Document:

EXHIBIT 10.10
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                               SECURITY AGREEMENT
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         SECURITY AGREEMENT (this "AGREEMENT") made this 15 day of October,
2003, by and between LASERTEL INC, an Arizona corporation having its chief
executive offices at 7775 North Casa Grande Highway, Marana, Arizona 85743 (the
"DEBTOR"), in favor of CITIZENS BANK NEW HAMPSHIRE, a guaranty savings bank
chartered under the laws of the State of New Hampshire, with a place of business
at 875 Elm Street, Manchester, New Hampshire 03101 (together with its successors
and assigns, the "SECURED PARTY"), for itself and acting as agent under the
terms of that certain Credit Agreement dated as of even date herewith (as it may
be amended from time to time, the "CREDIT AGREEMENT") by and among Presstek,
Inc., as "Borrower", the Debtor, as Guarantor, the Secured Party and the banks
that are parties thereto as Lenders from time to time (the "LENDERS").

         WHEREAS, the Debtor has requested that the Lenders enter into the
Credit Agreement with the Borrower and the Debtor, and to extend credit to the
Borrower on the terms and subject to the conditions set forth therein;

         WHEREAS, it is a condition precedent to the Lenders' agreement to enter
into the Credit Agreement and extend credit to the Borrower thereunder that the
Debtor execute and deliver this Agreement and grant the security interest herein
provided;

         NOW, THEREFORE, in order to induce the Lenders to enter into the Credit
Agreement and extend credit to the Borrower thereunder, and in consideration
thereof, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

ARTICLE 1.  DEFINITIONS.

         1.01 Generally. All capitalized terms used without definition herein or
in any certificate, report or other document delivered pursuant hereto, but
defined in the Credit Agreement, shall have the meanings ascribed to such terms
in the Credit Agreement. Except as otherwise defined herein, terms defined in
the NH UCC (as defined below) and used herein shall have the meanings ascribed
to such terms in the NH UCC; provided, however, that if a term is defined in
Article 9 of the NH UCC differently than in another Article thereof, the term
shall have the meaning set forth in Article 9.

         1.02 Terms Defined in this Agreement. For purposes of this Agreement,
the following terms have the meanings set forth below:

         "AGREEMENT" shall have the meaning set forth in the Preamble.

         "LENDERS" shall have the meaning set forth in the Preamble.
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         "BLUE SKY LAWS" shall have the meaning set forth in Section 9.02(c).

         "BORROWER" shall mean Presstek, Inc.

         "CHANGE" shall have the meaning set forth in Section 8.02.

         "COLLATERAL" shall have the meaning set forth in Article 2.

         "COPYRIGHT OFFICE" shall have the meaning set forth in Article 6.

         "DEBTOR" shall have the meaning set forth in the Preamble.

         "INDEMNIFIED PARTY" shall have the meaning set forth in Article 12.

         "CREDIT AGREEMENT" shall have the meaning set forth in the Preamble.

         "NH UCC" means the Uniform Commercial Code in effect in the State of
New Hampshire, as it may be amended from time to time, provided, that if by
reason of mandatory provisions of law, perfection, or the effect of perfection
or nonperfection, of the Security Interest in any Collateral or the availability
of any remedy hereunder is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than New Hampshire, "NH UCC" means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or effect of perfection or
non-perfection or availability of such remedy, as the case may be.

         "PERFECTION CERTIFICATE" means the certificate, substantially in the
form attached hereto as Exhibit A, signed by an authorized officer of the Debtor
and delivered to the Secured Party.

         "PERFECTION DOCUMENTS" shall have the meaning set forth in Section
3.01.

         "SECURED PARTY" shall have the meaning set forth in the Preamble.

         "SECURITIES ACT" shall have the meaning set forth in Section 9.02(c).

         "SECURITY INTEREST" means the security interest and liens granted
pursuant to Article 2 hereof as well as all other security interests created or
assigned as additional security for the Obligations pursuant to this Agreement.

         "UNIFORM COMMERCIAL CODE" means, in reference to any jurisdiction, the
Uniform Commercial Code as adopted and in effect in such jurisdiction, as it may
be amended from time to time.

         1.03 Terms Defined in NH UCC. For purposes of this Agreement, the terms
for which definitions are supplied by the NH UCC include, without limitation,
those set forth below. Term and section references contained herein are provided
for convenience only, and the omission of any term from following list is not
intended to mean that the applicable NH UCC definition does not apply to such
omitted term.

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                  "ACCESSION"                           ss.9-102(a)(1)
                  "ACCOUNT"                             ss.9-102(a)(2)
                  "ACCOUNT DEBTOR"                      ss.9-102(a)(3)
                  "CERTIFICATED SECURITY"               ss.8-102(a)(4)
                  "CONFIRMER"                           ss.5-102(a)(4)
                  "CHATTEL PAPER"                       ss.9-102(a)(11)
                  "COMMERCIAL TORT CLAIM"               ss.9-102(a)(13)
                  "COMMODITY INTERMEDIARY               ss.9-102(a)(17)
                  "DEPOSIT ACCOUNT"                     ss.9-102(a)(29)
                  "DOCUMENT"                            ss.9-102(a)(30)
                  "ELECTRONIC CHATTEL PAPER"            ss.9-102(a)(31)
                  "ENTITLEMENT HOLDER"                  ss.8-102(a)(7)
                  "ENTITLEMENT ORDER"                   ss.8-102(a)(8)
                  "EQUIPMENT"                           ss.9-102(a)(33)
                  "FILING OFFICE"                       ss.9-102(a)(37)
                  "FINANCIAL ASSET"                     ss.8-102(a)(9)
                  "FINANCING STATEMENT"                 ss.9-102(a)(39)
                  "FIXTURE FILING"                      ss.9-102(a)(40)
                  "GENERAL INTANGIBLE"                  ss.9-102(a)(42)
                  "GOODS"                               ss.9-102(a)(44)
                  "INSTRUMENT(S)"                       ss.9-102(a)(47)
                  "INVENTORY"                           ss.9-102(a)(48)
                  "INVESTMENT PROPERTY"                 ss.9-102(a)(49)
                  "ISSUER"                              ss.8-201
                  "LETTER-OF-CREDIT RIGHT"              ss.9-102(a)(51)
                  "PAYMENT INTANGIBLE"                  ss.9-102(a)(61)
                  "PROCEEDS"                            ss.9-102(a)(64)
                  "SECURITIES INTERMEDIARY"             ss.8-102(a)(14)
                  "SECURITY"                            ss.8-102(a)(15)
                  "SUPPORTING OBLIGATION"               ss.9-102(a)(77)
                  "TANGIBLE CHATTEL PAPER"              ss.9-102(a)(78)
                  "UNCERTIFICATED SECURITY"             ss.8-102(a)(18)

         1.04  Matters of Interpretation and Construction.

                  (a) The language of this Agreement, having been negotiated by
the parties hereto, shall not be construed against any party hereto by reason of
the extent to which such party or its counsel participated in the drafting
hereof or by reason of the extent to which any such provision is inconsistent
with any prior draft hereof.

                  (b) Use of the singular shall be deemed to include the plural
and use of the plural shall be deemed to include the singular. Use of any gender
shall be deemed to include all other genders.

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                  (c) A reference to any law, agreement or other document
includes any amendment or modification to such law, agreement or document.

                  (d) A reference to any Person includes its successors and
permitted assigns.

                  (e) Unless the context clearly requires otherwise, reference
to a particular "Article" or "Section" refers to the corresponding article or
section of this Agreement.

                  (f) Unless the context clearly requires otherwise, use of the
word "including" shall mean "including, without limitation"; use of the words
"and" and "or" shall in each case mean "and/or."

ARTICLE 2. GRANT OF SECURITY INTEREST. The Debtor hereby grants to the Secured
Party for the benefit of the Secured Party and the Lenders, to secure the full,
punctual and unconditional payment and performance of the Obligations, a
security interest in all of the Debtor's right, title and interest in and to the
following properties, assets and rights of the Debtor, wherever located, whether
now owned or hereafter acquired or arising, and all Proceeds and products
thereof (all of the same being hereinafter called the "COLLATERAL"):

         all personal and fixture property of every kind and nature including
         without limitation all Goods (including Inventory, Equipment and any
         Accessions thereto), Instruments (including promissory notes),
         Documents, Accounts, Chattel Paper (whether Tangible Chattel Paper or
         Electronic Chattel Paper), Deposit Accounts (other than payroll
         accounts), Letter-of-Credit Rights (whether or not the letter of credit
         is evidenced by a writing), Commercial Tort Claims, Securities and all
         other Investment Property, Supporting Obligations, any other contract
         rights or rights to the payment of money, all sums payable under any
         policy of insurance (including without limitation, any return for
         premiums), tort claims, and all General Intangibles (including all
         Payment Intangibles).

The Secured Party acknowledges that the attachment of its security interest in
any Commercial Tort Claim is subject to the Debtor's compliance with Section
8.22(g). The Debtor agrees that the security interest herein granted has
attached and shall continue until (i) the Obligations have been paid, performed
and undefeasibly discharged in full and (ii) the Lenders are no longer committed
to extend any credit to the Debtor under the Credit Agreement or any other Loan
Document. The security interest is granted as security only and shall not
subject the Secured Party or the Lenders to, transfer to the Secured Party or
the Lenders, or in any way affect or modify, any obligation or liability of the
Debtor with respect to any of the Collateral or any transaction in connection
therewith. Except during the existence of an Event of Default, the Debtor shall
retain the right to vote any of the Investment Property constituting Collateral
in a manner not inconsistent with the terms of this Agreement and the Credit
Agreement.

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ARTICLE 3.  DELIVERY AND FILING OF FINANCING STATEMENTS.

         3.01 Delivery of Perfection Documents. Upon the execution of this
Agreement, and from time to time thereafter, the Debtor shall deliver to the
Secured Party such Financing Statements, documentation, notices, and
assignments, including assignments under the Assignment of Claims Act of 1940,
as amended (collectively, the "PERFECTION DOCUMENTS"), as may be deemed
necessary by the Secured Party to perfect the Security Interest in all
Collateral.

         3.02 Authorization to File Financing Statements and Take Other Action.
The Debtor hereby irrevocably authorizes the Secured Party at any time and from
time to time to sign (if required) and file in any appropriate Filing Office,
wherever located, any Financing Statement that (a) describes the Collateral (i)
as all assets of the Borrower or words of similar effect, regardless of whether
any particular assets comprised in the Collateral falls within the scope of
Article 9 of the Uniform Commercial Code of such jurisdiction, or (ii) as being
of any equal or lesser scope or with greater detail and (b) contains any other
information required by Part 5 of Article 9 of the Uniform Commercial Code of
the applicable jurisdiction for the sufficiency or Filing Office acceptance of
any Financing Statement, including (i) whether the Debtor is an organization,
the type of organization and any organization identification number issued to
the Debtor and, (ii) in the case of a Financing Statement filed as a Fixture
Filing, a sufficient description of real property to which the Collateral
relates. The Debtor also authorizes the Secured Party to file a copy of this
Agreement in lieu of a Financing Statement, and to take any and all actions
required by any earlier versions of the Uniform Commercial Code or by any other
applicable law. The Debtor shall provide the Secured Party with any information
the Secured Party shall reasonably request in connection with any of the
foregoing.

ARTICLE 4. SECURITIES PLEDGE AGREEMENT. From time to time, at the request of the
Secured Party, the Debtor shall execute and deliver to the Secured Party, for
the benefit of the Secured Party and the Lenders, a Securities Collateral Pledge
Agreement pursuant to which the Debtor shall pledge to the Secured Party all
Securities included in the Collateral. The provisions of any Securities
Collateral Pledge Agreement shall be supplemental to the provisions of this
Agreement, and nothing contained in any Securities Collateral Pledge Agreement
shall derogate from any of the rights or remedies of the Secured Party
hereunder; nor shall anything contained in any Securities Collateral Pledge
Agreement be deemed to prevent or extend the time of attachment or perfection of
any Security Interest in such Collateral created hereby.

