<PAGE>



                                             EXHIBIT 10.6


<PAGE>


                                    COMMERCIAL SECURITY
                                          AGREEMENT


                   BORROWER                                  OWNER OF COLLATERAL

Nortech Systems Incorporated                        Nortech Systems Incorporated
Nortech Medical Services, Inc.


                   ADDRESS                                         ADDRESS

4050 Norris Court                                   4050 Norris Court
Bemidji, MN 56601                                   Bemidji, MN 56601

TELEPHONE NO.      IDENTIFICATION NO.        TELEPHONE NO.    IDENTIFICATION NO.


   1.  SECURITY INTEREST.  For good and valuable consideration, Owner of
Collateral ("Owner") grants to Lender identified above a continuing security
interest in the Collateral described below to secure the obligations
described in this Agreement.

   2.  OBLIGATIONS.  The Collateral shall secure the payment and performance
of all of Borrower's and Owner's present and future, joint and/or several,
direct and indirect, absolute and contingent, express and implied,
indebtedness, (including costs of collection, legal expenses and attorneys'
fees, incurred by Lender upon the occurrence of a default under this
Agreement, in collecting or enforcing payment of such indebtedness, or
preserving, protecting or realizing on the Collateral herein), liabilities,
obligations and covenants (cumulatively "Obligations") to Lender including
(without limitation) those arising under or pursuant to:

      a.  this Agreement and the following promissory notes and agreements:


  INTEREST   PRINCIPAL AMOUNT/     FUNDING/      MATURITY    CUSTOMER    LOAN
    RATE       CREDIT LIMIT    AGREEMENT DATE      DATE       NUMBER    NUMBER
Variable       3,000,000          12/31/96       6/30/98                533551
Variable         510,000          12/29/95       1/1/01                 533552
Variable         640,000          12/29/95       1/1/01                 533553
Variable         500,000           5/10/96       2/10/97                533717
Variable       1,500,000          12/31/96       6/30/98                533910
Variable       1,500,000          12/31/96       6/30/98                533909
Variable         400,000          11/25/96       12/1/98                533932

*schedule continued on page 4

  b.  all other present or future, Obligations of Borrower or Owner to Lender
      (whether incurred for the same or different purposes than the foregoing);
  c.  all renewals, extensions, amendments, modifications, replacements or
      substitutions to any of the foregoing; and
  d.  applicable law.

   3. COLLATERAL.  The Collateral shall consist of all of the following-
described property and Owner's rights, title and interest in such property
whether now owned or hereafter acquired by Owner and wherever located:

     /x/  All accounts, contract rights and rights to payment in money or in
          kind for goods sold or leased or for services rendered, and all
          guarantees and security therefor; all returned or repossessed goods
          arising from or relating to any account, contract right, or right to
          payment; and any rights of Owner as an unpaid seller of goods or
          services; including, but not limited to, the accounts and contract
          rights described on Schedule A attached hereto and incorporated herein
          by this reference;

     /x/  All chattel paper, together with all guarantees and security
          therefor; including, but not limited to, the chattel paper described
          on Schedule A attached hereto and incorporated herein by this
          reference;

     /x/  All documents of title including, but not limited to, the documents
          described on Schedule A attached hereto and incorporated herein by
          this reference;

     /x/  All equipment, machinery, and vehicles including, but not limited
          to, the equipment described on Schedule A attached hereto and
          incorporated herein by this reference;

     / /  All fixtures, including, but not limited to, the fixtures located
          or to be located on the real property described on Schedule B
          attached hereto and incorporated herein by this reference;

     /X/  All general intangibles of any kind or nature including, but not
          limited to, goodwill, literary rights, copyrights, trademarks and
          patents; all securities, stocks, bonds, partnership interests, and
          similar devices; any right to performance or payment, including,
          without limitation, rights to receive dividends, tax refunds,
          insurance claims and insurance proceeds, pension payments, and
          other disbursements; things in action; and rights in intangible
          property of any kind, specifically including, but not limited to,
          the general intangibles described on Schedule A attached hereto and
          incorporated herein by this reference;

