deemed a failure to exercise reasonable care. Borrower shall also observe and
perform all of the covenants and obligations contained in the Assignment.

4.   GENERAL COVENANTS.

     a. Confidentiality. All of the IP, except IP described in one or more
patent applications prepared with mutual consent of Lender and Borrower and made
publicly available, shall be considered confidential information and trade
secrets ("Confidential Information"). Except as otherwise provided herein, each
party agrees that it will not disclose the Confidential Information and will
take steps to safeguard such information from disclosure or discovery by third
persons. Each party agrees that it will -

        (i) Keep the Confidential Information secret and confidential and will
not disclose such information to any third party;

        (ii) Make no copies and permit no reproductions of the Confidential
Information other than for internal use;

        (iii) Keep the Confidential Information confidential and secret from
employees, agents, independent contractors or others unless such persons have a
need to know such information in connection with services they are performing
for the discloser and have agreed in writing to bound by the terms of this
agreement to keep the Confidential Information secret.

     The covenant of confidentiality shall not apply to any information which -

        (i) was in the recipient's possession or was known to recipient, without
an obligation to keep it confidential, before such information was disclosed to
recipient by the discloser;

        (ii) is or becomes public knowledge through a source other than the
recipient and through no fault of the recipient;

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        (iii) is independently developed by or for the recipient;

        (iv) is or becomes lawfully available to the recipient from a source
other than the discloser; or

        (v) is disclosed by the recipient with the discloser's prior written
approval.

     After the payment by Borrower of the $600,000 payment provided for in
Section 1.a. (plus any interest accrued thereon and unreimbursed expenses
advanced by Lender as provided for herein), the covenants of nondisclosure shall
continue to apply to Lender, but not to Borrower, who shall be free of any
limitations or restrictions on disclosure of the Confidential Information.

     If either party is required to disclose Confidential Information by law or
by court or governmental order, such party shall give the other party prompt
written notice thereof so that such other party may seek a protective order or
other appropriate remedy prior to such disclosure, and both parties shall
provide full and complete cooperation in seeking such order or remedy.

     b. Limitations on Use of IP. During the term of this Agreement, in addition
to the limitations on disclosure and the covenants of confidentiality contained
herein, each party agrees not to sell, lease, license or otherwise transfer the
IP or any part thereof to any third party. Furthermore, Borrower agrees that it
shall make no alterations or modifications to the IP. After the payment of
$600,000 provided for in Section 1.a. (plus any interest accrued thereon and
unreimbursed expenses advanced by Lender as provided for herein) by Borrower,
Borrower shall be free of such restrictions with respect to the IP, but Lender
shall remain bound by them. So long as Borrower is in default under this
Assignment or under the Security Agreement, or if Lender reacquires or transfers
the IP pursuant to a default under the Security Agreement, Lender shall be free
of such restrictions with respect to the IP but Borrower shall remain bound by
them.

     c. Defense of the IP and Infringement. Lender hereby represents to Borrower
that to the best of Lender's knowledge and belief, there is no infringement with
respect to the IP as of the date hereof. During the term of this Agreement, in
the event that Lender or Borrower suspects that a third party is infringing upon
any or all of the proprietary rights comprising the IP, such party shall provide
prompt notice thereof to the other party. If the infringement represents a
material threat to the proprietary nature of the IP or the business of Borrower,
Borrower shall initiate at its expense action against such infringer and use its
best efforts to achieve a successful result therefrom. Lender agrees to assist
Borrower in such effort and shall be consulted on the conduct of such
proceedings and shall have the right to consent to any material actions taken in
any such proceedings, including without limitation the settlement thereof, which
consent shall not be unreasonably withheld. Nothing herein shall limit the right
of Lender to take action on its own against any infringement of the IP.

     d. Treatment of Collateral. Lender shall be under no duty to: (i) collect
or protect the Collateral or any proceeds thereof or give any notice with
respect thereto; (ii) sell or otherwise realize upon the Collateral; or (iii)
seek payment from any particular source. Without limiting the generality of the
foregoing, Lender shall not be obligated to take any action in connection with
any conversion, call, redemption, retirement or any other event relating to any
of the Collateral.

