Document:

Exhibit 10.20 12/31/2000 10-KSB

EXHIBIT 10.20

eScreen
Avert Joint Marketing Agreement

        This
Agreement is entered into this _____ day of _________, 2000, between eScreen,
Inc. (hereinafter referred to as “eScreen” or “Company”) a
Kansas corporation, with principal office located at 10895 Grandview, Suite220,
Overland Park, Kansas 66210 and Avert, Inc., with an office located at 301
Remington Street, Fort Collins, Colorado 80524, hereinafter referred to as
“Avert.” For convenience, this Agreement may refer to Avert and
eScreen each individually as a “Party” or together as
“Parties.” 

It is the intention of
this Agreement to enter into a joint marketing venture between the Parties to
develop and distribute a unique and exclusive product offering that integrates
eScreen and Avert products in a mutually developed and deployed customer order
and delivery environment. This mutually developed product offering will be
exclusively offered through the eScreen/Avert partnership, and may not be
altered modified, sold or re-marketed by any other entity. 

        Now,
therefore, in consideration of the foregoing and the mutual agreements set forth
herein, eScreen and Avert agree as follows:

        1.
SERVICES AND DUTIES

	        A. 	
Both Parties agree to develop and market an eScreen/Avert employment screening
product that can be targeted to the small to medium-size customer. This target
market shall generally be considered as those customers who have fewer than 1000
employees. 

	        B. 	
This development shall involve the integration of the eScreen and Avert customer
order and delivery systems into a common platform that allows seamless ordering
and applicant results reporting and management. The eScreen clinic software and
the Avert OrderXpert system shall be modified to allow the direct ordering and
retrieval of the eScreen/Avert offering.  

	        C. 	
Each party will assume responsibility for the software and system modifications
to their respective platforms. The scope and definition of these changes shall
be mutually agreed upon during the design phase. Avert and eScreen may at a
later date amend this agreement to include additional Avert support for the
funding and development of the eScreen modifications. This funding will grant
Avert additional rights equal in value to the funding. This commitment will be
defined and scheduled within 60 days of execution of this agreement by both
Parties. eScreen reserves the right to modify this schedule of integration of
systems, contingent on the successful implementation and release of
eScreen’s Apollo project.  

	        D. 	
Both Parties agree to a mutual commitment to market and sell this product. This
commitment shall be defined and developed within 90 days of execution of this
agreement by both Parties, but shall generally be accepted as including:  

        o
The creation of a unique Avert product name and brand that identifies eScreen as
the provider of the drug test services 

o        The establishment of revenue goals and targets
o        The establishment of distribution strategies through each Party's current distribution channels
o        The development and distribution of marketing collateral

	        E. 	
Avert shall have the exclusive right to resell eScreen services through the
Avert ADP partner channel. All obligations, commitments, service levels, rights
or requirements that Avert has with ADP shall be the sole responsibility of
Avert and cannot be construed as committing eScreen to any of these obligations
unless expressly spelled out in this agreement.  

	        F. 	
eScreen shall have the exclusive right to resell this product through the
eScreen clinic channel. All obligations, commitments, service levels, rights or
requirements that eScreen has with the clinics shall be the sole responsibility
of eScreen and cannot be construed as committing Avert to any of these
obligations unless expressly spelled in this agreement.  

	        G. 	
In addition, both Parties may also offer each parties respective services to
larger corporate accounts. 

        2.
APPOINTMENT

	        A. 	
Effective upon execution of this Agreement by Avert and eScreen, both parties
shall be appointed and shall become authorized representatives to offer (by
sale, license, lease or otherwise) the mutually developed product offering. 

	        B. 	
In addition, effective upon execution of this Agreement by Avert and eScreen,
both parties shall be appointed and shall become authorized representatives to
offer (by sale, license, lease or otherwise) each Party’s products and
services that are listed on Appendix A of this Agreement and such other products
and services as the parties may mutually agree (referred to as
“Products”). Upon execution of this Agreement, each Party accepts its
appointment as a representative of the Company pursuant to the terms of this
Agreement.  

	        C. 	
Both parties acknowledge and agree that this appointment is exclusive only as it
relates to the mutually developed products described in Section 1, and that
either Party may appoint other representatives for their other products and
services at their sole discretion. Both parties agree to represent each other as
Preferred Providers of screening products to each Party’s network and
customers. “Preferred Provider” for purposes of this Agreement shall
mean possessing a preferential right to offer each Party’s respective
products to customers.  

2

	        D. 	
The parties agree that for purposes of this Agreement, Client shall be deemed to
include all affiliates of Client and, accordingly, all references herein to
Client shall be deemed to include Client and such affiliates. 