     /x/  All instruments including, but not limited to, the instruments
          described on Schedule A attached hereto and incorporated herein by
          this reference;

     /x/  All inventory (goods, merchandise, and other personal property)
          which are held for sale or lease, or are furnished or to be furnished
          under any contract of service or are raw materials, work-in-process,
          supplies, or materials used or consumed in Owner's business, and any
          right of Owner as an unpaid seller of goods or services, including,
          but not limited to, the inventory described on Schedule A attached
          hereto and incorporated herein by this reference;

     / /  All minerals or the like located on or related to the real property
          described on Schedule B attached hereto and incorporated herein by
          this reference;

     / /  All standing timber located on the real property described on
          Schedule B attached hereto and incorporated herein by this reference;

     / /  Other:


All monies, instruments, and savings, checking or other deposit accounts that
are now or in the future in Lender's custody or control (excluding IRA,
Keogh, trust accounts, and deposits subject to tax penalties if so assigned);
All accessions, accessories, additions, amendments, attachments,
modifications, replacements and substitutions to any of the above;
All proceeds and products of any of the above;
All policies of insurance pertaining to any of the above as well as any
proceeds and unearned premiums pertaining to such policies; and
All books and records pertaining to any of the above.

<PAGE>

   4.  OWNER'S TAXPAYER IDENTIFICATION.  Owner's social security number or
federal taxpayer identification number is:__________________________________.

   5.  RESIDENCY/LEGAL STATUS.  / / Owner is an individual(s) and a resident
of the state of: ___________________________________________________________.
/x/ Owner is a: Corporation duly organized, validly existing and in good
standing under the laws of the state of:  Minnesota