ARTICLE 5. PATENT AND TRADEMARK SECURITY AGREEMENT. Concurrently herewith the
Debtor is executing and delivering to the Secured Party, for the benefit of the
Secured Party and the Lenders, a Patent and Trademark Security Agreement
pursuant to which the Debtor is granting to the Secured Party a security
interest in certain Collateral consisting of patents, patent rights, trademarks,
service marks, and trademark and service mark rights, together with the goodwill
appurtenant thereto. The provisions of the Patent and Trademark Security
Agreement are supplemental to the provisions of this Agreement, and nothing

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contained in the Patent and Trademark Security Agreement shall derogate from any
of the rights or remedies of the Secured Party hereunder; nor shall anything
contained in the Patent and Trademark Security Agreement be deemed to prevent or
extend the time of attachment or perfection of any Security Interest in such
Collateral created hereby.

ARTICLE 6. COPYRIGHT MEMORANDUM. Concurrently herewith the Debtor is, in
addition, executing and delivering to the Secured Party, for the benefit of the
Secured Party and the Lenders, and for recording in the United States Copyright
Office (the "COPYRIGHT OFFICE"), a Memorandum of Grant of Security Interests in
Copyrights. The Debtor represents and warrants to the Secured Party and the
Lenders that such Memorandum identifies all now existing material copyrights and
other rights in and to all material copyrightable works of the Debtor,
identified, where applicable, by title, author and/or Copyright Office
registration number and date. The Debtor represents and warrants to the Secured
Party and the Lenders that it has registered all material copyrights with the
Copyright Office, as identified in such Memorandum. The Debtor covenants,
promptly following the acquisition thereof, to provide to the Secured Party like
identifications of all material copyrights and other rights in and to all
material copyrightable works hereafter acquired by the Debtor and to execute and
deliver to the Secured Party a supplemental Memorandum of Grant of Security
Interest in Copyrights modified to reflect such subsequent acquisitions.

ARTICLE 7. REPRESENTATIONS AND WARRANTIES. The Debtor hereby represents and
warrants to the Secured Party and the Lenders as follows, each such
representation and warranty to continue in full force so long as this Agreement
remains in effect:

         7.01 Accuracy of Perfection Certificate. The Debtor has delivered a
Perfection Certificate to the Secured Party on the date hereof, which is hereby
incorporated by reference as if fully set forth herein. All of the information
set forth in such Perfection Certificate is true and correct in all material
respects. The Debtor has not failed to disclose in the Perfection Certificate
any information necessary for the information contained in the Perfection
Certificate not to be misleading.

         7.02 Ownership of Collateral; Absence of Liens and Restrictions. The
Debtor is, and in the case of property acquired after the date hereof, will be,
the sole legal and equitable owner of the Collateral purported to be owned by
it, holding good and marketable title to the same free and clear of all
Encumbrances except for the Security Interest and Encumbrances specifically
permitted under the terms of the Credit Agreement, and has good right and legal
authority to pledge, sell, assign, deliver, and create the Security Interest in
such Collateral in the manner herein contemplated. The Collateral is genuine and
is what it is purported to be. The Collateral is not subject to any restriction
that would prohibit or restrict the assignment, delivery or creation of the
Security Interests.

         7.03 First Priority Security Interest. This Agreement creates a valid
and continuing lien on and security interest in the Collateral. Upon the filing
of a Financing Statement in the appropriate Filing Office for the location of
the Debtor listed in the Debtor's Perfection Certificate, the Security Interest
will be perfected (except to the extent a security interest may not be perfected
by filing under the Uniform Commercial Code), prior to all other Encumbrances,

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and will be enforceable as such against creditors of the Debtor, any owner of
the real property where any of the Collateral is located, any purchaser of such
real property and any present or future creditor obtaining a lien on such real
property.

         7.04 No Conflicts. Neither the Debtor nor any of its predecessors has
performed any act or is bound by any agreement which might prevent the Secured
Party from enforcing the Security Interest or any of the terms of this
Agreement, or which would limit the Secured Party in any such enforcement.
Except as specifically disclosed in the Perfection Certificate, no Financing
Statement or other document evidencing a lien that names the Debtor as debtor is
on file in any jurisdiction and the Debtor has not signed any document or
agreement authorizing the filing of any such Financing Statement or document.

         7.05 Accounts. Each Account constituting Collateral (i) is and will be
a true and correct statement of the actual Indebtedness incurred by each Account
Debtor with respect thereto, (ii) arises and will arise out of or in connection
with the sale or lease of Goods or for the rendering of services by the Debtor
to each Account Debtor, and (iii) is and shall be a valid, legal and binding
obligation of the party purported to be obligated thereon, enforceable in
accordance with its terms and free of material setoffs, defenses or
counterclaims.

         7.06 Inventory. All Inventory constituting Collateral at any time are
and will be genuine and salable in the ordinary course of the Debtor's business.
None of the Inventory has been or will be produced in violation of the Fair
Labor Standards Act of 1938, as amended, or any other law.

         7.07 Notes and Other Instruments. Pursuant to the terms of this
Agreement, the Debtor has endorsed, assigned and delivered to the Secured Party
all promissory notes and other Instruments pledged hereunder. Regardless of the
form of such endorsement, the Debtor hereby waives presentment, demand, notice
of dishonor, protest, notice of protest and all other notices with respect
thereto.

         7.08 No Authorization. No authorization, approval or other action by,
and no notice to or filing with, any domestic or foreign governmental authority
or regulatory body or consent of any other Person is required for (i) the grant
of the Security Interest, (ii) the execution, delivery or performance of this
Agreement by the Debtor or (iii) the perfection of the Security Interest or the
exercise by the Secured Party of its rights and remedies hereunder, other than
(a) the filing of Financing Statements under the Uniform Commercial Code, (b)
the filing of appropriate documents in the United States Patent and Trademark
Office, (c) the filing of appropriate documents in the U.S. Copyright Office and
(d) such other filings as have already been made.

         7.09 Validity of Collateral. The Debtor has no knowledge of any fact
that would impair the validity or make uncollectible any material amount of the
Collateral that is Accounts, Chattel Paper, Payment Intangibles, General

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Intangibles, contract rights, Documents or Instruments, and to the best of the
Debtor's knowledge, each obligor liable on such Collateral has and will have the
capacity to contract.

ARTICLE 8. COVENANTS. The Debtor hereby covenants with the Secured Party and the
Lenders that, so long as this Agreement remains in effect:

         8.01 Perfection Certificate. The Debtor will supplement the Perfection
Certificate promptly upon learning of (i) the inaccuracy of any of the
information provided therein or (ii) the existence of any information that is
necessary for the information contained therein not to be misleading or
incomplete.

         8.02 Changes Relating to Debtor. The Debtor will not change its name,
identity or organizational structure, nature or jurisdiction of organization, or
chief executive office, or place where its business records and records relating
to the Collateral are kept, or move any tangible Collateral (other than
Investment Property and Inventory which has been sold in the ordinary course of
business) to a location other than those set forth in the Perfection
Certificate, or merge into or consolidate with any other Person, without the
prior written consent of the Secured Party and the Lenders. With respect to any
such proposed event, the Debtor shall provide the Secured Party and the Lenders
at least 30 days' prior written notice thereof and the Debtor shall deliver to
the Secured Party and the Lenders such new Financing Statements or other
documentation as may be necessary or required by the Secured Party and the
Lenders to ensure the continued perfection and priority of the Security
Interest. In connection with the movement of any Collateral to a new location, a
Landlord Waiver with respect to such new location shall be delivered to the
Secured Party, at the Secured Party's request, concurrently with the occupancy
thereof. The Debtor hereby grants to the Secured Party, for a term commencing on
the date hereof and continuing so long as any of the Obligations remain
outstanding, at a rental of $1.00 for such entire term, the receipt and
sufficiency of which are hereby acknowledged, the right upon and after an Event
of Default to the use of all premises or places of business which the Debtor now
or hereafter may have and where any Collateral may be located for the purpose of
exercising its rights against the Collateral, except, in the case of leased
premises, to the extent such a grant is prohibited by the terms of the
applicable lease. With respect to any such leased premises, the Debtor hereby
agrees that the Secured Party shall not owe to the Debtor any rent attributable
to the Secured Party's use of such leased premises while exercising its right
under this Agreement. Promptly after the consummation of any of the foregoing
changes or any merger or consolidation (each, a "CHANGE"), the Debtor shall
deliver to the Secured Party copies of its amended organizational documents, if
any, certified by the Secretary of State (or equivalent) of its state of
organization evidencing the Change.

         8.03 Protection and Defense of Security Interest; Sales and
Encumbrances. The Debtor shall take all steps that are necessary and prudent to
protect the Security Interest in the Collateral, and shall defend the Security
Interest of the Secured Party in the Collateral against the competing claims and
demands of all other Persons. The Debtor will not sell, grant, lease, assign or
transfer any interest in, or permit to exist any lien, security interest or

                                       -8-
<PAGE>
other Encumbrance on, any of the Collateral, except the Security Interest and as
specifically permitted by the Credit Agreement.

         8.04 Fixture Conflicts; Required Waivers. The Debtor intends, to the
extent not inconsistent with applicable law, that the Collateral shall remain
personal property of the Debtor and shall not be deemed to be a fixture
irrespective of the manner of its attachment to any real estate. The Debtor will
deliver to the Secured Party such disclaimers, waivers, or other documents as
the Secured Party reasonably may request to confirm the foregoing, executed by
each Person having an interest in such real estate.

         8.05 Books and Records; Notice of Security Interest. The Debtor shall
keep complete and accurate books and records (in form and substance satisfactory
to the Secured Party) relating to the Collateral at its chief executive office
as listed on the Perfection Certificate, and will not remove the same from such
location without the prior written consent of the Secured Party in accordance
with Section 8.02. Upon the request of the Secured Party, the Debtor shall stamp
or otherwise mark such books and records in such manner as the Secured Party may
reasonably request in order to reflect the Security Interest including, without
limitation notation of the Security Interest on any certificates of title or
other evidence of ownership outstanding with respect to the Collateral and the
posting of notices thereof upon the Collateral or in and about designated areas
where the Collateral may be used, stored or kept, from time to time. The Debtor
will allow the Secured Party or its designees access at any reasonable time and
from time to time during the Debtor's regular business hours upon reasonable
notice (and at all times during the existence of an Event of Default) to
examine, to inspect and make extracts from or copies of the Debtor's books and
records, inspect the Collateral and, during the existence of an Event of
Default, arrange for verification of Accounts constituting Collateral directly
with any Account Debtors or by other methods or for other purposes as the
Secured Party may require.

         8.06 Collection and Delivery of Proceeds. The Debtor will diligently
collect all of its Accounts constituting Collateral until the Secured Party
exercises its right to collect the Accounts pursuant to this Agreement during
the existence of an Event of Default. During the existence of an Event of
Default, all Proceeds of Accounts, Inventory and other Collateral received by
the Debtor, regardless of the form of the Collateral or the manner of receipt,
shall be held in trust for the Secured Party and the Lenders, and the Debtor
shall deliver said Proceeds daily to the Secured Party, without commingling, in
the identical form received (properly endorsed or assigned where required to
enable the Secured Party to collect same), for application to the Obligations.
If any Accounts are at any time evidenced by Tangible Chattel Paper, promissory
notes, trade acceptances or other Instruments, the Debtor will promptly deliver
the same to the Secured Party, accompanied by such instruments of transfer or
assignment duly executed in blank as the Secured Party may from time to time
specify and, regardless of the form of such instrument, the Debtor hereby waives
presentment, demand, notice of dishonor, protest, notice of protest and all
other notices with respect thereto.

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         8.07 Lockboxes. Upon request of the Secured Party during the existence
of an Event of Default, the Debtor will (i) enter into a lockbox arrangement
satisfactory to the Secured Party with one or more financial institutions (which
may include the Lenders) deemed acceptable by the Secured Party for the
collection of Proceeds and direct all of its Account Debtors to make all
payments on Accounts to the lockboxes established thereunder, and/or (ii)
maintain all its Deposit Accounts (other than payroll) with the Secured Party or
at another financial institution which has agreed to accept drafts drawn on it
by the Secured Party under a written depository transfer agreement or other
arrangement with the Secured Party and to block such Deposit Accounts and waive
such institution's own rights as against such Deposit Accounts, and deposit all
Proceeds of Collateral (including the Proceeds received in such lockboxes) into
such Deposit Accounts. The Debtor shall pay all fees, costs and expenses
associated with the establishment and maintenance of such lockboxes and Deposit
Accounts.

