<PAGE>


EXHIBIT 10.2 - BANK LINE OF CREDIT AGREEMENT
                                CREDIT AGREEMENT

         THIS AGREEMENT is dated to be effective as of March 31, 2001, by and
between CHECK TECHNOLOGY CORPORATION, a Minnesota corporation ("Borrower"), and
WELLS FARGO BANK, NATIONAL ASSOCIATION as successor in interest to Norwest Bank
Minnesota, National Association ("Bank").


                                    RECITALS

         Borrower has requested that Bank extend or continue credit to Borrower
as described below, and Bank has agreed to provide such credit to Borrower on
the terms and conditions contained herein.

         NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Bank and Borrower hereby agree as follows:


                                    ARTICLE I
                                  CREDIT TERMS

         SECTION 1.1. LINE OF CREDIT.

         (a) Line of Credit. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make advances to Borrower from time to time up
to and including April 30, 2002, not to exceed at any time the aggregate
principal amount of Two Million Five Hundred Thousand Dollars ($2,500,000.00)
("Line of Credit"), the proceeds of which shall be used to finance accounts
receivable and inventory. Borrower's obligation to repay advances under the Line
of Credit shall be evidenced by a promissory note substantially in the form of
Exhibit A attached hereto ("Line of Credit Note"), all terms of which are
incorporated herein by this reference.

         (b) Letter of Credit Subfeature. As a subfeature under the Line of
Credit, Bank agrees from time to time during the term thereof to issue or cause
an affiliate to issue standby or documentary letters of credit for the account
of Borrower to finance accounts receivable and inventory (each, a "Letter of
Credit" and collectively, "Letters of Credit"); provided however, that the
aggregate undrawn amount of all outstanding Letters of Credit shall not at any
time exceed One Million Dollars ($1,000,000.00). The form and substance of each
Letter of Credit shall be subject to approval by Bank, in its sole discretion.
No Letter of Credit shall have an expiration date subsequent to the maturity
date of the Line of Credit. The undrawn amount of all Letters of Credit shall be
reserved under the Line of Credit and shall not be available for borrowings
thereunder. Each Letter of Credit shall be subject to the additional terms and
conditions of the Letter of Credit agreements, applications and any related
documents required by Bank in connection with the issuance thereof. Each draft
paid under a Letter of Credit shall be deemed an advance under the Line of
Credit and shall be repaid by Borrower in accordance with the terms and
conditions of this Agreement applicable to such advances; provided however, that
if advances under the Line of Credit are not available, for any reason, at the
time any draft is paid, then Borrower shall immediately pay to Bank the full
amount of such draft, together with interest thereon from the date such draft is
paid to the date such draft is fully repaid by Borrower, at the rate of interest
applicable to advances under the Line of Credit. In such event Borrower agrees
that Bank, in its sole discretion, may debit any account maintained by Borrower
with Bank for the amount of any such draft.



<PAGE>



         (c) Borrowing and Repayment. Borrower may from time to time during the
term of the Line of Credit borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit Note; provided however,
that the total outstanding borrowings under the Line of Credit shall not at any
time exceed the maximum principal amount available thereunder, as set forth
above.

         SECTION 1.2. INTEREST/FEES.

         (a) Interest. The outstanding principal balance of the Line of Credit
shall bear interest, and the amount of each draft paid under any Letter of
Credit or Standby Letter of Credit shall bear interest from the date such draft
is paid to the date such amount is fully repaid by Borrower, at the rate of
interest set forth in each promissory note or other instrument executed in
connection therewith.

         (b) Prime Rate. The term "Prime Rate" shall mean at any time the rate
of interest most recently announced within Bank at its principal office as its
Prime Rate, with the understanding that the Prime Rate is one of Bank's base
rates and serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto, and is evidenced by the
recording thereof in such internal publication or publications as Bank may
designate. Each change in the rate of interest shall become effective on the
date each Prime Rate change is announced within Bank.

         (c) Computation and Payment. Interest shall be computed on the basis of
a 360-day year, actual days elapsed. Interest shall be payable at the times and
place set forth in each promissory note or other instrument required hereby.

         (d) Unused Commitment Fee. Borrower shall pay to Bank a fee equal to 20
basis points on the average daily unused amount of the Line of Credit, which fee
shall be calculated on a 360 day basis by Bank and shall be due and payable
quarterly by Borrower in arrears.

         (e) Letter of Credit Fees. Borrower shall pay to Bank fees upon the
issuance of each Letter of Credit, upon the payment or negotiation of each draft
under any Letter of Credit and upon the occurrence of any other activity with
respect to any Letter of Credit (including without limitation, the transfer,
amendment or cancellation of any Letter of Credit) determined in accordance with
Bank's standard fees and charges then in effect for such activity.

         SECTION 1.3. COLLATERAL.

         As security for all indebtedness of Borrower to Bank under the Line of
Credit, Borrower hereby grants to Bank security interests of first priority in
all Borrower's accounts receivable, inventory, equipment and general
intangibles.

All of the foregoing shall be evidenced by and subject to the terms of such
security agreements, financing statements, deeds of trust and other documents as
Bank shall reasonably require, all in form and substance satisfactory to Bank.
Borrower shall reimburse Bank immediately upon demand for all costs and expenses
incurred by Bank in connection with any of the foregoing security, including
without limitation, filing and recording fees and costs of appraisals, audits
and title insurance.






                                       2
<PAGE>


                                   ARTICLE II
                         REPRESENTATIONS AND WARRANTIES

         Borrower makes the following representations and warranties to Bank,
which representations and warranties shall survive the execution of this
Agreement and shall continue in full force and effect until the full and final
payment, and satisfaction and discharge, of all obligations of Borrower to Bank
subject to this Agreement.

         SECTION 2.1. LEGAL STATUS. Borrower is a corporation, duly organized
and existing and in good standing under the laws of the State of Minnesota, and
is qualified or licensed to do business (and is in good standing as a foreign
corporation, if applicable) in all jurisdictions in which such qualification or
licensing is required or in which the failure to so qualify or to be so licensed
could have a material adverse effect on Borrower.

         SECTION 2.2. AUTHORIZATION AND VALIDITY. This Agreement and each
promissory note, contract, instrument and other document required hereby or at
any time hereafter delivered to Bank in connection herewith (collectively, the
"Loan Documents") have been duly authorized, and upon their execution and
delivery in accordance with the provisions hereof will constitute legal, valid
and binding agreements and obligations of Borrower or the party which executes
the same, enforceable in accordance with their respective terms.

         SECTION 2.3. NO VIOLATION. The execution, delivery and performance by
Borrower of each of the Loan Documents do not violate any provision of any law
or regulation, or contravene any provision of the Articles of Incorporation or
By-Laws of Borrower, or result in any breach of or default under any contract,
obligation, indenture or other instrument to which Borrower is a party or by
which Borrower may be bound.

         SECTION 2.4. LITIGATION. There are no pending, or to the best of
Borrower's knowledge threatened, actions, claims, investigations, suits or
proceedings by or before any governmental authority, arbitrator, court or
administrative agency which could have a material adverse effect on the
financial condition or operation of Borrower other than those disclosed by
Borrower to Bank in writing prior to the date hereof.

         SECTION 2.5. CORRECTNESS OF FINANCIAL STATEMENT. The financial
statement of Borrower dated December 31, 2000, a true copy of which has been
delivered by Borrower to Bank prior to the date hereof, (a) is complete and
correct and presents fairly the financial condition of Borrower, (b) discloses
all liabilities of Borrower that are required to be reflected or reserved
against under generally accepted accounting principles, whether liquidated or
unliquidated, fixed or contingent, and (c) has been prepared in accordance with
generally accepted accounting principles consistently applied. Since the date of
such financial statement there has been no material adverse change in the
financial condition of Borrower, nor has Borrower mortgaged, pledged, granted a
security interest in or otherwise encumbered any of its assets or properties
except in favor of Bank or as otherwise permitted by Bank in writing.

         SECTION 2.6. INCOME TAX RETURNS. Borrower has no knowledge of any
pending assessments or adjustments of its income tax payable with respect to any
year.

         SECTION 2.7. NO SUBORDINATION. There is no agreement, indenture,
contract or instrument to which Borrower is a party or by which Borrower may be
bound that requires the subordination in right of payment of any of Borrower's
obligations subject to this Agreement to any other obligation of Borrower.