   6.  REPRESENTATIONS, WARRANTIES, AND COVENANTS.  Owner represents,
warrants and covenants to Lender that:

      (a) Owner is and shall remain the sole owner of the Collateral;
      (b) Neither Owner nor, to the best of Owner's knowledge, has any other
          party used, generated, released, discharged, stored, or disposed of
          any hazardous material, toxic substance, or related material on any
          of the Collateral. Owner shall not commit or permit such actions to
          be taken in the future. The term "Hazardous Materials" shall mean any
          substance, material, or waste which is or becomes regulated by any
          governmental authority including, but not limited to, (i) petroleum;
          (ii) asbestos; (iii) polychlorinated biphenyls; (iv) those substances,
          materials or wastes designated as a "hazardous substance" pursuant to
          Section 311 of the Clean Water Act or listed pursuant to Section 307
          of the Clean Water Act or any amendments or replacements to these
          statutes; (v) those substances, materials or wastes defined as a
          "hazardous waste" pursuant to Section 1004 of the Resource
          Conservation and Recovery Act or any amendments or replacements to
          that statute; or (vi) those substances, materials or wastes defined as
          a "hazardous substance" pursuant to Section 101 of the Comprehensive
          Environmental Response, Compensation and Liability Act, or any
          amendments or replacements to that statute;
      (c) Owner's chief executive office, chief place of business, office
          where its business records are located, or residence is the address
          identified above. Owner's other executive offices, places of business,
          locations of its business records, or domiciles are described on
          Schedule C attached hereto and incorporated herein by this reference.
          Owner shall immediately advise Lender in writing of any change in or
          addition to the foregoing addresses;
      (d) Owner shall not become a party to any restructuring of its form of
          business or participate in any consolidation, merger, liquidation or
          dissolution without providing Lender with thirty (30) or more days'
          prior written notice of change;
      (e) Owner shall notify Lender of the nature of any intended change of
          Owner's name, or the use of any trade name, and the effective date of
          such change;
      (f) The Collateral is and shall at all times remain free of all tax and
          other liens, security interests, encumbrances and claims of any kind
          except for those belonging to Lender and those described on Schedule D
          attached hereto and incorporated herein by this reference. Without
          waiving the event of default as a result thereof, Owner shall take any
          action and execute any document needed to discharge the foregoing
          liens, security interests, encumbrances and claims;
      (g) Owner shall defend the Collateral against all claims and demands of
          all persons at any time claiming any interest therein;
      (h) All of the goods, fixtures, minerals or the like, and standing
          timber constituting the Collateral is and shall be located at Owner's
          executive offices, places of business, residence and domiciles
          specifically described in this Agreement;
      (i) Owner shall provide Lender with possession of all chattel paper and
          instruments constituting the Collateral unless otherwise agreed by
          Lender. Owner shall promptly mark all chattel paper, instruments, and
          documents constituting the Collateral to show that the same are
          subject to Lender's security interest;
      (j) All of Owner's accounts or contract rights; chattel paper;
          documents; general intangibles; instruments; and federal, state,
          county, and municipal government and other permits and licenses;
          trusts, liens, contracts, leases, and agreements constituting the
          Collateral are and shall be valid, genuine and legally enforceable
          obligations and rights belonging to Owner and not subject to any
          claim, defense, set-off or counterclaim of any kind;
      (k) Owner shall not amend, modify, replace, or substitute any account
          or contract right; chattel paper; document; general intangible; or
          instrument constituting the Collateral without the prior consent of
          Lender, which shall not be unreasonably withheld;
      (l) Owner has the right and is duly authorized to enter into and perform
          its obligations under this Agreement. Owner's execution and
          performance of these obligations do not and shall not conflict with
          the provisions of any statute, regulation, ordinance, rule of law,
          contract or other agreement which now or hereafter be binding on
          Owner;
      (m) No action or proceeding is pending against Owner which might result
          in any material adverse change in its business operations or financial
          condition or materially affect the Collateral;
      (n) Owner has not violated and shall not violate any applicable federal,
          state, county or municipal statute, regulation or ordinance (including
          but not limited to those governing Hazardous Materials) which may
          materially and adversely affect its business operations or financial
          condition or the Collateral;
      (o) Owner shall, upon Lender's request, deposit all proceeds of the
          Collateral into an account or accounts maintained by Owner or Lender
          at Lender's institution;
      (p) Owner will, upon receipt, deliver to Lender as additional
          Collateral all securities distributed on account of the Collateral
          such as stock dividends and securities resulting from stock splits,
          reorganizations and recapitalizations; and
      (q) This Agreement and the obligations described in this Agreement are
          executed and incurred for business and not consumer purposes.

   7.  SALE OF COLLATERAL.  Owner shall not assign, convey, lease, sell or
transfer any of the Collateral to any third party without the prior written
consent of Lender except for sales of inventory to buyers in the ordinary
course of business.

   8.  FINANCING STATEMENTS AND OTHER DOCUMENTS.  Owner shall take all
actions and execute all documents required by Lender to attach, perfect and
maintain Lender's security interest in the Collateral and establish and
maintain Lender's right to receive the payment of the proceeds of the
Collateral including, but not limited to, executing any financing statements,
fixture filings, continuation statements, notices of security interest and
other documents required by the Uniform Commercial Code and other applicable
law. Owner shall pay the costs of filing such documents in all offices
wherever filing or recording is deemed by Lender to be necessary or
desirable. Lender shall be entitled to perfect its security interest in the
Collateral by filing carbon, photographic or other reproductions of the
aforementioned documents with any authority required by the Uniform
Commercial Code or other applicable law. Lender may execute and file any
financing statements, as well as extensions, renewals and amendments of
financing statements in such form as Lender may require to perfect and
maintain perfection of any security interest granted in this Agreement. Owner
appoints Lender as its agent and attorney-in-fact to endorse Owner's name on
all instruments and other remittances payable to Owner with respect to the
Collateral. This power of attorney is coupled with an interest and is
irrevocable.

   9.  INQUIRIES AND NOTIFICATION TO THIRD PARTIES. Owner hereby authorizes
Lender to contact any third party and make any inquiry pertaining to Owner's
financial condition or the Collateral. In addition, Lender is authorized to
provide oral or written notice of its security interest in the Collateral to
any third party.

