Document:

<PAGE>

       6.1 Acceleration of Obligations.  Declare any or all obligations under
the Note to be immediately due and payable, whereupon such Obligations shall
be immediately due and payable.

       6.2 If Secured Party demands or attempts to take possession of any or
all collateral, Obligor shall promptly assemble such Collateral and turn over
and deliver possession of such Collateral to Secured Party at a place
designated by Secured Party and convenient to Secured party and Obligor.

       6.3 Retain the Collateral as Payment.  Upon written notice to Obligor,
retain the Collateral in satisfaction of the obligations.  Unless such written
notice is given, retention of the Collateral by Secured Party shall not be in
satisfaction of any of the obligations.

       6.4 Other Rights and Remedies.  Exercise any and all other rights and
remedies of Secured Party under the Note or under applicable law.

       7.0 Application of the Proceeds.  After an event of default, all cash
and checks included in the Collateral and all proceeds of Collateral received
by Secured Party will be applied by Secured Party to the Obligor's
obligations, whether or not due, in such order as Secured Party may determine
in its absolute and sole discretion, subject to any requirements of law.  If
application of the Collateral is not sufficient to pay the obligations in
full, Obligor shall remain obligated for the remaining obligations.

       8.0.  Continuation and Termination. This Agreement shall continue in
effect until payment and performance of the obligations of Obligor in full.

       Dated as of the date first above written.

                                          "Obligor"

                                          CHEQUEMATE INTERNATIONAL, INC.

                                                 /s/ J. Michael Heil, CEO
                                          -------------------------------------
                                          By

                                     144

<PAGE>

                              EXHIBIT 10.5

               CONVERTIBLE LINE OF CREDIT PROMISSORY NOTE

Amount: $1,000,000.00                             Date: May 24, 2000

       FOR VALUE RECEIVED, Chequemate International, Inc., a Utah corporation
(referred to herein as the"Borrower") promises to pay to MERIDEL LIMITED
(referred to herein as the "Lender"), or order, at the address the Lender
shall designate in writing to the Borrower from time to time, the sum of One
Million dollars ($1,000,000) or the aggregate unpaid principal balance of all
advances made to the Borrower by the Lender pursuant to this Note from time to
time ("Advances") on May 1, 2001 ("Maturity Date") in lawful money of the
United States and in immediately available funds, together with interest on
the unpaid principal balance of this Convertible Line of Credit Promissory
Note ("Note") computed on the basis of a 360 day year and charged on actual
days the principal amount of any Advance  is outstanding, at the rate of
twelve percent (12%) per annum.

       1.  TERM OF NOTE.  The principal amount of all Advances made under the
terms of this Note and all accrued and unpaid interest shall be due and
payable on the Maturity Date.

       2.  PREPAYMENT.  The Borrower may not prepay any of the principal
amount of this Note, except with the express written consent of the Lender.

       3.  CONVERSION PRIVILEGES.  The Lender shall have the right to convert
up to the full amount of the then outstanding principal balance of the Note to
common stock of the Borrower to be issued by Borrower on the terms and
conditions set forth below:

              a.  TERM OF OPTION.  The Lender may convert any part of the
              principal balance of the loan to common stock at any time or
              from time to time from the date of this Note until the principal
              balance is retired or converted.

              b.  CONVERSION PRICE.  The price at which the principal balance
              of the Advance is to be converted to common stock shall be 50% of
              the bid price, but not lower than $2.00 per share.

              c.  NOTICE OF ELECTION TO CONVERT.  The option to convert to
              common stock may be made by Lender at any time upon written
              Notice of Election to convert by Lender. The Notice of Election
              to convert shall contain the date of conversion and the principal
              amount of the Advance to be converted to common stock.  Such
              conversion shall be effective on the date specified in the notice.

              d.  ADJUSTMENT FOR COMMON STOCK RECLASSIFICATIONS.  In the event,
              at any time after the date hereof, the holders of the common
              stock of the Borrower shall have received, or, on or after the
              record date fixed for the determination of eligible stockholders,
              shall have become entitled to receive, without payment therefore,
              other or additional stock or other securities or property by way
              of stock-split, spinoff, reclassification, combination of shares
              or similar corporate rearrangement, then and in each such case
              the Lender, upon the exercise hereof as provided herein, shall be
              entitled to receive the amount of stock and other securities and
              property which the Lender would hold on the date of such exercise
              if on record date of such corporate reclassification Lender had

                                     145

<PAGE>

              been the holder of record of the number of shares of common stock
              of the Borrower called for in the event of complete conversion of
              the Note and had thereafter retained such shares and/or all other
              or additional stock and other securities and property receivable
              by Lender as aforesaid during such period, giving effect to all
              adjustments called for during such period.

              e.  ADJUSTMENT FOR CONSOLIDATION OR MERGER.  In case of any
              reorganization of the Borrower after the date hereof, or in case,
              after such date, the Borrower shall consolidate with or merge
              into another corporation or convey all or substantially all of
              its assets to another corporation, then and in each such case
              the Lender, upon the exercise of its conversion rights at any
              time after the consummation of such reorganization,
              consolidation, merger or conveyance, shall be entitled to
              receive, in lieu of the stock or other securities and property
              receivable upon the conversion of this Note prior to such
              consummation, the stock or other securities or property to which
              Lender would be entitled had the Lender converted this Note
              immediately prior thereto.