                                       3

<PAGE>


         SECTION 2.8. PERMITS, FRANCHISES. Borrower possesses, and will
hereafter possess, all permits, consents, approvals, franchises and licenses
required and rights to all trademarks, trade names, patents, and fictitious
names, if any, necessary to enable it to conduct the business in which it is now
engaged in compliance with applicable law.

         SECTION 2.9. ERISA. Borrower is in compliance in all material respects
with all applicable provisions of the Employee Retirement Income Security Act of
1974, as amended or recodified from time to time ("ERISA"); Borrower has not
violated any provision of any defined employee pension benefit plan (as defined
in ERISA) maintained or contributed to by Borrower (each, a "Plan"); no
Reportable Event as defined in ERISA has occurred and is continuing with respect
to any Plan initiated by Borrower; Borrower has met its minimum funding
requirements under ERISA with respect to each Plan; and each Plan will be able
to fulfill its benefit obligations as they come due in accordance with the Plan
documents and under generally accepted accounting principles.

         SECTION 2.10. OTHER OBLIGATIONS. Borrower is not in default on any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation.

         SECTION 2.11. ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to
Bank in writing prior to the date hereof, Borrower is in compliance in all
material respects with all applicable federal or state environmental, hazardous
waste, health and safety statutes, and any rules or regulations adopted pursuant
thereto, which govern or affect any of Borrower's operations and/or properties,
including without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Federal Resource Conservation and Recovery Act
of 1976, and the Federal Toxic Substances Control Act, as any of the same may be
amended, modified or supplemented from time to time. None of the operations of
Borrower is the subject of any federal or state investigation evaluating whether
any remedial action involving a material expenditure is needed to respond to a
release of any toxic or hazardous waste or substance into the environment.
Borrower has no material contingent liability in connection with any release of
any toxic or hazardous waste or substance into the environment.

                                   ARTICLE III
                                   CONDITIONS

         SECTION 3.1. CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation
of Bank to extend any credit contemplated by this Agreement is subject to the
fulfillment to Bank's satisfaction of all of the following conditions:

         (a) Approval of Bank Counsel. All legal matters incidental to the
extension of credit by Bank shall be satisfactory to Bank's counsel.

         (b) Documentation. Bank shall have received, in form and substance
satisfactory to Bank, each of the following, duly executed:

         (i)      This Agreement and each promissory note or other instrument
                  required hereby.
         (ii)     UCC-1.
         (iii)    Security Agreements.
         (iv)     Borrowing Resolution.
         (v)      Certificate of Incumbency.
         (vi)     Such other documents as Bank may require under any other
                  Section of this Agreement.





                                       4
<PAGE>



         (c) Financial Condition. There shall have been no material adverse
change, as determined by Bank, in the financial condition or business of
Borrower, nor any material decline, as determined by Bank, in the market value
of any collateral required hereunder or a substantial or material portion of the
assets of Borrower.

         (d) Insurance. Borrower shall have delivered to Bank evidence of
insurance coverage on all Borrower's property, in form, substance, amounts,
covering risks and issued by companies satisfactory to Bank, and where required
by Bank, with loss payable endorsements in favor of Bank.

         SECTION 3.2. CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of
Bank to make each extension of credit requested by Borrower hereunder shall be
subject to the fulfillment to Bank's satisfaction of each of the following
conditions:

         (a) Compliance. The representations and warranties contained herein and
in each of the other Loan Documents shall be true on and as of the date of the
signing of this Agreement and on the date of each extension of credit by Bank
pursuant hereto, with the same effect as though such representations and
warranties had been made on and as of each such date, and on each such date, no
Event of Default as defined herein, and no condition, event or act which with
the giving of notice or the passage of time or both would constitute such an
Event of Default, shall have occurred and be continuing or shall exist.

         (b) Documentation. Bank shall have received all additional documents
which may be required in connection with such extension of credit.


                                   ARTICLE IV
                              AFFIRMATIVE COVENANTS

         Borrower covenants that so long as Bank remains committed to extend
credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower shall, unless Bank otherwise consents in
writing:

         SECTION 4.1. PUNCTUAL PAYMENTS. Punctually pay all principal, interest,
fees or other liabilities due under any of the Loan Documents at the times and
place and in the manner specified therein.

         SECTION 4.2. ACCOUNTING RECORDS. Maintain adequate books and records in
accordance with generally accepted accounting principles consistently applied,
and permit any representative of Bank, at any reasonable time, to inspect, audit
and examine such books and records, to make copies of the same, and to inspect
the properties of Borrower.

         SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the
following, in form and detail satisfactory to Bank:





                                       5
<PAGE>



         (a) not later than 90 days after and as of the end of each fiscal year,
an annual audited financial statement of Borrower, prepared by an independent
certified public accountant with an unqualified opinion, to include balance
sheet and income statement.

         (b) not later than 45 days after and as of the end of each quarter, a
financial statement of Borrower, prepared by Borrower, to include balance sheet
and income statement;

         (c) contemporaneously with each quarterly financial statement of
Borrower required during periods of borrowing or prior to an initial advance
hereby, a compliance certificate of the President or Chief Financial Officer
that said financial statements are accurate and that there exists no Event of
Default nor any condition, act or event which with the giving of notice or the
passage of time or both would constitute an Event of Default;

         (d) from time to time such other information as Bank may reasonably
request.

         SECTION 4.4. COMPLIANCE. Preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; and comply with the provisions of all documents
pursuant to which Borrower is organized and/or which govern Borrower's continued
existence and with the requirements of all laws, rules, regulations and orders
of any governmental authority applicable to Borrower and/or its business.

         SECTION 4.5. INSURANCE. Maintain and keep in force insurance of the
types and in amounts customarily carried in lines of business similar to that of
Borrower, including but not limited to fire, extended coverage, public
liability, flood, property damage and workers' compensation, with all such
insurance carried with companies and in amounts satisfactory to Bank, and
deliver to Bank from time to time at Bank's request schedules setting forth all
insurance then in effect.

         SECTION 4.6. FACILITIES. Keep all properties useful or necessary to
Borrower's business in good repair and condition, and from time to time make
necessary repairs, renewals and replacements thereto so that such properties
shall be fully and efficiently preserved and maintained.

         SECTION 4.7. TAXES AND OTHER LIABILITIES. Pay and discharge when due
any and all indebtedness, obligations, assessments and taxes, both real or
personal, including without limitation federal and state income taxes and state
and local property taxes and assessments, except such (a) as Borrower may in
good faith contest or as to which a bona fide dispute may arise, and (b) for
which Borrower has made provision, to Bank's satisfaction, for eventual payment
thereof in the event Borrower is obligated to make such payment.

         SECTION 4.8. LITIGATION. Promptly give notice in writing to Bank of any
litigation pending or threatened against Borrower.

         SECTION 4.9. FINANCIAL CONDITION. Maintain Borrower's financial
condition as follows using generally accepted accounting principles consistently
applied and used consistently with prior practices (except to the extent
modified by the definitions herein):

         (a) Current Ratio not at any time less than 2.0 to 1.0, with "Current
Ratio" defined as total current assets divided by total current liabilities.





                                       6
<PAGE>


         (b) Total Liabilities divided by Tangible Net Worth not at any time
greater than .75 to 1.0, with "Total Liabilities" defined as the aggregate of
current liabilities and non-current liabilities less subordinated debt, and with
"Tangible Net Worth" defined as total assets less total liabilities and less the
following types of assets: (1) leasehold improvements; (2) receivables and other
investments in or amounts due from any shareholder, director, officer, employee
or other person or entity related to or affiliated with the Borrower; and (3)
goodwill, patents, copyrights, mailing lists, trade names, trademarks, servicing
rights, organizational and franchise costs, bond underwriting costs and other
like assets properly classified as intangible.

         (c) Net profitability not less than one dollar ($1) on a quarterly
basis, beginning with the fiscal quarter ending June 30, 2001.

         SECTION 4.10. NOTICE TO BANK. Promptly (but in no event more than five
(5) days after the occurrence of each such event or matter) give written notice
to Bank in reasonable detail of: (a) the occurrence of any Event of Default, or
any condition, event or act which with the giving of notice or the passage of
time or both would constitute an Event of Default; (b) any change in the name
[or the organizational structure] of Borrower; (c) the occurrence and nature of
any Reportable Event or Prohibited Transaction, each as defined in ERISA, or any
funding deficiency with respect to any Plan; or (d) any termination or
cancellation of any insurance policy which Borrower is required to maintain, or
any uninsured or partially uninsured loss through liability or property damage,
or through fire, theft or any other cause affecting Borrower's property.