   10.  COLLECTION OF INDEBTEDNESS FROM THIRD PARTIES.  Lender shall be
entitled to notify, and upon request of Lender Owner shall notify any account
debtor or other third party (including, but not limited to, insurance
companies) to pay any indebtedness or obligation owing to Owner and
constituting the Collateral (cumulatively "Indebtedness") to Lender whether
or not a default exists under this Agreement. Owner shall diligently collect
the indebtedness owing to Owner from its account debtors and other third
parties until the giving of such notification. In the event that Owner
possesses or receives possession of any instruments or other remittances with
respect to the indebtedness following the giving of such notification or if
the instruments or other remittances constitute the prepayment of any
indebtedness or the payment of any insurance proceeds, Owner shall hold such
instruments and other remittances in trust for Lender apart from its other
property, endorse the instruments and other remittances to Lender, and
immediately provide Lender with possession of the instruments and other
remittances. Lender shall be entitled, but not required, to collect (by legal
proceedings or otherwise), extend the time for payment, compromise, exchange
or release any obligor or collateral upon, or otherwise settle any of the
indebtedness whether or not an event of default exists under this Agreement.
Lender shall not be liable to Owner for any action, error, mistake, omission
or delay pertaining to the actions described in this paragraph or any damages
resulting therefrom.

   11.  POWER OF ATTORNEY.  Owner hereby appoints Lender as its
attorney-in-fact to endorse Owner's name on all instruments and other
remittances payable to Owner with respect to the Indebtedness or other
documents pertaining to Lender's actions in connection with the indebtedness.
In addition, Lender shall be entitled, but not required, to perform any
action or execute any document required to be taken or executed by Owner
under this Agreement. Lender's performance of such action or execution of
such documents shall not relieve Owner from any obligation or cure any
default under this Agreement. The powers of attorney described in this
paragraph are coupled with an interest and are irrevocable.

   12.  USE AND MAINTENANCE OF COLLATERAL.  Owner shall use the Collateral
solely in the ordinary course of its business, for the usual purposes
intended by the manufacturer (if applicable), with due care, and in
compliance with the laws, ordinances, regulation requirements and rules of
all federal, state, county and municipal authorities including environmental
laws and regulations and insurance policies. Owner shall not make any
alterations, additions or improvements to the Collateral without the prior
written consent of Lender. Without limiting the foregoing, all alterations,
additions and improvements made to the Collateral shall be subject to the
security interest belonging to Lender, shall not be removed without the prior
written consent of Lender, and shall be made at Owner's sole expense. Owner
shall take all actions and make any repairs or replacements needed to
maintain the Collateral in good condition and working order.

                                                            Page 2 of 5 ________

<PAGE>

   13. LOSS OR DAMAGE. Owner shall bear the entire risk of any loss, theft,
destruction or damage (cumulatively "Loss or Damage") to all or any part of
the Collateral. In the event of any Loss or Damage, Owner will either restore
the Collateral to its previous condition, replace the Collateral with similar
property acceptable to Lender in its sole discretion, or pay or cause to be
paid to Lender the decrease in the fair market value of the affected
Collateral.

   14. INSURANCE.  The Collateral will be kept insured for its full value
against all hazards including loss or damage caused by fire, collision, theft
or other casualty. If the Collateral consists of a motor vehicle, Owner will
obtain comprehensive and collision coverage in amounts at least equal to the
actual cash value of the vehicle with deductibles not to exceed $____________.
Insurance coverage obtained by Owner shall be from a licensed insurer subject
to Lender's approval. Owner shall assign to Lender all rights to receive
proceeds of insurance not exceeding the amount owed under the obligations
described above, and direct the insurer to pay all proceeds directly to
Lender. The insurance policies shall require the insurance company to provide
Lender with at least thirty (30) days' written notice before such policies
are altered or cancelled in any manner. The insurance policies shall name
Lender as a loss payee and provide that no act or omission of Owner or any
other person shall affect the right of Lender to be paid the insurance
proceeds pertaining to the loss or damage of the Collateral. In the event
Owner fails to acquire or maintain insurance, Lender (after providing notice
as may be required by law) may in its discretion procure appropriate
insurance coverage upon the Collateral and charge the insurance cost as an
advance of principal under the promissory note. Owner shall furnish Lender
with evidence of insurance indicating the required coverage. Lender may act
as attorney-in-fact for Owner in making and settling claims under insurance
policies, cancelling any policy or endorsing Owner's name on any draft or
negotiable instrument drawn by any insurer.