        3.
MARKET TO BE SERVED; PARTIES RESPONSIBILITIES

	        A. 	
This agreement shall allow the joint marketing and development of the mutual
products developed as part of this agreement and as further defined in paragraph
1.C above. It is generally understood and excepted that eScreen shall have the
sole right to market this product to their existing customers and channels, and
that Avert shall have the sole right to market this product to its existing
customers and channels. 

	        B. 	

For all other products and services represented by each party, this agreement
will allow both parties to offer Products to any Client customer, current or
future with the exception of clients directly contracted with eScreen. During
the term of this Agreement, eScreen shall not sell directly to any then current
Client customers for the Products listed in Appendix A. eScreen reserves the
right to sell products listed on Appendix A directly or indirectly to any future
potential Client customer for the Products.  

	        C. 	
Each Party shall be responsible for providing adequate training and sales
support regarding the Products developed under this agreement to each
other’s personnel. Specific timelines and schedules for this training will
be defined within 60 days of execution of this agreement. Additional training
may be provided as reasonably requested. 

        4.
SOLICITING AND ACCEPTING OF ORDERS

	        A. 	
Pricing for the Products will be billed directly to each of the Parties
irrespective of the charges Client makes to their Customers for these services.
 

	        B. 	
The parties agree to develop integrated customer set up and management to ensure
complete coordination of service and product delivery. All required
documentation necessary in order for each party to efficiently service the
customers. 

        5.
TERMS OF SALE

	        A. 	
eScreen and Avert shall provide Products for general resale with pricing as
established in Appendix A (eScreen reseller pricing) and Appendix B (Avert
Reseller pricing). Pricing for the small business product shall be decided based
on the product design, estimated volume and anticipated product costs defined
during the project definition phase defined in paragraph 1C. Each Party hereby
reserves the right to amend the fee schedules set forth in Appendix A and
Appendix B should terms or conditions change. The pricing at individual eScreen
clinics may be changed, with at least ninety (90) days advance written notice,
which said notice shall depend upon clinic configuration with respect to
communications and location. Notice of any such changes shall be given to the
Client by furnishing Client with copies of new or superseding versions of
handbooks, discount sheets, or other written material customarily employed by
the Company to convey such information.  

3

	        B. 	
Commencing sixty (60) days prior to the end of the initial three (3) year term
of this Agreement, the parties shall negotiate in good faith the prices at which
each Party shall continue to provide the Products for the following one (1) year
renewal term. If at the end of such sixty (60) day period, the parties are
unable to reach agreement for the renewal term, this Agreement shall not be
renewed for an additional term and shall be terminated effective on the
expiration date of such sixty (60) day period. 

        6.
COMMISSIONS AND EXPENSES

	 	
No
Commissions or expenses shall be paid to either Party for the referral of the
small business customers. All financial benefit derived from this agreement to
the Parties of this Agreement will be due to the “marking up” of the
resold products and services provided by the Parties to the customers.

	 	
For
national accounts, Avert and eScreen will develop a commission strategy that
compensates the respective sales representatives of each
organization.

        7.
LEGAL STATUS OF REPRESENTATIVE

	        A. 	
This agreement is intended to create a joint venture between the parties,
however, neither party has the authority or power to bind the other party by any
statement, representation, warrant, or guaranty: to incur any debts,
obligations, or liabilities of any kind on behalf of the other party, or to act
for or on behalf of the other party in any way, except upon prior express
consent from the other party. Except as otherwise set forth in this Agreement,
or as otherwise may be required by applicable law, no party shall be held to be
a fiduciary or trustee, or to have any fiduciary obligations to the other party.  

	        B. 	
The authority of each Party under this Agreement is limited to offering the
products and services defined in this agreement. 

	        C. 	
In all matters relating to this Agreement, each Party shall act as an
independent contractor. Neither Party or their respective employees shall act as
employees of the other Party under the meaning or application of federal, state
or local laws. This Agreement does not constitute either party the agent of the
other.  

4

        8.
PROPRIETARY INFORMATION

	 	
Each
part recognizes that it has had and will continue to have access to the other
party’s confidential information, including but not limited to trade
secrets, technical product information, financial and marketing data, customer
lists, sales records and leads, specific knowledge of the types and categories
or items ordered by customers and particular needs and requirements related
thereto, as well as pricing, business practices and other proprietary commercial
information (hereinafter the “Proprietary Information”) and that such
information constitutes valuable special and unique property of such party. Each
party agrees that it will not, for any reason or purpose whatsoever, during the
term of this Agreement and thereafter, directly or indirectly, disclose to any
party, or use for its own purposes, any of the Proprietary Information without
the other party’s written authorization, except as is necessary in the
ordinary course of performing its duties under this Agreement. In the event of a
breach or threat of breach by a party of the provisions of this Section 6, the
non-breaching party shall be entitled to injunctive relief against such party
from using or disclosing the Proprietary Information, however the foregoing
shall not be construed as prohibiting the non-breaching party from having
available to it any other remedy, either at law or in equity, for such breach or
threatened breach, including but not limited to the recovery of damages from
such breaching party.