                                    ARTICLE V
                               NEGATIVE COVENANTS

         Borrower further covenants that so long as Bank remains committed to
extend credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower will not without Bank's prior written
consent:

         SECTION 5.1. USE OF FUNDS. Use any of the proceeds of any credit
extended hereunder except for the purposes stated in Article I hereof.

         SECTION 5.2. OTHER INDEBTEDNESS. Create, incur, assume or permit to
exist any indebtedness or liabilities in excess of $100,000.00 resulting from
borrowings, loans or advances, whether secured or unsecured, matured or
unmatured, liquidated or unliquidated, joint or several, except (a) the
liabilities of Borrower to Bank, and (b) any other liabilities of Borrower
existing as of, and disclosed to Bank prior to, the date hereof.

         SECTION 5.3. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or
consolidate with any other entity; make any substantial change in the nature of
Borrower's business as conducted as of the date hereof; acquire all or
substantially all of the assets of any other entity; nor sell, lease, transfer
or otherwise dispose of all or a substantial or material portion of Borrower's
assets except in the ordinary course of its business.

         SECTION 5.4. LOANS, ADVANCES, INVESTMENTS. Make any loans or advances
to or investments in any person or entity, except any of the foregoing existing
as of, and disclosed to Bank prior to, the date hereof.




                                       7
<PAGE>


         SECTION 5.5. DIVIDENDS, DISTRIBUTIONS. Declare or pay any dividend or
distribution either in cash, stock or any other property on Borrower's stock now
or hereafter outstanding, nor redeem, retire, repurchase or otherwise acquire
any shares of any class of Borrower's stock now or hereafter outstanding.

         SECTION 5.6. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to
exist a security interest in, or lien upon, all or any portion of Borrower's
assets now owned or hereafter acquired, except any of the foregoing in favor of
Bank or which is existing as of, and disclosed to Bank in writing prior to, the
date hereof.

                                   ARTICLE VI
                                EVENTS OF DEFAULT

         SECTION 6.1. The occurrence of any of the following shall constitute an
"Event of Default" under this Agreement:

         (a) Borrower shall fail to pay when due any principal, interest, fees
or other amounts payable under any of the Loan Documents.

         (b) Any financial statement or certificate furnished to Bank in
connection with, or any representation or warranty made by Borrower or any other
party under this Agreement or any other Loan Document shall prove to be
incorrect, false or misleading in any material respect when furnished or made.

         (c) Any default in the performance of or compliance with any
obligation, agreement or other provision contained herein or in any other Loan
Document (other than those referred to in subsections (a) and (b) above), and
with respect to any such default which by its nature can be cured, such default
shall continue for a period of twenty (20) days from its occurrence.

         (d) Any default in the payment or performance of any obligation, or any
defined event of default, under the terms of any contract or instrument (other
than any of the Loan Documents) pursuant to which Borrower has incurred any
indebtedness from borrowed money in the amount of $50,000.00 or more to any
person or entity, including Bank.

         (e) The filing of a notice of judgment lien against Borrower; or the
recording of any abstract of judgment against Borrower in any county in which
Borrower has an interest in real property; or the service of a notice of levy
and/or of a writ of attachment or execution, or other like process, against the
assets of Borrower; or the entry of a judgment against Borrower in each case
which involves an obligation in excess of $50,000.00 and which continues
unsatisfied for more than 30 days without a stay of execution.

         (f) Borrower shall become insolvent, or shall suffer or consent to or
apply for the appointment of a receiver, trustee, custodian or liquidator of
itself or any of its property, or shall generally fail to pay its debts as they
become due, or shall make a general assignment for the benefit of creditors;
Borrower shall file a voluntary petition in bankruptcy, or seeking
reorganization, in order to effect a plan or other arrangement with creditors or
any other relief under the Bankruptcy Reform Act, Title 11 of the United States
Code, as amended or recodified from time to time ("Bankruptcy Code"), or under
any state or federal law granting relief to debtors, whether now or hereafter in
effect; or any involuntary petition or proceeding pursuant to the Bankruptcy
Code or any other applicable state or federal law relating to bankruptcy,





                                       8
<PAGE>


reorganization or other relief for debtors is filed or commenced against
Borrower and remains undismissed for a period of sixty days, or Borrower shall
file an answer admitting the jurisdiction of the court and the material
allegations of any involuntary petition; or Borrower shall be adjudicated a
bankrupt, or an order for relief shall be entered against Borrower by any court
of competent jurisdiction under the Bankruptcy Code or any other applicable
state or federal law relating to bankruptcy, reorganization or other relief for
debtors.

         (g) The dissolution or liquidation of Borrower; or Borrower, or any of
its directors, stockholders or members, shall take action seeking to effect the
dissolution or liquidation of Borrower.

         SECTION 6.2. REMEDIES. Upon the occurrence of any Event of Default: (a)
all indebtedness of Borrower under each of the Loan Documents, any term thereof
to the contrary notwithstanding, shall at Bank's option and without notice
become immediately due and payable without presentment, demand, protest or
notice of dishonor, all of which are hereby expressly waived by each Borrower;
(b) the obligation, if any, of Bank to extend any further credit under any of
the Loan Documents shall immediately cease and terminate; and (c) Bank shall
have all rights, powers and remedies available under each of the Loan Documents,
or accorded by law, including without limitation the right to resort to any or
all security for any credit subject hereto and to exercise any or all of the
rights of a beneficiary or secured party pursuant to applicable law. All rights,
powers and remedies of Bank may be exercised at any time by Bank and from time
to time after the occurrence of an Event of Default, are cumulative and not
exclusive, and shall be in addition to any other rights, powers or remedies
provided by law or equity.


                                   ARTICLE VII
                                  MISCELLANEOUS

         SECTION 7.1. NO WAIVER. No delay, failure or discontinuance of Bank in
exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Bank of any breach of or default under any of the Loan Documents must be
in writing and shall be effective only to the extent set forth in such writing.

         SECTION 7.2. NOTICES. All notices, requests and demands which any party
is required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to each party at the following address:

     BORROWER:  CHECK TECHNOLOGY CORPORATION
                Attn: Robert Barniskis
                12500 Whitewater Dr.
                Minnetonka, MN 55343-9420

     BANK:      WELLS FARGO BANK, NATIONAL ASSOCIATION
                Attn: Kent Paulson
                7901 Xerxes Avenue South
                Bloomington, MN 55432
                MAC# N9307-013





                                       9
<PAGE>



or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt.

         SECTION 7.3. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to
Bank immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), expended or
incurred by Bank in connection with (a) the negotiation and preparation of this
Agreement and the other Loan Documents, Bank's continued administration hereof
and thereof, and the preparation of any amendments and waivers hereto and
thereto, (b) the enforcement of Bank's rights and/or the collection of any
amounts which become due to Bank under any of the Loan Documents, and (c) the
prosecution or defense of any action in any way related to any of the Loan
Documents, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower or any other person or entity.

         SECTION 7.4. SUCCESSORS, ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided however, that
Borrower may not assign or transfer its interest hereunder without Bank's prior
written consent. Bank reserves the right to sell, assign, transfer, negotiate or
grant participations in all or any part of, or any interest in, Bank's rights
and benefits under each of the Loan Documents. In connection therewith, Bank may
disclose all documents and information which Bank now has or may hereafter
acquire relating to any credit subject hereto, Borrower or its business, or any
collateral required hereunder.

         SECTION 7.5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other
Loan Documents constitute the entire agreement between Borrower and Bank with
respect to each credit subject hereto and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
hereof. This Agreement may be amended or modified only in writing signed by each
party hereto.

         SECTION 7.6. NO THIRD PARTY BENEFICIARIES. This Agreement is made and
entered into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any other of the Loan Documents
to which it is not a party.

         SECTION 7.7. TIME. Time is of the essence of each and every provision
of this Agreement and each other of the Loan Documents.

         SECTION 7.8. SEVERABILITY OF PROVISIONS. If any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or any remaining provisions
of this Agreement.





                                       10
<PAGE>


         SECTION 7.9. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which when executed and delivered shall be deemed to be
an original, and all of which when taken together shall constitute one and the
same Agreement.

         SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota.

         SECTION 7.11. ARBITRATION.

