APPLIED BIOMETRICS INC
CONFIDENTIAL SEPARATION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>CONFIDENTIAL SEPARATION AGREEMENT
<TEXT>


                                                                    EXHIBIT 10.1


                          CONFIDENTIAL SEPARATION AGREEMENT


This Confidential Separation Agreement ("Agreement") is made and entered into
this 15 day of August 2000 by and among Applied Biometrics, Inc. all of its
subsidiaries, affiliates, members and related entities (collectively: "Company"
or "Applied Biometrics"), and Andrew M. Weiss ("Mr. Weiss") as follows:

Applied Biometrics and Mr. Weiss wish to provide for the termination of their
employment relationship and all agreements that may have existed between them,
and fully and finally to settle any and all disputes Mr. Weiss may have arising
out of his employment by Applied Biometrics or the termination of that
employment, without any admission of any kind by either party.

All remaining employees of Applied Biometrics are eligible to participate in
this group exit incentive. The offer to participate will remain open until
October 15, 2000. Attached to this Agreement, as Exhibit 1 is a listing of the
job titles and ages of all individuals eligible for this incentive. There are no
remaining employees who are not eligible for this incentive.

THEREFORE, in consideration of the promises and agreements set forth in this
Agreement, Applied Biometrics and Mr. Weiss agree as follows:

                                       RELEASE

1.    Employment Separation:

      a.    Separation: Effective on October 31, 2000, or on an earlier date
            mutually agreed upon by Mr. Weiss and Applied Biometrics, Mr. Weiss
            shall have no duties and no authority to make any representations or
            commitments on behalf of Applied Biometrics as an employee or in any
            capacity whatsoever. Thereafter, Mr. Weiss shall have no further
            rights deriving from his employment by Applied Biometrics, and shall
            not be entitled to any further compensation or non-vested benefits,
            except as provided in this Agreement.


      b.    Consideration: In exchange for the promises and release of claims
            contained in this Agreement, and subject to its terms, Applied
            Biometrics agrees to provide Mr. Weiss the following benefits as
            consideration. If Mr. Weiss elects not to sign the Agreement, Mr.
            Weiss shall receive only those benefits and payments required by
            law.

            1)    SEVERANCE PAYMENTS.

                  (a)   Applied Biometrics will pay Mr. Weiss as severance a
                        gross amount equal to twelve months ("Severance Period")
                        salary and car allowance. This severance payment will be
                        payable as a lump sum payment, to be paid on the next
                        regularly scheduled payday following the expiration of
                        the rescission period described in


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                        Paragraph 8 of the Agreement, or the last date actually
                        worked by Mr. Weiss, whichever is later. This payment
                        will be subject to all applicable deductions, including
                        federal, state, FICA and other taxes. Mr. Weiss will not
                        be eligible for bonus or bonus payments after his last
                        day of work at the Company. Applied Biometrics will
                        issue an IRS Form W-2 for this payment.

                  (b)   BENEFITS PAYMENTS. Applied Biometrics will pay Mr. Weiss
                        a lump sum payment in the amount of $8,200, which equals
                        the cost of maintaining COBRA benefits for Mr. Weiss
                        during the severance period. This payment will be made
                        on the next regularly scheduled payday following the
                        expiration of the rescission period described in
                        Paragraph 8 of the Agreement, or the last date actually
                        worked by Mr. Weiss, whichever is later. To the extent
                        such payments constitute taxable income to Mr. Weiss,
                        Mr. Weiss will pay all associated taxes.

2.    Mr. Weiss has the option to assume as primary lessee the Company's lease
      with Audi Financial Service, account #715119308, ("lease"), associated
      with a 1999 Audi A6 VIN WAUDA34B7XN076028 ("vehicle") or purchase the
      vehicle from the Company for $31,480.

      If Mr. Weiss elects to become the primary lessee of the lease, Mr. Weiss
      agrees to lease the vehicle in an "as is" condition. Mr. Weiss agrees to
      comply fully with the terms of the lease, including maintaining the
      vehicle and making all payments required under the lease. Mr. Weiss agrees
      to defend and indemnify Applied Biometrics against any and all claims and
      complaints arising from his use of the vehicle, failure to properly
      maintain the vehicle and/or failure to fully comply with the terms of the
      lease. Mr. Weiss agrees to maintain insurance on the vehicle as is
      required by the lease, naming Applied Biometrics as an additional insured.

