<PAGE>   1

                                                              EXHIBIT 10.37

                             BUSINESS LOAN AGREEMENT


<TABLE>
<CAPTION>
     PRINCIPAL        LOAN DATE    MATURITY    LOAN NO.     CALL   COLLATERAL     ACCOUNT       OFFICER   INITIALS
<S>                  <C>           <C>         <C>          <C>    <C>           <C>            <C>       <C>
  $10,000,000.00     12-31-1997    12-30-98     004615                           1735058640      DSB06
</TABLE>

References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

<TABLE>
<S>                                                      <C>
BORROWER:   TRANSCRYPT INTERNATIONAL, INC.    LENDER:    U.S. BANK NATIONAL ASSOCIATION D/B/A FIRST BANK N.A.
            4800 NW 1ST STREET                           233 SOUTH 13TH STREET
            LINCOLN, NE 68521                            LINCOLN, NE 68508
</TABLE>

THIS BUSINESS LOAN AGREEMENT BETWEEN TRANSCRYPT INTERNATIONAL, INC. ("BORROWER")
AND U.S. BANK NATIONAL ASSOCIATION D/B/A FIRST BANK N.A. ("LENDER") IS MADE AND
EXECUTED ON THE FOLLOWING TERMS AND CONDITIONS. BORROWER HAS RECEIVED PRIOR
COMMERCIAL LOANS FROM LENDER OR HAS APPLIED TO LENDER FOR A COMMERCIAL LOAN OR
LOANS AND OTHER FINANCIAL ACCOMMODATIONS, INCLUDING THOSE WHICH MAY BE DESCRIBED
ON ANY EXHIBIT OR SCHEDULE ATTACHED TO THIS AGREEMENT. ALL SUCH LOANS AND
FINANCIAL ACCOMMODATIONS, TOGETHER WITH ALL FUTURE LOANS AND FINANCIAL
ACCOMMODATIONS FROM LENDER TO BORROWER, ARE REFERRED TO IN THIS AGREEMENT
INDIVIDUALLY AS THE "LOAN" AND COLLECTIVELY AS THE "LOANS." BORROWER UNDERSTANDS
AND AGREES THAT: (A) IN GRANTING, RENEWING, OR EXTENDING ANY LOAN, LENDER IS
RELYING UPON BORROWER'S REPRESENTATIONS, WARRANTIES, AND AGREEMENTS, AS SET
FORTH IN THIS AGREEMENT; (B) THE GRANTING, RENEWING, OR EXTENDING OF ANY LOAN BY
LENDER AT ALL TIMES SHALL BE SUBJECT TO LENDER'S SOLE JUDGMENT AND DISCRETION;
AND (C) ALL SUCH LOANS SHALL BE AND SHALL REMAIN SUBJECT TO THE FOLLOWING TERMS
AND CONDITIONS OF THIS AGREEMENT.

TERM. This Agreement shall be effective as of December 31, 1997, and shall
continue thereafter until all Indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.

DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.

     AGREEMENT. The word "Agreement" means this Business Loan Agreement, as this
     Business Loan Agreement may be amended or modified from time to time by
     written agreement of the parties, together with all exhibits and schedules
     attached to this Business Loan Agreement from time to time.

     BORROWER. The word "Borrower" means Transcrypt International, Inc.

     CERCLA. The word "CERCLA" means the Comprehensive Environmental Response,
     Compensation, and Liability Act of 1980, as amended.

     CASH FLOW. The words "Cash Flow" mean net income after taxes, and exclusive
     of extraordinary gains and income, plus depreciation and amortization.

     COLLATERAL. The word "Collateral" means and includes without limitation all
     property and assets granted as collateral security for a Loan, whether real
     or personal property, whether granted directly or indirectly, whether
     granted now or in the future, and whether granted in the form of a security
     interest, mortgage, deed of trust, assignment, pledge, chattel mortgage,
     chattel trust, factor's lien, equipment trust, conditional sale, trust
     receipt, lien, charge, lien or title retention contract, lease or
     consignment intended as a security device, or any other security or lien
     interest whatsoever, whether created by law, contract, or otherwise.

     DEBT. The word "Debt" means all of Borrower's liabilities excluding
     Subordinated Debt.

     ERISA. The word "ERISA" means the Employee Retirement Income Security Act
     of 1974, as amended.

     EVENT OF DEFAULT. The words "Event of Default" mean and include without
     limitation any of the Events of Default set forth below in the section
     titled "EVENTS OF DEFAULT."

     GRANTOR. The word "Grantor" means and includes without limitation each and
     all of the persons or entities granting a Security Interest in any
     Collateral for the Indebtedness, including without limitation all Borrowers
     granting such a Security interest.

     GUARANTOR. The word "Guarantor" means and includes without limitation each
     and all of the guarantors, sureties, and accommodation parties in
     connection with any Indebtedness.

     INDEBTEDNESS. The word "Indebtedness" means and includes without limitation
     all Loans, together with all other obligations, debts and liabilities of
     Borrower to Lender, or any one or more of them, whether now or hereafter
     existing, voluntary or involuntary, absolute or contingent, liquidated or
     unliquidated; whether Borrower may be liable individually or jointly with
     others; whether Borrower may be obligated as a guarantor, surety, or
     otherwise.

     LENDER. The word "Lender" means U.S. Bank National Association d/b/a First
     Bank N.A., its successors and assigns.

     LIQUID ASSETS. The words "Liquid Assets" mean Borrower's cash on hand plus
     Borrower's readily marketable securities.

     LOAN. The word "Loan" or "Loans" means and includes without limitation any
     and all commercial loans and financial accommodations from Lender to
     Borrower, whether now or hereafter existing, and however evidenced,
     including without limitation those loans and financial accommodations
     described herein or described on any exhibit or schedule attached to this
     Agreement from time to time.

     NOTE. The word "Note" means and includes without limitation Borrower's
     promissory note or notes, if any, evidencing Borrower's Loan obligations in
     favor of Lender, as well as any substitute, replacement or refinancing note
     or notes therefor.

     PERMITTED LIENS. The words "Permitted Liens" mean: (a) liens and security
     interests securing indebtedness owed by Borrower to Lender; (b) liens for
     taxes, assessments, or similar charges either not yet due or being
     contested in good faith; (c) liens of materialmen, mechanics, warehousemen,
     or carriers, or other like liens arising in the ordinary course of business
     and securing obligations which are not yet delinquent; (d) purchase money
     liens or purchase money security interests upon or in any property acquired
     or held by Borrower in the ordinary course of business to secure
     indebtedness outstanding on the date of this Agreement or permitted to be
     incurred under the paragraph of this Agreement titled "Indebtedness and
     Liens"; (e) liens and security interests which, as of the date of this
     Agreement, have been disclosed to and approved by


<PAGE>   2

                                                                               2

                             BUSINESS LOAN AGREEMENT
                                   (CONTINUED)


     the Lender in writing; and (f) those liens and security interests which in
     the aggregate constitute an immaterial and insignificant monetary amount
     with respect to the net value of Borrower's assets.

     RELATED DOCUMENTS. The words "Related Documents" mean and include without
     limitation all promissory notes, credit agreements, loan agreements,
     environmental agreements, guaranties, security agreements, mortgages, deeds
     of trust, and all other instruments, agreements and documents, whether now
     or hereafter existing, executed in connection with the Indebtedness.

     SECURITY AGREEMENT. The words "Security Agreement" mean and include without
     limitation any agreements, promises, covenants, arrangements,
     understandings or other agreements, whether created by law, contract, or
     otherwise, evidencing, governing, representing, or creating a Security
     Interest.