         (a) Arbitration. The parties hereto agree, upon demand by any party, to
submit to binding arbitration all claims, disputes and controversies between or
among them (and their respective employees, officers, directors, attorneys, and
other agents), whether in tort, contract or otherwise arising out of or relating
to in any way (i) the loan and related Loan Documents which are the subject of
this Agreement and its negotiation, execution, collateralization,
administration, repayment, modification, extension, substitution, formation,
inducement, enforcement, default or termination; or (ii) requests for additional
credit.

         (b) Governing Rules. Any arbitration proceeding will (i) proceed in a
location in Minnesota selected by the American Arbitration Association ("AAA");
(ii) be governed by the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in any of the
documents between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA's commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
costs in which case the arbitration shall be conducted in accordance with the
AAA's optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to, as applicable, as the "Rules"). If there
is any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
dispute. Nothing contained herein shall be deemed to be a waiver by any party
that is a bank of the protections afforded to it under 12 U.S.C. Section 91 or
any similar applicable state law.

         (c) No Waiver of Provisional Remedies, Self-Help and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in sections (i), (ii) and (iii) of this paragraph.

         (d) Arbitrator Qualifications and Powers. Any arbitration proceeding in
which the amount in controversy is $5,000,000.00 or less will be decided by a
single arbitrator selected according to the Rules, and who shall not render an
award of greater than $5,000,000.00. Any dispute in which the amount in
controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel
of three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State of Minnesota or a neutral retired judge of the
state or federal judiciary of {State Name},





                                       11
<PAGE>


in either case with a minimum of ten years experience in the substantive law
applicable to the subject matter of the dispute to be arbitrated. The arbitrator
will determine whether or not an issue is arbitratable and will give effect to
the statutes of limitation in determining any claim. In any arbitration
proceeding the arbitrator will decide (by documents only or with a hearing at
the arbitrator's discretion) any pre-hearing motions which are similar to
motions to dismiss for failure to state a claim or motions for summary
adjudication. The arbitrator shall resolve all disputes in accordance with the
substantive law of Minnesota and may grant any remedy or relief that a court of
such state could order or grant within the scope hereof and such ancillary
relief as is necessary to make effective any award. The arbitrator shall also
have the power to award recovery of all costs and fees, to impose sanctions and
to take such other action as the arbitrator deems necessary to the same extent a
judge could pursuant to the Federal Rules of Civil Procedure, the Minnesota
Rules of Civil Procedure or other applicable law. Judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.

         (e) Discovery. In any arbitration proceeding discovery will be
permitted in accordance with the Rules. All discovery shall be expressly limited
to matters directly relevant to the dispute being arbitrated and must be
completed no later than 20 days before the hearing date and within 180 days of
the filing of the dispute with the AAA. Any requests for an extension of the
discovery periods, or any discovery disputes, will be subject to final
determination by the arbitrator upon a showing that the request for discovery is
essential for the party's presentation and that no alternative means for
obtaining information is available.

         (f) Class Proceedings and Consolidations. The resolution of any dispute
arising pursuant to the terms of this Agreement shall be determined by a
separate arbitration proceeding and such dispute shall not be consolidated with
other disputes or included in any class proceeding.

         (g) Payment Of Arbitration Costs And Fees. The arbitrator shall award
all costs and expenses of the arbitration proceeding.

         (h) Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a dispute, the arbitration provision most directly
related to the Loan Documents or the subject matter of the dispute shall
control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.




                                       12
<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.

                                            WELLS FARGO BANK,
CHECK TECHNOLOGY CORPORATION                NATIONAL ASSOCIATION

By:                                         By:
   ------------------------                    -----------------------------
   Robert Barniskis, CFO                    Title:
By:                                               --------------------------
   ------------------------













                                       13
<PAGE>


                          REVOLVING LINE OF CREDIT NOTE


$2,500,000.00                                             Bloomington, Minnesota
                                                                  March 31, 2001

         FOR VALUE RECEIVED, the undersigned CHECK TECHNOLOGY CORPORATION
("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at Minn RCBO-REG Coml Bloom Mid Mkt, 7900
Xerxes Ave. South, Bloomington, Minnesota 55431, or at such other place as the
holder hereof may designate, in lawful money of the United States of America and
in immediately available funds, the principal sum of Two Million Five Hundred
Thousand Dollars ($2,500,000.00), or so much thereof as may be advanced and be
outstanding, with interest thereon, to be computed on each advance from the date
of its disbursement as set forth herein.

INTEREST:

         (a) Interest. The outstanding principal balance of this Note shall bear
interest (computed on the basis of a 360-day year, actual days elapsed) at a
rate per annum equal to the Prime Rate in effect from time to time. The "Prime
Rate" is a base rate that Bank from time to time establishes and which serves as
the basis upon which effective rates of interest are calculated for those loans
making reference thereto. Each change in the rate of interest hereunder shall
become effective on the date each Prime Rate change is announced within Bank.

         (b) Payment of Interest. Interest accrued on this Note shall be payable
on the last day of each month, commencing April 30, 2001.

         (c) Default Interest. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to four percent (4%) above
the rate of interest from time to time applicable to this Note.

BORROWING AND REPAYMENT:

         (a) Borrowing and Repayment. Borrower may from time to time during the
term of this Note borrow, partially or wholly repay its outstanding borrowings,
and reborrow, subject to all of the limitations, terms and conditions of this
Note and of any document executed in connection with or governing this Note;
provided however, that the total outstanding borrowings under this Note shall
not at any time exceed the principal amount stated above. The unpaid principal
balance of this obligation at any time shall be the total amounts advanced
hereunder by the holder hereof less the amount of principal payments made hereon
by or for any Borrower, which balance may be endorsed hereon from time to time
by the holder. The outstanding principal balance of this Note shall be due and
payable in full on April 30, 2002.

         (b) Advances. Advances hereunder, to the total amount of the principal
sum stated above, may be made by the holder at the oral or written request of
any person, with respect to advances deposited to the credit of any deposit
account of any Borrower, which advances, when so deposited, shall be
conclusively presumed to have been made to or for the benefit of each Borrower
regardless of the fact that persons other than those authorized to request
advances may have authority to draw against such account. The holder shall have
no obligation to determine whether any person requesting an advance is or has
been authorized by any Borrower.

         (c) Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof.





                                       14
<PAGE>


EVENTS OF DEFAULT:

         This Note is made pursuant to and is subject to the terms and
conditions of that certain Credit Agreement between Borrower and Bank dated as
of March 31, 2001, as amended from time to time (the "Credit Agreement"). Any
default in the payment or performance of any obligation under this Note, or any
defined event of default under the Credit Agreement, shall constitute an "Event
of Default" under this Note.

MISCELLANEOUS:

         (a) Remedies. Upon the occurrence of any Event of Default, the holder
of this Note, at the holder's option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by each Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of the holder's in-house counsel), expended
or incurred by the holder in connection with the enforcement of the holder's
rights and/or the collection of any amounts which become due to the holder under
this Note, and the prosecution or defense of any action in any way related to
this Note, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower or any other person or entity.

         (b) Obligations Joint and Several. Should more than one person or
entity sign this Note as a Borrower, the obligations of each such Borrower shall
be joint and several.

         (c) Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Minnesota.

         IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.

CHECK TECHNOLOGY CORPORATION

By:
   -------------------------
   Robert Barniskis, CFO






                                       15
<PAGE>

                                                              SECURITY AGREEMENT
WELLS FARGO BANK                                                       EQUIPMENT
--------------------------------------------------------------------------------

         1. GRANT OF SECURITY INTEREST. For valuable consideration, the
undersigned CHECK TECHNOLOGY CORPORATION, or any of them ("Debtor"), hereby
grants and transfers to WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") a
security interest in all goods, tools, machinery, furnishings, furniture and
other equipment, now or at any time hereafter, and prior to the termination
hereof, owned or acquired by Debtor, wherever located, whether in the possession
of Debtor or any other person and whether located on Debtor's property or
elsewhere, and all improvements, replacements, accessions and additions thereto
(collectively called "Collateral"), together with whatever is receivable or
received when any of the Collateral or proceeds thereof are sold, leased,
collected, exchanged or otherwise disposed of, whether such disposition is
voluntary or involuntary, including without limitation, (a) all accounts,
contract rights, chattel paper, instruments, documents, general intangibles and
rights to payment of every kind now or at any time hereafter arising out of any
such sale, lease, collection, exchange or other disposition of any of the
foregoing, (b) all rights to payment, including returned premiums, with respect
to any insurance relating to any of the foregoing, and (c) all rights to payment
with respect to any cause of action affecting or relating to any of the
foregoing (hereinafter called "Proceeds").