              f.  PIGGYBACK REGISTRATION RIGHTS.  If, at any time after the
              conversion of this Note and expiring one year thereafter, the
              Borrower proposes to register any of its securities under the
              Securities Act of 1933 (the "Act") either for its own account or
              for the account of others, in connection with the public offering
              of such equity securities solely for cash, on a registration form
              that would also permit the registration of the shares of common
              stock or preferred stock issuable upon conversion of this Note,
              the Borrower shall promptly give the Lender written notice of
              such proposal.  Within thirty days after the notice is given, the
              Lender shall give notice as to the number of shares of common
              stock or preferred stock, if any, which the Lender requests be
              registered simultaneously with such registration by the Borrower.
              The Borrower shall use its best efforts to include such shares in
              such registration statement and to cause such registration
              statement to become effective with respect to such shares.  All
              costs in connection such registration statement shall be borne by
              the Borrower.  The Lender shall bear all underwriting discounts,
              selling commissions, sales concessions and similar expenses
              applicable to the sale of the Lender's common stock or preferred
              stock.

              g.  RESERVATION OF STOCK.  The Borrower shall at all times
              reserve and keep available for issue upon conversion of this
              Note such number of its authorized but unissued shares of common
              stock  as will be sufficient to permit the conversion in full of
              this Note.

              h.  INTEREST.  In the event of the conversion to common stock of
              any of the principal amount of any Advance, the accrued interest
              applicable to such converted principal shall be deemed to be
              forgiven upon conversion and shall not be otherwise payable
              pursuant to the terms of this Note.

              i.  ASSIGNMENT.  Lender may assign all or any part of this Note
              with its attendant conversion privileges to any party or parties.

              j.  CONDITION  PRECEDENT. The conversion of any part of this Note
              to common stock and the issuance of the related common stock is
              subject to the approval of the American

                                     146

<PAGE>

              Stock Exchange ("Amex") of a request by the Borrower to list such
              shares on the Amex.

       4.  SECURITY.  This Note is secured by a Security Agreement and a
financing statement granting a security interest in Borrower's tangible and
intangible assets.

       5.  DEFAULT.   If any installment or the final payment due under this
Note is not paid on its due date or within fifteen (15) days thereafter, if
the Borrower Board of Directors, or the Borrower shareholders if consent of
shareholders is required, fails to approve or ratify all of the terms of this
Note, or if the Borrower otherwise defaults under the terms of this Note or
the Security Agreement, then the holder hereof, following the giving of 10
days written notice may accelerate this Note and declare the entire balance
due and owing whereupon the Borrower agrees to pay the entire balance of the
Note upon demand.

       Each payment shall be applied first to the payment of interest and
thereafter to the payment of principal.  In the event of non-payment of any
installment, the final payment or the accelerated principal in the event of
default, the Borrower agrees to pay all expenses of collection of this Note,
including reasonable attorney's fees and court costs incurred in any
proceeding including any proceedings in the United States Bankruptcy Court.
After acceleration, in the event of default, and after the due date and before
and after judgment, this Note shall accrue interest until paid at the highest
legal rate.

       6.  GOVERNING LAW.  This Note shall be governed by the laws of the
State of Utah.

       7.  WAIVER OF NOTICE, ETC.   Every maker, endorser or guarantor of this
Note waives presentment, demand, notice, protest and all other notices in
connection with the deliver, acceptance, default or enforcement of this Note
and each agrees that the holder, from time to time, may renew, modify or
extend performance of obligations hereunder without their consent.

       8.  ARBITRATION.  If at any time during or after the term of this Note
any dispute, difference, or disagreement shall arise upon or in respect of
this Note, or the conversion of the Note to common stock, and the meaning
and construction of the terms hereof, every such dispute, difference, and
disagreement shall be referred to a single arbitrator agreed upon by the
Borrower and the Lender, or if no single arbitrator can be agreed upon, an
arbitrator or arbitrators shall be selected in accordance with the rules of
the American Arbitration Association and such dispute, difference, or
disagreement shall be settled by arbitration in accordance with the then
prevailing commercial rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.  The arbitration proceedings shall be held in
Salt Lake City, Utah.

       9.  ASSIGNMENT.  This Note and the conversion privileges associated
herewith shall be assignable in whole or in part at any time by Lender.

       IN WITNESS WHEREOF, the Borrower has caused this Note to be executed as
of the date above set forth.

                                          BORROWER:

                                     147

<PAGE>

                                          CHEQUEMATE INTERNATIONAL, INC.

                                                 /s/ J. Michael Heil, CEO
                                          -------------------------------------
                                          By

                                 SECURITY AGREEMENT

                                    May 24, 2000

                                        148

<PAGE>

       Parties:    Obligor: CHEQUEMATE INTERNATIONAL, INC, a Utah corporation

                   Secured Party: MERIDEL LIMTED

       Collateral: All tangible and intangible assets of the Obligor, including
                   patents and patents pending.

       Obligation: Convertible Line of Credit Promissory Note ("Note") dated
May 24, 2000

2.  Grant of Security Interest.  Obligor grants to Secured Party a Security
Interest in the Collateral to secure payment and performance of the Note.

3.  Obligor Representations and Warranties.  Obligor represents and warrants
to Secured Party as of the date of this Agreement and, as to Collateral in
which Obligor acquires an interest or rights after the date of this Agreement,
as of the date Obligor acquires such interest or rights.