        9.
TRADEMARKS

	 	
Neither
Party shall alter, amend, deface, or obscure eScreen or Avert trademarks and
trade names on any eScreen or Avert Products. Furthermore, when using each
Party’s respective trademarks or trade names on printed material, each
party shall identify them as the registered trademarks and trade names of
eScreen Inc or Avert Inc. Both Parties shall be entitled to use the eScreen and
Avert trademarks and trade names in conjunction with other trademarks and trade
names so long as the marks are properly identified.

        10.
DURATION OF AGREEMENT; TERMINATION

	        A. 	
The term of this Agreement shall be for a three (3) year period commencing on
the date on which the Agreement is made and, with the exception of termination
as provided herein, this Agreement shall automatically renew itself for
additional one year periods, unless notification of non-renewal is given by
Client sixty (60) days prior to the anniversary date.  

	        B. 	
Notwithstanding any other provisions of this Agreement to the contrary, this
Agreement may be terminated prior to expiration of its term as follows:
 

	      
            
     1.   	
Either Party may terminate this Agreement without prior notice, which
termination shall be effective upon giving notice of immediate termination, in
any of the following circumstances:

	      
            
              
            
      a.  	
Either Party is put into receivership, makes an assignment for the benefit of
creditors, or files or suffers the filing of a petition in bankruptcy and any of
such actions is not dismissed within sixty (60) days;

5

	      
            
              
            
      b.  	
Either Party ceases to function as a going concern or to conduct its operations
in the normal course of business as a representative; or

	      
            
              
            
      c.  	
Either Party fails to pay any amounts due to the other Party within thirty (30)
days after being given written notice that the amounts owed by the other Party
are past due (other than amounts subject to dispute).

	      
            
              
            
      d.  	
Either Party actively solicits customers contracted directly with the other
party. Both Parties reserve the sole and exclusive right to determine it’s
protected customer list.

	      
            
              
            
      e.  	
If either party fails to meet the commitments and service level objectives (to
be defined by mutual consent during the design phase)

	      
            
              
            
      f.  	
Notwithstanding anything to the contrary in this agreement, either Party may
terminate this Agreement without cause and without liability or penalty upon 6
months written notice to the other party, and consistent with the obligations
for continued customer services identified in Section 11. 

	        C. 	
Any notice permitted or required under this Agreement shall be in writing and
shall be addressed to the party to whom the notice is given as shown on the
first page of this Agreement, or at such new address as the receiving party may
have notified the other under this Agreement. Notice shall be deemed to have
been given (i) when delivered, if personally delivered, (ii) when sent, if sent
by telecopy, (iii) on the next business day after dispatch, if sent by a
nationally recognized overnight courier, and (iv) on the 5th (fifth)
business day following the date such notice is mailed, if sent by regular U.S.
mail. 

        11.
EFFECT OF NON-RENEWAL OR TERMINATION

	        A. 	
Neither party shall be deemed to posses any right or property in this Agreement
other than the rights stated herein, and the parties agree that any non-renewal
or termination pursuant to the terms of this Agreement, or any change in the
terms of the appendices attached hereto, shall not be actionable and shall not
create any liability by virtue of such termination, non-renewal, or change. 

	        B. 	
Non-renewal or termination pursuant to this Agreement shall not affect any
rights or obligations that have vested under this Agreement prior to the
non-renewal or termination. With respect to existing customers of who have
purchased Products prior to the nonrenewal hereof, both Parties, on
Client’s behalf shall be required to continue offering services pursuant
hereto to such clients for so long as such clients desire and continue to pay
for such services. 

	        C. 	
Acceptance by either Party of any new client from the other Party after
termination or non-renewal shall not be construed as a renewal of this Agreement
or a waiver of the right to terminate or non-renew.
 

	        D. 	
Upon non-renewal or termination both Parties shall return all confidential and
proprietary documents and other tangible material containing proprietary
information, including but not limited to technical information, catalog
information, price lists, and selling materials.  