         8.08 Notification of Account Debtors. The Debtor shall at the request
of the Secured Party, and at its option the Secured Party may itself during the
existence of an Event of Default, notify Account Debtors of the Security
Interest in any Account and that payment thereof is to be made directly to the
Secured Party for application to the Obligations.

         8.09 Information re Inventory. Whenever reasonably requested by the
Secured Party, the Debtor shall prepare a physical listing of all Inventory,
shall furnish to the Secured Party a report (certified by an authorized officer
of the Debtor to be true, correct and complete) of such physical listing, such
report to be in such form and with such specificity as may be requested by the
Secured Party, and shall take all further steps requested by the Secured Party
to perfect the Security Interest in the Inventory.

         8.10 Insurance. The Debtor will maintain insurance on the Collateral as
required by the Credit Agreement or other Loan Documents.

         8.11 Maintenance and Use; Payment of Taxes. The Debtor will maintain,
preserve, protect and keep the Collateral in good condition and repair (ordinary
wear and tear excepted) and prevent any waste or unusual or unreasonable
depreciation thereof; will not use the same in violation of law or any policy of
insurance thereon, and will pay promptly when due all taxes and assessments on
such Collateral or on its use or operation, except as otherwise permitted by the
Credit Agreement.

         8.12 General Intangibles. The Debtor will apply for, and diligently
pursue applications for, registration of its ownership of the General
Intangibles constituting Collateral for which registration is appropriate, and
will use such other measures as are appropriate to preserve its rights in its
other General Intangibles constituting Collateral. The Debtor will, at the
request of the Secured Party, retain off-site current copies of all materials
created by or furnished to the Debtor on which is recorded then-current
information about any computer programs or data bases that the Debtor has
developed or otherwise has the right to use from time to time. Such materials
shall include, without limitation, magnetic or other computer media on which

                                      -10-
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object, source or other code is recorded and documentation of those computer
programs or data bases, in the nature of listing printouts, narrative
descriptions, flow diagrams and similar items. The Debtor will, at the request
of the Secured Party, deliver a set of such copies to the Secured Party for
safekeeping and retention or transfer in the event of foreclosure.

         8.13 Investment Property. If the Debtor shall at any time hold or
acquire any Certificated Securities, the Debtor shall forthwith endorse, assign
and deliver the same to the Secured Party, accompanied by such instruments of
transfer or assignment duly executed in blank as the Secured Party may from time
to time specify. If any Securities now held or hereafter acquired by the Debtor
are Uncertificated Securities and are issued to the Debtor or its nominee
directly by the Issuer thereof, the Debtor shall promptly notify the Secured
Party thereof and, at the Secured Party's request and option, pursuant to an
agreement in form and substance satisfactory to the Secured Party, either (i)
cause the Issuer to agree to comply with instructions from the Secured Party as
to such Securities, without further consent of the Debtor or such nominee, or
(ii) arrange for the Secured Party to become the registered owner of the
Securities. If the Debtor, as registered holder of Investment Property, receives
(i) any dividend or other distribution in cash or other property in connection
with the liquidation or dissolution of the Issuer of such Investment Property,
or in connection with the redemption or payment of such Investment Property, or
(ii) any stock certificate, option or right, or other distribution, whether as
an addition to, in substitution of, or in exchange for, such Investment
Property, or otherwise, the Debtor agrees to accept the same in trust for the
Secured Party and the Lenders and to forthwith endorse, assign and deliver the
same to the Secured Party, accompanied by such instruments of transfer or
assignment duly executed in blank as the Secured Party may from time to time
specify, to be held by the Secured Party as Collateral. If any Securities,
whether Certificated Securities or Uncertificated Securities, or other
Investment Property now held or hereafter acquired by the Debtor are held by the
Debtor or its nominee through a Securities Intermediary or Commodity
Intermediary, the Debtor shall promptly notify the Secured Party thereof and, at
the Secured Party's request and option, pursuant to an agreement in form and
substance satisfactory to the Secured Party, either (i) cause such Securities
Intermediary or Commodity Intermediary, as the case may be, to agree to comply
with Entitlement Orders or other instructions from the Secured Party to such
Securities Intermediary as to such Securities or other Investment Property or,
as the case may be, to apply any value distributed on account of any commodity
contract as directed by the Secured Party to such Commodity Intermediary, in
each case without further consent of the Debtor or such nominee, or (ii) in the
case of Financial Assets or other Investment Property held through a Securities
Intermediary, arrange for the Secured Party to become the Entitlement Holder
with respect to such Investment Property, with the Debtor being permitted, only
with the consent of the Secured Party, to exercise rights to withdraw or
otherwise deal with such Investment Property.

         8.14 Deposit Accounts. The Debtor shall take all actions necessary or
requested by the Secured Party to maintain, preserve or protect the rights and
interest of the Secured Party with respect to all cash deposits of the Debtor
(other than payroll accounts) and all other Proceeds of Collateral. The Debtor
shall not open or maintain any Deposit Account or other bank account (other than
payroll accounts) unless the Debtor shall either (a) cause the depositary bank

                                      -11-
<PAGE>
to agree to comply at any time with instructions from the Secured Party to such
depositary bank directing the disposition of funds from time to time credited to
such Deposit Account or other bank account, without further consent of the
Debtor, or (b) arrange for the Secured Party to become the customer of the
depositary bank with respect to the Depositary Account or other bank account,
with the Debtor being permitted, only with the consent of the Secured Party, to
exercise rights to withdraw funds from such Deposit Account or other bank
account. The provisions of this section shall not apply to (i) any Deposit
Account for which the Debtor, the depositary bank and the Secured Party have
specifically negotiated and entered into a cash collateral agreement, (ii)
Deposit Accounts for which the Secured Party or any of the Lenders is the
depositary bank or (iii) payroll accounts.

         8.15 Letters of Credit Rights. For each letter of credit at any time
issued to the Debtor as beneficiary thereunder, the Debtor shall notify the
Secured Party thereof and, at the option and request of the Secured Party, the
Debtor shall deliver the original letter of credit and any ancillary documents
to the Secured Party and shall, pursuant to an agreement in form and substance
satisfactory to the Secured Party, either (i) arrange for the issuer and any
Confirmer of such letter of credit to consent to an assignment to the Secured
Party of the proceeds of any drawing under the letter of credit or (ii) arrange
for the Secured Party to become the transferee beneficiary of the letter of
credit, with the Secured Party agreeing, in each case, that the proceeds of any
drawing under the letter of credit are to be paid to the Secured Party to be
held by the Secured Party as Collateral.

         8.16 Electronic Chattel Paper and Transferable Records. If the Debtor
at any time holds or acquires an interest in any Electronic Chattel Paper or any
"transferable record," as that term is defined in Section 201 of the federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any jurisdiction
applicable to the Debtor, the Debtor shall promptly notify the Secured Party
thereof and, at the request of the Secured Party, shall take such action as the
Secured Party may reasonably request to vest in the Secured Party control under
Section 9-105 of the Uniform Commercial Code of such Electronic Chattel Paper or
control under Section 201 of the federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, of such transferable record.

         8.17 Bailments, Etc. If any Collateral is at any time in the possession
or control of any warehouseman, bailee or any of the Debtor's agents, the Debtor
shall promptly notify the Secured Party thereof and, upon request of the Secured
Party, (i) notify such warehouseman, bailee or agent of the Security Interest
and instruct such warehouseman, bailee or agent to hold all such Collateral for
the Secured Party 's account subject to the Secured Party 's instructions, (ii)
obtain from such warehouseman, bailee or agent a written acknowledgment that
such Person holds possession of the Collateral for the Secured Party's benefit
and shall act upon the Secured Party's instructions with respect to such
Collateral without the further consent of the Debtor, (iii) deliver any
negotiable warehouse receipt, bill of lading or other document of title issued
with regard to the Collateral to the Secured Party appropriately endorsed to the
Secured Party's order, and/or (iv) arrange for the issuance in the name of the

                                      -12-
<PAGE>
Secured Party, in form reasonably satisfactory to the Secured Party, any
nonnegotiable document of title covering such Collateral. Until the occurrence
of an Event of Default, Debtor shall be entitled to issue instructions to each
such warehouseman, bailee, an agent regarding the Collateral.

         8.18 Assignment of Claims Act. If at any time any Accounts of the
Debtor arise from contracts with the United States of America or any department,
agency or instrumentality thereof, the Debtor will promptly notify the Secured
Party thereof and shall execute all assignments and take all steps reasonably
requested by the Secured Party in order that all monies due and to become due
thereunder will be assigned and paid to the Secured Party and notice thereof
given to the federal authorities under the Assignment of Claims Act of 1940.

         8.19 Tangible Chattel Paper, Notes and Other Instruments. If at any
time any amount payable under or in connection with any of the Collateral is
evidenced by any Tangible Chattel Paper, promissory note, trade acceptances or
other Instrument, the Debtor shall promptly deliver the same to the Secured
Party, accompanied by such instruments of transfer or assignment duly executed
in blank as the Secured Party may from time to time reasonably request.
Regardless of the form of such instrument, the Debtor hereby waives presentment,
demand, notice of dishonor, protest, notice of protest and all other notices
with respect thereto.

         8.20 Assembly of Collateral. Following the occurrence and during the
continuance of an Event of Default, the Debtor will, upon demand, assemble the
Collateral and make it available to the Secured Party at a place and time
designated by the Secured Party that is reasonably convenient to both parties.

         8.21 Further Assurances. Upon the reasonable request of the Secured
Party, and at the sole expense of the Debtor, the Debtor will promptly execute
and deliver such further instruments and documents and take such further actions
as the Secured Party may deem desirable to obtain the full benefits of this
Agreement and of the rights and powers herein granted, including, without
limitation, filing of any Financing Statement, or notice under the Uniform
Commercial Code or other applicable law, execution of assignments or mortgages
of General Intangibles, delivery of appropriate stock or bond powers, and
transfer of Collateral (other than Inventory, Accounts, General Intangibles and
Equipment) to the Secured Party's possession. The Debtor shall also take all
actions requested by the Secured Party in order to insure the continued
perfection and priority of the Security Interest in any of the Collateral and
the preservation of the rights of the Secured Party therein.

         8.22 Notices and Reports Pertaining to Collateral. In addition to any
other notice or reporting requirement imposed on the Debtor under this
Agreement, the Debtor will, with respect to the Collateral:

                  (a) promptly furnish to the Secured Party, from time to time
upon request, reports in form and detail reasonably satisfactory to the Secured
Party;

                                      -13-
<PAGE>
                  (b) promptly notify the Secured Party of any Encumbrance
(except Encumbrances specifically permitted under the Credit Agreement) asserted
against the Collateral, including any attachment, levy, execution or other legal
process levied against any of the Collateral, and of any information received by
the Debtor relating to the Collateral, including the Accounts, the Account
Debtors, or other Persons obligated in connection therewith, that may in any way
materially adversely affect the value of the Collateral or the rights and
remedies of the Secured Party with respect thereto, and reimburse the Secured
Party and the Lenders for any expenses they may incur in satisfying any of the
foregoing;

                  (c) promptly notify the Secured Party when it obtains
knowledge of actual or imminent bankruptcy or other insolvency proceeding of any
material Account Debtor or Issuer of Investment Property;

                  (d) promptly deliver to the Secured Party, as the Secured
Party may from time to time request, originals of all schedules, lists,
invoices, delivery receipts, customers' purchase orders, documents of the
shipping instructions, bills of lading and any other evidence of shipping
arrangements, receipts, writings and other items relating to the Collateral;

                  (e) promptly notify the Secured Party of any material return
or adjustment, rejection, repossession, or loss or damage of or to merchandise
represented by Accounts or constituting Inventory and of any material credit,
adjustment or dispute arising in connection with the goods or services
represented by Accounts or constituting Inventory;

                  (f) promptly after the application by the Debtor for
registration of any General Intangibles, as contemplated in Section 8.12, notify
the Secured Party thereof;

                  (g) promptly upon acquiring any Commercial Tort Claim, notify
the Secured Party in a writing signed by the Debtor, of the details thereof and
grant to the Secured Party, for the benefit of the Secured Party and the
Lenders, in such writing a security interest therein and in all the Proceeds
thereof, such writing to be in form and substance satisfactory to the Secured
Party; and

                  (h) promptly notify the Secured Party in the event of a
material loss or damage to the Collateral, if such loss or damage is not covered
by insurance, of any reclamation or repossession of or any action by a creditor
to reclaim or repossess any material asset(s) of the Debtor, of any material
adverse change in the Collateral; and of any other occurrence that may
materially adversely affect the Security Interest of the Secured Party in the
Collateral.