       3.1 Ownership and Possession of Collateral.  Obligor is the legal
and/or beneficial owner of the Collateral.  There are no liens and
encumbrances on the Collateral or claims thereof, except as may be granted
contemporaneously with this Security Agreement.  There is no financing
statement now filed or recorded covering any of the Collateral.  Obligor is in
exclusive possession of the Collateral.

       3.2 Validity, Perfection, and Priority of Security Interest.  The
Security Interest granted in this agreement (i) is legal, valid, binding, and
enforceable, (ii) is a perfected Security Interest in all the collateral, and
(iii) is a first priority Security Interest in all the Collateral.

       3.3 Enforceability, Amount, and Other Matters concerning Collateral.
The Assets of the Obligee and the agreements, documents, and instruments
evidencing and securing the Assets are (i) genuine, (ii) the legal, valid and
binding obligations of the parties thereto, and (iii) enforceable against the
parties thereto in accordance with their terms.  Any copies of such
agreements, documents, and instruments delivered to Secured Party are accurate
and complete and, except for the items delivered to Secured Party there are
no amendments, modifications, extensions, renewals, restatements, or
supplements thereof.  No surety bond was required or given by Obligor in
connection with or is otherwise applicable to (1) any goods, or other tangible
personal property, or services relating to the Receivables, or (2) the
agreements, documents, or instruments out of which the Receivables arose.

       4.  Obligor Covenants.  Until the Note is paid in full, Obligor agrees
that, unless Secured Party otherwise agrees in writing in Secured Party's sole
and absolute discretion:

       4.1 Defense of Obligor's Title and of Security Interest.  Obligor shall
defend the Collateral, the title and interest therein of Obligor represented
and warranted in this Agreement, and the legality, validity, binding nature,
and enforceability of the Security Interest granted herein, the perfection
thereof, and the first priority thereof against all matters, including,
without limitation, (i) any attachment, levy, or other seizure by legal process
or otherwise of any or all Collateral, (ii) any lien or encumbrance or claim
thereof on any or all Collateral, (iii) any attempt to realize upon any or all
Collateral under any lien or encumbrance, regardless of whether junior or
senior to the Security Interest herein, and (iv) any claim questioning the
legality, validity, binding nature, enforceability, perfection, or priority of
the

                                     149

<PAGE>

Security Interest herein.  Obligor shall notify Secured Party immediately in
writing of any of the foregoing.

       4.2 Allowances or Discounts.  Obligor shall grant to its customers only
such allowances, discounts, and other adjustments relating to the Collateral
as Obligor may reasonably determine to be in accordance with sound business
practice.

       4.3 Books and Records.  Obligor shall maintain complete and accurate
books and records relating to the collateral.

       4.4 Inspection and Verification.  The Secured Party and such persons as
the Secured Party may designate shall have the right, at any reasonable time
from time to time, (i) to enter upon the premises at which any of the
Collateral or any of the books and records included in the Collateral or
relating to the business, operations, or financial condition of Obligor is
located, (ii) to inspect the Collateral and such books and records, (iii) to
make copies of and extracts from such books and records, and (iv) to verify
under reasonable procedures determined by the Secured Party the amount,
condition, quality, quantity, status, validity, and value of, or any other
matter relating to, the collateral or the accounts payable or cash of Obligor
shown on any financial statement or other document delivered to Secured Party
(including, without limitation, in the case of Collateral that is an
obligation of or in the possession of a third person and in the case of
accounts payable and cash, by contacting the third party holding such
assets).

       4.5 Further Assurances.  Obligor shall promptly execute, acknowledge,
deliver, and cause to be duly filed and recorded all such additional
agreements, documents, and instruments (including, without limitation,
financing statements and patent or intellectual property assignments) and take
all such other actions as Secured Party may reasonably request from time to
time to better assure, perfect, preserve, and protect the security interest
granted herein, the priority thereof, and the rights and remedies of Secured
Party hereunder.

       4.6 No Obligations and limit of Liability of Secured Party.  The
Secured Party does not assume and shall have no liability or obligation for
any liabilities or obligations of Obligor relating to the Collateral.  In
exercising its rights and remedies under the  Note and this Agreement and
under applicable law, in performing any obligations to Obligor, and in acting
or omitting to act in respect of the Collateral and this Agreement, the
Secured Party shall have no liability or responsibility whatsoever.

       5.0 Subordination.  Secured Party agrees that in the event the Obligor
secures loan funds from an institutional source(s) in an amount greater than
$10,000,000, the Secured Party shall subordinate its interest to the lending
institution.

       6.0 Default.  Upon occurrence of an event of default, Secured Party
may, in its absolute and sole discretion and without demand or notice, do any
or all of the following:

       6.1 Acceleration of Obligations.  Declare any or all obligations under
the Note to be immediately due and payable, whereupon such Obligations shall
be immediately due and payable.

                                     150

<PAGE>

       6.2   If Secured Party demands or attempts to take possession of any or
all collateral, Obligor shall promptly assemble such Collateral and turn over
and deliver possession of such Collateral to Secured Party at a place
designated by Secured Party and convenient to Secured party and Obligor.

       6.3 Retain the Collateral as Payment.  Upon written notice to Obligor,
retain the Collateral in satisfaction of the obligations.  Unless such written
notice is given, retention of the Collateral by Secured Party shall not be in
satisfaction of any of the obligations.

       6.4 Other Rights and Remedies.  Exercise any and all other rights and
remedies of Secured Party under the Note or under applicable law.