6

	        E. 	
The provisions of Sections 8, 9, and 12 shall survive termination or non-renewal
of this Agreement.
 

        12.
OTHER TERMS

	        A. 	
Each Party agrees to indemnify, hold harmless and defend the other Party, and
its respective shareholders, officers, directors, agents and employees, from and
against any and all liability, loss, damages, claims, causes of action, and
expenses (including reasonable attorneys, fees), whether or not covered by
insurance, caused or asserted to have been caused, directly or indirectly, by or
as a result of the other Party’s performance or breach under this
Agreement, or any other act or omission by the other Party, its agents,
employees or contractors or any other liability expressly assumed by each Party
hereunder. 

	        B. 	
All data relating to each Party’s customers and all propriety rights
therein shall be and remain the sole and exclusive property of each Party and
each Party shall be deemed the sole owner thereof.  

	        C. 	
This Agreement and the rights and obligations hereunder may be assigned by
either party without the prior written consent of the other party. Providing the
assignee agrees to the terms of this agreement.
 

	        D. 	
The parties to this Agreement shall not be liable to the other for failure of
performance of any part of this Agreement as a result of government regulations,
Acts of God, fire, labor dispute, accident, war, insurrection, carrier delays,
or causes that are of such character that it could not have been prevented or
escaped by any amount of foresight or prudence, or by any reasonable degree of
care or diligence. 

	        E. 	
The failure by either party to this Agreement to exercise any right it may have
under this Agreement shall not be deemed to be a waiver by such party of its
right to exercise said right or any other right under this Agreement at any
subsequent date. 

	        F. 	
Any dispute arising out of or related to this Agreement shall be resolved by
binding arbitration and shall be conducted in accordance with the Commercial
Rules of the American Arbitration Association. The arbitrator shall have the
power to grant injunctive relief. If the dispute is brought by eScreen against
Avert it shall be resolved by arbitration in Colorado. If the dispute is brought
by Avert against eScreen it shall be resolved by arbitration in Kansas. 

	        G. 	
Each Party hereby irrevocably waives, to the fullest extent permitted by law,
all rights it may have to a trial by jury in any action, counterclaim or
proceeding arising out of or in any way related to this Agreement, or the
actions of any Party hereto in the performance, non-performance or enforcement
hereof. 

	        H. 	
In connection with any dispute relating to this Agreement, neither party shall
be liable to the other party for any incidental, special or consequential
damages (other than lost profits). 

ESCREEN, INC.
                
                
                
                
                
                
                
                
AVERT, INC.

By:    Brian Heatwole
              
                
                
                
                
                
                
         
By:    Jerry D. Thurber        
             
   

        Title: Vice President, Sales
                
                
                
                
                
       
        
                
Title: Vice President, Client Services

Date:
                
                
                
                
                
                
                
 
                
                
Date:                
                
                

7

APPENDIX A

eScreen
PRICING FOR PRODUCTS AND SERVICES TO BE SOLD BY THE

REPRESENTATIVE

eScreen
Services and Products

o        eScreen Clinic Collection

o        eCup Urine Drug Test

o        GC/MS Confirmation (if required)

o        Data Management hourly transmission to Clients database

     Pricing based on a minimum volume requirement of ten thousand (10,000) eCup transactions per year with a
     confirmation rate not to exceed 10%.  (The 10,000 minimum to go into effect after 2000 eScreen clinics are
     installed.)

Avert Pricing
Attached as Separate Spreadsheet labeled Appendix B

8Exhibit 10.20.1 12/31/2000 Form 10-KSB

EXHIBIT
10.20.1

THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(“ACT”), NOR HAVE THEY BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES LAWS OF ANY STATE. NO TRANSFER OF SUCH SECURITIES WILL BE PERMITTED
UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER,
THE TRANSFER IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR IN THE
OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) REGISTRATION UNDER THE
ACT IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT AND WITH
APPLICABLE STATE SECURITIES LAWS. 

CONVERTIBLE
PROMISSORY NOTE

$1,000,000  
              
              
              
              
              
              
              
              
              
              
              
              
              
       
July 21, 2000

Subject to the terms and
conditions of this Convertible Promissory Note (this “Note”),
for good and valuable consideration received, eScreen Holdings, Inc., a Delaware
corporation (the “Company”), promises to pay to Avert, Inc., a
Colorado corporation, (the “Holder”), the principal amount of
$1,000,000, plus interest hereon, as set forth below. This Note is issued
pursuant to that certain Note Purchase Agreement dated July 20, 2000, among
Company, Dr. Murray Lappe (“Guarantor”) and Holder (the
“Purchase Agreement”). 