                                      -14-
<PAGE>
ARTICLE 9.  RIGHTS AND REMEDIES OF THE SECURED PARTY.

         9.01 Rights and Remedies Generally. Following the occurrence and during
the continuance of an Event of Default, in addition to the rights and remedies
of a secured party under the NH UCC and the Uniform Commercial Code in effect in
any other jurisdiction in which enforcement of the rights of the Secured Party
is sought, the Secured Party may take any or all of the following actions:

                  (a) The Secured Party may, at its option, without notice or
demand, cause all of the Obligations to become immediately due and payable and,
subject to applicable law, take immediate possession of the Collateral, and for
that purpose the Secured Party may, so far as the Debtor can give authority
therefor, enter upon any premises on which any of the Collateral is situated and
remove the same therefrom or remain on such premises and in possession of such
Collateral for purposes of conducting a sale or enforcing the rights of the
Secured Party.

                  (b) The Secured Party may collect and receive all income and
Proceeds in respect of any Collateral and exercise all rights of the Debtor with
respect thereto, including without limitation the right to exercise all voting
and corporate rights at any meeting of the shareholders of the Issuer of any
Investment Property and to exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to any
Investment Property as if the Secured Party was the absolute owner thereof,
including the right to exchange, at its discretion, any and all of any
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the Issuer thereof, all without
liability except to account for property actually received (but the Secured
Party shall have no duty to exercise any of the aforesaid rights, privileges or
options and shall not be responsible for any failure to do so or delay in so
doing).

                  (c) The Secured Party may sell, lease or otherwise dispose of
any Collateral at a public or private sale, with or without having such
Collateral at the place of sale, and upon such terms and in such manner as the
Secured Party may determine in accordance with applicable law, and the Secured
Party may purchase any Collateral at any such sale. The Debtor agrees that upon
any such sale the Collateral sold shall be held by the purchaser free from all
claims or rights of every kind and nature, including any equity of redemption or
similar rights, and all such equity of redemption and similar rights are hereby
expressly waived and released by the Debtor. In the event any consent, approval
or authorization of any governmental agency is necessary to effectuate any such
sale, the Debtor agrees to execute all applications or other instruments as may
be required.

                  (d) With respect to any Collateral consisting of Accounts, the
Secured Party may (i) demand, collect, and receive any amounts relating thereto,
as the Secured Party may determine; (ii) commence and prosecute any actions in
any court for the purposes of collecting any such Accounts and enforcing any
other rights in respect thereof, (iii) defend, settle or compromise any action
brought and, in connection therewith, give such discharges or releases as the
Secured Party may deem appropriate; (iv) receive, open and dispose of mail

                                      -15-
<PAGE>
addressed to any of the Debtor and endorse checks, notes, drafts, acceptances,
money orders, bills of lading, warehouse receipts or other instruments or
documents evidencing payment, shipment or storage of the goods giving rise to
such Accounts or securing or relating to such Accounts, on behalf of and in the
name of any of the Debtor; and (v) sell, assign, transfer, make any agreement in
respect of, or otherwise deal with or exercise rights in respect of, any such
Accounts or the goods or services which have given rise thereto, as fully and
completely as though the Secured Party were the absolute owner thereof for all
purposes.

                  (e) With respect to any Collateral consisting of Equipment or
Inventory, the Secured Party may (i) make, adjust and settle claims under any
insurance policy related thereto and place and pay for appropriate insurance
thereon; (ii) discharge taxes and other Encumbrances at any time levied or
placed thereon; (iii) make repairs or provide maintenance with respect thereto;
and (iv) pay any necessary filing fees and any taxes arising as a consequence of
any such filing. The Secured Party shall have no obligation to make any such
expenditures nor shall the making thereof relieve any Debtor of its obligation
to make such expenditures.

                  (f) With respect to any Collateral consisting of Investment
Property, the Secured Party may (i) transfer such Collateral at any time to
itself, or to its nominee, and receive the income thereon and hold the same as
Collateral hereunder or apply it to the Obligations; and (ii) demand, sue for,
collect or make any compromise or settlement it deems desirable.

                  (g) The Secured Party may perform any covenant or agreement of
any of the Debtor contained herein that the Debtor has failed to perform and in
so doing the Secured Party may expend such sums as it may reasonably deem
advisable in the performance thereof, including, without limitation, the payment
of any taxes or insurance premiums, payment to obtain a release of an
Encumbrance or potential Encumbrance, expenditures made in defending against any
adverse claim and all other expenditures which the Secured Party may make for
the protection of any Collateral or which it may be compelled to make by
operation of law. All such sums and amounts so expended shall be repaid by the
Debtor upon demand, shall constitute additional Obligations and shall bear
interest from the date said amounts are expended at the rate per annum provided
in the Credit Agreement to be paid on Prime Rate Loans after the occurrence of
an Event of Default. No such performance of any covenant or agreement by the
Secured Party on behalf of any Debtor, and no such advance or expenditure
therefor, shall relieve the Debtor of any Event of Default.

                  (h) The Secured Party may retain and apply the Proceeds of any
disposition of Collateral, first, to its reasonable expenses of retaking,
holding, protecting and maintaining, and preparing for disposition and disposing
of, the Collateral, including reasonable attorneys' fees and other legal
expenses incurred by it in connection therewith; and second, to the payment of
the Obligations in such order of priority as the Lenders shall determine. Any
surplus remaining after such application shall be paid to the Debtor or to
whomever may be legally entitled thereto, provided that in no event shall the

                                      -16-
<PAGE>
Debtor be credited with any part of the Proceeds of the disposition of the
Collateral until such Proceeds shall have been received in cash by the Lenders.
The Debtor shall remain liable for any deficiency.

         9.02     Disposition of Collateral.

                  (a) Prior to any disposition of Collateral pursuant to this
Agreement, the Secured Party may, at its option, cause any of the Collateral to
be repaired or reconditioned in such manner and to such extent as to make it
saleable. Unless such Collateral threatens to decline rapidly in value or is of
the type customarily sold on a recognized market, the Secured Party shall send
to the Debtor prior written notice of the time and place of any public sale of
such Collateral or of the time after which any private sale or other disposition
thereof is to be made.

                  (b) The Debtor hereby grants to the Secured Party a license or
other right to use, without charge, the Debtor's labels, patents, copyrights,
rights of use of any name, trade secrets, trade names, trademarks and
advertising matter, or any property of a similar nature, relating to the
Collateral, in completing production of, advertising for sale and selling any
Collateral; and the Debtor's rights under all licenses and all franchise
agreements shall inure to the Secured Party's benefit.

                  (c) The Debtor recognizes (i) that the Secured Party may be
unable to effect a public sale of all or a part of the Investment Property by
reason of certain prohibitions contained in the Securities Act of 1933 (as
amended from time to time, the "SECURITIES ACT") or the Securities laws of
various states (the "BLUE SKY LAWS"), but may be compelled to resort to one or
more private sales to a restricted group of purchasers who will be obliged to
agree, among other things, to acquire the Investment Property for their own
account, for investment and not with a view to the distribution or resale
thereof, (ii) that private sales so made may be at prices and upon other terms
less favorable to the seller than if the Investment Property were sold at public
sales, (iii) that neither the Secured Party nor the Lenders has any obligation
to delay sale of any of the Investment Property for the period of time necessary
to permit the Investment Property to be registered for public sale under the
Securities Act or the Blue Sky Laws, and (iv) that private sales made under the
foregoing circumstances shall be deemed to have been made in a commercially
reasonable manner.

         9.03 Appointment as Attorney-in-Fact. The Debtor hereby appoints the
Secured Party and the Secured Party's designees or agents as attorney-in-fact of
the Debtor, irrevocably and with power of substitution, with full authority in
the name of the Debtor, for sole use and benefit of the Lenders, but at the
Debtor's expense, so long as an Event of Default is continuing, to take any and
all of the actions specified above in this section and elsewhere in this
Agreement. This power of attorney is coupled with an interest and shall be
irrevocable for so long as any of the Obligations remain outstanding.

         9.04 Duties re Collateral. Except as otherwise provided herein, and as
may be mandated by applicable law, the Secured Party shall have no duty as to

                                      -17-
<PAGE>
the collection or protection of any Collateral nor as to the preservation of any
rights pertaining thereto, beyond the safe custody of any Collateral in its
possession.

         9.05 Destruction of Documents and Records. The Debtor authorizes the
Secured Party and the Lenders to destroy all invoices, delivery receipts,
reports and other types of documents and records delivered to the Secured Party
and/or the Lenders in connection with the transactions contemplated herein at
any time subsequent to the expiration of the applicable statute of limitations.

ARTICLE 10. SET-OFF. Any deposits or other sums at any time credited by or due
from any of the Lenders to any of the Debtor may, without demand or notice (any
such demand or notice being expressly waived hereby) and to the fullest extent
permitted by law and without regard to any source of payment whatsoever,
following the occurrence and during the continuance of an Event of Default, be
applied to or set off against Obligations on which the Debtor is primarily
liable and may at or after the maturity thereof be applied to or set off against
Obligations on which the Debtor is secondarily liable, and advice thereof shall
thereafter be given to the Debtor 's chief financial officer.

ARTICLE 11. WAIVERS. To the extent permitted by applicable law, the Debtor
waives (i) presentment, demand, notice, protest, notice of acceptance of this
Agreement, notice of any loans made, credit or other extensions granted,
Collateral received or delivered and any other action taken in reliance hereon
and all other demands and notices of any description, except for such demands
and notices as are expressly required to be provided to the Debtor under this
Agreement or any other document evidencing the Obligations and (ii) to the full
extent permitted by law, the benefit of all appraisement, valuation, stay,
extension and redemption laws now or hereafter in force and all rights of
marshaling in the event of any sale or disposition of any of the Collateral. To
the extent that it lawfully may do so, the Debtor hereby agrees that it will not
invoke any law relating to the marshaling of collateral which might cause delay
in or impede the enforcement of the rights of the Secured Party or the Lenders
under this Agreement or under any other instrument evidencing any of the
Obligations or under which any of the Obligations is outstanding or by which any
of the Obligations is secured or guaranteed, and to the extent that it lawfully
may do so the Debtor hereby irrevocably waives the benefits of all such laws.
With respect to both the Obligations and any Collateral, the Debtor assents to
any extension or postponement of the time of payment or any other forgiveness or
indulgence, to any substitution, exchange or release of Collateral, to the
addition or release of any party or Person primarily or secondarily liable, to
the acceptance of partial payment thereon and the settlement, compromise or
adjustment of any thereof, all in such manner and at such time or times as the
Secured Party may deem advisable. The Secured Party may exercise its rights with
respect to the Collateral without resorting, or regard, to other collateral or
sources of reimbursement for Obligations. The Secured Party and the Lenders
shall not be deemed to have waived any of their rights with respect to the
Obligations or the Collateral unless such waiver is in writing and signed by the
Secured Party and the Lenders. No delay or omission on the part of the Secured
Party or the Lenders in exercising any right and no course of dealing shall
operate as a waiver of such right or any other right. A waiver on any one
occasion shall not bar or waive the exercise of any right on any future

                                      -18-
<PAGE>
occasion. All rights and remedies of the Secured Party and the Lenders with the
respect to the Obligations or the Collateral, whether evidenced hereby or by any
other instrument or papers, are cumulative and not exclusive of any remedies
provided by law or any other agreement, and may be exercised separately or
concurrently.

ARTICLE 12. INDEMNIFICATION AND EXPENSES. The Debtor agrees to indemnify and
hold the Secured Party and the Lenders, and their respective officers,
directors, trustees, agents, servants and employees (each, an "INDEMNIFIED
PARTY") harmless from and against any taxes, liabilities, claims and damages,
including reasonable attorneys' fees and disbursements, and other expenses
incurred or arising by reason of the taking or the failure to take action by the
Indemnified Party under this Agreement and in respect of any transactions
effected in connection with this Agreement, except those arising from the gross
negligence or willful misconduct of the Indemnified Party. The Debtor promises
to reimburse the Secured Party and the Lenders on demand for all reasonable
out-of-pocket fees and disbursements (including all reasonable attorneys' fees
and collateral evaluation costs) incurred or expended in protecting, preserving
or enforcing the rights of the Secured Party and the Lenders under or in respect
of the Obligations or any of the Collateral. The amount of all such costs and
expenses shall, until paid, bear interest at the rate applicable to Prime Rate
Loans and shall be an Obligation secured by the Collateral.