                                       3

<PAGE>

     After payment of part of the Obligations, Lender may, at its option, retain
all or any portion of the Collateral as security for any remaining Obligations
and retain this Agreement as evidence of such security. The Borrower agrees to
reimburse Lender, on demand, for any amounts paid or advanced by Lender from and
after the occurrence of a breach of this Agreement by Borrower until cured for
the purposes of preserving the Collateral or any part thereof and any
liabilities or expenses incurred by Lender as the transferee or holder of the
Collateral.

     During any period in which there are no uncured breaches of this Agreement
by Borrower, nothing contained in this Section 4 shall be construed to limit the
ability of the Borrower to use the IP in the ordinary course of business
consistent with past practices.

5.   RIGHTS AND REMEDIES.

     Lender shall have, by way of example and not of limitation, the rights and
remedies in subparagraph (a) of this paragraph at all times prior to and after
the occurrence of an Event of Default and shall have all the rights and remedies
enumerated herein after the occurrence of an Event of Default.

     (a) Lender may, at its option and without notice: (i) transfer into its
name or the name of its nominee all or any part of the Collateral for purposes
of perfecting its security interest in the Collateral; or (ii) notify any person
obligated on any of the Collateral of the security interest of Lender therein
and request such person to make payment directly to Lender.

     (b) If any Event of Default shall occur, then or at any time thereafter,
while such Event of Default shall continue, Lender may declare all Obligations
to be due and payable regardless of their terms, for the purposes of this
Agreement, without notice, protest, presentment or demand, all of which are
hereby expressly waived by the Borrower. At or after such time Lender shall
have, in addition to any other rights and remedies contained in this Agreement,
and any other agreements, guarantees, notes, instruments and documents
heretofore, now or at any time or times hereafter executed by the Borrower, and
delivered to Lender, all of the rights and remedies of a pledgee, under law,
including without limitation all of the rights and remedies of a secured party
under the Uniform Commercial Code in force in the State of Colorado as of the
date hereof, all of which rights and remedies shall be cumulative, and
non-exclusive, to the extent permitted by law.

6.   TERM AND TERMINATION.

     This Agreement shall terminate upon payment by Borrower of all amounts due
to Lender hereunder. Upon termination due to payment of all amounts due from
Borrower to Lender hereunder:

     (a) Lender shall continue to be bound by the confidentiality provisions
hereof.

     (b) Lender shall immediately deliver to Borrower all written copies of all
programs, drawings, specifications, instructions and any other documentation
pertaining to the IP and all magnetic copies of the foregoing documents. Lender
shall not retain any of the foregoing materials

                                       4

<PAGE>

and shall take all steps necessary to insure that all copies of the foregoing
materials are permanently removed from his premises and that of his employees
and agents.

     Upon the occurrence of an Event of Default by Borrower -

     (a) Borrower shall continue to be bound by the confidentiality provisions
hereof.

     (b) Borrower shall immediately deliver to Lender all written copies of all
programs, drawings, specifications, instructions and any other documentation
pertaining to the IP and all magnetic copies of the foregoing documents.
Borrower shall not retain any of the foregoing materials and shall take all
steps necessary to insure that all copies of the foregoing materials are
permanently removed from its premises and that of its employees and agents.

7.   GENERAL.

     (a) Each reference herein to Lender and Borrower shall be deemed to include
their respective successors and assigns, all of whom shall be bound by the
provisions hereof.

     (b) Borrower represents that the officer signing on its behalf has been
duly authorized to execute this Agreement for and on behalf of the corporation
by its Board of Directors or stockholders.

     (c) No delay on the part of Lender in exercising any rights hereunder or
failure to exercise the same shall operate as a waiver of such rights; no notice
to or demand on the Borrower shall be deemed to be a waiver of any obligations
of the Borrower or of the right of Lender to take other or further action
without notice or demand as provided herein. In any event, no modification or
waiver of the provisions hereof shall be effective unless in writing and signed
by Lender nor shall any waiver be applicable except in the specific instance or
matter for which given.

     (d) The Borrower hereby certifies and covenants that all acts, conditions
and things required to be done and performed and to have happened precedent to
the creation and issuance of this Agreement and to constitute the same the valid
and legally binding obligation of the Borrower in accordance with its terms,
have been done and performed and have happened in due and strict compliance with
all applicable laws.