This Note, including the
principal amount and any accrued and unpaid interest hereon, will: (a) be due
and payable on the (i) earlier to occur of July 20, 2001 or (ii) occurrence of
an Event of Default (as defined in Section 1.3.1 below) (the “Due
Date”); or (b) convert at the option of Holder into Conversion Shares
of the Company pursuant to Section 2.1 below; provided that, on such date of
conversion this Note is still outstanding and no Event of Default has either
previously occurred or is then occurring. 

The following is a
statement of the rights of the Holder of this Note and the terms and conditions
to which this Note is subject, and to which the Holder hereof, by the acceptance
of this Note, agrees: 

ARTICLE 1

INTEREST; PAYMENTS; EVENTS OF DEFAULT; EXTENSION.

1.1 Interest.

        1.1.1
Rate. Simple interest will accrue on the unpaid principal amount
hereof beginning the date hereof until paid in full or converted pursuant to
Article 2 at a rate of interest equal to 10% per annum. Interest on this Note
will be payable upon prepayment (to the extent accrued on the amount being
prepaid) and on the Due Date. Unless prohibited under applicable law, any
accrued interest that is not paid on the date on which it is due and payable
shall bear interest at the same rate at which interest is then accruing on the
principal amount of this Note until such interest is paid. Any accrued interest
that for any reason has not theretofore been paid shall be paid in full on the
date on which the final principal payment on this Note is made. The indebtedness
outstanding under this Note shall bear interest on the basis of actual days
elapsed in a 360-day year of twelve 30-day months. 

        1.1.2
Limited By Law. Notwithstanding the provisions of this Note, if
the rate of interest payable hereunder is limited by law, the rate payable
hereunder shall be the lesser of: (a) the rate set forth in this Note; and
(b) the maximum rate permitted by law. If, however, interest is paid
hereunder in excess of the maximum rate of interest permitted by law, any
interest so paid which exceeds such maximum rate shall automatically be
considered a payment of principal and shall automatically be applied in
reduction of principal due on this Note to the extent of such excess. 

1.2 Payments.

        1.2.1
Principal and Interest. All payments of principal, interest and
other amounts payable on or in respect of this Note or the indebtedness
evidenced hereby shall be made to the Holder in U.S. dollars, by a Company
check. The Company shall make such payments of principal and interest to the
Holder at the address of the Holder set forth on the signature page hereto or at
such other place as the Holder shall have notified the Company in writing. 

        1.2.2
No Set-off. All payments on or in respect of this Note or the
indebtedness evidenced hereby shall be made to the Holder without set-off
counterclaim and free and clear of and without any deductions of any kind. 

        1.2.3
Prepayment. The Company may prepay this Note at any time,
without penalty, subject to Holder’s right to convert in accordance with
Section 2.1 on the date of such prepayment. 

        1.2.4
Cancellation. After all principal and accrued interest at
any time owed on this Note has been paid in full, this Note shall be surrendered
to the Company for cancellation and shall not be reissued. 

1.3 Events of
Default.

        1.3.1
Definition. For purposes of this Note, an “Event of
Default” shall be deemed to have occurred if any of the following
occur, whatever the reason or cause for such Event of Default and whether it is
voluntary or involuntary or is effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body: 

	(a) 	
failure of Company to pay principal and accrued interest at the due date whether
at stated maturity, by acceleration, or otherwise; or

	(c) 	
any material provision of the Purchase Agreement, the Note or the personal
guaranty executed by Guarantor in favor of Holder (the
“Guaranty”) shall for any reason cease to be valid and binding
on Company or Guarantor, as the case may be, or Company or Guarantor shall so
assert in writing; or

	(d) 	
dissolution, liquidation, winding up or cessation of Company’s business, or
the failure of Company or Guarantor to pay its or his debts as they mature; or
the admission in writing by Company or Guarantor of its or his inability to pay
its or his debts as they mature; or the calling of a meeting of any creditors of
Company or Guarantor, as the case may be, for purposes of compromising the debts
of either of such persons; or

2

	(e) 	
the commencement by or against Company or Guarantor of any bankruptcy,
insolvency, arrangement, reorganization, receivership or similar proceedings
under any federal or state law and, in the case of any such involuntary
proceeding, such proceeding remains undismissed or unstayed for 45 days
following the commencement thereof, or any action by Company or Guarantor is
taken authorizing any such proceedings; or

	(f) 	
an assignment for the benefit of creditors is made by Company or Guarantor,
whether voluntary or involuntary, or either of such persons consents to the
appointment of a trustee or receiver, or if a trustee or receiver is appointed
for Company or Guarantor or for a substantial part of its or his property;

	(g) 	
Guarantor, his immediate family or trusts established for the benefit of
Guarantor or his immediate family shall cease to beneficially own 51% of the
voting securities of the Company; provided that it shall not be an Event of
Default hereunder if Guarantor, his immediate family or trusts established for
the benefit of Guarantor, or his immediate family beneficially owns at least 50%
of the voting securities of ESP Employment Screening Partners, Inc. and ESP
Employment Screening Partners, Inc. controls the Company; or

	(h) 	
failure of Company to perform or comply with any of the covenants or agreements
contained in the Purchase Agreement.