     SECURITY INTEREST. The words "Security Interest" mean and include without
     limitation any type of collateral security, whether in the form of a lien,
     charge, mortgage, deed of trust, assignment, pledge, chattel mortgage,
     chattel trust, factor's lien, equipment trust, conditional sale, trust
     receipt, lien or title retention contract, lease or consignment intended as
     a security device, or any other security or lien interest whatsoever,
     whether created by law, contract, or otherwise.

     SARA. The word "SARA" means the Superfund Amendments and Reauthorization
     Act of 1986 as now or hereafter amended.

     SUBORDINATED DEBT. The words "Subordinated Debt" mean Indebtedness and
     liabilities of Borrower which have been subordinated by written agreement
     to indebtedness owed by Borrower to Lender in form and substance acceptable
     to Lender.

     TANGIBLE NET WORTH. The words "Tangible Net Worth" mean Borrower's total
     assets excluding all intangible assets (i.e., goodwill, trademarks,
     patents, copyrights, organizational expenses, and similar intangible items,
     but including leaseholds and leasehold improvements) less total Debt.

     WORKING CAPITAL. The words "Working Capital" mean Borrower's current
     assets, excluding prepaid expenses, less Borrower's current liabilities.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Loan Advance and each subsequent Loan Advance under this Agreement shall be
subject to the fulfillment to Lender's satisfaction of all of the conditions set
forth in this Agreement and in the Related Documents.

     LOAN DOCUMENTS. Borrower shall provide to Lender in form satisfactory to
     Lender the following documents for the Loan: (a) the Note, (b) Security
     Agreements granting to Lender security interests in the Collateral, (c)
     Financing Statements perfecting Lender's Security interests; (d) evidence
     of insurance as required below; and (e) any other documents required under
     this Agreement or by Lender or its counsel.

     BORROWER'S AUTHORIZATION. Borrower shall have provided in form and
     substance satisfactory to Lender property certified resolutions, duly
     authorizing the execution and delivery of this Agreement, the Note and the
     Related Documents, and such other authorizations and other documents and
     instruments as Lender or its counsel, in their sole discretion, may
     require.

     PAYMENT OF FEES AND EXPENSES. Borrower shall have paid to Lender all fees,
     charges, and other expenses which are then due and payable as specified in
     this Agreement or any Related Document.

     REPRESENTATIONS AND WARRANTIES. The representations and warranties set
     forth in this Agreement, in the Related Documents, and in any document or
     certificate delivered to Lender under this Agreement are true and correct.

     NO EVENT OF DEFAULT. There shall not exist at the time of any advance a
     condition which would constitute an Event of Default under this Agreement.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:

     ORGANIZATION. Borrower is a corporation which is duly organized, validly
     existing, and in good standing under the laws of the state of Borrower's
     incorporation and is validly existing and in good standing in all states in
     which Borrower is doing business. Borrower has the full power and authority
     to own its properties and to transact the businesses in which it is
     presently engaged or presently proposes to engage. Borrower also is duly
     qualified as a foreign corporation and is in good standing in all states in
     which the failure to so qualify would have a material adverse effect on its
     businesses or financial condition.

     AUTHORIZATION. The execution, delivery, and performance of this Agreement
     and all Related Documents by Borrower, to the extent to be executed,
     delivered or performed by Borrower, have been duly authorized by all
     necessary action by Borrower, do not require the consent or approval of any
     other person, regulatory authority or governmental body; and do not
     conflict with, result in a violation of, or constitute a default under (a)
     any provision of its articles of incorporation or organization, or bylaws,
     or any agreement or other instrument binding upon Borrower or (b) any law,
     governmental regulation, court decree, or order applicable to Borrower.

     FINANCIAL INFORMATION. Each financial statement of Borrower supplied to
     Lender truly and completely disclosed Borrower's financial condition as of
     the date of the statement, and there has been no material adverse change in
     Borrower's financial condition subsequent to the date of the most recent
     financial statement supplied to Lender. Borrower has no material contingent
     obligations except as disclosed in such financial statements.

     LEGAL EFFECT. This Agreement constitutes, and any instrument or agreement
     required hereunder to be given by Borrower when delivered will constitute,
     legal, valid and binding obligations of Borrower enforceable against
     Borrower in accordance with their respective terms.

     PROPERTIES. Except as contemplated by this Agreement or as previously
     disclosed in Borrower's financial statements or in writing to Lender and as
     accepted by Lender, and except for property tax liens for taxes not
     presently due and payable,


<PAGE>   3

                                                                               3

                             BUSINESS LOAN AGREEMENT
                                   (CONTINUED)


     Borrower owns and has good title to all of Borrowers properties free and
     clear of all Security Interests, and has not executed any security
     documents or financing statements relating to such properties. All of
     Borrower's properties are titled in Borrower's legal name, and Borrower has
     not used, or filed a financing statement under, any other name for at least
     the last five (5) years.

     HAZARDOUS SUBSTANCES. The terms "hazardous waste," "hazardous substance,"
     "disposal," "release," and "threatened release," as used in this Agreement,
     shall have the same meanings as set forth in the "CERCLA," "SARA," the
     Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.,
     the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et
     seq., or other applicable state or Federal laws, rules, or regulations
     adopted pursuant to any of the foregoing. Except as disclosed to and
     acknowledged by Lender in writing, Borrower represents and warrants that:
     (a) During the period of Borrower's ownership of the properties, there has
     been no use, generation, manufacture, storage, treatment, disposal, release
     or threatened release of any hazardous waste or substance by any person on,
     under, about or from any of the properties in violation of applicable
     environmental laws. (b) Borrower has no knowledge of, or reason to believe
     that there has been (i) any use, generation, manufacture, storage,
     treatment, disposal, release, or threatened release of any hazardous waste
     or substance on, under, about or from the properties by any prior owners or
     occupants of any of the properties in violation of applicable environmental
     laws, or (ii) any actual or threatened litigation or claims of any kind by
     any person relating to such matters. (c) Neither Borrower nor any tenant,
     contractor, agent or other authorized user of any of the properties shall
     use, generate, manufacture, store, treat, dispose of, or release any
     hazardous waste or substance on, under, about or from any of the properties
     in violation of applicable environmental laws; and any such activity shall
     be conducted in compliance with all applicable federal, state, and local
     laws, regulations, and ordinances, including without limitation those laws,
     regulations and ordinances described above. Borrower authorizes Lender and
     its agents to enter upon the properties to make such reasonable inspections
     and tests as Lender may deem appropriate to determine compliance of the
     properties with this section of the Agreement. Any inspections or tests
     made by Lender shall be at Borrower's expense and for Lender's purposes
     only and shall not be construed to create any responsibility or liability
     on the part of Lender to Borrower or to any other person. The
     representations and warranties contained herein are based on Borrower's due
     diligence in investigating the properties for hazardous waste and hazardous
     substances. Borrower hereby (a) releases and waives any future claims
     against Lender for indemnity or contribution in the event Borrower becomes
     liable for cleanup or other costs under any such laws, and (b) agrees to
     indemnify and hold harmless Lender against any and all claims, losses,
     liabilities, damages, penalties, and expenses which Lender may directly or
     indirectly sustain or suffer resulting from a breach of this section of the
     Agreement or as a consequence of any use, generation, manufacture, storage,
     disposal, release or threatened release occurring prior to Borrower's
     ownership or interest in the properties, whether or not the same was or
     should have been known to Borrower. The provisions of this section of the
     Agreement, including the obligation to indemnity, shall survive the payment
     of the Indebtedness and the termination or expiration of this Agreement and
     shall not be affected by Lender's acquisition of any interest in any of the
     properties, whether by foreclosure or otherwise.