     (e) This Agreement is and shall be deemed to be a contract entered into and
made pursuant to the laws of the State of Colorado and shall in all respects be
governed, construed, applied and enforced in accordance with the laws of said
state; in the event that the Lender brings any action hereunder in any court of
record of Colorado or the Federal Government, the Borrower consents and consents
and confers personal jurisdiction over the Borrower by such court or courts and
agrees that service of process may be made upon the Borrower by mailing a copy
of the summons to the Borrower in the manner specified in paragraph 7(i) hereof;
and in any action hereunder the Borrower waives the right to demand a trial by
jury.

                                       5

<PAGE>

     (f) Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law.
Should any portion of this Agreement be declared invalid for any reason in any
jurisdiction, such declaration shall have no effect upon the remaining portions
of this Agreement; furthermore, the entirety of this Agreement shall continue in
full force and effect in all other jurisdictions and said remaining portions of
this Agreement shall continue in full force and effect in the subject
jurisdiction as if this Agreement had been executed with the invalid portions
thereof deleted.

     (g) The section headings herein are included for convenience only and shall
not be deemed to be a part of this Agreement.

     (h) Each party recognizes and acknowledges that any breach or threatened
breach of this Agreement by other may cause irreparable harm for which monetary
damages may be inadequate. The recipient of Confidential Information agrees,
therefore, that the discloser shall be entitled to an injunction to restrain the
recipient from such breach or threatened breach. Nothing in this Agreement shall
be construed as preventing the discloser from pursuing any remedy at law or in
equity for my breach or threatened breach of this Agreement.

     (i) All notices, statements, reports, requests, consents and other
communications, whether required by this Agreement or in any way related to the
transactions contemplated herein, shall be in writing and shall be deemed to
have been sufficiently given (i) three business days after depositing the same
in the U.S. mail, by registered or certified mail, postage prepaid, return
receipt requested; (ii) one business day after deposit with a recognized
overnight courier service; or (iii) immediately upon facsimile transmission, if
such transmission occurs during the regular business hours of the recipient, or
otherwise the next business day thereafter, provided that the transmission is
followed by the mailing of the original by registered or certified mail or by
recognized overnight courier service; at the following addresses, or at such
other addresses as the parties may designate by written notice in the foregoing
manner:

          (i)  If Lender:

               Harry J. Tiffany, III
               701 Automation Drive
               Windsor, Co 80550
               Fax: (970) 686-2422

               With a copy to:

               Jeffrey Davine
               Ballard Spahr Andrews & Ingersoll, LLP
               1225 17th Street, Suite 2300
               Denver, CO 80202
               Fax: (303) 296-3956

                                       6

<PAGE>

          (ii) If to Borrower:

               CardXX, Inc.
               701 Automation Drive
               Windsor, CO 80550
               Bus Fax: (970) 686-2422

               With a copy to:

               Frank A. Leo
               44 Minebrook Road
               Colts Neck, New Jersey 07722
               Fax: (732) 462-7840

               Larry D. Harvey, Esq.
               5290 DTC Parkway, Suite 150
               Englewood, CO 80111
               Fax: (303) 850-7115

     (j) Upon the request of a party hereto, the other party shall execute any
documents and take all such further actions as shall be reasonably necessary to
accomplish the purposes of this Agreement.

8.   ASSIGNMENT BY LENDER.

     Lender may, from time to time, without notice to the Borrower, sell,
assign, transfer or otherwise dispose of all or any part of the Obligations or
the security interest therefor, or both. In such event, each and every immediate
and successive purchaser, assignee, transferee or holder of all or any part of
the Obligations or the Collateral shall have the right to enforce this Agreement
by legal action or otherwise, for its own benefit as fully as if such purchaser,
assignee, transferee or holder were herein by name specifically given such
rights. Lender shall have an unimpaired right to enforce this Agreement for its
benefit to the portion of the Obligations of Borrower as Lender has not sold,
assigned, transferred or otherwise disposed of.

                                             BORROWER:

                                             CardXX, Inc., a Nevada corporation

                                             By: /s/ Frank Leo
                                                 ------------------------------

                                             LENDER: /s/ Harry J. Tiffany, III
                                                     --------------------------
                                                     Harry J. Tiffany, III

                                       7

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