        1.3.2
Remedies.

	(a) 	
Demand Payment. If any Event of Default has occurred and is continuing,
the Holder of this Note may declare all or any portion of the outstanding
principal amount of this Note (together with all accrued interest hereon and all
other amounts due and payable with respect hereto) to be immediately due and
payable and may demand immediate payment of all or any portion of the
outstanding principal amount of this Note (together with all such other amounts
then due and payable). Following any such demand, the Company shall immediately
pay to such Holder all amounts due and payable with respect to this Note. 

	(b) 	
Waiver. The Company hereby waives diligence, presentment, protest and
demand and notice of protest and demand, dishonor and nonpayment of this Note,
and expressly agrees that this Note, or any payment hereunder, may be extended
from time to time and that the Holder may accept security for this Note or
release security for this Note, all without in any way affecting the liability
of the Company hereunder.

ARTICLE 2

CONVERSION.

        2.1
Optional Conversion.  At the option of the Holder, the outstanding
principal amount of this Note plus any accrued and unpaid interest thereon (the
“Outstanding Amount”) may be converted on or prior to the Due
Date into the aggregate number of Conversion Shares equivalent to the quotient
resulting from dividing Outstanding Amount by the Conversion Price. Such
optional conversion must be for the entire Outstanding Amount. 

3

        2.2
Mechanics and Effect of Conversion. 

	(a) 	
Written Notification. No later than 5 business days prior to the desired
conversion date, the Holder shall give written notice to the Company regarding
(a) Holder’s election to convert this Note on the date specified in the
notice and (b) the names or names in which the Conversion Shares shall be issued
upon conversion of this Note if different from the Holder. Such conversion will
take place on the date specified in the notice at which time the Holder shall
surrender the Note, duly endorsed, to the Company.

	(b) 	
Issuance of Shares. Upon conversion of this Note pursuant to
Section 2.1, the Company shall issue the Conversion Shares to the Holder or
its designees, provided that the Company shall not issue any fractional
Conversion Shares. In lieu of the Company issuing any fractional shares to the
Holder or its designees upon the conversion of this Note, the Company shall pay
to the Holder the unconverted amount of the Note, such payment to be in the form
of a Company check payable to the Holder. The Company shall deliver to the
Holder or its designees a certificate or certificates representing such
Conversion Shares upon surrender of this Note by the Holder. Such conversion
shall be deemed to have been made on such date, and the Person or Persons
entitled to the Conversion Shares upon such conversion shall be treated for all
purposes as the record holder or holders of such Conversion Shares as of such
date. Upon conversion of this Note, the Company shall be forever released from
all its obligations and liabilities under this Note.

	(c) 	
Splits and Subdivisions. If at any time on or prior to the Due Date
outstanding shares of common stock shall be subdivided or split into a greater
number of shares of common stock, the Conversion Price in effect immediately
prior to the time of effectiveness of such subdivision or split shall be
proportionately decreased concurrently with the effectiveness of such
subdivision or split. If outstanding shares of common stock shall be combined
into a lesser number of shares of common stock, the Conversion Price in effect
immediately prior to the time of effectiveness of such combination shall be
proportionately increased concurrently with the effectiveness of such
combination. 

	(d) 	
Sale of Shares Below Conversion Price. 

	(i) 	
If at any time on or prior to the date that is six months after the Issue Date
the Company issues or sells, or is deemed by the express provisions of this
subsection (d) to have issued or sold, Additional Common Stock, other than as a
dividend on or other distribution in respect of the common stock or a
subdivision or combination of common stock as provided in subsection (c) above,
for an Effective Price which is less than the then existing Conversion Price,
then and in each such case the Conversion Price then in effect shall be reduced,
as of the opening of business on the date of each such issue or sale, to the
price (calculated to the nearest cent) determined by dividing (A) an amount
equal to the sum of (I) the total number of shares of common stock issued and
outstanding immediately prior to the time of such issuance or sale of Additional
Common Stock, multiplied by the respective Conversion Price then in effect,
plus, (II) the amount of consideration, if any, received by the Company
upon such issuance or sale of Additional Common Stock, by (B) the total number
of shares of common stock issued and outstanding immediately after the time of
such issuance or sale.