     LITIGATION AND CLAIMS. No litigation, claim, investigation, administrative
     proceeding or similar action (including those for unpaid taxes) against
     Borrower is pending or threatened which would have a materially adverse
     affect on Borrower's net worth, and no other event has occurred which may
     materially adversely affect Borrower's financial condition or properties.

     TAXES. To the best of Borrower's knowledge, all tax returns and reports of
     Borrower that are or were required to be filed, have been filed, and all
     taxes, assessments and other governmental charges are current, except those
     presently being or to be contested by Borrower in good faith in the
     ordinary course of business and for which adequate reserves have been
     provided.

     LIEN PRIORITY. Unless otherwise previously disclosed to Lender in writing,
     Borrower has not entered into or granted any Security Agreements, or
     permitted the filing or attachment of any Security Interests on or
     affecting any of the Collateral directly or indirectly securing repayment
     of Borrower's Loan and Note, that would be prior or that may in any way be
     superior to Lender's Security Interests and rights in and to such
     Collateral.

     BINDING EFFECT. This Agreement, the Note, all Security Agreements directly
     or indirectly securing repayment of Borrower's Loan and Note and all of the
     Related Documents are binding upon Borrower as well as upon Borrower's
     successors, representatives and assigns, and are legally enforceable in
     accordance with their respective terms.

     COMMERCIAL PURPOSES. Borrower intends to use the Loan proceeds solely for
     business or commercial related purposes.

     EMPLOYEE BENEFIT PLANS. To the best of Borrower's knowledge each employee
     benefit plan as to which Borrower provides for it's employees, materially
     complies with all applicable requirements of law and regulations, and (i)
     no Reportable Event (as defined in ERISA) has occurred with respect to any
     such plan.

     LOCATION OF BORROWER'S OFFICES AND RECORDS. Borrower's place of business,
     or Borrower's Chief executive office, if Borrower has more than one place
     of business, is located at 4800 NW 1st Street, Lincoln, NE 68521. Unless
     Borrower has designated otherwise in writing this location is also the
     office or offices where Borrower keeps its records concerning the
     Collateral.

     INFORMATION. All information heretofore or contemporaneously herewith
     furnished by Borrower to Lender for the purposes of or in connection with
     this Agreement or any transaction contemplated hereby is, and all
     information hereafter furnished by or on behalf of Borrower to Lender will
     be, true and accurate in every material respect on the date as of which
     such information is dated or certified; and to the best of Borrower's
     knowledge none of such information is or will be incomplete by omitting to
     state any material fact necessary to make such information not misleading.

     SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Borrower understands and agrees
     that Lender, without independent investigation, is relying on the above
     representations and warranties in extending Loan Advances to Borrower.
     Borrower further agrees that the foregoing representation and warranties
     shall be continuing in nature and shall remain in full force and effect
     until such time as Borrowers Indebtedness shall be paid in full, or until
     this Agreement shall be terminated in the manner provided above, whichever
     is the last to occur.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
there is any outstanding indebtedness pursuant to this Agreement, Borrower will:

     LITIGATION. Promptly inform Lender in writing of (a) all material adverse
     changes in Borrower's financial condition, and (b) all existing litigation,
     claims, investigations, administrative proceedings or similar actions
     affecting Borrower which would materially affect the financial condition of
     Borrower.


<PAGE>   4

                                                                               4

                             BUSINESS LOAN AGREEMENT
                                   (CONTINUED)


     FINANCIAL RECORDS. Maintain its books and records in accordance with
     generally accepted accounting principles, applied on a consistent basis.

     FINANCIAL STATEMENTS. Furnish Lender with, as soon as available, but in no
     event later than one hundred twenty (120) days after the end of each fiscal
     year, Borrower's balance sheet and income statement for the year ended,
     audited by a certified public accountant satisfactory to Lender, and, as
     soon as available, but in no event later than forty five (45) days after
     the end of each fiscal quarter, Borrower's balance sheet and profit and
     loss statement for the period ended without footnotes, prepared and
     certified as correct to the best knowledge and belief by Borrower's chief
     financial officer or other officer or person acceptable to Lender. All
     financial reports required to be provided under this Agreement shall be
     prepared in accordance with generally accepted accounting principles,
     applied on a consistent basis subject to normal year-end adjustments, and
     certified by Borrower as being true and correct.

     ADDITIONAL INFORMATION. Furnish such additional information and statements,
     lists of assets and liabilities, agings of receivables and payables,
     inventory schedules, budgets, forecasts, tax returns, and other reports
     with respect to Borrower's financial condition and business operations as
     Lender may request from time to time.

     FINANCIAL COVENANTS AND RATIOS. Comply with the following covenants and
     ratios:

         TANGIBLE NET WORTH. Maintain a minimum Tangible Net Worth of not less
         than $70,000,000.00.

         FIXED CHARGE COVERAGE RATIO. Maintain at all times a ratio of not less
         than 1.50 to 1.00. For purposes of this covenant, "fixed charge
         coverage ratio" means the ratio of Borrower net income plus
         depreciation, amortization and any non-cash charges in the
         determination of Borrower net income divided by mandatory principal and
         interest payments, plus cash taxes and cash capital expenditures.

         FUNDED DEBT TO EBITDA. Maintain a ratio of Funded Debt to EBITDA for
         the twelve months ending 12/31/98 not greater than 2.00 to 1.00. For
         purposes of this covenant, "funded debt" shall mean Indebtedness for
         borrowed money for which an interest rate has been established.

         Except as provided above, all computations made to determine compliance
         with the requirements contained in this section shall be made in
         accordance with generally accepted accounting principles, applied on a
         consistent basis, and certified by Borrower as being true and correct.

     INSURANCE. Maintain fire and other risk insurance and public liability
     insurance, with respect to Borrower's properties and operations, in form,
     amounts, coverages and with insurance companies reasonably acceptable to
     Lender. Borrower, upon request of Lender, will deliver to Lender from time
     to time copies of policies or certificates of insurance, including
     stipulations that coverages will not be canceled or diminished without at
     least thirty (30) days' prior written notice to Lender. In connection with
     all policies covering assets in which Lender holds or is offered a security
     interest for the Loans, Borrower will provide Lender with such loss payable
     or other endorsements as Lender may reasonably require.

     GUARANTIES. Prior to disbursement of any Loan proceeds, furnish executed
     guaranties of the Loans in favor of Lender, executed by the guarantor named
     below, on Lender's forms, and in the amount and under the conditions
     spelled out in those guaranties.

         Guarantor                    Amount
     E.F. Johnson Company            Unlimited

     OTHER AGREEMENTS. Comply with all terms and conditions of all other
     agreements, whether now or hereafter existing, between Borrower and any
     other party and notify Lender immediately in writing of any default in
     connection with any other such agreements.

     LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
     operations, unless specifically consented to the contrary by Lender in
     writing.

     TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
     indebtedness and obligations, including without limitation all assessments,
     taxes, governmental charges, levies and liens, of every kind and nature
     imposed upon Borrower or its properties, income, or profits, prior to the
     date on which penalties would attach in and all lawful claims that, if
     unpaid, might become a lien or charge upon any of Borrower's properties,
     income or profits. Provided however, Borrower will not be required to pay
     and discharge any such assessment, tax, charge, levy, lien or claim so long
     as the legality of the same shall be contested in good faith by appropriate
     proceeding. Borrower, upon demand of Lender, will furnish to Lender
     evidence of payment of the assessments, taxes, charges, levies, liens and
     claims and will authorize the appropriate governmental official to deliver
     to Lender at any time a written statement of any assessments, taxes,
     charges, levies, liens and claims against Borrower's properties, income, or
     profits.