         2. OBLIGATIONS SECURED. The obligations secured hereby are the payment
and performance of: (a) all present and future Indebtedness of Debtor to Bank;
(b) all obligations of Debtor and rights of Bank under this Agreement; and (c)
all present and future obligations of Debtor to Bank of other kinds. The word
"Indebtedness" is used herein in its most comprehensive sense and includes any
and all advances, debts, obligations and liabilities of Debtor, or any of them,
heretofore, now or hereafter made incurred or created, whether voluntary or
involuntary and however arising, whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, and whether Debtor may
be liable individually or jointly with others, or whether recovery upon such
Indebtedness may be or hereafter becomes unenforceable.

         3. TERMINATION. This Agreement will terminate upon the performance of
all obligations of Debtor to Bank, including without limitation, the payment of
all Indebtedness of Debtor to Bank, and the termination of all commitments of
Bank to extend credit to Debtor, existing at the time Bank receives written
notice from Debtor of the termination of this Agreement.

         4. OBLIGATIONS OF BANK. Bank has no obligation to make any loans
hereunder. Any money received by Bank in respect of the Collateral may be
deposited, at Bank's option, into a non-interest bearing account over which
Debtor shall have no control, and the same shall, for all purposes, be deemed
Collateral hereunder.

         5. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to
Bank that: (a) Debtor is the owner and has possession or control of the
Collateral and Proceeds; (b) Debtor has the right to grant a security interest
in the Collateral and Proceeds; (c) all Collateral and Proceeds are genuine,
free from liens, adverse claims, setoffs, default, prepayment, defenses and
conditions precedent of any kind or character, except the lien created hereby or
as otherwise agreed to by Bank, or as heretofore disclosed by Debtor to Bank, in
writing; (d) all statements contained herein are true and complete in all
material respects; (e) no financing statement covering any of the Collateral or
Proceeds, and naming any secured party other than Bank, is on file in any public
office; and (f) Debtor is not in the business





                                       16
<PAGE>


of selling goods of the kind included within the Collateral subject to this
Agreement, and Debtor acknowledges that no sale of any Collateral, including
without limitation, any Collateral which Debtor may deem to be surplus, has been
or shall be consented to or acquiesced in by Bank, except as specifically set
forth in writing by Bank.

         6. COVENANTS OF DEBTOR.

         (a) Debtor agrees in general: (i) to pay Indebtedness secured hereby
when due; (ii) to indemnify Bank against all losses, claims, demands,
liabilities and expenses of every kind caused by property subject hereto; (iii)
to pay all costs and expenses, including reasonable attorneys' fees, incurred by
Bank in the perfection and preservation of the Collateral or Bank's interest
therein and/or the realization, enforcement and exercise of Bank's rights,
powers and remedies hereunder; (iv) to permit Bank to exercise its powers; (v)
to execute and deliver such documents as Bank deems necessary to create, perfect
and continue the security interests contemplated hereby; and (vi) not to change
its chief place of business or the places where Debtor keeps any of the
Collateral or Debtor's records concerning the Collateral and Proceeds without
first giving Bank written notice of the address to which Debtor is moving same.

         (b) Debtor agrees with regard to the Collateral and Proceeds, unless
Bank agrees otherwise in writing: (i) to insure the Collateral with Bank as loss
payee, in form, substance and amounts, under agreements, against risks and
liabilities, and with insurance companies satisfactory to Bank; (ii) to operate
the Collateral in accordance with all applicable statutes, rules and regulations
relating to the use and control thereof, and not to use the Collateral for any
unlawful purpose or in any way that would void any insurance required to be
carried in connection therewith; (iii) not to permit any lien on the Collateral
or Proceeds, including without limitation, liens arising from repairs to or
storage of the Collateral, except in favor of Bank; (iv) to pay when due all
license fees, registration fees and other charges in connection with any
Collateral; (v) not to remove the Collateral from Debtor's premises unless the
Collateral consists of mobile goods as defined in the Minnesota Uniform
Commercial Code, in which case Debtor agrees not to remove or permit the removal
of the Collateral from its state of domicile for a period in excess of thirty
(30) calendar days; (vi) not to sell, hypothecate or otherwise dispose of, nor
permit the transfer by operation of law of, any of the Collateral or Proceeds or
any interest therein; (vii) not to rent, lease or charter the Collateral; (viii)
to permit Bank to inspect the Collateral at any time; (ix) to keep, in
accordance with generally accepted accounting principles, complete and accurate
records regarding all Collateral and Proceeds, and to permit Bank to inspect the
same and make copies thereof at any reasonable time; (x) if requested by Bank,
to receive and use reasonable diligence to collect Proceeds, in trust and as the
property of Bank, and to immediately endorse as appropriate and deliver such
Proceeds to Bank daily in the exact form in which they are received together
with a collection report in form satisfactory to Bank; (xi) not to commingle
Proceeds or collections thereunder with other property; (xii) to give only
normal allowances and credits and to advise Bank thereof immediately in writing
if they affect any Collateral or Proceeds in any material respect; (xiii) in the
event Bank elects to receive payments of Proceeds hereunder, to pay all expenses
incurred by Bank in connection therewith, including expenses of accounting,
correspondence, collection efforts, reporting to account or contract debtors,
filing, recording, record keeping and expenses incidental thereto; and (xiv) to
provide any service and do any other acts which may be necessary to maintain,
preserve and protect all Collateral and, as appropriate and applicable, to keep
the Collateral in good and saleable condition and repair, to deal with the
Collateral in accordance with the standards and practices adhered to generally
by owners of like property, and to keep all Collateral and Proceeds free and
clear of all defenses, rights of offset and counterclaims.





                                       17
<PAGE>



         7. POWERS OF BANK. Debtor appoints Bank, effective upon the occurrence
of an Event of Default, its true attorney in fact to perform any of the
following powers, which are coupled with an interest, are irrevocable until
termination of this Agreement and may be exercised from time to time by Bank's
officers and employees, or any of them, whether or not Debtor is in default: (a)
to perform any obligation of Debtor hereunder in Debtor's name or otherwise; (b)
to give notice to account debtors or others of Bank's rights in the Collateral
and Proceeds, to enforce the same and make extension agreements with respect
thereto; (c) to release persons liable on Proceeds and to give receipts and
acquittances and compromise disputes in connection therewith; (d) to release
security; (e) to resort to security in any order; (f) to prepare, execute, file,
record or deliver notes, assignments, schedules, designation statements,
financing statements, continuation statements, termination statements,
statements of assignment, applications for registration or like papers to
perfect, preserve or release Bank's interest in the Collateral and Proceeds; (g)
to receive, open and read mail addressed to Debtor; (h) to take cash,
instruments for the payment of money and other property to which Bank is
entitled; (i) to verify facts concerning the Collateral and Proceeds by inquiry
of obligors thereon, or otherwise, in its own name or a fictitious name; (j) to
endorse, collect, deliver and receive payment under instruments for the payment
of money constituting or relating to Proceeds; (k) to prepare, adjust, execute,
deliver and receive payment under insurance claims, and to collect and receive
payment of and endorse any instrument in payment of loss or returned premiums or
any other insurance refund or return, and to apply such amounts received by
Bank, at Bank's sole option, toward repayment of the Indebtedness or replacement
of the Collateral; (l) to exercise all rights, powers and remedies which Debtor
would have, but for this Agreement, with respect to all the Collateral and
Proceeds subject hereto; (m) to enter onto Debtor's premises in inspecting the
Collateral; and (n) to do all acts and things and execute all documents in the
name of Debtor or otherwise, deemed by Bank as necessary, proper and convenient
in connection with the preservation, perfection or enforcement of its rights
hereunder.

         8. PAYMENT OF PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS. Debtor
agrees to pay, prior to delinquency, all insurance premiums, taxes, charges,
liens and assessments against the Collateral and Proceeds, and upon the failure
of Debtor to do so, Bank at its option may pay any of them and shall be the sole
judge of the legality or validity thereof and the amount necessary to discharge
the same. Any such payments made by Bank shall be obligations of Debtor to Bank,
due and payable immediately upon demand, together with interest at a rate
determined in accordance with the provisions of Section 15 hereof, and shall be
secured by the Collateral and Proceeds, subject to all terms and conditions of
this Agreement.