ARTICLE 13. NOTICES. All notices, approvals, requests, demands and other
communications hereunder expressly required by this Agreement to be in writing,
to any party hereto shall be deemed to have been given when delivered to the
Person(s) and in the manner provided in Section 9.1 of the Credit Agreement. Any
notice, unless otherwise specified, may be given orally or in writing.

ARTICLE 14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Debtor and its respective successors and assigns,
and shall be binding upon and inure to the benefit of and be enforceable by the
Secured Party and its successors and assigns permitted under the Credit
Agreement, whether or not an express assignment of rights hereunder is made;
provided that the Debtor may not assign or transfer its rights or obligations
hereunder. Without limiting the generality of the foregoing sentence, the
Lenders may, in the manner and to the extent set forth in the Credit Agreement,
assign or otherwise transfer any agreement or any Note held by it evidencing,
securing or otherwise executed in connection with the Obligations, or sell
participations in any interest therein, to any other Person, and such other
Person shall thereupon become vested, to the extent set forth in the agreement
evidencing such assignment, transfer or participation, with all the rights in
respect thereof granted to the Lenders under the terms of the Loan Documents.

ARTICLE 15. GOVERNING LAW. This agreement shall be governed by the laws of the
State of New Hampshire without regard to its principles relating to choice and
conflicts of law.

ARTICLE 16. CONSENT TO JURISDICTION. DEBTOR HEREBY CONSENTS TO THE JURISDICTION
OF ANY OF THE COURTS OF THE STATE OF NEW HAMPSHIRE LOCATED IN HILLSBOROUGH
COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

                                      -19-
<PAGE>
SITTING IN CONCORD, NEW HAMPSHIRE IN CONNECTION WITH ANY ACTION TO ENFORCE THE
RIGHTS OF THE SECURED PARTY UNDER THIS AGREEMENT. THE DEBTOR IRREVOCABLY WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE EXERCISE OF JURISDICTION
BY SAID COURTS IN CONNECTION WITH ANY SUCH ACTION AND AGREES NOT TO ASSERT IN
ANY SUCH ACTION THAT SUCH ACTION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

ARTICLE 17. WAIVER OF JURY TRIAL. EACH OF THE DEBTOR, THE SECURED PARTY AND THE
LENDERS HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR
CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS
OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
EXCEPT AS PROHIBITED BY LAW, EACH OF THE DEBTOR, THE SECURED PARTY AND THE
LENDERS HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN ACTUAL DAMAGES. THE
DEBTOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE SECURED
PARTY OR THE LENDERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE SECURED
PARTY OR THE LENDERS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT EACH OF THE LENDERS HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BECAUSE OF, AMONG OTHER THINGS, THE DEBTOR'S
WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.

ARTICLE 18. CONTINUING OBLIGATIONS. The Debtor acknowledges that the Secured
Party and the Lenders, in determining to enter into the Credit Agreement, have
relied upon the fact that the Security Interest granted herein constitutes the
continuing and irrevocable agreement of the Debtor, and the Debtor agrees that
its obligations hereunder may not be revoked in whole or in part. The
obligations of the Debtor hereunder shall terminate when the commitment of the
Lenders to extend credit under the Credit Agreement shall have terminated and
all of the Obligations have been indefeasibly paid in full in cash and
discharged; provided, however, that:

                  (a) if a claim is made upon the Secured Party or the Lenders
at any time for repayment or recovery of any amounts or any property received by
the Secured Party or the Lenders from any source on account of any of the
Obligations and the Secured Party or the Lenders repay or return any amounts or
property so received (including interest thereon to the extent required to be
paid by the Secured Party or the Lenders) or

                  (b) if the Secured Party or the Lenders become liable for any
part of such claim by reason of (i) any judgment or order of any court or
administrative authority having competent jurisdiction, or (ii) any settlement
or compromise of any such claim,

                                      -20-
<PAGE>
then the Debtor shall remain obligated under this Agreement with respect to the
amounts so repaid or property so returned and the amounts for which the Secured
Party or the Lenders become liable (such amounts being deemed part of the
Obligations), and the Security Interest granted herein shall apply with full
force and effect with to such Obligations, to the same extent as if such amounts
or property had never been received by the Secured Party or the Lenders,
notwithstanding any termination hereof or the cancellation of any instrument or
agreement evidencing any such Obligations.

ARTICLE 19.  GENERAL.

         19.01    Amendment, Etc.  This Agreement may not be amended, modified
or supplemented except by a writing signed by the parties hereto.

         19.02 Multiple Counterparts. This Agreement and any amendment hereof
may be executed in several counterparts by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, but all of
which together shall constitute one and the same instrument.

         19.03 Captions and Headings. Captions and section headings are for
convenience of reference only and in no way define, limit or describe the scope
or intent of the provisions hereof.

         19.04 Joint Possession. In the event that any Collateral or any deposit
or other sum due from or credited by the Lenders is held or stands in the name
of any of the Debtor and another or others jointly, the Lenders may deal with
the same for all purposes as if it belonged to or stood in the name of the
Debtor alone.

         19.05 Survival. All representations, warranties, covenants and
agreements contained in this Agreement, including without limitation the
agreement of the Debtor to indemnify the Secured Party and the Lenders set forth
in Article 12, shall survive the execution and delivery of the Loan Documents.

         19.06 Severability. If any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, that holding
shall not invalidate or render unenforceable any other provision hereof.

                                      -21-
<PAGE>

         IN WITNESS WHEREOF, the Debtor has caused this Agreement to be duly
executed as an instrument under seal as of the date first written above.

DEBTOR:

LASTERTEL, INC.

By: /s/ Moosa E. Moosa
   ---------------------------
   Name:  Moosa E. Moosa
   Title: Vice President - Finance
   Hereunto Duly Authorized

Accepted in Manchester, New Hampshire as of the date and year first above
written.

SECURED PARTY:

CITIZENS BANK NEW HAMPSHIRE

By: /s/ Timothy J. Whitaker
   ---------------------------
   Name:  Timothy J. Whitaker
   Title:  Vice President
   Hereunto Duly Authorized

                                      -22-EXHIBIT 10.11
                                                                   -------------
                               SECURITY AGREEMENT
                             (INTELLECTUAL PROPERTY)

         THIS SECURITY AGREEMENT (the "Agreement"), is made as of this 15 day of
October, 2003, by and between PRESSTEK, INC., a Delaware corporation having its
principal office at 55 Executive Drive, Hudson, New Hampshire 03051
(hereinafter, together with any successors to and assigns of any or all of its
present or future interests in the Intellectual Property Collateral, as
hereinafter defined, other than the Lenders, as hereinafter defined, referred to
jointly, severally, individually, and collectively as the "Debtor"), and
CITIZENS BANK NEW HAMPSHIRE, a New Hampshire guaranty savings bank having an
office at 875 Elm Street, Manchester, New Hampshire 03101 (together with its
successors and assigns, the "Secured Party"), acting as agent under the terms of
that certain Credit Agreement dated as of even date herewith (as it may be
amended from time to time, the "Credit Agreement") by and among the Debtor,
Lasertel Inc., as Guarantor, the Secured Party and the banks that are parties
thereto (the "Lenders") (the "Secured Party").

         WHEREAS, the Debtor has requested that the Lenders enter into the
Credit Agreement with the Debtor, and to extend credit to the Debtor on the
terms and subject to the conditions set forth therein; and

         WHEREAS, it is a condition precedent to the Lenders' agreement to enter
into the Credit Agreement and extend credit to the Debtor thereunder that the
Debtor execute and deliver this Agreement and grant the security interest herein
provided. Certain terms are used in this Agreement as specifically defined
herein. These definitions are set forth or referred to in Section 9 hereof. Any
and all terms not described herein shall have the meaning ascribed to them in
the Credit Agreement.

         NOW, THEREFORE, in order to induce the Lenders to enter into the Credit
Agreement and extend credit to the Debtor thereunder, and in consideration
thereof, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

         1. Granting Clause; Intellectual Property Collateral; Assignments.

         1.1 Granting Clause. For good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Debtor hereby sells,
assigns and transfers unto the Secured Party, and hereby grants to the Secured
Party, a first security interest (except as noted in the attached Schedules) in
the Intellectual Property Collateral, to secure the Secured Obligations and
Debtor's obligations under the Credit Agreement and the Security Agreement both
between the Debtor and the Secured Party pursuant to which the Secured
Obligations are incurred.

         1.2 Intellectual Property Collateral. As used herein, the term
"Intellectual Property Collateral" shall mean all now owned or hereafter
acquired or arising:

                                      -1-
<PAGE>

         (a) (i) patents and patent applications, including, without limitation,
those listed on Schedule 1.2(a) hereto and the inventions and improvements
described and claimed therein, and patentable inventions, (ii) the reissues,
divisions, continuations, continuations-in-part, renewals and extensions of any
of the foregoing, (iii) all income, royalties, damages or payments now or
hereafter due and/or payable under any of the foregoing or with respect to any
of the foregoing, including without limitation, damages or payments for past or
future infringements of any of the foregoing, (iv) the right to sue for past,
present and future infringements of any of the foregoing, and (v) all rights
corresponding to any of the foregoing throughout the world (collectively, the
"Patents");

         (b) (i) trademarks, service marks, trademark registrations, service
mark registrations, trade names, collective marks and certification marks, and
trademark and servicemark applications, and trade dress, including logos and/or
designs, in connection with any of the foregoing including, without limitation,
those listed on Schedule 1.2(b) hereto, (ii) all renewals of any of the
foregoing, (iii) all income, royalties, damages and payments now or hereafter
due and/or payable under any of the foregoing or with respect to any of the
foregoing, including without limitation, damages or payments for past or future
infringements of any of the foregoing, (iv) the right to sue for past, present
and future infringements of any of the foregoing, (v) all rights corresponding
to any of the foregoing throughout the world, and (vi) the goodwill of the
Debtor's business connected with and symbolized by any of the foregoing
(collectively, the "Marks");

         (c) (i) trade secrets, including, without limitation, patentable
inventions, any and all product formulae, manufacturing techniques, product
specifications, financial information, customer lists, computer data and
programs, and marketing and business plans, (ii) all income, royalties, damages
and payments now or hereafter due and/or payable under any of the foregoing or
with respect to any of the foregoing, including without limitation, damages or
payments for past or future infringements of any of the foregoing, (iii) the
right to sue for past, present and future infringements of any of the foregoing,
and (iv) all rights corresponding to any of the foregoing throughout the world
(collectively, the "Trade Secrets").

         (d) (i) copyrights, copyright registrations, and copyright
applications, including, without limitation, those listed on Schedule 1.2(d)
hereto and copyrights for computer programs and all tangible property embodying
the copyrights, (ii) the reissues, renewals and extensions of any of the
foregoing, (iii) all income, royalties, damages and payments now or hereafter
due and/or payable under any of the foregoing or with respect to any of the
foregoing, including without limitation, damages or payments for past or future
infringements of any of the foregoing, (iv) the right to sue for past, present
and future infringements of any of the foregoing, and (v) all rights
corresponding to any of the foregoing throughout the world (collectively, the
"Copyrights");

         (e) licenses and license agreements, whether as a licenser or licensee,
with any other Person, including, without limitation, the licenses of the Debtor
listed on Schedule 1.2(e) hereto, relating to the use of any Patents, Marks,
Trade Secrets or Copyrights, and all rights of the Debtor under any of the
foregoing, including the right to (i) prepare for sale, (ii) sell, and (iii)

                                      -2-
<PAGE>

advertise for sale, all inventory now or hereafter owned by the Debtor and now
or hereafter covered by such license (collectively, the "Licenses"); together
with all proceeds (cash and non-cash) and products of the foregoing.