   15. INDEMNIFICATION. Lender shall not assume or be responsible for the
performance of any of Owner's obligations with respect to the Collateral
under any circumstances. Owner shall immediately provide Lender with written
notice of and indemnify and hold Lender and its shareholders, directors,
officers, employees and agents harmless from all claims, damages, liabilities
(including attorneys' fees and legal expenses), causes of action, actions,
suits and other legal proceedings (cumulatively "Claims") pertaining to its
business operations or the Collateral including, but not limited to, those
arising from Lender's performance of Owner's obligations with respect to the
Collateral. Owner, upon the request of Lender, shall hire legal counsel to
defend Lender from such Claims, and pay the attorneys' fees, legal expenses
and other costs to the extent permitted by applicable law, incurred in
connection therewith. In the alternative, Lender shall be entitled to employ
its own legal counsel to defend such Claims at Owner's cost.

   16. TAXES AND ASSESSMENTS. Owner shall execute and file all tax returns
and pay all taxes, licenses, fees and assessments relating to its business
operations and the Collateral (including, but not limited to, income taxes,
personal property taxes, withholding taxes, sales taxes, use taxes, excise
taxes and workers' compensation premiums) in a timely manner.

   17.  INSPECTION OF COLLATERAL AND BOOKS AND RECORDS.  Owner shall allow
Lender or its agents to examine, inspect and make abstracts and copies of the
Collateral and Owner's books and records pertaining to Owner's business
operations and financial condition or the Collateral during normal business
hours. Owner shall provide any assistance required by Lender for these
purposes. All of the signatures and information pertaining to the Collateral
or contained in the books and records shall be genuine, true, accurate and
complete in all respects.

   18.  DEFAULT.  Owner shall be in default under this Agreement in the
event that Owner, Borrower or any guarantor:

     (a) fails to make any payment under this Agreement or any other
         indebtedness to Lender when due;
     (b) fails to perform any obligation or breaches any warranty or covenant
         to Lender contained in this Agreement or any other present or future
         written agreement regarding this or any other indebtedness to Lender;
     (c) provides or causes any false or misleading signature or
         representation to be provided to Lender;
     (d) allows the Collateral to be destroyed, lost or stolen, damaged in
         any material respect, or subject to seizure or confiscation;
     (e) seeks to revoke, terminate or otherwise limit its liability under
         any continuing guaranty;
     (f) permits the entry or service of any garnishment, judgment, tax levy,
         attachment or lien against Owner, any guarantor, or any of their
         property;
     (g) dies, becomes legally incompetent, is dissolved or terminated,
         ceases to operate its business, becomes insolvent, makes an assignment
         for the benefit of creditors, or becomes the subject of any bankruptcy,
         insolvency or debtor rehabilitation proceeding;
     (h) allows the Collateral to be used by anyone to transport or store
         goods, the possession, transportation, or use of which, is illegal; or
     (i) causes Lender in good faith to deem itself insecure for any reason.