     PERFORMANCE. Perform and comply with all terms, conditions, and provisions
     set forth in this Agreement and in the Related Documents in a timely
     manner, and promptly notify Lender if Borrower learns of the occurrence of
     any event which constitutes an Event of Default under this Agreement or
     under any of the Related Documents.

     INSPECTION. Permit employees or agents of Lender at any reasonable time to
     inspect any and all Collateral for the Loan or Loans and Borrower's other
     properties.

     COMPLIANCE CERTIFICATE. Unless waived in writing by Lender, provide Lender
     at least annually and at the time of each disbursement of Loan proceeds
     with a certificate executed by Borrower's chief financial officer, or other
     officer or person acceptable to Lender, certifying that the representations
     and warranties set forth in this Agreement are true and correct as of the
     date of the certificate and further certifying that, as of the date of the
     certificate, no Event of Default exists under this Agreement.

     ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such promissory
     notes, mortgages, deeds of trust, security agreements, financing
     statements, instruments, documents and other agreements as Lender or its
     attorneys may reasonably request to evidence and secure the Loans and to
     perfect all Security Interests.



<PAGE>   5

                                                                               5

                             BUSINESS LOAN AGREEMENT
                                   (CONTINUED)


NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:

     CAPITAL EXPENDITURES. Make or contract to make capital expenditures,
     including leasehold improvements, in any fiscal year in excess of
     $10,000,000 or incur liability for rentals of property (including both real
     and personal property) in an amount which, together with capital
     expenditures, shall in any fiscal year exceed such sum.

     INDEBTEDNESS AND LIENS. (a) Except for trade debt incurred in the normal
     course of business and indebtedness to Lender contemplated by this
     Agreement, create, incur or assume indebtedness for borrowed money,
     including capital leases in excess of $300,000.00, (b) except as allowed as
     a Permitted Lien, sell, transfer, mortgage, assign, pledge, lease, grant a
     security interest in, or encumber any of Borrower's assets, or (c) sell
     with recourse any of Borrower's accounts, except to Lender. Lender
     acknowledges the current lien on the Lincoln, Nebraska plant located at
     4800 NW 1st Street and the planned purchase and IDB financing of the E.F.
     Johnson plant in Waseca, Minnesota.

     CONTINUITY OF OPERATIONS. (a) Engage in any business activities
     substantially different than those in which Borrower is presently engaged,
     (b) cease operations, liquidate, or sell Collateral out of the ordinary
     course of business.

     LOANS, ACQUISITIONS AND GUARANTIES. (a) Loan, invest in or advance money or
     assets, (b) purchase, create or acquire any interest in any other
     enterprise or entity, or (c) incur any obligation as surety or guarantor
     other than in the ordinary course of business.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(a) Borrower is in default under the terms of this Agreement (b) Borrower
becomes insolvent, files a petition in bankruptcy or similar proceedings, or is
adjudged a bankrupt; (c) there occurs a material adverse change in Borrowers
financial condition, or in the value of any Collateral securing any Loan.

RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrowers right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings or some other account), including without
limitation all accounts held jointly with someone else and all accounts Borrower
may open in the future, excluding however all IRA and Keogh accounts, and all
trust accounts for which the grant of a security interest would be prohibited by
law. Borrower authorizes Lender, to the extent permitted by applicable law, to
charge or setoff all sums owing on the indebtedness against any and all such
accounts.

     EVENTS OF DEFAULT. Each of the following shall constitute an Event of
     Default under this Agreement:

     DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when due
     on the Loans within a five (5) day cure period.

     OTHER DEFAULTS. Failure of Borrower or any Grantor to comply with or to
     perform when due any other term, obligation, covenant or condition
     contained in this Agreement or in any of the Related Documents, or failure
     of Borrower to comply with or to perform any other term, obligation,
     covenant or condition contained in any other agreement between Lender and
     Borrower.

     DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor default
     under any loan, extension of credit, security agreement, purchase or sales
     agreement, or any other agreement, in favor of any other creditor or person
     that may materially affect Borrower's ability to repay the Loans or perform
     their respective obligations under this Agreement or any of the Related
     Documents.

     FALSE STATEMENTS. Any warranty, representation or statement made or
     furnished to Lender by or on behalf of Borrower or any Grantor under this
     Agreement or the Related Documents is false or misleading in any material
     respect at the time made or furnished.

     DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related Documents
     ceases to be in full force and effect (including failure of any Security
     Agreement to create a valid and perfected Security Interest) at any time
     and for any reason.

     INSOLVENCY. The dissolution or termination of Borrower's existence as a
     going business, the insolvency of Borrower, the appointment of a receiver
     for any part of Borrower's property, or the commencement of any proceeding
     under any bankruptcy or insolvency laws by or against Borrower.

     CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
     forfeiture proceedings, whether by judicial proceeding, self-help,
     repossession or any other method, by any creditor of Borrower, any creditor
     of any Grantor against any collateral securing the Indebtedness, or by any
     governmental agency. This includes a garnishment, attachment, or levy on or
     of any of Borrower's deposit accounts with Lender. However, this Event of
     Default shall not apply if there is a good faith dispute by Borrower or
     Grantor, as the case may be, as to the validity or reasonableness of the
     claim which is the basis of the creditor or forfeiture proceeding, and if
     Borrower or Grantor gives Lender written notice of the creditor or
     forfeiture proceeding and furnishes reserves or a surety bond for the
     creditor or forfeiture proceeding satisfactory to Lender.

     CHANGE IN OWNERSHIP. Any change in ownership of twenty-five percent (25%)
     or more of the non-publicly traded common stock of Borrower.

     ADVERSE CHANGE. A material adverse change occurs in Borrower's financial
     condition.

     RIGHT TO CURE. If any default, other than a Default on Indebtedness, is
     curable and if Borrower or Grantor, as the case may be, has not been given
     a notice of a similar default within the preceding twelve (12) months, it
     may be cured (and no Event of Default will have occurred) if Borrower or
     Grantor, as the case may be, after receiving written notice from Lender
     demanding cure of such default: (a) cures the default within twenty (20)
     days; or (b) if the cure requires more than twenty (20) days, immediately
     initiates steps which Lender deems in Lender's sole discretion to be
     sufficient to cure the default and thereafter continues and completes all
     reasonable and necessary steps sufficient to produce compliance as soon as
     reasonably practical.



<PAGE>   6

                                                                               6

                             BUSINESS LOAN AGREEMENT
                                   (CONTINUED)


EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate (including any obligation to make
Loan Advances or disbursements), and, at Lender's option, all Indebtedness
immediately will become due and payable, all without notice of any kind to
Borrower, except that in the case of an Event of Default of the type described
in the "Insolvency" subsection above, such acceleration shall be automatic and
not optional. In addition, Lender shall have all the rights and remedies
provided in the Related Documents or available at law, in equity, or otherwise.
Except as may be prohibited by applicable law, all of Lender's rights and
remedies shall be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to perform an
obligation of Borrower or of any Grantor shall not affect Lender's right to
declare a default and to exercise its rights and remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

     AMENDMENTS. This Agreement, together with any Related Documents,
     constitutes the entire understanding and agreement of the parties as to the
     matters set forth in this Agreement. No alteration of or amendment to this
     Agreement shall be effective unless given in writing and signed by the
     party or parties sought to be charged or bound by the alteration or
     amendment.