       7.0 Application of the Proceeds.  After an event of default, all cash
and checks included in the Collateral and all proceeds of Collateral received
by Secured Party will be applied by Secured Party to the Obligor's
obligations, whether or not due, in such order as Secured Party may determine
in its absolute and sole discretion, subject to any requirements of law.  If
application of the Collateral is not sufficient to pay the obligations in
full, Obligor shall remain obligated for the remaining obligations.

       8.0.  Continuation and Termination. This Agreement shall continue in
effect until payment and performance of the obligations of Obligor in full.

       Dated as of the date first above written.

                                          "Obligor"

                                          CHEQUEMATE INTERNATIONAL, INC.

                                                 /s/ J. Michael Heil, CEO
                                          -------------------------------------
                                          By

                   CONVERTIBLE LINE OF CREDIT PROMISSORY NOTE

Amount: $1,000,000.00                                      Date: May 24, 2000

                                     151

<PAGE>

       FOR VALUE RECEIVED, Chequemate International, Inc., a Utah corporation
  (referred to herein as the"Borrower") promises to pay to PASCOO HOLDINGS,
INC. (referred to herein as the "Lender"), or order, at the  address the
Lender shall designate in writing to the Borrower from time to time,  the sum
of One Million dollars ($1,000,000) or the aggregate unpaid principal balance
of all advances made to the Borrower by the Lender  pursuant to this Note from
time to time ("Advances")  on May 1, 2001 ("Maturity Date") in lawful money of
the United States and in immediately available funds, together with interest
on the unpaid principal balance of this Convertible Line of Credit Promissory
Note ("Note") computed on the basis of a 360 day year and charged on actual
days the principal amount of any Advance  is outstanding, at the rate of
twelve percent (12%) per annum.

       1.  TERM OF NOTE.  The principal amount of all Advances made under the
terms of this Note and all accrued and unpaid interest shall be due and
payable on the Maturity Date.

       2.  PREPAYMENT.  The Borrower may not prepay any of the principal
amount of this Note, except with the express written consent of the Lender.

       3.  CONVERSION PRIVILEGES.  The Lender shall have the right to convert
up to the full amount of the then outstanding principal balance of the Note
to common stock of the Borrower to be issued by Borrower on the terms and
conditions set forth below:

              a.  TERM OF OPTION.  The Lender may convert any part of  the
              principal balance of the loan to common stock at any time or from
              time to time from the date of this Note until the principal
              balance is retired or converted.

              b.  CONVERSION PRICE.  The price at which the principal balance
              of the Advance is to be converted to common stock shall be 50% of
              the bid price, but not lower than $2.00 per share.

              c.  NOTICE OF ELECTION TO CONVERT.  The option to convert to
              common stock  may be made by Lender at any time upon written
              Notice of Election to convert by Lender.  The Notice of Election
              to convert shall contain the date of conversion and the principal
              amount of the Advance to be converted to common stock.  Such
              conversion shall be effective on the date specified in the
              notice.

              d.  ADJUSTMENT FOR COMMON STOCK RECLASSIFICATIONS.  In the event,
              at any time after the date hereof, the holders of the common
              stock of the Borrower shall have received, or, on or after the
              record date fixed for the determination of eligible stockholders,
              shall have become entitled to receive, without payment therefore,
              other or additional stock or other securities or property by way
              of stock-split, spinoff, reclassification, combination of shares
              or similar corporate rearrangement, then and in each such case
              the Lender, upon the exercise hereof as provided herein, shall be
              entitled to receive the amount of stock and other securities and
              property which the Lender would hold on the date of such exercise
              if on record date of such corporate reclassification Lender had
              been the holder of record of the number of shares of common stock
              of the Borrower called for in the event of complete conversion of
              the Note and had thereafter retained

                                     152

<PAGE>

              such shares and/or all other or additional stock and other
              securities and property receivable by Lender as aforesaid
              during such period, giving effect to all adjustments called
              for during such period.

              e.  ADJUSTMENT FOR CONSOLIDATION OR MERGER.  In case of any
              reorganization of the Borrower after the date hereof, or in case,
              after such date, the Borrower shall consolidate with or merge
              into another corporation or convey all or substantially all of
              its assets to another corporation, then and in each such case
              the Lender, upon the exercise of its conversion rights at any
              time after the consummation of such reorganization,
              consolidation, merger or conveyance, shall be entitled to
              receive, in lieu of the stock or other securities and property
              receivable upon the conversion of this Note prior to such
              consummation, the stock or other securities or property to which
              Lender would be entitled had the Lender converted this Note
              immediately prior thereto.

              f.  PIGGYBACK REGISTRATION RIGHTS.  If, at any time after the
              conversion of this Note and expiring one year thereafter, the
              Borrower proposes to register any of its securities under the
              Securities Act of 1933 (the "Act") either for its own account or
              for the account of others, in connection with the public offering
              of such equity securities solely for cash, on a registration form
              that would also permit the registration of the shares of common
              stock or preferred stock  issuable upon conversion of this Note,
              the Borrower shall promptly give the Lender written notice of
              such proposal.  Within thirty days after the notice is given, the
              Lender shall give notice as to the number of shares of common
              stock or preferred stock, if any, which the Lender requests be
              registered simultaneously with such registration by the Borrower.
              The Borrower shall use its best efforts to include such shares in
              such registration statement and to cause such registration
              statement to become effective with respect to such shares.  All
              costs in connection such registration statement shall be borne by
              the Borrower.  The Lender shall bear all underwriting discounts,
              selling commissions, sales concessions and similar expenses
              applicable to the sale of the Lender's common stock or preferred
              stock.