         1.3 Assignments. In order to duly perfect the Secured Party's interests
in the Intellectual Property Collateral and/or to notify interested third
parties of the Secured Party's interests therein, the Debtor shall
contemporaneously herewith duly execute and deliver to the Secured Party, and
the Secured Party may file, with the U.S. Patent and Trademark Office (the
"PTO") or the U.S. Copyright Office (the "Copyright Office"), as appropriate,
and any appropriate state and local filing offices, a written collateral
assignment of security interest (in each case, a "Collateral Assignment") in
Patents, Marks or Copyrights owned by such Debtor, each to be in substantially
the form of Exhibits A, B and C, respectively, hereto. At such time or times as
any Debtor shall acquire or obtain any new Intellectual Property Collateral or
rights thereto, the Debtor shall promptly notify the Secured Party by delivering
to the Secured Party an amendment to the appropriate Schedule and to the
appropriate exhibit hereto, and shall promptly duly execute and deliver to the
Secured Party, and the Secured Party may file or record, if necessary, an
appropriate Collateral Assignment with the appropriate filing or recording
office, provided, however, Debtor shall not be required to deliver a Collateral
Assignment in any application for an intent-to-use a trademark or service mark.

         2.       General Provisions.

         Debtor hereby represents and warrants to and covenants with the Secured
Party as follows:

         2.1      Title to Security; First Lien.

         (a) The Intellectual Property Collateral listed on the Schedules (and
any amendments thereto) hereto constitute all material property rights of the
Debtor described in Sections 1.2(a) through (d) hereof to which the Debtor has
any right, title or interest or which are used in connection with the Debtor's
business and all of such Intellectual Property Collateral is, to the best of
Debtor's knowledge, valid and subsisting, unrevoked and uncancelled and none of
the foregoing has been adjudged unenforceable, in whole or in part and, all of
the Intellectual Property collateral is enforceable in accordance with its
terms. The Debtor is to the best of its knowledge the owner or is licensed to
use or practice under all trademarks, service marks, patents, trade secrets and
copyrights used in its business.

         (b) To the best of Debtor's knowledge, the Debtor is the true and
lawful sole and exclusive owner of the Intellectual Property Collateral,
including any Intellectual Property Collateral acquired or arising after the
date hereof, and the Intellectual Property Collateral is subject to no Lien,
including covenants by the Debtor not to sue third Persons, other than Permitted
Encumbrances and the provisions of Section 7 hereof and, except for the
foregoing, no financing statement, security agreement, assignment, license,
covenant not to sue, shop rights or other Lien instrument covering all or any
part of the Intellectual Property Collateral is on file in any public office;
and the Debtor will not execute or authorize to be filed in any public office
any

                                      -3-
<PAGE>

of the foregoing except in favor of the Secured Party or with respect to a
Permitted Encumbrance.

         (c) Upon (i) the giving of value to the Debtor by the Secured Party,
(ii) the filing of financing statements on form UCC-1 (or other comparable form)
in the appropriate filing offices, and (iii) upon the filing of any Assignments
in the appropriate filing offices, the Secured Party will obtain a valid,
enforceable first priority perfected Lien and security interest in the
Intellectual Property Collateral except to the extent of any Liens permitted
hereby.

         2.2 New Intellectual Property Collateral. Any Intellectual Property
Collateral acquired or developed by any of the Debtor's officers, directors,
stockholders or employees in the course of the Debtor's business shall be owned
of record by the Debtor and shall be automatically subject to Section 1 hereof.

         2.3 Chief Executive Office; Intellectual Property Collateral Locations.
The Debtor's chief executive office and the office where the Debtor keeps its
books and records relating to the Intellectual Property Collateral, is located
at the locations set forth on the Disclosure Schedule. The Debtor will not move
its chief executive office unless (i) it shall have given to the Secured Party
not less than thirty (30) days' prior written notice of its intention so to do,
clearly describing such new location and providing such other information in
connection therewith as the Secured Party may reasonably request and (ii) with
respect to such new location, it shall have taken all action satisfactory to the
Secured Party to maintain the security interest of the Secured Party in the
Intellectual Property Collateral to be granted hereby at all times fully
perfected and in full force and effect. The originals of all documents
evidencing the Intellectual Property Collateral and the only original records of
the Debtor relating thereto are and will continue to be kept at such locations
and/or at the offices of the Debtor.

         2.4 General Duties of the Debtor. The Debtor shall (i) prosecute
diligently any patent, trademark, service mark or copyright application material
to its business pending as of the date hereof or thereafter until the Secured
Obligations shall have been paid in full, (ii) make application at the federal
level on unpatented but patentable inventions and on trademarks, service marks
and copyrights, as Debtor in its reasonable discretion deems appropriate, (iii)
preserve and maintain all rights in the Patents, Marks, Trade Secrets,
Copyrights and Licenses, and (iv) fulfill its obligations under any and all
Licenses, except with the prior written consent of the Secured Party. Any
expenses incurred in connection with the foregoing shall be borne by the Debtor,
including, without limitation, any and all maintenance fees. Except in its
commercial reasonable judgment, the Debtor shall not discontinue the payment of
any maintenance fees without the prior written consent of the Secured Party.

         2.5 Filings and Consents. Debtor shall deliver to the Secured Party in
form and substance satisfactory to the Secured Party:

         (i) such instruments as Secured Party may reasonably request, for
filing by Secured Party, at its discretion, in the appropriate offices, as
specified in Section 1.3; and

                                      -4-
<PAGE>

         (ii) evidence that all necessary consents, waivers and agreements have
been obtained from any other party to the Licenses to the granting of the Lien
in favor of the Secured Party in such Licenses.

         2.6 Recording and Filing. At all times, and at its sole cost and
expense, the Debtor shall provide appropriate documents to Secured Party to
enable Secured Party to cause appropriate assignments, confirmatory assignments
and financing and continuation statements to be recorded and filed and to be
kept recorded and filed in such manner and in such places, as may be required by
law in order to establish, preserve, perfect and protect the first Lien (subject
to the Permitted Encumbrances, if any) of the Secured Party in the Intellectual
Property Collateral (including, without limitation, any interests acquired after
the execution hereof) and the rights of the Secured Party thereunder. The
Secured Party may record or file as such a financing statement or statements, a
carbon, photographic or other reproduction of this Agreement. The Debtor shall
pay all such recording, filing or other taxes, fees and other charges associated
with recording and filing.

         2.7 Restrictions on Future Agreements. Debtor agrees that until the
Secured Obligations shall have been paid in full, the Debtor will not, without
the Secured Party's prior written consent, sell, assign, pledge, encumber or
otherwise transfer to any Person other than the Secured Party, any of the
Debtor's rights in its present or future Patents, Marks, Trade Secrets,
Copyrights or Licenses, or enter into any other agreement, including, without
limitation, a license agreement, which is inconsistent with the Debtor's
obligations under this Agreement, except (i) licenses by Debtor in the ordinary
course of business , (ii) so-called end-user, non-exclusive licenses granted to
the Debtor's customers in the ordinary course of its business, and (iii) Liens
in favor of the Secured Party pursuant hereto or in respect of the Permitted
Encumbrances or other Liens permitted hereby. Debtor further agrees that it will
not take any action, or permit any action to be taken by any affiliate of the
Debtor or any other Person subject to the Debtor's control, including, without
limitation, licensees, or fail to take any action, which would affect the
validity or enforcement of the rights transferred to the Secured Party under
this Agreement.

         2.8 Infringements. To the best of Debtor's knowledge, none of the
Intellectual Property Collateral infringes the superior rights of any Person
and, except as set forth on the Disclosure Schedule, there is no pending or
threatened claim, action, suit or proceeding against the Debtor with respect to
any alleged infringement by the Debtor's business or operations of any
trademark, service mark, patent, trade secret or copyright. Debtor agrees,
promptly upon learning thereof, to notify the Secured Party in writing of the
name and address of, and to furnish such pertinent information that may be
available with respect to, any Person who may be infringing or otherwise
violating any of the Debtor's rights in and to any Intellectual Property
Collateral in a manner which is materially adverse to the Debtor, or with
respect to any Person claiming that the Debtor's use or practice of any
Intellectual Property Collateral violates any property right of that Person.
Debtor further agrees, unless otherwise directed by the Secured Party,
diligently to prosecute and/or enjoin permanently any Person infringing any such
rights in a manner which is or may become materially adverse to the Debtor.
Debtor further agrees that it will not settle or compromise any dispute, claim,
suit or legal proceeding with regard to the same without the prior written
consent of the Secured Party.

                                      -5-
<PAGE>

         2.9 Amendments; Etc. The Debtor shall not permit any documents,
instruments, chattel paper, guarantees and contracts constituting or evidencing
any Intellectual Property Collateral hereunder to be amended, modified or
changed in any way without the prior written consent of the Secured Party.

         2.10 Direction to Third Parties; Etc. Upon the occurrence of an Event
of Default, the Debtor agrees (i) to cause payments, if any, on account of the
Licenses to be made directly to a cash collateral account established by the
Secured Party and (ii) that the Secured Party may, at its option, directly
notify the obligors with respect to any Licenses to make any payments with
respect thereto as provided in the preceding clause. Without notice to or assent
by the Debtor, the Secured Party may apply any or all amounts therein, or
thereafter deposited in, any cash collateral account in the manner provided in
Section 8.7 hereof. The costs and expenses (including attorneys' fees) of
collection, whether incurred by the Debtor or the Secured Party, shall be borne
by the Debtor.

         2.11 Collection. Debtor shall endeavor to cause to be collected from
the obligor under any License, as and when due (including, without limitation,
amounts which are delinquent, such amounts to be collected in accordance with
generally accepted lawful collection procedures) amounts, if any, owing under or
on account of such License, and apply forthwith upon receipt thereof all such
amounts as are so collected to the outstanding balance under such License,
except that, prior to the occurrence of an Event of Default, the Debtor may
allow in the ordinary course of business adjustments to amounts, if any, owing
under its Licenses or an extension or renewal of the time or times of payment,
or settlement for less than the total unpaid balance, which the Debtor deems
appropriate in accordance with sound business judgment. The costs and expenses
(including, without limitation, attorneys' fees) of collection, whether incurred
by the Debtor or the Secured Party, shall be borne by the Debtor.

         2.12 Payments. Debtor shall pay or cause to be paid promptly when due
all taxes and other governmental levies, to whomever and whenever laid or
assessed, whether on this Agreement, or on or in respect of any of the
Intellectual Property Collateral, which if unpaid might by law become a Lien
upon any of the foregoing; provided, however, that, except to the extent
otherwise provided in any other Loan Document, any such tax, levy or claim need
not be paid if the validity or amount thereof shall currently be contested in
good faith by appropriate proceedings and if the Debtor shall have set aside on
its books appropriate reserves with respect thereto; and provided, further, that
the Debtor will pay all such taxes, levies or other governmental charges
forthwith upon the commencement of proceedings to foreclose any Lien which may
have attached as security therefor.

         2.13 Employees; Agents; Etc. Debtor has entered and will enter into
written agreements with each of its present and future employees, agents and
consultants which will enable it to comply with the covenants herein contained.

         2.14 Further Assurances. Upon the Secured Party's request from time to
time, the Debtor will make, execute, endorse, acknowledge, file and/or deliver,
and file and record in the

                                      -6-
<PAGE>

proper filing and recording places, if applicable, all such instruments,
including without limitation transfer endorsements, powers of attorney,
certificates, reports and other assurances, and take all such action as the
Secured Party or counsel for the Secured Party may reasonably deem necessary or
advisable to carry out the intent and purposes of this Agreement, or for
assuring and confirming to the Secured Party the Intellectual Property
Collateral and the priority of the Secured Party's Lien therein provided for
hereunder.

         3.       Special Provisions Concerning Marks and Licenses.

         3.1 Maintenance of Records. Debtor will keep and maintain or cause to
be kept or maintained at its own cost and expense satisfactory and complete
records of its Marks and Licenses, including, but not limited to, the originals
of all documentation with respect thereto, and the Debtor will make the same
available to the Secured Party for inspection, at the Debtor 's own cost and
expense, at any and all reasonable times upon reasonable prior notice. Debtor
shall, at its own cost and expense, deliver all tangible evidence of its Marks
and Licenses (including, without limitation, all Certificates of Registration
relating to Marks and all Licenses) and such books and records relating thereto
(including, in the case of Marks, file histories with regard to the prosecution
and registration of such Marks, to the extent within the possession or control
of the Debtor) to the Secured Party or to its representatives (copies of which
evidence and books and records may be retained by the Debtor) at any time upon
its demand. If the Secured Party so directs, each Debtor shall legend, in form
and manner reasonably satisfactory to the Secured Party, the Licenses, as well
as books, records and documents of the Debtor evidencing or pertaining to the
Licenses with an appropriate reference to the fact that the Licenses have been
assigned to the Secured Party and that the Secured Party has a security interest
therein. In furtherance of the foregoing, the Debtor hereby grants to the
Secured Party or the Secured Party's designee the right to visit upon reasonable
prior notice during normal business hours any or all of the Debtor's places of
business which manufacture, sell, inspect or store goods sold or services
rendered (or which have done so during the prior six month period) under any
Mark, and to inspect the services and goods and control records relating
thereto. Secured Party shall conduct such inspections in a manner that is not
unreasonably disruptive to Debtor's business and operations, and will obey any
safety or work rules of Debtor while on its premises.