     APPLICABLE LAW. THIS AGREEMENT HAS BEEN DELIVERED TO LENDER AND ACCEPTED BY
     LENDER IN THE STATE OF NEBRASKA. IF THERE IS A LAWSUIT, BORROWER AGREES
     UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE COURTS OF
     LANCASTER COUNTY, THE STATE OF NEBRASKA. THIS AGREEMENT SHALL BE GOVERNED
     BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEBRASKA.

     CAPTION HEADINGS. Caption headings in this Agreement are for convenience
     purposes only and are not to be used to interpret or define the provisions
     of this Agreement.

     MULTIPLE PARTIES; CORPORATE AUTHORITY. All obligations of Borrower under
     this Agreement shall be joint and several, and all references to Borrower
     shall mean each and every Borrower. This means that each of the Borrowers
     signing below is responsible for ALL obligations in this Agreement.

     CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's
     sale or transfer, whether now or later, of one or more participation
     interests in the Loans to one or more purchasers, whether related or
     unrelated to Lender. Lender may provide, without any limitation whatsoever,
     to any one or more purchasers, or potential purchasers, any information or
     knowledge Lender may have about Borrower or about any other matter relating
     to the Loan, and Borrower hereby waives any rights to privacy it may have
     with respect to such matters. Borrower additionally waives any and all
     notices of sale of participation interests, as well as all notices of any
     repurchase of such participation interests. Borrower also agrees that the
     purchasers of any such participation interests will be considered as the
     absolute owners of such interests in the Loans and will have all the rights
     granted under the participation agreement or agreements governing the sale
     of such participation interests. Borrower further waives all rights of
     offset or counterclaim that it may have now or later against Lender or
     against any purchaser of such a participation interest and unconditionally
     agrees that either Lender or such purchaser may enforce Borrower's
     obligation under the Loans irrespective of the failure or insolvency of any
     holder of any interest in the Loans. Borrower further agrees that the
     purchaser of any such participation interests may enforce its interests
     irrespective of any personal claims or defenses that Borrower may have
     against Lender.

     COSTS AND EXPENSES. Borrower agrees to pay upon demand all of Lender's
     expenses, including without limitation reasonable attorneys' fees, incurred
     in connection with any collection action pursuant to this Agreement or in
     connection with the Loans made pursuant to this Agreement. Lender may pay
     someone else to help collect the Loans and to enforce this Agreement, and
     Borrower will pay that amount. This includes, subject to any limits under
     applicable law, Lender's reasonable attorneys' fees and Lender's legal
     expenses, whether or not there is a lawsuit, including attorneys' fees for
     bankruptcy proceedings (including efforts to modify or vacate any automatic
     stay or injunction), appeals, and any anticipated post-judgment collection
     services. Borrower also will pay any court costs, in addition to all other
     sums provided by law.

     NOTICES. All notices required to be given under this Agreement shall be
     given in writing, may be sent by telefacsimile (unless otherwise required
     by law), and shall be effective when actually delivered or when deposited
     with a nationally recognized overnight courier or deposited in the United
     States mail, first class, postage prepaid, addressed to the party to whom
     the notice is to be given at the address shown above. Any party may change
     its address for notices under this Agreement by giving formal written
     notice to the other parties, specifying that the purpose of the notice is
     to change the party's address. To the extent permitted by applicable law,
     if there is more than one Borrower, notice to any Borrower will constitute
     notice to all Borrowers. For notice purposes, Borrower will keep Lender
     informed at all times of Borrower's current address(es).

     SEVERABILITY. If a court of competent jurisdiction finds any provision of
     this Agreement to be invalid or unenforceable as to any person or
     circumstance, such finding shall not render that provision invalid or
     unenforceable as to any other persons or circumstances. If feasible, any
     such offending provision shall be deemed to be modified to be within the
     limits of enforceability or validity; however, if the offending provision
     cannot be so modified, it shall be stricken and all other provisions of
     this Agreement in all other respects shall remain valid and enforceable.

     SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
     behalf of Borrower shall bind its successors and assigns and shall inure to
     the benefit of Lender, its successors and assigns. Borrower shall not,
     however, have the right to assign its rights under this Agreement or any
     interest therein, without the prior written consent of Lender.

     SURVIVAL. All warranties, representations, and covenants made by Borrower
     in this Agreement or in any certificate or other instrument delivered by
     Borrower to Lender under this Agreement shall be considered to have been
     relied upon by Lender and will survive the making of the Loan and delivery
     to Lender of the Related Documents.

     TIME IS OF THE ESSENCE. Time is of the essence in the performance of this
     Agreement.

     WAIVER. Lender shall not be deemed to have waived any rights under this
     Agreement unless such waiver is given in writing and signed by Lender. No
     delay or omission on the part of Lender in exercising any right shall
     operate as a waiver of such right or any other right. A waiver by Lender of
     a provision of this Agreement shall not prejudice or constitute a waiver of
     Lender's right otherwise to demand strict compliance with that provision or
     any other provision of this Agreement. No prior waiver by Lender, or
     between Lender and any Grantor, shall constitute a waiver of any of Lenders
     rights or of any obligations of Borrower or of any Grantor as to any future
     transactions. Whenever the consent of Lender is required under


<PAGE>   7

                                                                               7

                             BUSINESS LOAN AGREEMENT
                                   (CONTINUED)

     this Agreement, the granting of such consent by Lender in any instance
     shall not constitute continuing consent in subsequent instances where such
     consent is required, and in all cases such consent may be granted or
     withheld in the sole discretion of Lender.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
DECEMBER 31, 1997.

BORROWER:
TRANSCRYPT INTERNATIONAL, INC.

BY:   /S/  JEFFERY L. FULLER
      -------------------------------------------------------
     JEFFERY L. FULLER, PRESIDENT AND CHIEF EXECUTIVE OFFICER


LENDER:
U.S. BANK NATIONAL ASSOCIATION D/B/A FIRST BANK N.A.

BY:   /S/  DANIEL S. BLACK
   -----------------------------------------------------
AUTHORIZED OFFICER


<PAGE>   8

                                 PROMISSORY NOTE

<TABLE>
<CAPTION>
     PRINCIPAL        LOAN DATE    MATURITY   LOAN NO.    CALL   COLLATERAL    ACCOUNT     OFFICER   INITIALS
<S>                  <C>           <C>         <C>        <C>    <C>          <C>          <C>       <C>
   $10,000,000.00    12-31-1997    12-30-98    004615                         1735058640    DSB06
</TABLE>

References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

<TABLE>
<S>                                                      <C>
BORROWER:   TRANSCRYPT INTERNATIONAL, INC.  LENDER:      U.S. BANK NATIONAL ASSOCIATION D/B/A FIRST BANK N.A.
            5900 "O" STREET                              LINCOLN MAIN - COMMERCIAL
            LINCOLN, NE 68510-22345                      233 SOUTH 13TH STREET
                                                         LINCOLN, NE 68508
</TABLE>

<TABLE>
<S>                <C>                     <C>                             <C> 
PRINCIPAL AMOUNT:  $10,000,000.00          INITIAL RATE: 7.500%            DATE OF NOTE: DECEMBER 31, 1997
</TABLE>

PROMISE TO PAY. Transcrypt International, Inc. ("Borrower") promises to pay to
U.S. Bank National Association d/b/a First Bank N.A. ("Lender"), or order, in
lawful money of the United States of America, the principal amount of Ten
Million & 00/100 Dollars ($10,000,000.00) or so much as may be outstanding,
together with interest on the unpaid outstanding principal balance of each
advance. Interest shall be calculated from the date of each advance until
repayment of each advance.