              g.  RESERVATION OF STOCK.  The Borrower shall at all times
              reserve and keep available for issue upon conversion of this
              Note such number of its authorized but unissued shares of common
              stock  as will be sufficient to permit the conversion in full of
              this Note.

              h.  INTEREST.  In the event of the conversion to common stock of
              any of the principal amount of any Advance, the accrued interest
              applicable to such converted principal shall be deemed to be
              forgiven upon conversion and shall not be otherwise payable
              pursuant to the terms of this Note.

              i.  ASSIGNMENT.  Lender may assign all or any part of this Note
              with its attendant conversion privileges to any party or parties.

              j.  CONDITION  PRECEDENT. The conversion of any part of this Note
              to common stock and the issuance of the related common stock is
              subject to the approval of the American Stock Exchange ("Amex")
              of a request by the Borrower to list such shares on the Amex.

                                     153

<PAGE>

       4.  SECURITY.  This Note is secured by a Security Agreement and a
financing statement granting a security interest in Borrower's tangible and
intangible assets.

       5.  DEFAULT.   If any installment or the final payment due under this
Note is not paid on its due date or within fifteen (15) days thereafter, if
the Borrower Board of Directors, or the Borrower shareholders if consent of
shareholders is required,  fails to approve or ratify all of the terms of this
Note, or if the Borrower otherwise defaults under the terms of this Note or
the Security Agreement, then the holder hereof, following the giving of 10
days written notice may accelerate this Note and declare the entire balance
due and owing whereupon the Borrower agrees to pay the entire balance of the
Note upon demand.

       Each payment shall be applied first to the payment of interest and
thereafter to the payment of principal.  In the event of non-payment of any
installment, the final payment or the accelerated principal in the event of
default, the Borrower agrees to pay all expenses of collection of this Note,
including reasonable attorney's fees and court costs incurred in any
proceeding including any proceedings in the United States Bankruptcy Court.
After acceleration, in the event of default, and after the due date and before
and after judgment, this Note shall accrue interest until paid at the highest
legal rate.

       6.  GOVERNING LAW.  This Note shall be governed by the laws of the
State of Utah.

       7.  WAIVER OF NOTICE, ETC.   Every maker, endorser or guarantor of this
Note waives presentment, demand, notice, protest and all other notices in
connection with the deliver, acceptance, default or enforcement of this Note
and each agrees that the holder, from time to time, may renew, modify or
extend performance of obligations hereunder without their consent.

       8.  ARBITRATION.  If at any time during or after the term of this Note
any dispute, difference, or disagreement shall arise upon or in respect of
this Note, or the conversion of the Note to common stock, and the meaning
and construction of the terms hereof, every such dispute, difference, and
disagreement shall be referred to a single arbitrator agreed upon by the
Borrower and the Lender, or if no single arbitrator can be agreed upon, an
arbitrator or arbitrators shall be selected in accordance with the rules of
the American Arbitration Association and such dispute, difference, or
disagreement shall be settled by arbitration in accordance with the then
prevailing commercial rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.  The arbitration proceedings shall be held in
Salt Lake City, Utah.

       9.  ASSIGNMENT.  This Note and the conversion privileges associated
herewith shall be assignable in whole or in part at any time by Lender.

       IN WITNESS WHEREOF, the Borrower has caused this Note to be executed as
of the date above set forth.

                                          BORROWER:

                                          CHEQUEMATE INTERNATIONAL, INC.

                                     154

<PAGE>

                                                 /s/ J. Michael Heil, CEO
                                          -------------------------------------
                                          By

                                 SECURITY AGREEMENT

                                    May 24, 2000

       Parties:    Obligor: CHEQUEMATE INTERNATIONAL, INC, a Utah corporation

                   Secured Party: PASCOO HOLDINGS, INC.

       Collateral: All tangible and intangible assets of the Obligor, including
                   patents and patents pending.

                                     155

<PAGE>

       Obligation: Convertible Line of Credit Promissory Note ("Note") dated
                   May 24, 2000

2.  Grant of Security Interest.  Obligor grants to Secured Party a Security
Interest in the Collateral to secure payment and performance of the Note.

3.  Obligor Representations and Warranties.  Obligor represents and warrants
to Secured Party as of the date of this Agreement and, as to Collateral in
which Obligor acquires an interest or rights after the date of this Agreement,
as of the date Obligor acquires such interest or rights.

       3.1 Ownership and Possession of Collateral.  Obligor is the legal
and/or beneficial owner of the Collateral.  There are no liens and
encumbrances on the Collateral or claims thereof, except as may be granted
contemporaneously with this Security Agreement.   There is no financing
statement now filed or recorded covering any of the Collateral.  Obligor is in
exclusive possession of the Collateral.

       3.2 Validity, Perfection, and Priority of Security Interest.  The
Security Interest granted in this agreement (i) is legal, valid, binding, and
enforceable, (ii) is a perfected Security Interest in all the collateral, and
(iii) is a first priority Security Interest in all the Collateral.

       3.3 Enforceability, Amount, and Other Matters concerning Collateral.
The Assets of the Obligee and the agreements, documents, and instruments
evidencing and securing the Assets are (i) genuine, (ii) the legal, valid and
binding obligations of the parties thereto, and (iii) enforceable against the
parties thereto in accordance with their terms.  Any copies of such
agreements, documents, and instruments delivered to Secured Party are accurate
and complete and, except for the items delivered to Secured Party there are
no amendments, modifications, extensions, renewals, restatements, or
supplements thereof.  No surety bond was required or given by Obligor in
connection with or is otherwise applicable to (1) any goods, or other tangible
personal property, or services relating to the Receivables, or (2) the
agreements, documents, or instruments out of which the Receivables arose.