         9. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" under this Agreement: (a) any Event of Default
as defined in the Credit Agreement between Debtor and Bank; (b) any
representation or warranty made by any Debtor herein shall prove to be
incorrect, false or misleading in any material respect when made; and (c) Bank,
in good faith, believes any or all of the Collateral and/or Proceeds to be in
danger of misuse, dissipation, commingling, loss, theft, damage or destruction,
or otherwise in jeopardy or unsatisfactory in character or value.

         10. REMEDIES. Upon the occurrence of any Event of Default, Bank shall
have the right to declare immediately due and payable all or any Indebtedness
secured hereby and to terminate any commitments to make loans or otherwise
extend credit to Debtor. Bank shall have all other rights, powers, privileges
and remedies granted to a secured party upon default under the Minnesota Uniform
Commercial Code or otherwise provided by law, including without limitation, the
right to contact all persons obligated to Debtor on any Collateral or Proceeds






                                       18
<PAGE>


and to instruct such persons to deliver all Collateral and/or Proceeds directly
to Bank. All rights, powers, privileges and remedies of Bank shall be
cumulative. No delay, failure or discontinuance of Bank in exercising any right,
power, privilege or remedy hereunder shall affect or operate as a waiver of such
right, power, privilege or remedy; nor shall any single or partial exercise of
any such right, power, privilege or remedy preclude, waive or otherwise affect
any other or further exercise thereof or the exercise of any other right, power,
privilege or remedy. Any waiver, permit, consent or approval of any kind by Bank
of any default hereunder, or any such waiver of any provisions or conditions
hereof, must be in writing and shall be effective only to the extent set forth
in writing. It is agreed that public or private sales, for cash or on credit, to
a wholesaler or retailer or investor, or user of property of the types subject
to this Agreement, or public auction, are all commercially reasonable since
differences in the sales prices generally realized in the different kinds of
sales are ordinarily offset by the differences in the costs and credit risks of
such sales. While an Event of Default exists: (a) Debtor will deliver to Bank
from time to time, as requested by Bank, current lists of all Collateral and
Proceeds; (b) Debtor will not dispose of any of the Collateral or Proceeds
except on terms approved by Bank; (c) at Bank's request, Debtor will assemble
and deliver all Collateral and Proceeds, and books and records pertaining
thereto, to Bank at a reasonably convenient place designated by Bank; and (d)
Bank may, without notice to Debtor, enter onto Debtor's premises and take
possession of the Collateral.

         11. DISPOSITION OF COLLATERAL AND PROCEEDS. Upon the transfer of all or
any part of the Indebtedness, Bank may transfer all or any part of the
Collateral or Proceeds and shall be fully discharged thereafter from all
liability and responsibility with respect to any of the foregoing so
transferred, and the transferee shall be vested with all rights and powers of
Bank hereunder with respect to any of the foregoing so transferred; but with
respect to any Collateral or Proceeds not so transferred, Bank shall retain all
rights, powers, privileges and remedies herein given. Any proceeds of any
disposition of any of the Collateral or Proceeds, or any part thereof, may be
applied by Bank to the payment of expenses incurred by Bank in connection with
the foregoing, including reasonable attorneys' fees, and the balance of such
proceeds may be applied by Bank toward the payment of the Indebtedness in such
order of application as Bank may from time to time elect.

         12. STATUTE OF LIMITATIONS. Until all Indebtedness shall have been paid
in full and all commitments by Bank to extend credit to Debtor have been
terminated, the power of sale and all other rights, powers, privileges and
remedies granted to Bank hereunder shall continue to exist and may be exercised
by Bank at any time and from time to time irrespective of the fact that the
Indebtedness or any part thereof may have become barred by any statute of
limitations, or that the personal liability of Debtor may have ceased, unless
such liability shall have ceased due to the payment in full of all Indebtedness
secured hereunder.

         13. MISCELLANEOUS. (a) The obligations of Debtor are joint and several;
(b) effective upon the occurrence of an Event of Default, Debtor waives any
right (i) to require Bank to make any presentment or demand, or give any notice
of nonpayment or nonperformance, protest, notice of protest or notice of
dishonor hereunder, (ii) to direct the application of payments or security for
any Indebtedness of Debtor, or indebtedness of customers of Debtor, or (iii) to
require proceedings against others or to require exhaustion of security; and (c)
Debtor hereby consents to extensions, forbearances or alterations of the terms
of Indebtedness, the release or substitution of security, and the release of any
guarantors; provided however, that in each instance, Bank believes in good faith
that the action in question is commercially reasonable in that it does not
unreasonably increase the risk of nonpayment of the Indebtedness to which the
action applies. Until all Indebtedness shall have been paid in full, no





                                       19
<PAGE>


Debtor shall have any right of subrogation or contribution, and each Debtor
hereby waives any benefit of or right to participate in any of the Collateral or
Proceeds or any other security now or hereafter held by Bank.

         14. NOTICES. All notices, requests and demands required under this
Agreement must be in writing, addressed to Bank at the address specified in any
other loan documents entered into between Debtor and Bank and to Debtor at the
address of its chief executive office (or personal residence, if applicable)
specified below or to such other address as any party may designate by written
notice to each other party, and shall be deemed to have been given or made as
follows: (a) if personally delivered, upon delivery; (b) if sent by mail, upon
the earlier of the date of receipt or three (3) days after deposit in the U.S.
mail, first class and postage prepaid; and (c) if sent by telecopy, upon
receipt.

         15. COSTS, EXPENSES AND ATTORNEYS' FEES. Debtor shall pay to Bank
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), incurred by
Bank in exercising, following the occurrence of any Event of Default, any right,
power, privilege or remedy conferred by this Agreement or in the enforcement
thereof, whether incurred at the trial or appellate level, in an arbitration
proceeding or otherwise, and including any of the foregoing incurred in
connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to Debtor or in any way affecting any of the Collateral or
Bank's ability to exercise any of its rights or remedies with respect thereto.
All of the foregoing shall be paid by Debtor with interest from the date of
demand until paid in full at a rate per annum equal to the greater of ten
percent (10%) or Bank's Prime Rate in effect from time to time, but not in
excess of the maximum rate permitted under applicable Minnesota law.

         16. SUCCESSORS; ASSIGNS; AMENDMENT. This Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties, and may be amended or
modified only in writing signed by Bank and Debtor.

         17. SEVERABILITY OF PROVISIONS. If any provision of this Agreement
shall be held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or any
remaining provisions of this Agreement.

         18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.

         Debtor warrants that its chief executive office (or personal residence,
if applicable) is located at the following address: 12500 Whitewater Dr.,
Minnetonka, MN 55343.

         Debtor warrants that the Collateral (except goods in transit) is
located or domiciled at the following additional addresses: NONE





                                       20
<PAGE>


         IN WITNESS WHEREOF, this Agreement has been duly executed to be
effective as of March 31, 2001.

CHECK TECHNOLOGY CORPORATION

By:
   -------------------------
   Robert Barniskis, CFO

By:
   -------------------------



















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<PAGE>


                                                   CONTINUING SECURITY AGREEMENT
WELLS FARGO BANK                                 RIGHTS TO PAYMENT AND INVENTORY
--------------------------------------------------------------------------------

         1. GRANT OF SECURITY INTEREST. For valuable consideration, the
undersigned CHECK TECHNOLOGY CORPORATION, or any of them ("Debtor"), hereby
grants and transfers to WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") a
security interest in all accounts, deposit accounts, chattel paper, instruments,
documents and general intangibles (collectively called "Rights to Payment"), now
existing or at any time hereafter, and prior to the termination hereof, arising
(whether they arise from the sale, lease or other disposition of inventory or
from performance of contracts for service, manufacture, construction, repair or
otherwise or from any other source whatsoever), including all securities,
guaranties, warranties, indemnity agreements, insurance policies and other
agreements pertaining to the same or the property described therein, and in all
goods returned by or repossessed from Debtor's customers, together with a
security interest in all inventory, goods held for sale or lease or to be
furnished under contracts for service, goods so leased or furnished, raw
materials, component parts, work in process or materials used or consumed in
Debtor's business and all warehouse receipts, bills of lading and other
documents evidencing goods owned or acquired by Debtor, and all goods covered
thereby, now or at any time hereafter, and prior to the termination hereof,
owned or acquired by Debtor, wherever located, and all products thereof
(collectively called "Inventory"), whether in the possession of Debtor,
warehousemen, bailees or any other person, or in process of delivery, and
whether located at Debtor's places of business or elsewhere (with all Rights to
Payment and Inventory referred to herein collectively as the "Collateral"),
together with whatever is receivable or received when any of the Collateral or
proceeds thereof are sold, leased, collected, exchanged or otherwise disposed
of, whether such disposition is voluntary or involuntary, including without
limitation, all Rights to Payment, including returned premiums, with respect to
any insurance relating to any of the foregoing, and all Rights to Payment with
respect to any cause of action affecting or relating to any of the foregoing
(hereinafter called "Proceeds").