4

	(ii) 	
For the purpose of making any adjustment required under this subsection (v), the
consideration received by the Company for any issuance or sale of securities
shall (A) to the extent it consists of cash, be computed at the gross amount of
cash received by the Company in consideration for such issuance or sale, (B) to
the extent it consists of property other than cash, be computed at the fair
value of that property as reasonably determined in good faith by the board of
directors of the Company, and (C) if Additional Common Stock, Convertible
Securities or rights or options to purchase either Additional Common Stock or
Convertible Securities are issued or sold together with other stock or
securities or other assets of the Company for a consideration which covers both,
be computed as the portion of the consideration so received that may be
reasonably determined in good faith by the board of directors of the Company to
be allocable to such Additional Common Stock, Convertible Securities or rights
or options.

	(iii) 	
For the purpose of the adjustment required under this section 2.2(d), if the
Company issues or sells any rights or options for the purchase of, or stock or
other securities convertible or exchangeable, with or without consideration,
into or for, Additional Common Stock (such convertible or exchangeable stock or
securities being hereinafter referred to as “Convertible
Securities”) and if the Effective Price of such Additional Common Stock
is less than the Conversion Price then in effect, then in each case the Company
shall be deemed (A) to have issued at the time of the issuance of such rights or
options or Convertible Securities the maximum number of shares of Additional
Common Stock issuable upon exercise, conversion or exchange thereof and (B) to
have received, as consideration for the issuance of such shares of Additional
Common Stock, an amount equal to the total amount of the consideration, if any,
received by the Company for the issuance of such rights or options or
Convertible Securities, plus (x) in the case of such rights or options, the
minimum amounts of consideration, if any, payable to the Company upon the
exercise of such rights or options, and (y) plus, in the case of Convertible
Securities, the minimum amounts of consideration, if any, payable to the Company
(other than by cancellation of liabilities or obligations evidenced by such
Convertible Securities) upon the conversion or exchange thereof. In the event
the Effective Price for any shares of Additional Common Stock issuable upon
conversion or exercise of any such rights, options or Convertible Securities
shall be modified or adjusted subsequent to the issuance of such securities,
then the Conversion Price shall be further adjusted to the Conversion Price that
would have been in effect had such Effective Price been in effect upon the
initial issuance of such rights, options or Convertible Securities. No further
adjustment of the Conversion Price, adjusted upon the issuance of such rights,
options or Convertible Securities, shall be made as a result of the actual
issuance of Additional Common Stock on the exercise of any such rights or
options or the conversion or exchange of any such Convertible Securities.

5

ARTICLE 3

REPRESENTATIONS OF HOLDER.

        The
Holder hereby represents and warrants to the Company that:

        3.1
Accredited Investor. The Holder is an accredited investor within
the meaning of Regulation D under the Securities Act of 1933, as amended. The
Holder is in a financial position to hold the Note and the Conversion Shares and
is able to bear the economic risk and withstand a complete loss of the
Holder’s investment in the Note and the Conversion Shares. The Holder
recognizes that the Note and Conversion Shares as an investment involve a high
degree of risk. The Holder understands and acknowledges that there can be no
assurance that the Company will be able to meet its projected goals and the
Company will need significant additional capital to be successful, which capital
may not be readily available. 

        3.2
Acquisition for Holder’s Own Account. The Holder is acquiring
the Note and the Conversion Shares for the Holder’s own account, not as
nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act as of 1933, as amended. By executing this Note, the Holder
further represents that the Holder does not have any contract, undertaking,
agreement, or arrangement with any Person to sell, transfer, or grant
participation to any such Person or to any third Person, with respect to the
Note or the Conversion Shares. 

ARTICLE 4

MISCELLANEOUS.

        4.1
Assignment. The rights and obligations of the Company and
the Holder will be binding upon and inure to the benefit of the successors,
assigns, heirs, administrators and transferees of the parties. The Holder cannot
assign its interests in this Note without the consent of the Company. 

        4.2
Waiver and Amendment. Any provision of this Note may be
amended, waived or modified upon the written consent of the Company and the
Holder of the Note.

        4.3
Notices. All notices (including other communications
required or permitted) under this Note must be in writing and must be delivered
(a) in person, (b) by registered or certified mail, postage prepaid,
return receipt requested, (c) by a generally recognized courier or
messenger service that provides written acknowledgement of receipt by the
addressee, or (d) by facsimile or other generally accepted means of
electronic transmission with a verification of delivery. Notices are deemed
delivered when actually delivered to the address for notices. Notices to the
Holder must be given to its last known address appearing on the books of the
Company and notices to the Company must be given at its principal executive
office. Any party may furnish, from time to time, other addresses for notices to
it. 