       4.  Obligor Covenants.  Until  the Note is paid in full, Obligor agrees
that, unless Secured Party otherwise agrees in writing in Secured Party's sole
and absolute discretion:

       4.1 Defense of Obligor's Title and of Security Interest.  Obligor shall
defend the Collateral, the title and interest therein of Obligor represented
and warranted in this Agreement, and the legality, validity, binding nature,
and enforceability of the Security Interest granted herein, the perfection
thereof, and the first priority thereof against all matters, including,
without limitation, (i) any attachment, levy, or other seizure by legal process
or otherwise of any or all Collateral, (ii) any lien or encumbrance or claim
thereof on any or all Collateral, (iii) any attempt to realize upon any or all
Collateral under any lien or encumbrance, regardless of whether junior or
senior to the Security Interest herein, and (iv) any claim questioning the
legality, validity, binding nature, enforceability, perfection, or priority of
the Security Interest herein.  Obligor shall notify Secured Party immediately
in writing of any of the foregoing.

       4.2 Allowances or Discounts.  Obligor shall grant to its customers only
such allowances, discounts, and other adjustments relating to the Collateral
as Obligor may reasonably determine to be in accordance with sound business
practice.

                                     156

<PAGE>

       4.3 Books and Records.  Obligor shall maintain complete and accurate
books and records relating to the collateral.

       4.4 Inspection and Verification.  The Secured Party and such persons as
the Secured Party may designate shall have the right, at any reasonable time
from time to time, (i) to enter upon the premises at which any of the
Collateral or any of the books and records included in the Collateral or
relating to the business, operations, or financial condition of Obligor is
located, (ii) to inspect the Collateral and such books and records, (iii) to
make copies of and extracts from such books and records, and (iv) to verify
under reasonable procedures determined by the Secured Party the amount,
condition, quality, quantity, status, validity, and value of, or any other
matter relating to, the collateral or the accounts payable or cash of Obligor
shown on any financial statement or other document delivered to Secured Party
(including, without limitation, in the case of Collateral that is an
obligation of or in the possession of a third person and in the case of
accounts payable and cash, by contacting the third party holding such
assets).

       4.5 Further Assurances.  Obligor shall promptly execute, acknowledge,
deliver, and cause to be duly filed and recorded all such additional
agreements, documents, and instruments (including, without limitation,
financing statements and patent or intellectual property assignments) and take
all such other actions as Secured Party may reasonably request from time to
time to better assure, perfect, preserve, and protect the security interest
granted herein, the priority thereof, and the rights and remedies of Secured
Party hereunder.

       4.6 No Obligations and limit of Liability of Secured Party.  The
Secured Party does not assume and shall have no liability or obligation for
any liabilities or obligations of Obligor relating to the Collateral.  In
exercising its rights and remedies under the Note and this Agreement and
under applicable law, in performing any obligations to Obligor, and in acting
or omitting to act in respect of the Collateral and this Agreement, the
Secured Party shall have no liability or responsibility whatsoever.

       5.0 Subordination.  Secured Party agrees that in the event the Obligor
secures loan funds from an institutional source(s) in an amount greater than
$10,000,000, the Secured Party shall subordinate its interest to the lending
institution.

       6.0 Default.  Upon occurrence of an event of default, Secured Party
may, in its absolute and sole discretion and without demand or notice, do any
or all of the following:

       6.1 Acceleration of Obligations.  Declare any or all obligations under
the Note to be immediately due and payable, whereupon such Obligations shall
be immediately due and payable.

       6.2   If Secured Party demands or attempts to take possession of any or
all collateral, Obligor shall promptly assemble such Collateral and turn over
and deliver possession of such Collateral to Secured Party at a place
designated by Secured Party and convenient to Secured party and Obligor.

       6.3 Retain the Collateral as Payment.  Upon written notice to Obligor,
retain the Collateral in satisfaction of the obligations.  Unless such written
notice is given, retention of the Collateral by Secured Party shall not be in
satisfaction of any of the obligations.

                                     157

<PAGE>

       6.4 Other Rights and Remedies.  Exercise any and all other rights and
remedies of Secured Party under the Note or under applicable law.

       7.0 Application of the Proceeds.  After an event of default, all cash
and checks included in the Collateral and all proceeds of Collateral received
by Secured Party will be applied by Secured Party to the Obligor's
obligations, whether or not due, in such order as Secured Party may determine
in its absolute and sole discretion, subject to any requirements of law.  If
application of the Collateral is not sufficient to pay the obligations in
full, Obligor shall remain obligated for the remaining obligations.

       8.0.  Continuation and Termination. This Agreement shall continue in
effect until payment and performance of the obligations of Obligor in full.

       Dated as of the date first above written.

                                          "Obligor"

                                          CHEQUEMATE INTERNATIONAL, INC.

                                                 /s/ J. Michael Heil, CEO
                                          -------------------------------------
                                          By

                                     158<PAGE>

                                   EXHIBIT 4.1

Indenture between the Company and State Street Bank And Trust Company of
California N.A., a national banking association, dated March 1, 2000
(Incorporated herein by reference from the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1999 filed March 14, 2000, and
accompanied by its table of contents and the following cross-reference table).