   19.  RIGHTS OF LENDER ON DEFAULT.  If there is a default under this
Agreement, Lender shall be entitled to exercise one or more of the following
remedies without notice or demand (except as required by law):

     (a) to declare the Obligations immediately due and payable in full;
     (b) to collect the outstanding Obligations with or without resorting to
         judicial process;
     (c) to retain any instruments or other remittances constituting the
         Collateral;
     (d) to take possession of any Collateral in any manner permitted by law;
     (e) to apply for and obtain, without notice and upon ex parte application,
         the appointment of a receiver for the Collateral without regard to
         Owner's financial condition or solvency, the adequacy of the Collateral
         to secure the payment or performance of the obligations, or the
         existence of any waste to the Collateral;
     (f) to require Owner to deliver and make available to Lender any
         Collateral at a place reasonably convenient to Owner and Lender;
     (g) to sell, lease or otherwise dispose of any Collateral and collect
         any deficiency balance with or without resorting to legal process;
     (h) to set-off Owner's obligations against any amounts due to Owner
         including, but not limited to, monies, instruments, and deposit
         accounts maintained with Lender; and
     (i) to exercise all other rights available to Lender under any other
         written agreement or applicable law.

Lender's rights are cumulative and may be exercised together, separately, and
in any order. If notice to Owner of intended disposition of Collateral is
required by law, Lender will provide reasonable notification of the time and
place of any sale or intended disposition as required under the Uniform
Commercial Code. In the event that Lender institutes an action to recover any
Collateral or seeks recovery of any Collateral by way of a prejudgment remedy
in an action against Owner, Owner waives the posting of any bond which might
otherwise be required. Lender's remedies under this paragraph are in addition
to those available at common law, such as setoff.

   20.  APPLICATION OF PAYMENTS.  Whether or not a default has occurred under
this Agreement, all payments made by or on behalf of Owner and all credits
due to Owner from the disposition of the Collateral or otherwise may be
applied against the amounts paid by Lender (including attorneys' fees and
legal expenses) in connection with the exercise of its rights or remedies
described in this Agreement and any interest thereon and then to the payment
of the remaining Obligations.

   21.  REIMBURSEMENT OF AMOUNTS EXPENDED BY LENDER.  Owner shall reimburse
Lender for all amounts (including attorneys' fees and legal expenses)
expended by Lender in the performance of any action required to be taken by
Owner or the exercise of any right or remedy belonging to Lender under this
Agreement, together with interest thereon at the lower of the highest rate
described in any promissory note or credit agreement executed by Borrower or
Owner or the highest rate allowed by law from the date of payment until the
date of reimbursement. These sums shall be included in the definition of
Obligations, shall be secured by the Collateral identified in this Agreement
and shall be payable upon demand.

   22.  ASSIGNMENT.  Owner shall not be entitled to assign any of its rights,
remedies or obligations described in this Agreement without the prior written
consent of Lender. Consent may be withheld by Lender in its sole discretion.
Lender shall be entitled to assign some or all of its rights and remedies
described in this Agreement without notice to or the prior consent of Owner
in any manner.

   23.  MODIFICATION AND WAIVER.  The modification or waiver of any of
Owner's Obligations or Lender's rights under this Agreement must be contained
in a writing signed by Lender. Lender may perform any of Owner's Obligations
or delay or fail to exercise any of its rights without causing a waiver of
those Obligations or rights. A waiver on one occasion shall not constitute a
waiver on any other occasion.  Owner's Obligations under this Agreement shall
not be affected if Lender amends, compromises, exchanges, fails to exercise,
impairs or releases any of the obligations belonging to any Owner or third
party or any of its rights against any Owner, third party or collateral.

   24.  SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of Owner and Lender and their respective successors,
assigns, trustees, receivers, administrators, personal representatives,
legatees, and devisees.

   25.  NOTICES.  Any notice or other communication to be provided under this
Agreement shall be in writing and sent to the parties at the addresses
described in this Agreement or such other address as the parties may
designate in writing from time to time.

   26.  SEVERABILITY.  If any provision of this Agreement violates the law or
is unenforceable, the rest of the Agreement shall remain valid.

<PAGE>

   27.  APPLICABLE LAW.  This Agreement shall be governed by the laws of the
state indicated in Lender's address. Owner consents to the jurisdiction and
venue of any court located in the state indicated in Lender's address in the
event of any legal proceeding pertaining to the negotiation, execution,
performance or enforcement of any term or condition contained in this
Agreement or any related document and agrees not to commence or seek to
remove such legal proceeding in or to a different court.