6

        4.4
Attorneys’ Fees and Costs. If any legal action,
arbitration or other proceeding is brought to enforce or interpret this Note or
matters relating to it, the substantially prevailing party will be entitled to
recover reasonable attorneys’ fees and other costs incurred in such action,
arbitration or proceeding from the other party, in addition to any other relief
to which such prevailing party is entitled. 

        4.5
Interpretation. If any claim is made by a party relating to any
conflict, omission or ambiguity in the provisions of this Note, no presumption
or burden of proof or persuasion will be implied because this Note was prepared
by or at the request of any party or its counsel. 

        4.6
Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, excluding that body of
law relating to conflict of laws.

        4.7
Jurisdiction and Venue. The parties consent to the jurisdiction of
all federal and state courts in California. Venue will lie exclusively in Los
Angeles County, California.

        4.8
Headings; Exhibits; References. The headings in this Note
are only for convenience and ease of reference and are not to be considered in
construction or interpretation. All exhibits, schedules and appendices attached
to this Note are incorporated herein. Except where otherwise indicated, all
references in this Note to Sections refer to Sections of this Note. 

        4.9
Survival. The representations, warranties and agreements in this
Note will survive any investigation made by any party and the execution of this
Note.

        4.10
Additional Documents and Acts. Each party will execute and
deliver such additional documents and instruments, and perform such additional
acts, as are commercially reasonable and necessary to carry out and perform its
obligations in this Note. 

        4.11
Binding Effect; Parties in Interest. This Note is binding
upon and benefits only the parties and their respective permitted successors and
assigns. Nothing in this Note gives any rights or remedies to any Person other
than the parties and their respective permitted successors and assigns, nor does
anything in this Note relieve or discharge any obligation or liability of any
third Person to any party. No provision of this Note gives any third Person any
right of subrogation or action over or against any party to this Note. 

        4.12
Complete Note. This Note is the complete and exclusive
statement of agreement of the parties with respect to matters in this Note. This
Note replaces and supersedes all prior written or oral agreements or statements
by and among the parties with respect to the matters covered by it. No
representation, statement, condition or warranty not contained in this Note is
binding on the parties. 

7

ARTICLE 5

CERTAIN
DEFINITIONS.

        “Additional
Common Stock” means all shares of common stock issued by the Company
after the Issuance Date, whether or not subsequently reacquired or retired by
the Company, other than (A) common stock or warrants to purchase common stock
issued by the Company on or prior to the Issuance Date, and (B) common stock
issued to management, directors or employees of, or consultants to, the Company
pursuant to plans outstanding as of the Issuance Date, and options to purchase
common stock issued in accordance with such plans or pursuant to other employee
plans approved by a majority of the Company’s Board of Directors. 

“Conversion
Shares” at any time means any shares common stock of the Company issued
upon conversion of this Note. 

        “Conversion
Price” means initially $2.00 per share of common stock of the Company
as that price shall be adjusted from time to time in accordance with
Section 2.2(c) and 2.2(d). 

        “Effective
Price” of Additional Common Stock shall mean the quotient determined by
dividing (x) the aggregate consideration received, or deemed to have been
received by the Company for such issue under subsection 2.2(d), for such
Additional Common Stock, by (y) the total number of shares of Additional Common
Stock, issued or sold, or deemed to have been issued or sold by the Company
under subsection 2.2(d). 

        “Issuance
Date” means July 21, 2000.

        “Person”
means an individual, a corporation, an association, a trust, a partnership, a
joint venture, a limited liability company, an organization, a business, an
individual, or a governmental body or subdivision or agency thereof. 

                
                
                
                
[Signature Page to Follow]

8

IN WITNESS WHEREOF, the
parties have caused this Note to be issued on the day and year first above
written. 

HOLDER:        
                
                
                
                
                
                
                
COMPANY:

                
                
                
                
                
                
                
                
           EScreen Holdings, Inc.,

                
                
                
                
                
                
                
                
           a Delaware corporation

By:_____________________________    
                
                
                
                
By:_____________________________

            (Signature)    
                
          
                
                
                
                
                
        (Signature)

Name:_____________________________    
                
           
                
                
Name:   _____________________________

    
                
                
                
                
                
                
                
                
      Title: President

Address:           
                
                
                
                
                
                
                
Address:

Avert, Inc.        
                
                
                
                
                
                
                
Escreen, Holdings. Inc.

________________________        
                
                
            
                
                
5900 Wilshire Boulevard

________________________        
                
                
            
                
                
Los Angeles, CA   90036

9

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