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                     PAGE
                                                                                                     ----
<S>                                                                                                  <C>
ARTICLE I. DEFINITIONS; TRUST INDENTURE ACT............................................................1
   Section 1.01. Definitions...........................................................................1
   Section 1.02. Other Definitions.....................................................................5
   Section 1.03. Incorporation by Reference of Trust Indenture Act.....................................6
   Section 1.04. Rules of Construction.................................................................6
ARTICLE II. THE NOTES..................................................................................7
   Section 2.01. Form and Dating.......................................................................7
   Section 2.02. Execution and Authentication..........................................................8
   Section 2.03. Registrar and Paying Agent............................................................9
   Section 2.04. Paying Agent to Hold Money in Trust...................................................9
   Section 2.05. Holder Lists.........................................................................10
   Section 2.06. Transfer and Exchange................................................................10
   Section 2.07. Replacement Notes....................................................................14
   Section 2.08. Outstanding Notes....................................................................15
   Section 2.09. Treasury Notes.......................................................................15
   Section 2.10. Temporary Notes; Global Notes........................................................15
   Section 2.11. Cancellation.........................................................................16
   Section 2.12. Defaulted Interest...................................................................16
ARTICLE III. REDEMPTION...............................................................................17
   Section 3.01. Notices to Trustee...................................................................17
   Section 3.02. Selection of Notes to Be Redeemed....................................................17
   Section 3.03. Notice of Redemption.................................................................17
   Section 3.04. Effect of Notice of Redemption.......................................................18
   Section 3.05. Deposit of Redemption Price..........................................................18
   Section 3.06. Notes Redeemed in Part...............................................................18
   Section 3.07. Optional Redemption..................................................................18
   Section 3.08. Mandatory Redemption.................................................................18
   Section 3.09. Purchase Offer.......................................................................19
ARTICLE IV. COVENANTS.................................................................................20
   Section 4.01. Payment of Notes.....................................................................20
   Section 4.02. Reports..............................................................................21
   Section 4.03. Compliance Certificate...............................................................21
   Section 4.04. Stay, Extension and Usury Laws.......................................................22
   Section 4.05. Corporate Existence..................................................................22
   Section 4.06. Taxes................................................................................22
   Section 4.07. Change of Control....................................................................22
   Section 4.08. Limitation on Status As Investment Company...........................................22
ARTICLE V. CONVERSION.................................................................................23
   Section 5.01. Conversion Privilege.................................................................23
   Section 5.02. Conversion Procedure.................................................................23
   Section 5.03. Fractional Shares....................................................................24
   Section 5.04. Taxes on Conversion..................................................................24
   Section 5.05. Company to Provide Stock.............................................................24
   Section 5.06. Adjustment of Conversion Price.......................................................25
   Section 5.07. No Adjustment........................................................................27
   Section 5.08. Other Adjustments....................................................................28
   Section 5.09. Adjustments for Tax Purposes.........................................................28
   Section 5.10. Notice of Adjustment.................................................................28
   Section 5.11. Notice of Certain Transactions.......................................................28
   Section 5.12. Effect of Reclassifications, Consolidations, Mergers or Sales on Conversion
                 Privilege............................................................................29
   Section 5.13. Trustee's Disclaimer.................................................................29

</TABLE>

<PAGE>

<TABLE>

<S>                                                                                                  <C>
ARTICLE VI. SUBORDINATION.............................................................................30
   Section 6.01. Agreement to Subordinate and Ranking.................................................30
   Section 6.02. No Payment on Notes if Senior Debt in Default........................................30
   Section 6.03. Distribution on Acceleration of Notes; Dissolution and Reorganization;
                 Subrogation of Notes.................................................................31
   Section 6.04. Reliance by Senior Debt on Subordination Provisions..................................34
   Section 6.05. No Waiver of Subordination Provisions................................................34
   Section 6.06. Trustee's Relation to Senior Debt....................................................34
   Section 6.07. Other Provisions Subject Hereto......................................................35
ARTICLE VII. SUCCESSORS...............................................................................35
   Section 7.01. Limitation on Merger, Sale or consolidation..........................................35
   Section 7.02. Successor Corporation Substituted....................................................36
ARTICLE VIII. DEFAULTS AND REMEDIES...................................................................36
   Section 8.01. Events of Default....................................................................36
   Section 8.02. Acceleration.........................................................................38
   Section 8.03. Other Remedies.......................................................................38
   Section 8.04. Waiver of Past Defaults..............................................................39
   Section 8.05. Control by majority..................................................................39
   Section 8.06. Limitation on Suits..................................................................39
   Section 8.07. Rights of Holders to Receive Payment.................................................39
   Section 8.08. Collection Suit by Trustee...........................................................39
   Section 8.09. Trustee May File Proofs of Claim.....................................................40
   Section 8.10. Priorities...........................................................................40
   Section 8.11. Undertaking for Costs................................................................40
ARTICLE IX. TRUSTEE...................................................................................40
   Section 9.01. Duties of Trustee....................................................................40
   Section 9.02. Rights of Trustee....................................................................41
   Section 9.03. Individual Rights of Trustee.........................................................42
   Section 9.04. Trustee's Disclaimer.................................................................42
   Section 9.05. Notice of Defaults...................................................................42
   Section 9.06. Reports by Trustee to Holders........................................................42
   Section 9.07. Compensation and Indemnity...........................................................42
   Section 9.08. Replacement of Trustee...............................................................43
   Section 9.09. Successor Trustee by Merger, Etc.....................................................44
   Section 9.10. Eligibility; Disqualification........................................................44
   Section 9.11. Preferential Collection of Claims Against Company....................................44
ARTICLE X. DISCHARGE OF INDENTURE.....................................................................44
   Section 10.01. Termination of Company's Obligations................................................44
   Section 10.02. Repayment to Company................................................................44
ARTICLE XI. AMENDMENTS, SUPPLEMENTS AND WAIVERS.......................................................45
   Section 11.01. Without Consent of Holders..........................................................45
   Section 11.02. With Consent of Holders.............................................................45
   Section 11.03. Compliance with Trust Indenture Act.................................................46
   Section 11.04. Revocation and Effect of Consents...................................................46
   Section 11.05. Notation on or Exchange of Notes....................................................47
   Section 11.06. Trustee Protected...................................................................47
ARTICLE XII. MISCELLANEOUS............................................................................47
   Section 12.01. Trust Indenture Act Controls........................................................47
   Section 12.02. Notices.............................................................................47
   Section 12.03. Communication by Holders with Other Holders.........................................48
   Section 12.04. Certificate and Opinion as to Conditions Precedent..................................48
   Section 12.05. Statements Required in Certificate or Opinion.......................................48
   Section 12.06. Rules by Trustee and Agents.........................................................48
   Section 12.07. Legal Holidays......................................................................48
   Section 12.08. No Recourse Against Others..........................................................49
   Section 12.09. Counterparts and Facsimile Signatures...............................................49
   Section 12.10. Variable Provisions.................................................................49