   28.  COLLECTION COSTS.  If Lender hires an attorney to assist in
collecting any amount due or enforcing any right or remedy under this
Agreement, Owner agrees to pay Lender's attorneys' fees and collection costs.

   29.  MISCELLANEOUS.  This Agreement is executed for commercial purposes.
Owner shall supply information regarding Owner's business operations and
financial condition or the Collateral in the form and manner as requested by
Lender from time to time. All information furnished by Owner to Lender shall
be true, accurate and complete in all respects. Owner and Lender agree that
time is of the essence. Owner waives presentment, demand for payment, notice
of dishonor and protest except as required by law. All references to Owner in
this Agreement shall include all parties signing below except Lender. If
there is more than one Owner, their obligations shall be joint and several.
This Agreement shall remain in full force and effect until Lender provides
Owner with written notice of termination. This Agreement and any related
documents represent the complete and integrated understanding between Owner
and Lender pertaining to the terms and conditions of those documents.

   30.  WAIVER OF JURY TRIAL. LENDER AND OWNER HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN
RESPECT TO ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN
CONJUNCTION WITH THE PROMISSORY NOTE, THIS AGREEMENT AND ANY OTHER AGREEMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH OR THEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
LENDER MAKING THE LOAN EVIDENCED BY THE PROMISSORY NOTE.

   31.  ADDITIONAL TERMS:

In addition to all of its other rights, powers and remedies under this
Agreement, Lender shall, upon the occurrence and during the continuation of
any default hereunder, have the right (i) to enter upon the premises of
Borrower or Owner or any other place or places where the Collateral is
located through self-help and without judicial process or giving Borrower or
Owner notice and opportunity for a hearing on the validity of Lender's claim
and without any obligation to pay rent; (ii) to prepare, assemble or process
the collateral for sale, lease, or other disposition; (iii) to remove the
Collateral to the premises of Lender or any agent of Lender, for such time as
Lender may desire, in order to collect or dispose of the Collateral; (iv) to
require Borrower or Owner to assemble the Collateral and make it available to
Lender at a place to be designated by Lender; and (v) to require Borrower or
Owner to make available to Lender all computer and other equipment of
Borrower or Owner containing books and records pertaining to the Collateral
(and the assistance of the employees of Borrower or Owner having
responsibility for such equipment) and to use such computer and other
equipment at no charge for the purposes of obtaining information pertaining
to the Collateral, including by making copies of computer and other files and
records. To the extent necessary or desirable to enable Lender to dispose of
the Collateral, Lender is hereby granted a license or other right to use,
without charge, Borrower's or Owner'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 as it pertains to the Collateral
or in advertising for sale or lease for the disposition of any of the
Collateral, and Borrower's or Owner's rights under all licenses and all
franchise agreements shall to such extent and for such purpose inure to the
Lender's benefit.

*2a schedule continued:


Interest Rate   Principal Amount   Agreement Date   Maturity Date   Loan Number
-------------   ----------------   --------------   -------------   -----------
 Variable          125,000            3/21/94          4/01/00        532784
 Fixed             300,000            9/24/93          5/01/99        532693



Owner acknowledges that Owner has read, understands, and agrees to the terms
and conditions of this Agreement.

Dated: December 31, 1996





OWNER: Nortech Systems Incorporated         OWNER:

______________________________________      ___________________________________
 Garry M. Anderly
 Vice President


OWNER:                                      OWNER:

______________________________________      ___________________________________


OWNER:                                      OWNER:

______________________________________      ___________________________________


OWNER:                                      OWNER:

______________________________________      ___________________________________


                                                                  Page 4 of ____


<PAGE>


                                      SCHEDULE A










                                      SCHEDULE B


The name of the record owner is:  _____________________________________________






                                      SCHEDULE C







                                      SCHEDULE D