      Mr. Weiss has until September 15, 2000 to elect either to assume the lease
      or purchase the vehicle from the Company. If Mr. Weiss does not choose
      either of the above options, Mr. Weiss agrees to return the vehicle to
      Carousel Automobiles on or before September 30, 2000.

3.    Mr. Weiss certifies that he has reviewed the Agreement provided by Applied
      Biometrics, given to him on or before August 15, 2000.

      Mr. Weiss has forty-five (45) days to consider whether to accept this
      Agreement and enter into this Release, and he has been advised to consult
      with legal counsel of his choice. If he chooses to sign before forty-five
      (45) days have passed, he understands that it is his decision to execute
      the Agreement early and that Applied Biometrics has made the full
      forty-five (45) day period available for his to consider the Agreement.

4.    Mr. Weiss understands that the offer to accept the Agreement remains in
      effect for forty-five (45) days after August 15, 2000. After forty-five
      (45) days have passed, this offer


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      expires and Applied Biometrics will be under no obligation to accept the
      release or to provide any benefits under the Agreement.

5.    After considering the Agreement and other relevant matters, Mr. Weiss
      voluntarily agrees to waive any claims he (or anyone acting in his name or
      on his behalf) may have against Applied Biometrics relating to his
      employment with or separation from Applied Biometrics in exchange for the
      consideration described in Paragraph 1. Mr. Weiss understands that this is
      a full and complete release and waiver of all claims, complaints, causes
      of action or demands relating to his employment with and separation from
      Applied Biometrics that she/he may have against Applied Biometrics, its
      successors, affiliates or related companies, all directors, officers,
      employees and agents of Applied Biometrics, as of the date of his signing
      the Release (the "Claims") based on events occurring up to the date he
      signs this Agreement.

      Mr. Weiss understands that this Release extends to, but is not limited to,
      any Claims which he may have for age discrimination or any other form of
      employment discrimination prohibited under Title VII of the Civil Rights
      Act of 1964, the Age Discrimination in Employment Act, the Older Workers
      Benefit Protection Act, the American with Disabilities Act, ERISA, the
      Rehabilitation Act of 1973, the Minnesota Human Rights Act, the Minnesota
      Human Rights Act, and any other local state or federal anti-discrimination
      law or ordinance, any applicable wage and hour laws, and for wrongful
      discharge, breach of contract, breach of any express or implied promise,
      retaliation, breach of public policy, defamation, negligence or other
      tortious conduct, or any other theory, whether legal or equitable and
      including any Claims which could have been asserted to date. Mr. Weiss
      acknowledges that he has been provided a full opportunity to review and
      reflect on the terms of this Agreement and to seek legal counsel of his
      choice, and any and all releases and waivers have been made with advice of
      counsel. Notwithstanding the provisions of this Paragraph, nothing in this
      Agreement shall be construed as a waiver by Mr. Weiss or Applied
      Biometrics of any claim either may have for insurance coverage for defense
      costs and/or indemnity based on actions performed by Mr. Weiss during his
      employment at Applied Biometrics. Nothing in this agreement shall be
      construed as waiving Mr. Weiss's coverage or rights under the Company's
      Director and Officers Insurance Policy.

6.    Mr. Weiss agrees to keep the terms of the Agreement strictly confidential,
      except that he may disclose the terms of the Agreement to his spouse, his
      attorney and tax advisor, or as required by law, provided each party to
      whom disclosure occurs is advised and agrees not to disclose the
      information further. Mr. Weiss understands and agrees that except as set
      forth in this paragraph, disclosure in any fashion of the existence of
      this Agreement or any or all of its terms or conditions shall be a
      material breach of the Agreement. Mr. Weiss agrees that any breach of this
      confidentiality provision shall be specifically enforceable by a court of
      law or equity, and further agrees to indemnify and hold Applied Biometrics
      harmless for any costs, including reasonable attorneys' fees, incurred in
      the enforcement of this confidentiality provision.