         2. OBLIGATIONS SECURED. The obligations secured hereby are the payment
and performance of: (a) all present and future Indebtedness of Debtor to Bank;
(b) all obligations of Debtor and rights of Bank under this Agreement; and (c)
all present and future obligations of Debtor to Bank of other kinds. The word
"Indebtedness" is used herein in its most comprehensive sense and includes any
and all advances, debts, obligations and liabilities of Debtor, or any of them,
heretofore, now or hereafter made, incurred or created, whether voluntary or
involuntary and however arising, whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, and whether Debtor may
be liable individually or jointly with others, or whether recovery upon such
Indebtedness may be or hereafter becomes unenforceable.

         3. TERMINATION. This Agreement will terminate upon the performance of
all obligations of Debtor to Bank, including without limitation, the payment of
all Indebtedness of Debtor to Bank, and the termination of all commitments of
Bank to extend credit to Debtor, existing at the time Bank receives written
notice from Debtor of the termination of this Agreement.

         4. OBLIGATIONS OF BANK. Bank has no obligation to make any loans
hereunder. Any money received by Bank in respect of the Collateral may be
deposited, at Bank's option, into a non-interest bearing account over which
Debtor shall have no control, and the same shall, for all purposes, be deemed
Collateral hereunder.





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<PAGE>


         5. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to
Bank that: (a) Debtor is the owner and has possession or control of the
Collateral and Proceeds; (b) Debtor has the right to grant a security interest
in the Collateral and Proceeds; (c) all Collateral and Proceeds are genuine,
free from liens, adverse claims, setoffs, default, prepayment, defenses and
conditions precedent of any kind or character, except the lien created hereby or
as otherwise agreed to by Bank, or as heretofore disclosed by Debtor to Bank, in
writing; (d) all statements contained herein and, where applicable, in the
Collateral are true and complete in all material respects; (e) no financing
statement covering any of the Collateral or Proceeds, and naming any secured
party other than Bank, is on file in any public office; (f) all persons
appearing to be obligated on Rights to Payment and Proceeds have authority and
capacity to contract and are bound as they appear to be; (g) all property
subject to chattel paper has been properly registered and filed in compliance
with law and to perfect the interest of Debtor in such property; and (h) all
Rights to Payment and Proceeds comply with all applicable laws concerning form,
content and manner of preparation and execution, including where applicable
Federal Reserve Regulation Z and any State consumer credit laws.

         6. COVENANTS OF DEBTOR.

         (a) Debtor agrees in general: (i) to pay Indebtedness secured hereby
when due; (ii) to indemnify Bank against all losses, claims, demands,
liabilities and expenses of every kind caused by property subject hereto; (iii)
to pay all costs and expenses, including reasonable attorneys' fees, incurred by
Bank in the perfection and preservation of the Collateral or Bank's interest
therein and/or the realization, enforcement and exercise of Bank's rights,
powers and remedies hereunder; (iv) to permit Bank to exercise its powers; (v)
to execute and deliver such documents as Bank deems necessary to create, perfect
and continue the security interests contemplated hereby; and (vi) not to change
its chief place of business or the places where Debtor keeps any of the
Collateral or Debtor's records concerning the Collateral and Proceeds without
first giving Bank written notice of the address to which Debtor is moving same.

         (b) Debtor agrees with regard to the Collateral and Proceeds, unless
Bank agrees otherwise in writing: (i) to insure Inventory and, where applicable,
Rights to Payment with Bank as loss payee, in form, substance and amounts, under
agreements, against risks and liabilities, and with insurance companies
satisfactory to Bank; (ii) not to use any Inventory for any unlawful purpose or
in any way that would void any insurance required to be carried in connection
therewith; (iii) not to remove Inventory from Debtor's premises, except for
deliveries to buyers in the ordinary course of Debtor's business and except
Inventory which consists of mobile goods as defined in the Minnesota Uniform
Commercial Code, in which case Debtor agrees not to remove or permit the removal
of the Inventory from its state of domicile for a period in excess of thirty
(30) calendar days; (iv) not to permit any lien on the Collateral or Proceeds,
including without limitation, liens arising from the storage of Inventory,
except in favor of Bank; (v) not to sell, hypothecate or dispose of, nor permit
the transfer by operation of law of, any of the Collateral or Proceeds or any
interest therein, except sales of Inventory to buyers in the ordinary course of
Debtor's business; (vi) to furnish reports to Bank of all acquisitions, returns,
sales and other dispositions of Inventory in such form and detail and at such
times as Bank may require; (vii) to permit Bank to inspect the Collateral at any
time; (viii) to keep, in accordance with generally accepted accounting
principles, complete and accurate records regarding all Collateral and Proceeds,
and to permit Bank to inspect the same and make copies thereof at any reasonable
time; (ix) if requested by Bank, to receive and use reasonable diligence to
collect Rights to Payment and Proceeds, in trust and as the property of Bank,
and to immediately endorse as appropriate and deliver such Rights to Payment and
Proceeds to Bank





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<PAGE>


daily in the exact form in which they are received together with a collection
report in form satisfactory to Bank; (x) not to commingle Rights to Payment,
Proceeds or collections thereunder with other property; (xi) to give only normal
allowances and credits and to advise Bank thereof immediately in writing if they
affect any Rights to Payment or Proceeds in any material respect; (xii) on
demand, to deliver to Bank returned property resulting from, or payment equal
to, such allowances or credits on any Rights to Payment or Proceeds or to
execute such documents and do such other things as Bank may reasonably request
for the purpose of perfecting, preserving and enforcing its security interest in
such returned property; (xiii) from time to time, when requested by Bank, to
prepare and deliver a schedule of all Collateral and Proceeds subject to this
Agreement and to assign in writing and deliver to Bank all accounts, contracts,
leases and other chattel paper, instruments, documents and other evidences
thereof; (xiv) in the event Bank elects to receive payments of Rights to Payment
or Proceeds hereunder, to pay all expenses incurred by Bank in connection
therewith, including expenses of accounting, correspondence, collection efforts,
reporting to account or contract debtors, filing, recording, record keeping and
expenses incidental thereto; and (xv) to provide any service and do any other
acts which may be necessary to maintain, preserve and protect all Collateral
and, as appropriate and applicable, to keep all Collateral in good and saleable
condition, to deal with the Collateral in accordance with the standards and
practices adhered to generally by users and manufacturers of like property, and
to keep all Collateral and Proceeds free and clear of all defenses, rights of
offset and counterclaims.

         7. POWERS OF BANK. Debtor appoints Bank, effective upon the occurrence
of an Event of Default, its true attorney in fact to perform any of the
following powers, which are coupled with an interest, are irrevocable until
termination of this Agreement and may be exercised from time to time by Bank's
officers and employees, or any of them, whether or not Debtor is in default: (a)
to perform any obligation of Debtor hereunder in Debtor's name or otherwise; (b)
to give notice to account debtors or others of Bank's rights in the Collateral
and Proceeds, to enforce the same and make extension agreements with respect
thereto; (c) to release persons liable on Collateral or Proceeds and to give
receipts and acquittances and compromise disputes in connection therewith; (d)
to release security; (e) to resort to security in any order; (f) to prepare,
execute, file, record or deliver notes, assignments, schedules, designation
statements, financing statements, continuation statements, termination
statements, statements of assignment, applications for registration or like
papers to perfect, preserve or release Bank's interest in the Collateral and
Proceeds; (g) to receive, open and read mail addressed to Debtor; (h) to take
cash, instruments for the payment of money and other property to which Bank is
entitled; (i) to verify facts concerning the Collateral and Proceeds by inquiry
of obligors thereon, or otherwise, in its own name or a fictitious name; (j) to
endorse, collect, deliver and receive payment under instruments for the payment
of money constituting or relating to Proceeds; (k) to prepare, adjust, execute,
deliver and receive payment under insurance claims, and to collect and receive
payment of and endorse any instrument in payment of loss or returned premiums or
any other insurance refund or return, and to apply such amounts received by
Bank, at Bank's sole option, toward repayment of the Indebtedness or replacement
of the Collateral; (l) to exercise all rights, powers and remedies which Debtor
would have, but for this Agreement, with respect to all Collateral and Proceeds
subject hereto; (m) to enter onto Debtor's premises in inspecting the
Collateral; (n) to make withdrawals from and to close deposit accounts or other
accounts with any financial institution, wherever located, into which Proceeds
may have been deposited, and to apply funds so withdrawn to payment of the
Indebtedness; (o) to preserve or release the interest evidenced by chattel paper
to which Bank is entitled hereunder and to endorse and deliver evidences of
title incidental thereto; and (p) to do all acts and things and execute all
documents in the name of Debtor or otherwise, deemed





                                       24
<PAGE>


by Bank as necessary, proper and convenient in connection with the preservation,
perfection or enforcement of its rights hereunder.