PAYMENT. BORROWER WILL PAY THIS LOAN IN ONE PAYMENT OF ALL OUTSTANDING PRINCIPAL
PLUS ALL ACCRUED UNPAID INTEREST ON DECEMBER 30, 1998. IN ADDITION, BORROWER
WILL PAY REGULAR MONTHLY PAYMENTS OF ACCRUED UNPAID INTEREST BEGINNING JANUARY
31, 1998, AND ALL SUBSEQUENT INTEREST PAYMENTS ARE DUE ON THE LAST DAY OF EACH
MONTH AFTER THAT. The annual interest rate for this Note is computed on a
365/360 basis; that is, by applying the ratio of the annual interest rate over a
year of 360 days, multiplied by the outstanding principal balance, multiplied by
the actual number of days the principal balance is outstanding. Borrower will
pay Lender at Lender's address shown above or at such other place as Lender may
designate in writing. Unless otherwise agreed or required by applicable law,
payments will be applied first to accrued unpaid interest, then to principal,
and any remaining amount to any unpaid collection costs and late charges.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an independent index which is the highest prime
rate published in the Wall Street Journal "Money Rate" table (the "Index"). The
Index is not necessarily the lowest rate charged by Lender on its loans. If the
Index becomes unavailable during the term of this loan, Lender may designate a
substitute index after notice to Borrower. Lender will tell Borrower the current
Index rate upon Borrower's request. Borrower understands that Lender may make
loans based on other rates as well. The interest rate change will not occur more
often than each day. THE INDEX CURRENTLY IS 8.500% PER ANNUM. THE INTEREST RATE
TO BE APPLIED TO THE UNPAID PRINCIPAL BALANCE OF THIS NOTE WILL BE AT A RATE OF
1.000 PERCENTAGE POINTS UNDER THE INDEX, RESULTING IN AN INITIAL RATE OF 7.500%
PER ANNUM. NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.

PREPAYMENT. Borrower may pay all or a portion of the amount owed earlier than it
is due without penalty. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrower's obligation to continue to make payments
of accrued unpaid interest. Rather, they will reduce the principal balance due.

DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower fails to comply with
or to perform when due any other term, obligation, covenant, or condition
contained in this Note or any agreement related to this Note, or in any other
agreement or loan Borrower has with Lender. (c) Any representation or statement
made or furnished to Lender by Borrower or on Borrower's behalf is false or
misleading in any material respect either now or at the time made or furnished.
(d) Borrower becomes insolvent, a receiver is appointed for any part of
Borrower's property, Borrower makes an assignment for the benefit of creditors,
or any proceeding is commenced either by Borrower or against Borrower under any
bankruptcy or insolvency laws. (e) Any creditor tries to take any of Borrower's
property on or in which Lender has a lien or security interest. This includes a
garnishment of any of Borrower's accounts with Lender. (f) Any of the other
events described in this default section occurs with respect to any guarantor of
this Note. (g) A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.

If any default, other than a default in payment which is subject to a five (5)
day cure period, is curable and if Borrower has not been given a notice of a
breach of the same provision of this Note within the preceding twelve (12)
months, it may be cured (and no event of default will have occurred) if
Borrower, after receiving written notice from Lender demanding cure of such
default: (a) cures the default within twenty (20) days; or (b) if the cure
requires more than twenty (20) days, immediately initiates steps which Lender
deems in Lender's sole discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and necessary steps sufficient
to produce compliance as soon as reasonably practical.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including failure
to pay upon final maturity, Lender, at its option, may also, if permitted under
applicable law, increase the variable interest rate on this Note to 3.500
percentage points over the Index. The interest rate will not exceed the maximum
rate permitted by applicable law. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower also will pay Lender that
amount. This includes, subject to any limits under applicable law, Lender's
attorneys' fees and Lender's legal expenses whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law. THIS NOTE HAS BEEN DELIVERED TO
LENDER AND ACCEPTED BY LENDER IN THE STATE OF NEBRASKA. IF THERE IS A LAWSUIT,
BORROWER AGREES UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE
COURTS OF LANCASTER COUNTY, THE STATE OF NEBRASKA. THIS NOTE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEBRASKA.

RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrowers accounts
with Lender (whether checking, savings, or some other account), excluding
however all IRA and Keogh accounts, and all trust accounts for which the grant
of a security interest would be prohibited by law. Borrower authorizes Lender,
to the extent permitted by applicable law, to charge or setoff all sums owing on
this Note against any and all such accounts.

COLLATERAL.  This note is secured by Financing Statement and Security Agreement.

LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note may be requested orally by Borrower or as provided in this paragraph.
Lender may, but need not, require that all oral requests be confirmed in
writing. All


<PAGE>   9

12-31-1997                      PROMISSORY NOTE                           PAGE 2
LOAN NO. 004615                  (CONTINUED)


communications, instructions, or directions by telephone or otherwise to Lender
are to be directed to Lender's office shown above. The following party or
parties are authorized as provided in this paragraph to request advances under
the line of credit until Lender receives from Borrower at Lender's address shown
above written notice of revocation of their authority: JOHN T. CONNOR, JEFFERY
L. FULLER AND REBECCA SCHULTZ. Borrower agrees to be liable for all sums either:
(a) advanced in accordance with the instructions of an authorized person or (b)
credited to any of Borrower's accounts with Lender. The unpaid principal balance
owing on this Note at any time may be evidenced by endorsements on this Note or
by Lender's internal records, including daily computer print-outs. Lender will
have no obligation to advance funds under this Note if: (a) Borrower or any
guarantor is in default under the terms of this Note or any agreement that
Borrower or any guarantor has with Lender, including any agreement made in
connection with the signing of this Note; (b) Borrower or any guarantor ceases
doing business or is insolvent; (c) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantor's guarantee of this Note or
any other loan With Lender; (d) Borrower has applied funds provided pursuant to
this Note for purposes other than those authorized by Lender, which are deemed
to include Borrower's general corporate operating needs.

PURPOSE OF LOAN.  General operating needs of the corporation.

GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest and notice of dishonor. Upon any change
in the terms of this Note, and unless otherwise expressly stated in writing, no
party who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan, or
release any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender's security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.

BORROWER:
TRANSCRYPT INTERNATIONAL, INC.


BY:   /S/  JEFFERY L. FULLER
     --------------------------------------------------------
     JEFFERY L. FULLER, PRESIDENT AND CHIEF EXECUTIVE OFFICER


<PAGE>   10

                         COMMERCIAL SECURITY AGREEMENT


<TABLE>
<CAPTION>
   PRINCIPAL         LOAN DATE    MATURITY    LOAN NO.    CALL    COLLATERAL     ACCOUNT      OFFICER  INITIALS
<S>                 <C>           <C>         <C>         <C>     <C>          <C>            <C>      <C>
$10,000,000.00      12-31-1997    12-30-98     004615                          1735058640       B85
</TABLE>

References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

<TABLE>
<S>                                                <C>
BORROWER:   TRANSCRYPT INTERNATIONAL, INC.         LENDER:  U.S. BANK NATIONAL ASSOCIATION D/B/A FIRST BANK N.A.
            4800 NW 1ST STREET                              1700 FARHAM STREET
            LINCOLN, NE 68521                               OMAHA, NE 68102
</TABLE>


THIS COMMERCIAL SECURITY AGREEMENT IS ENTERED INTO BETWEEN TRANSCRYPT
INTERNATIONAL, INC. (REFERRED TO BELOW AS "GRANTOR"); AND U.S. BANK NATIONAL
ASSOCIATION D/B/A FIRST BANK N.A. (REFERRED TO BELOW AS "LENDER"). FOR VALUABLE
CONSIDERATION, GRANTOR GRANTS TO LENDER A SECURITY INTEREST IN THE COLLATERAL TO
SECURE THE INDEBTEDNESS AND AGREES THAT LENDER SHALL HAVE THE RIGHTS STATED IN
THIS AGREEMENT WITH RESPECT TO THE COLLATERAL, IN ADDITION TO ALL OTHER RIGHTS
WHICH LENDER MAY HAVE BY LAW.

DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.

     AGREEMENT. The word "Agreement" means this Commercial Security Agreement,
     as this Commercial Security Agreement may be amended or modified from time
     to time, together with all exhibits and schedules attached to this
     Commercial Security Agreement from time to time.

     COLLATERAL. The word "Collateral" means the following described property of
     Grantor, whether now owned or hereafter acquired, whether now existing or
     hereafter arising, and wherever located:

         ALL INVENTORY, CHATTEL PAPER, ACCOUNTS, EQUIPMENT AND GENERAL
         INTANGIBLES

     In addition, the word "Collateral" includes all the following, whether now
     owned or hereafter acquired, whether now existing or hereafter arising, and
     wherever located:

         (a) All attachments, accessions, accessories, tools, parts, supplies,
         increases, and additions to and all replacements of and substitutions
         for any property described above.

         (b) All products and produce of any of the property described in this
         Collateral section.

         (c) All accounts, general intangibles, instruments, rents, monies,
         payments, and all other rights, arising out of a sale, lease, or other
         disposition of any of the property described in this Collateral
         section.

         (d) All proceeds (including insurance proceeds) from the sale,
         destruction, loss, or other disposition of any of the property
         described in this Collateral section.

         (e) All records and data relating to any of the property described in
         this Collateral section, whether in the form of a writing, photograph,
         microfilm, microfiche, or electronic media, together with all of
         Grantor's right, title, and interest in and to all computer software
         required to utilize, create, maintain, and process any such records or
         data on electronic media.

     EVENT OF DEFAULT. The words "Event of Default" mean and include without
     limitation any of the Events of Default set forth below in the section
     titled "Events of Default."

     GRANTOR. The word "Grantor" means Transcrypt International, Inc., its
     successors and assigns

     GUARANTOR. The word "Guarantor" means and includes without limitation each
     and all of the guarantors, sureties, and accommodation parties in
     connection with the Indebtedness.

     INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced by
     the Note, including all principal and interest, together with all other
     indebtedness and costs and expenses for which Grantor is responsible under
     this Agreement or under any of the Related Documents.

     LENDER. The word "Lender" means U.S. Bank National Association d/b/a First
     Bank N.A., its successors and assigns.

     NOTE. The word "Note" means the note or credit agreement dated December 31,
     1997, in the principal amount of $10,000,000.00 from Transcrypt
     International, Inc. to Lender, together with all renewals of, extensions
     of, modifications of, refinancings of, consolidations of and substitutions
     for the note or credit agreement.

     RELATED DOCUMENTS. The words "Related Documents" mean and include without
     limitation all promissory notes, credit agreements, loan agreements,
     environmental agreements, guaranties, security agreements, mortgages, deeds
     of trust, and all other instruments, agreements and documents, whether now
     or hereafter existing, executed in connection with the Indebtedness.

RIGHT OF SETOFF. Grantor hereby grants Lender a contractual possessory security
interest in and hereby assigns, conveys, delivers, pledges, and transfers all of
Grantor's right, title and interest in and to Grantor's accounts with Lender
(whether checking, savings, or some other account), including all accounts held
jointly with someone else and all accounts Grantor may open in the future,
excluding, however, all IRA and Keogh accounts, and all trust accounts for which
the grant of a security interest would be prohibited by law. Grantor authorizes
Lender, to the extent permitted by applicable law, to charge or setoff all
Indebtedness against any and all such accounts.

OBLIGATIONS OF GRANTOR.  Grantor warrants and covenants to Lender as follows:

     PERFECTION OF SECURITY INTEREST. Grantor agrees to execute such financing
     statements and to take whatever other actions are requested by Lender to
     perfect and continue Lender's security interest in the Collateral. Upon
     request of Lender, Grantor will deliver to Lender any and all of the
     documents evidencing or constituting the Collateral, and Grantor will note
     Lender's interest upon any and all chattel paper if not delivered to Lender
     for possession by Lender. Grantor hereby appoints Lender as its irrevocable
     attorney-in-fact for the purpose of executing any documents necessary to
     perfect or to continue the security interest granted in this Agreement.
     Lender may at any time, and without further authorization from Grantor,
     file


<PAGE>   11

12-31-1997                 COMMERCIAL SECURITY AGREEMENT                  PAGE 2
LOAN NO 004615                     (CONTINUED)


     a carbon, photographic or other reproduction of any financing statement or
     of this Agreement for use as a financing statement. Grantor will reimburse
     Lender for all expenses for the perfection and the continuation of the
     perfection of Lender's security interest in the Collateral. Grantor
     promptly will notify Lender before any change in Grantor's name including
     any change to the assumed business names of Grantor. THIS IS A CONTINUING
     SECURITY AGREEMENT AND WILL CONTINUE IN EFFECT EVEN THOUGH ALL OR ANY PART
     OF THE INDEBTEDNESS IS PAID IN FULL AND EVEN THOUGH FOR A PERIOD OF TIME
     GRANTOR MAY NOT BE INDEBTED TO LENDER.

     NO VIOLATION. The execution and delivery of this Agreement will not violate
     any law or agreement governing Grantor or to which Grantor is a party, and
     its certificate or articles of incorporation and bylaws do not prohibit any
     term or condition of this Agreement.

     ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
     accounts, chattel paper, or general intangibles, the Collateral is
     enforceable in accordance with its terms, is genuine, and complies with
     applicable laws concerning form, content and manner of preparation and
     execution, and all persons appearing to be obligated on the Collateral have
     authority and capacity to contract and are in fact obligated as they appear
     to be on the Collateral. At the time any account becomes subject to a
     security interest in favor of Lender, the account shall be a good and valid
     account representing an undisputed, bona fide indebtedness incurred by the
     account debtor, for merchandise held subject to delivery instructions or
     theretofore shipped or delivered pursuant to a contract of sale, or for
     services theretofore performed by Grantor with or for the account debtor;
     there shall be no setoffs or counterclaims against any such account; and no
     agreement under which any deductions or discounts may be claimed shall have
     been made with the account debtor except those disclosed to Lender in
     writing.

     LOCATION OF THE COLLATERAL. Grantor, upon request of Lender, will deliver
     to Lender in form satisfactory to Lender a schedule of real properties and
     Collateral locations relating to Grantor's operations, including without
     limitation the following: (a) all real property owned or being purchased by
     Grantor; (b) all real property being rented or leased by Grantor; (c) all
     storage facilities owned, rented, leased, or being used by Grantor; and (d)
     all other properties where Collateral is or may be located. Except in the
     ordinary course of its business, Grantor shall not remove the Collateral
     from its existing locations without the prior written consent of Lender.