         3.2 Standards of Quality. Debtor has, and will continue to use for the
duration of this Agreement, consistent standards of quality in its manufacture
of goods sold under the Marks. The Debtor has heretofore controlled, and will
hereafter continue to control, the nature and quality of the goods and services
in respect of which any Mark is used by any Person.

         3.3 Preservation of Marks. Debtor has used and agrees to use, and to
cause licensees to use, proper statutory notice in connection with the use of
the Marks. Except as the same may be discontinued in the ordinary course of
business, the Debtor further agrees to use its Marks in interstate commerce
during the time in which this Agreement is in effect sufficiently to preserve
such Marks as trademarks or service marks registered under the laws of the
United States.

         3.4 Maintenance of Applications and Registrations. Debtor shall, at its
own expense, diligently process all documents required by the Trademark Act of
1946, 15 U.S.C. Section 1051 et

                                      -7-
<PAGE>

seq., as amended, to maintain its trademark and service mark registrations which
are material to its business and its pending applications with respect thereto,
including, but not limited to, statements and affidavits of use and applications
for renewals of registration, and shall pay all fees and disbursements in
connection therewith, and shall not abandon any pending application or existing
registration which is material to its business prior to the exhaustion of all
administrative and judicial remedies, without the prior written consent of the
Secured Party. Debtor agrees to notify the Secured Party six (6) months prior to
the dates on which any affidavits of use or applications for renewal of
registration are due that the affidavit or application is being processed.

         4. Special Provisions Concerning Patents.

         4.1 Maintenance of Applications and Patents. Debtor shall not abandon
any right to file a patent application nor shall the Debtor abandon any pending
patent application, Patent, or any right with respect to the foregoing which in
each case is material to its business, prior to exhaustion of all administrative
and judicial remedies, without the prior written consent of the Secured Party.
At its own expense, the Debtor shall make timely payment of all post-issuance
fees required to maintain in force rights under each Patent.

         4.2 Scope of Patents. To the best of Debtor's knowledge and belief,
except as noted in Schedule 1.2(a), each patent owned or licensed by the Debtor
is broad enough in scope to preclude substantial competition with the product or
good covered thereby.

         5. Special Provisions Concerning Trade Secrets.

         5.1 Maintenance. Each Trade Secret of the Debtor which is legally
protectable as a trade secret has been preserved as "secret" and suitable
security precautions have been taken with respect to each such Trade Secret,
including confidentiality and noncompetition agreements with its employees,
agents, officers and directors. Upon request, the Debtor shall give the Secured
Party copies of any such agreements.

         6. Special Provisions Concerning Copyrights.

         6.1 Maintenance of Applications and Copyrights. Debtor shall not
abandon any right to file a copyright application that the Debtor in its
reasonable discretion deems appropriate, nor shall Debtor abandon any pending
copyright application, Copyright, or any right with respect to the foregoing,
prior to exhaustion of all administrative and judicial remedies, without the
prior written consent of the Secured Party.

         7. Grant-Back License.

         7.1 License. Unless and until there shall exist an Event of Default and
the Secured Party has given notice to the Debtor of the Secured Party's
intention to exercise its rights under this Agreement, the Secured Party hereby
grants to the Debtor, without representation or

                                      -8-
<PAGE>

warranty by the Secured Party, the exclusive, nontransferable (except by
sublicense in the ordinary course of Debtor's business) right and license to use
all Intellectual Property Collateral, and in particular: (i) to use the Marks on
and in connection with goods and services sold by the Debtor, or its franchises,
for the Debtor's own benefit and account and for none other, (ii) under the
Patents, to make, have made for it, use and sell the inventions disclosed and
claimed in the Patents for the Debtor's own benefit and account and for none
other, (iii) to collect any and all royalties under any sublicenses granted by
the Debtor, (iv) to prosecute any and all applications and maintain any and all
registrations for Copyrights, Marks and Patents, (v) to preserve and protect the
Copyrights, Patents and Marks against infringement by third parties in the
Debtor's reasonable commercial judgment, and (vi) to settle all disputes with
third parties with respect to use or non-use of the Copyrights, Patents and
Marks. The Debtor agrees not to sell or assign its interest in, or grant any
sublicense (except in the ordinary course of business) under the license granted
to the Debtor in this Section, without the prior written consent of the Secured
Party.

         7.2 Royalties. Debtor hereby agrees that the use by the Secured Party
of any and all Intellectual Property Collateral shall, subject to applicable law
and to any then existing Licenses granted by the Debtor of any such Patent,
Mark, Trade Secret or Copyright, be without any liability for royalties or other
related charges from the Secured Party to Debtor.

         8. Rights and Remedies of Secured Party.

         8.1 Rights Exercisable Regardless of Event of Default. Whether or not
an Event of Default exists, the Secured Party shall have the following rights:

         (a) The Secured Party is hereby specifically authorized to make, at the
Secured Party's sole option, any or all payments required to be made either
hereunder or otherwise in respect of the Intellectual Property Collateral by
Debtor, unless Debtor has intentionally abandoned such Intellectual Property
Collateral in its reasonable commercial judgment in the ordinary course of
business. Such payments may include, but are not limited to, payments for
maintenance fees, taxes, and other governmental levies, and insurance premiums.
The Secured Party shall have the right, but not the duty, to perform any
obligations of the Debtor relating to the Intellectual Property Collateral,
without waiving any other rights or releasing Debtor from any obligation
hereunder.

         (b) The Secured Party shall have the right, but not the duty, to
intervene or otherwise participate in any legal or equitable proceeding which,
in the Secured Party's sole judgment, affects the Intellectual Property
Collateral or any of the rights created or secured by this Agreement, provided
that the Debtor has the right to settle or compromise any suit, claim or action
without the consent of Secured Party if, in the reasonable commercial judgment
of Debtor, such settlement or compromise is in the best interest of Debtor.

Such rights may be exercised by the Secured Party at any time, but only after
seven (7) days notice to the Debtor, and only to the extent permitted by law and
necessary to protect the Secured Party's rights hereunder and in the
Intellectual Property Collateral.

                                      -9-
<PAGE>

         8.2 Power of Attorney. After an Event of Default, in order to permit
the Secured Party to operate the Debtor's business without interruption and to
use the Marks and associated goodwill in conjunction therewith and other
Intellectual Property Collateral, and otherwise to effectuate the intent of the
parties hereto, the Debtor hereby appoints the Secured Party the true and lawful
attorney-in-fact for the Debtor with full power of substitution, in its name or
in the name of the Debtor or otherwise, for the sole benefit of the Secured
Party but at the sole expense of the Debtor, without notice to or demand upon
the Debtor, at any time whether or not an Event of Default has occurred, (i) to
notify any party, and to demand, collect, receive payment of, receipt for,
settle, compromise or adjust and give discharges and releases with respect to,
any Intellectual Property Collateral; (ii) to commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect any monies due to the Debtor and to enforce any rights
pursuant to any Intellectual Property Collateral or any other rights in respect
thereof including suits for infringement; (iii) to defend any suit, action, or
proceeding brought against the Debtor in respect of any Intellectual Property
Collateral; (iv) to settle, compromise or adjust any suit, action or proceeding
described in clauses (ii) or (iii) above and, in connection therewith, to give
such discharges, terminations or releases as the Secured Party may deem
appropriate; (v) to endorse the name of the Debtor on checks, notes, drafts,
acceptances, money orders, or other instruments or documents constituting
payments on account of any Intellectual Property Collateral; (vi) to sign and
file or record the foregoing described Assignments or any financing or other
statement in order to perfect or protect the Secured Party's security interest
in the Intellectual Property Collateral; (vii) to prosecute any applications,
renewals and other matters in connection with any of the Intellectual Property
Collateral and to sign the name of the Debtor on any and all agreements,
documents, statements, certificates or other writings necessary or advisable to
effect such purposes; (viii) generally to sell, assign, transfer, pledge, make
any agreement in respect of or otherwise deal with any Intellectual Property
Collateral, including any new Intellectual Property Collateral, as fully and
completely as though the Secured Party were the absolute owner thereof for all
purposes. The powers vested in the Secured Party are, and shall be deemed to be,
coupled with an interest and irrevocable. The powers conferred on the Secured
Party by this Agreement are solely to protect the Secured Party's interest and
shall not impose upon the Secured Party any duty to exercise any such power, and
if the Secured Party shall exercise any such power, the Secured Party shall be
accountable only for amounts that the Secured Party actually receives as a
result thereof and shall not be responsible to the Debtor except for any failure
to comply with the requirement of applicable law.

         8.3 Effect of Exercise of Rights. Any sums paid, and any costs or
expenses, including reasonable attorneys' fees, incurred by the Secured Party,
pursuant to the Secured Party's exercise of rights specified or referred to
herein, shall: (a) as between the parties hereto and their
successors-in-interest, be deemed valid, so that in no event shall the necessity
or validity of any such payments, costs or expenses be disputed; and (b) with
respect to such sums, costs and expenses, be, until paid, part of the Secured
Debt and, until paid, shall accrue interest at the Default Rate.

         8.4 Remedies. Upon the occurrence of any Event of Default, the Secured
Party may at any time thereafter, at its option and, upon seven (7) days written
notice, exercise any or all of the following rights and remedies:

                                      -10-
<PAGE>

         (a) terminate the license granted to the Debtor pursuant to Section 7
hereof;

         (b) collect, receive, appropriate and realize upon the Intellectual
Property Collateral or any part thereof;

         (c) exercise any or all of the rights and remedies granted to it under
this Agreement or any other Loan Document and take such other actions or
proceedings as the Secured Party deems necessary or advisable to collect or
enforce or to protect its interest in the Secured Debt or the Intellectual
Property Collateral;

         (d) enter, with or without process of law and without breach of the
peace, any premises where the Intellectual Property Collateral or the books and
records of the Debtor related thereto are or may be located, and without charge
or liability to the Secured Party therefor seize and remove any tangible
personal property evidencing the Intellectual Property Collateral (and copies of
said Debtor's books and records in any way relating to the Intellectual Property
Collateral) from said premises and/or remain upon said premises and use the same
(together with said books and records) for the purpose of collecting, preparing
for sale and disposing of the Intellectual Property Collateral;

         (e) exercise any one or more of the rights and remedies accruing to the
Secured Party under any applicable law, or as provided herein or in the Loan
Documents. The Debtor recognizes that in the event it fails to perform, observe
or discharge any of its obligations or liabilities under this Agreement, no
remedy at law will provide adequate relief to the Secured Party, and the Debtor
agrees that the Secured Party shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages; and

         (f) exercise any and all of the rights and remedies of a secured party
under the Uniform Commercial Code or comparable statute in the applicable
jurisdiction, including, without limitation, the right to exercise all of the
following rights and remedies in a commercially reasonable manner:

                  (i)      declare the entire right, title and interest of the
                           Debtor in and to each of the Marks, together with all
                           trademark rights and rights of protection to the
                           same, vested, in which event such rights, title and
                           interest shall immediately vest, in the Secured
                           Party;

                  (ii)     declare the entire right, title and interest of the
                           Debtor in and to each of the Patents and Copyrights
                           vested, in which event such right, title and interest
                           shall immediately vest in the Secured Party;

                  (iii)    to take and practice or use all or any portion of the
                           Intellectual Property Collateral;

                                      -11-
<PAGE>

                  (iv)     to sell, license, or otherwise dispose of any or all
                           of the Intellectual Property Collateral, including
                           the goodwill of the Debtor's business symbolized by
                           the Marks and the right to carry on the business and
                           use the assets of the Debtor in connection with which
                           the Marks have been used;

                  (v)      to apply the proceeds of the Intellectual Property
                           Collateral towards (but not necessarily in complete
                           satisfaction of) the Secured Obligations; and/or

                  (vi)     to direct the Debtor to refrain from practicing or
                           using the Intellectual Property Collateral in any
                           manner whatsoever, directly or indirectly, and, if
                           requested by the Secured Party, change the Debtor's
                           corporate name to eliminate therefrom any use of any
                           Mark, as applicable, and execute such other and
                           further documents that the Secured Party may request
                           to further confirm this and to transfer ownership of
                           the Intellectual Property Collateral and any
                           associated goodwill to the Secured Party.