         8. PAYMENT OF PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS. Debtor
agrees to pay, prior to delinquency, all insurance premiums, taxes, charges,
liens and assessments against the Collateral and Proceeds, and upon the failure
of Debtor to do so, Bank at its option may pay any of them and shall be the sole
judge of the legality or validity thereof and the amount necessary to discharge
the same. Any such payments made by Bank shall be obligations of Debtor to Bank,
due and payable immediately upon demand, together with interest at a rate
determined in accordance with the provisions of Section 15 hereof, and shall be
secured by the Collateral and Proceeds, subject to all terms and conditions of
this Agreement.

         9. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" under this Agreement: (a) any Event of Default
as defined in the Credit Agreement between Debtor and Bank; (b) any
representation or warranty made by any Debtor herein shall prove to be
incorrect, false or misleading in any material respect when made; and (c) Bank,
in good faith, believes any or all of the Collateral and/or Proceeds to be in
danger of misuse, dissipation, commingling, loss, theft, damage or destruction,
or otherwise in jeopardy or unsatisfactory in character or value.

         10. REMEDIES. Upon the occurrence of any Event of Default, Bank shall
have the right to declare immediately due and payable all or any Indebtedness
secured hereby and to terminate any commitments to make loans or otherwise
extend credit to Debtor. Bank shall have all other rights, powers, privileges
and remedies granted to a secured party upon default under the Minnesota Uniform
Commercial Code or otherwise provided by law, including without limitation, the
right to contact all persons obligated to Debtor on any Collateral or Proceeds
and to instruct such persons to deliver all Collateral and/or Proceeds directly
to Bank. All rights, powers, privileges and remedies of Bank shall be
cumulative. No delay, failure or discontinuance of Bank in exercising any right,
power, privilege or remedy hereunder shall affect or operate as a waiver of such
right, power, privilege or remedy; nor shall any single or partial exercise of
any such right, power, privilege or remedy preclude, waive or otherwise affect
any other or further exercise thereof or the exercise of any other right, power,
privilege or remedy. Any waiver, permit, consent or approval of any kind by Bank
of any default hereunder, or any such waiver of any provisions or conditions
hereof, must be in writing and shall be effective only to the extent set forth
in writing. It is agreed that public or private sales, for cash or on credit, to
a wholesaler or retailer or investor, or user of property of the types subject
to this Agreement, or public auction, are all commercially reasonable since
differences in the sales prices generally realized in the different kinds of
sales are ordinarily offset by the differences in the costs and credit risks of
such sales. While an Event of Default exists: (a) Debtor will deliver to Bank
from time to time, as requested by Bank, current lists of all Collateral and
Proceeds; (b) Debtor will not dispose of any of the Collateral or Proceeds
except on terms approved by Bank; (c) at Bank's request, Debtor will assemble
and deliver all Collateral and Proceeds, and books and records pertaining
thereto, to Bank at a reasonably convenient place designated by Bank; and (d)
Bank may, without notice to Debtor, enter onto Debtor's premises and take
possession of the Collateral. With respect to any sale by Bank of any Collateral
subject to this Agreement, Debtor hereby expressly grants to Bank the right to
sell such Collateral using any or all of Debtor's trademarks, trade names, trade
name rights and/or proprietary labels or marks.

         11. DISPOSITION OF COLLATERAL AND PROCEEDS. Upon the transfer of all or
any part of the Indebtedness, Bank may transfer all or any part of the
Collateral or Proceeds





                                       25
<PAGE>


and shall be fully discharged thereafter from all liability and responsibility
with respect to any of the foregoing so transferred, and the transferee shall be
vested with all rights and powers of Bank hereunder with respect to any of the
foregoing so transferred; but with respect to any Collateral or Proceeds not so
transferred, Bank shall retain all rights, powers, privileges and remedies
herein given. Any proceeds of any disposition of any of the Collateral or
Proceeds, or any part thereof, may be applied by Bank to the payment of expenses
incurred by Bank in connection with the foregoing, including reasonable
attorneys' fees, and the balance of such proceeds may be applied by Bank toward
the payment of the Indebtedness in such order of application as Bank may from
time to time elect.

         12. STATUTE OF LIMITATIONS. Until all Indebtedness shall have been paid
in full and all commitments by Bank to extend credit to Debtor have been
terminated, the power of sale and all other rights, powers, privileges and
remedies granted to Bank hereunder shall continue to exist and may be exercised
by Bank at any time and from time to time irrespective of the fact that the
Indebtedness or any part thereof may have become barred by any statute of
limitations, or that the personal liability of Debtor may have ceased, unless
such liability shall have ceased due to the payment in full of all Indebtedness
secured hereunder.

         13. MISCELLANEOUS. (a) The obligations of Debtor are joint and several;
(b) effective upon the occurrence of an Event of Default, Debtor hereby waives
any right (i) to require Bank to make any presentment or demand, or give any
notice of nonpayment or nonperformance, protest, notice of protest or notice of
dishonor hereunder, (ii) to direct the application of payments or security for
any Indebtedness of Debtor, or indebtedness of customers of Debtor, or (iii) to
require proceedings against others or to require exhaustion of security; and (c)
Debtor hereby consents to extensions, forbearances or alterations of the terms
of Indebtedness, the release or substitution of security, and the release of any
guarantors; provided however, that in each instance, Bank believes in good faith
that the action in question is commercially reasonable in that it does not
unreasonably increase the risk of nonpayment of the Indebtedness to which the
action applies. Until all Indebtedness shall have been paid in full, no Debtor
shall have any right of subrogation or contribution, and each Debtor hereby
waives any benefit of or right to participate in any of the Collateral or
Proceeds or any other security now or hereafter held by Bank.

         14. NOTICES. All notices, requests and demands required under this
Agreement must be in writing, addressed to Bank at the address specified in any
other loan documents entered into between Debtor and Bank and to Debtor at the
address of its chief executive office (or personal residence, if applicable)
specified below or to such other address as any party may designate by written
notice to each other party, and shall be deemed to have been given or made as
follows: (a) if personally delivered, upon delivery; (b) if sent by mail, upon
the earlier of the date of receipt or three (3) days after deposit in the U.S.
mail, first class and postage prepaid; and (c) if sent by telecopy, upon
receipt.

         15. COSTS, EXPENSES AND ATTORNEYS' FEES. Debtor shall pay to Bank
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), expended or
incurred by Bank in exercising, following the occurrence of any Event of
Default, any right, power, privilege or remedy conferred by this Agreement or in
the enforcement thereof, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to Debtor





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or in any way affecting any of the Collateral or Bank's ability to exercise any
of its rights or remedies with respect thereto. All of the foregoing shall be
paid by Debtor with interest from the date of demand until paid in full at a
rate per annum equal to the greater of ten percent (10%) or Bank's Prime Rate in
effect from time to time, but not in excess of the maximum rate permitted under
applicable Minnesota law.

         16. SUCCESSORS; ASSIGNS; AMENDMENT. This Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties, and may be amended or
modified only in writing signed by Bank and Debtor.

         17. SEVERABILITY OF PROVISIONS. If any provision of this Agreement
shall be held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or any
remaining provisions of this Agreement.

         18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.

         Debtor warrants that its chief executive office (or personal residence,
if applicable) is located at the following address: 12500 Whitewater Dr.,
Minnetonka, MN 55343.

         Debtor warrants that the Collateral (except goods in transit) is
located or domiciled at the following additional addresses: NONE

         IN WITNESS WHEREOF, this Agreement has been duly executed to be
effective as of March 31, 2001.

CHECK TECHNOLOGY CORPORATION

By:
   -------------------------
   Robert Barniskis, CFO

By:
   -------------------------













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