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7.    Mr. Weiss agrees to refrain from making, or encouraging others to make,
      any disparaging remarks about Applied Biometrics, including Applied
      Biometrics' divisions, subsidiaries, affiliates, officers, directors,
      employees, agents, and locations worldwide.

8.    Mr. Weiss acknowledges that he has been provided a full opportunity to
      review and reflect on the terms of the Agreement and to seek the legal
      counsel of his choice. Mr. Weiss further acknowledges that he fully
      understands and accepts the terms of the Agreement, and that he has
      voluntarily and knowingly given it to Applied Biometrics.

9.    Mr. Weiss realizes that he may cancel the Agreement at any time on or
      before the fifteenth (15th) day following the date on which he signs this
      Agreement. He understands that if he cancels the Agreement, the Agreement
      shall not become effective or enforceable and he further understands that
      Applied Biometrics shall not pay his the consideration set forth in
      Paragraph 1. To be effective, the decision to cancel must be in writing
      and delivered to Applied Biometrics personally or by certified mail, to
      the attention of:

                              Board of Directors
                              Applied Biometrics, Inc.
                              501 East Highway 13, Suite 108
                              Burnsville, MN 55357

10.   Proprietary Information. Nothing in this Agreement shall be interpreted as
      releasing Mr. Weiss from compliance with any Applied Biometrics
      Confidentiality Agreement (or similar titled agreement) that Mr. Weiss may
      have executed. Mr. Weiss agrees not to disclose, in any manner to any
      person, any Applied Biometrics Confidential Information. Mr. Weiss agrees
      to return all originals and copies of documents containing Confidential
      Information as well as all documents generated by Mr. Weiss on behalf of
      Applied Biometrics and all documents relating to the business of Applied
      Biometrics from any source whatsoever. For purposes of this Agreement,
      "Applied Biometrics Confidential Information" means any information that
      Mr. Weiss learned or developed during the course of employment with
      Applied Biometrics that derives independent economic value from not being
      generally known, or not being readily ascertainable by proper means, by
      other persons who can obtain economic value from the disclosure or use of
      such information. Such information includes, but is not limited to Applied
      Biometrics' sales information, information about new or future products,
      Applied Biometrics' marketing plans and goals, lists of Applied
      Biometrics' customers and the identities of preferred customers,
      information about customer purchases and preferences, information
      regarding research and development, information regarding management
      systems and any other confidential information which provides Applied
      Biometrics with a competitive advantage.

11.   Miscellaneous. Except for agreements described in Paragraph 9, this
      Agreement constitutes the entire agreement among the parties hereto as to
      the subject matter hereof and supersedes all other previous written or
      oral agreements or understandings as to such subject matter. This
      Agreement may be modified, and the performance of it may be waived only by
      a writing signed by each of the parties hereto. No parol or other evidence
      may be offered to add to, contradict or otherwise interpret this
      Agreement, which all


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      parties agree is clear and concise as to its meaning. This Agreement may
      be signed in any number of counterparts with the same effect as if the
      signatures and all such counterparts were on the same instrument. This
      Agreement shall be construed and enforced in accordance with, and the laws
      of the State of Minnesota shall govern all questions concerning the
      construction, validity, interpretation and performance of this Agreement
      without giving effect to provisions thereof regarding conflict of laws.




        IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of this 15 day of August 2000.


Date:   August 24, 2000                  Date:   August 24, 2000
       -------------------------------          -------------------------------
        /s/ Andrew M. Weiss              By:     /s/ Jeffrey Green
       -------------------------------          -------------------------------
        Mr. Andrew M. Weiss                      Director
                                                -------------------------------
                                                 Applied Biometrics, Inc.


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LISTING OF JOB TITLES AND AGES OF ALL EMPLOYEES THAT ARE ELIGIBLE FOR THIS
INCENTIVE

                         JOB TITLE                         AGE
      ----------------------------------------------------------------
        President & Chief Executive Officer                43


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