         Any sale or other disposition of the Intellectual Property Collateral
may be at public or private sale upon such terms and in such manner as the
Secured Party deems advisable, having due regard to compliance with any statute
or regulation which might affect, limit, or apply to the Secured Party's
disposition of the Intellectual Property Collateral. The Secured Party shall
give the Debtor notice as required by applicable law of the date, time, and
place of any proposed public sale of, and of the date after which any private
sale or other disposition, of the Intellectual Property Collateral, or any
portion thereof, is to be made.

         Such options may be exercised individually, sequentially or in concert,
all such remedies being cumulative, the exercise of one not being deemed a
waiver of any other or a cure of any Event of Default. An Event of Default shall
not be deemed to be in existence or to be continuing for any purpose of this
Agreement if the Secured Party pursuant to this Agreement shall have waived such
event in writing or stated in writing that the same has been cured to its
reasonable satisfaction, but no such waiver shall extend to or affect any
subsequent Event of Default or impair any rights of the Secured Party upon the
occurrence thereof.

         8.5 Waivers and Enforcement of Rights. The failure of the Secured Party
to exercise any right or remedy or option provided for herein or otherwise shall
not be deemed to be a waiver of any of the covenants or obligations secured by
this Agreement or otherwise. No sale of all or any of the Intellectual Property
Collateral, no forbearance on the part of the Secured Party, no release or
partial release of any of the Intellectual Property Collateral, and no
extension, whether oral or in writing, of the time for the payment of the whole
or any part of the Secured Debt or any other indulgence given by the Secured
Party to the Debtor or any other Person, shall operate to release or in any
manner affect the Lien of the Agreement or the original liability of the Debtor.
A waiver by the Secured Party on any one occasion shall not be construed as a
bar to or waiver of any right or remedy on any future occasion. No waiver or
consent shall be binding upon the

                                      -12-
<PAGE>

Secured Party unless it is in writing and signed by the Secured Party. Debtor
waives any requirement of diligence or promptness on the Secured Party's part in
the enforcement of its rights under the provisions of this Agreement or any Loan
Document. To the fullest extent the Debtor may do so, the Debtor agrees that it
will not at any time insist upon, plead, claim or take the benefit or advantage
of any law now or hereafter in force providing for any appraisement, valuation,
stay, extension or redemption, and the Debtor, to the extent permitted by law,
hereby waives and releases all rights of redemption, valuation, appraisement,
stay of execution, notice of election to mature or declare due the whole of the
Secured Obligations and marshalling in the event of foreclosure of the Liens
hereby created. The Secured Party shall not be required to marshal the
Intellectual Property Collateral, or any other Security in any particular order.
The Debtor hereby covenants and agrees that it will not enforce or otherwise
exercise any rights of reimbursement, subrogation, contribution or other similar
rights against any co-obligor or any other Person obligated on or with respect
to any Secured Obligations or granting any Security prior to the payment in full
of the Secured Obligations. If any law referred to in this Section and now in
force, of which the Debtor or its representatives, successors and assigns or
other Person may take advantage despite this Section, shall hereafter be
repealed or cease to be in force, such law shall not thereafter be deemed to
preclude the application of this Section. To the extent permitted by law and
except as otherwise provided in this Agreement and the other Loan Documents, the
Debtor expressly waives and relinquishes any and all rights and remedies which
it may have or be able to assert by reason of the laws of the State of New
Hampshire pertaining to the rights and remedies of sureties. With respect to any
or all of the Secured Obligations and Intellectual Property Collateral, the
Debtor assents to any extension or postponement of the time of payment or any
other indulgence, to any substitution, exchange or release the Intellectual
Property Collateral, to the addition or release of any Person primarily or
secondarily liable, to the acceptance of partial payments thereon and the
settlement, compromising or adjusting thereof, all at such time or times as the
Secured Party may deem advisable, and the Debtor agrees that the Secured Party
may so act without regard to any requests or demands by the Debtor and without
thereby incurring any liability to the Debtor or releasing the Debtor hereunder.

         8.6 Duty to Intellectual Property Collateral. Anything herein contained
to the contrary notwithstanding, neither the Secured Party nor any nominee or
assignee shall have any obligation or liability by reason of or arising out of
this Agreement to make any inquiry as to the nature or sufficiency of, to
present or file any claim with respect to, or to take any action to collect or
enforce the payment of, any amounts to which it may be entitled at any time or
times by virtue of this Agreement, except to extent otherwise required by
applicable law. The Secured Party makes no representations or warranties with
respect to the Intellectual Property Collateral or any part thereof, and shall
not be chargeable with any obligations or liabilities of the Debtor or any other
Person with respect thereto.

         8.7 Application of Proceeds. The proceeds of all collections and any
other moneys (including any cash contained in the Intellectual Property
Collateral), the application of which is not otherwise herein or in any other
Loan Document provided for, shall be applied as follows:

                   First, to the payment of the costs and expenses of
         collection, sale or other disposition of the Intellectual Property
         Collateral, including the

                                      -13-
<PAGE>

         reasonable compensation of the Secured Party and its counsel, and all
         other charges against the Intellectual Property Collateral;

                   Second, any surplus then remaining to the payment of the
         Secured Obligations secured by such Intellectual Property Collateral in
         such order and manner as the Secured Party in its sole discretion may
         determine; and

                   Third, any surplus then remaining shall be paid to the
         Debtor, subject, however, to the rights of the holders of any then
         existing Lien or as otherwise required by law.

         9. Definitions.

         9.1 Unless otherwise defined herein, terms used herein shall have the
meanings set forth in the Security Agreement or in the Credit Agreement. For
purposes of this Agreement, the following terms defined elsewhere in this
Agreement and as set forth below shall have the respective meanings therein and
herein defined:

         Term                                             Definition
         ----                                             ----------

         "Agreement"                                      Preamble
         "Collateral Assignment"                          Section 1.3
         "Copyright Office"                               Section 1.3
         "Copyrights"                                     Section 1.2 (d)
         "Debtor"                                         Preamable
         "Intellectual Property Collateral"               Section 1.2
         "Licenses"                                       Section 1.2 (e)
         "Loan Document"                                  Section 10.10
         "Marks"                                          Section 1.2 (b)
         "Patents"                                        Section 1.2 (a)
         "PTO"                                            Section 1.3
         "Secured Party"                                  Preamble
         "Security Agreement"                             Preamble
         "Trade Secrets"                                  Section 1.2 (c)

         9.2 "Secured Obligations" as used herein shall mean the Obligations of
the Debtor under the Credit Agreement.

         10. General.

         10.1 Fees and Expenses. Any and all fees, costs and expenses, of
whatever kind or nature, including the reasonable attorney's fees and legal
expenses incurred by the Secured Party in connection with the preparation of
this Agreement and all other documents relating hereto and the consummation of
the transactions contemplated hereby, the filing or recording of any documents
(including all taxes in connection therewith) in public offices, the payment or

                                      -14-
<PAGE>

discharge of any taxes, counsel fees, maintenance fees, encumbrances or
otherwise protecting, maintaining or preserving the Intellectual Property
Collateral, or in defending or prosecuting any actions or proceedings arising
out of or related to the foregoing, shall be borne and paid by the Debtor on
demand by the Secured Party.

         10.2 Defeasance. When all Secured Obligations have been indefeasibly
paid and performed in full and no further obligation on the part of the Secured
Party or the Debtor shall exist, this Agreement shall cease and terminate, and,
at the Debtor's written request, accompanied by such certificates, opinions and
proof as the Secured Party shall reasonably deem necessary, the Intellectual
Property Collateral furnished hereunder shall revert to the Debtor and the
estate, rights, title, and interest of the Secured Party therein shall cease,
and thereupon on the Debtor's written request and at its cost and expense, the
Secured Party shall execute proper instruments, acknowledging satisfaction of
and discharging this Agreement, and shall redeliver to the Debtor the
Intellectual Property Collateral furnished hereunder then in its possession;
subject, however, to the terms and provisions contained in Section 10.3 hereof.

         10.3 Survival. All covenants, agreements, representations and
warranties made herein or in any other Loan Document and in certificates
delivered pursuant hereto or thereto shall be deemed to have been material and
relied upon by the Secured Party, notwithstanding any investigation made by the
Secured Party or on the Secured Party's behalf, and shall survive the execution
and delivery to the Secured Party hereof and thereof. Each such covenant,
agreement, representation and warranty is hereby confirmed by the Debtor to be
true and correct in all respects with the same force and effect on and as of the
date of delivery of any Intellectual Property Collateral to the Secured Party as
though made as of the date of such delivery.

         10.4 Amendments. This Agreement may not be waived, changed or
discharged orally, but only by an agreement in writing and signed by the Secured
Party, and any oral waiver, change or discharge of any provision of this
Agreement shall be without authority and of no force and effect.

         10.5 Successors and Assigns. The covenants, representations, warranties
and agreements herein set forth shall be binding upon the Debtor, its successors
and assigns and shall inure to the benefit of the Secured Party, its successors
and assigns. Any purchaser, assignee or transferee of any of the Secured
Obligations and the Secured Party's security interest hereunder shall forthwith
become vested with and entitled to exercise all the powers and rights given by
this Agreement and the other Loan Documents to the Secured Party, as if said
purchaser, assignee, transferee or pledges were originally named herein.

         10.6 Entire Agreement: Separability; Governing Law. This Agreement, any
Schedules or Exhibits hereto and any riders or other attachments, and the other
Loan Documents constitute the entire agreement between the parties with respect
to the subject matter hereof. If at any time one or more provisions of this
Agreement or any Loan Document, any amendment or supplement thereto or any
related writing is or becomes invalid, illegal or unenforceable in whole or in
part in any jurisdiction, the validity, legality and enforceability of such
provision in any other jurisdiction or of the remaining provisions shall not in
any way be affected or impaired thereby.

                                      -15-
<PAGE>

This Agreement shall be governed by the laws of the State of New Hampshire
without regard to its conflict of laws provisions.

         10.7 Counterparts. This Agreement may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts, each of which when so executed shall be
deemed an original, but all such counterparts shall constitute one and the same
instrument.

         10.8 Singular or Plural; Joint or Several. The term "Debtor," together
with any pronoun referring thereto, shall include the singular, plural,
masculine, feminine and neuter, as the context may require; and if more than one
Person constitutes the Debtor, the obligations of such Persons shall be joint
and several.

         10.9 Headings. The headings to Sections appearing in this Agreement and
in any Loan Document have been inserted for the purpose of convenience and ready
reference. They do not purport to, and shall not be deemed to, define, limit or
extend the scope or intent of the Sections to which they appertain.

         10.10 Loan Document. This Agreement shall constitute a "Loan Document"
as defined in the Credit Agreement. The terms and provisions of this Agreement
are intended to supplement the terms and provisions of the security portions of
the Security Agreement and are not intended to limit the force or effect of such
provisions.

                                      -16-
<PAGE>

         IN WITNESS WHEREOF, this instrument has been executed under seal as of
the day and year first above written.

                                         DEBTOR
                                         PRESSTEK, INC.

/s/ James F. Scafidi                      By: /s/ Moosa E. Moosa
-----------------------------                -----------------------------------
Witness                                      Moosa E. Moosa, Vice President -
                                             Finance

STATE OF NEW HAMPSHIRE
COUNTY OF HILLSBOROUGH

         The foregoing instrument was acknowledged before me this 15th day of
October, 2003, by Moosa E. Moosa, for, on behalf of, and as Vice President -
Finance of, Presstek, Inc. on behalf of the corporation.

                                         /s/ Connie L. Rakowsky
                                         ---------------------------------------
                                         Justice of the Peace/Notary Public
                                         My Commission Expires: 1/6/04

                                      -17-

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