</TABLE>

<PAGE>

<TABLE>

<S>                                                                                                  <C>
   Section 12.11. Governing Law, submission to jurisdiction...........................................49
   Section 12.12. No Adverse Interpretation of Other Agreements.......................................50
   Section 12.13. Successors..........................................................................50
   Section 12.14. Severability........................................................................50
   Section 12.15. Table of Contents, Headings, Etc....................................................50

</TABLE>

                        Certain Sections of the Indenture
                     relating to Sections 310 through 318 of
                          the Trust Indenture Act 1989:

<TABLE>
<CAPTION>
         -------------------------------------- -----------------------
         TIA Indenture Section                  Section
         -------------------------------------- -----------------------
         <S>                                    <C>
         -------------------------------------- -----------------------
         310(a)(1)                              9.10
         -------------------------------------- -----------------------
            (a)(2)                              9.10, 12.10
         -------------------------------------- -----------------------
            (a)(3)                              N/A
         -------------------------------------- -----------------------
            (a)(4)                              N/A
         -------------------------------------- -----------------------
            (a)(5)                              9.10
         -------------------------------------- -----------------------
            (b)                                 9.10
         -------------------------------------- -----------------------
            (c)                                 N/A
         -------------------------------------- -----------------------
         311(a)                                 9.11
         -------------------------------------- -----------------------
            (b)                                 9.11
         -------------------------------------- -----------------------
            (c)                                 N/A
         -------------------------------------- -----------------------
         312(a)                                 2.05, 12.03
         -------------------------------------- -----------------------
            (b)                                 12.03
         -------------------------------------- -----------------------
            (c)                                 12.03
         -------------------------------------- -----------------------
         313(a)                                 9.06
         -------------------------------------- -----------------------
            (b)(1)                              N/A
         -------------------------------------- -----------------------
            (b)(2)                              9.06
         -------------------------------------- -----------------------
            (c)                                 9.06
         -------------------------------------- -----------------------
            (d)                                 9.06
         -------------------------------------- -----------------------
         314(a)                                 4.02
         -------------------------------------- -----------------------
            (b)                                 N/A
         -------------------------------------- -----------------------
            (c)(1)                              4.03
         -------------------------------------- -----------------------
            (c)(2)                              4.03
         -------------------------------------- -----------------------
            (c)(3)                              N/A
         -------------------------------------- -----------------------
            (d)                                 N/A
         -------------------------------------- -----------------------
            (e)                                 4.03
         -------------------------------------- -----------------------
            (f)                                 N/A
         -------------------------------------- -----------------------
         315(a)                                 9.01, 9.02
         -------------------------------------- -----------------------
            (b)                                 9.05
         -------------------------------------- -----------------------
            (c)                                 9.01(a)
         -------------------------------------- -----------------------
            (d)                                 9.01, 9.02
         -------------------------------------- -----------------------
            (e)                                 8.11
         -------------------------------------- -----------------------
         3.16(a)(last sentence)                 1.01, 9.01
         -------------------------------------- -----------------------
             (a)(1)(A)                          8.05
         -------------------------------------- -----------------------
             (a)(1)(B)                          8.04
         -------------------------------------- -----------------------
             (a)(2)                             N/A
         -------------------------------------- -----------------------
             (b)                                4.08
         -------------------------------------- -----------------------
             (c)                                2.05
         -------------------------------------- -----------------------
         317(a)(1)                              8.08
         -------------------------------------- -----------------------
            (a)(2)                              8.09
         -------------------------------------- -----------------------
            (b)                                 8.03
         -------------------------------------- -----------------------
         318(a)                                 1.13
         -------------------------------------- -----------------------
</TABLE>

--------------------------------------------------------------------------------

N/A means Not Applicable
Note:  This Cross-Reference Table shall not, for any purpose, be deemed as part
of the Indenture

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}]]