     REMOVAL OF COLLATERAL. Grantor shall keep the Collateral (or to the extent
     the Collateral consists of intangible property such as accounts, the
     records concerning the Collateral) at Grantor's address shown above, or at
     such other locations as are acceptable to Lender. Except in the ordinary
     course of its business, including the sales of inventory, Grantor shall not
     remove the Collateral from its existing locations without the prior written
     consent of Lender. To the extent that the Collateral consists of vehicles,
     or other titled property, Grantor shall not take or permit any action which
     would require application for certificates of title for the vehicles
     outside the State of Nebraska, without the prior written consent of Lender.

     TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or accounts
     collected in the ordinary course of Grantor's business, Grantor shall not
     sell, offer to sell, or otherwise transfer or dispose of the Collateral.
     While Grantor is not in default under this Agreement, Grantor may sell
     inventory, but only in the ordinary course of its business and only to
     buyers who qualify as a buyer in the ordinary course of business. A sale in
     the ordinary course of Grantor's business does not include a transfer in
     partial or total satisfaction of a debt or any bulk sale. Grantor shall not
     pledge, mortgage, encumber or otherwise permit the Collateral to be subject
     to any lien, security interest, encumbrance, or charge, other than these
     security interest provided for in this Agreement, as the Business Loan
     Agreement between Lender and Grantor, without the prior written consent of
     Lender. This includes security interests even if junior in right to the
     security interests granted under this Agreement. Unless waived by Lender,
     while there is a balance outstanding on the Note, all proceeds from any
     disposition of the Collateral (for whatever reason) shall be held in trust
     for Lender and shall not be commingled with any other funds; provided
     however, this requirement shall not constitute consent by Lender to any
     sale or other disposition. Upon receipt, Grantor shall immediately deliver
     any such proceeds to Lender.

     TITLE. Grantor represents and warrants to Lender that it holds good and
     marketable title to the Collateral, free and clear of all liens and
     encumbrances except for the lien of this Agreement. No financing statement
     covering any of the Collateral is on file in any public office other than
     those which reflect the security interest created by this Agreement or to
     which Lender has specifically consented. Grantor shall defend Lender's
     rights in the Collateral against the claims and demands of all other
     persons.

     COLLATERAL SCHEDULES AND LOCATIONS. As often as Lender shall require, and
     insofar as the Collateral consists of accounts and general intangibles,
     Grantor shall deliver to Lender schedules of such Collateral, including
     such information as Lender may require, including without limitation names
     and addresses of account debtors and agings of accounts and general
     intangibles. Insofar as the Collateral consists of inventory and equipment,
     Grantor shall deliver to Lender, as often as Lender shall require, such
     lists, descriptions, and designations of such Collateral as Lender may
     require to identify the nature, extent, and location of such Collateral.
     Such information shall be submitted for Grantor and each of its
     subsidiaries or related companies.

     MAINTENANCE AND INSPECTION OF COLLATERAL. Grantor shall maintain all
     tangible Collateral in good condition and repair. Grantor will not commit
     or permit damage to or destruction of the Collateral or any part of the
     Collateral. Lender and its designated representatives and agents shall have
     the right at all reasonable times to examine, inspect, and audit the
     Collateral wherever located. Grantor shall immediately notify Lender of all
     cases involving the return, rejection, repossession, loss or damage of or
     to any Collateral; of any request for credit or adjustment or of any other
     dispute arising with respect to the Collateral; and generally of all
     happenings and events affecting the Collateral or the value or the amount
     of the Collateral.

     TAXES, ASSESSMENTS AND LIENS. Grantor will pay when due all taxes,
     assessments and liens upon the Collateral, its use or operation, upon this
     Agreement, upon any promissory note or notes evidencing the Indebtedness,
     or upon any of the other Related Documents. Grantor may withhold any such
     payment or may elect to contest any lien if Grantor is in good faith
     conducting an appropriate proceeding to contest the obligation to pay and
     so long as Lenders interest in the Collateral is not jeopardized in
     Lender's sole opinion. If the Collateral is subjected to a lien which is
     not discharged within fifteen (15) days, Grantor shall deposit with Lender
     cash, a sufficient corporate surety bond or other security satisfactory to
     Lender in an amount adequate to provide for the discharge of the lien plus
     any interest, costs, attorneys' fees or other charges that could accrue as
     a result of foreclosure or sale of the Collateral. In any contest Grantor
     shall defend itself and Lender and shall satisfy any final adverse judgment
     before enforcement against the Collateral. Grantor shall name Lender as an
     additional obligee under any surety bond furnished in the contest
     proceedings.

     COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply promptly
     with all laws, ordinances, rules and regulations of all governments[
     authorities, now or hereafter in effect, applicable to the ownership,
     production, disposition,


<PAGE>   12

12-31-1997               COMMERCIAL SECURITY AGREEMENT                    PAGE 3
LOAN NO 004615                   (CONTINUED)



     or use of the Collateral. Grantor may contest in good faith any such law,
     ordinance or regulation and withhold compliance during any proceeding,
     including appropriate appeals, so long as Lender's interest in the
     Collateral, in Lender's opinion, is not jeopardized.

     HAZARDOUS SUBSTANCES. Grantor represents and warrants that the Collateral
     never has been, and never will be so long as this Agreement remains a lien
     on the Collateral, used for the generation, manufacture, storage,
     transportation, treatment, disposal, release or threatened release of any
     hazardous waste or substance, as those terms are defined in the
     Comprehensive Environmental Response, Compensation, and Liability Act of
     1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund
     Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"),
     the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et
     seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901,
     et seq., or other applicable state or Federal laws, rules, or regulations
     adopted pursuant to any of the foregoing. The terms "hazardous waste" and
     "hazardous substance" shall also include, without limitation, petroleum and
     petroleum by-products or any fraction thereof and asbestos. The
     representations and warranties contained herein are based on Grantor's due
     diligence in investigating the Collateral for hazardous wastes and
     substances. Grantor hereby (a) releases and waives any future claims
     against Lender for indemnity or contribution in the event Grantor becomes
     liable for cleanup or other costs under any such laws, and (b) agrees to
     indemnity and hold harmless Lender against any and all claims and losses
     resulting from a breach of this provision of this Agreement. This
     obligation to indemnify shall survive the payment of the Indebtedness and
     the satisfaction of this Agreement.

     MAINTENANCE OF CASUALTY INSURANCE. Grantor shall procure and maintain all
     risks insurance, including without limitation fire, theft and liability
     coverage together with such other insurance as Lender may require with
     respect to the Collateral, in form, amounts, coverages and basis reasonably
     acceptable to Lender and issued by a company or companies reasonably
     acceptable to Lender. Grantor, upon request of Lender, will deliver to
     Lender from time to time the policies or certificates of insurance in form
     satisfactory to Lender, including stipulations that coverages will not be
     cancelled or diminished without at least ten (10) days prior written notice
     to Lender and not including any disclaimer of the insurer's liability for
     failure to give such a notice. In connection with all policies covering
     assets in which Lender holds or is offered a security interest, Grantor
     will provide Lender with such loss payable or other endorsements as Lender
     may require. If Grantor at any time falls to obtain or maintain any
     insurance as required under this Agreement, Lender may (but shall not be
     obligated to) obtain such insurance as Lender deems appropriate, including
     if it so chooses "single interest insurance," which will cover only
     Lender's interest in the Collateral.

     APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify Lender of
     any loss or damage to the Collateral. Lender may make proof of loss if
     Grantor fails to do so within fifteen (15) days of the casualty. All
     proceeds of any insurance on the Collateral, including accrued proceeds
     thereon, shall be held by Lender as part of the Collateral. If Lender
     consents to repair or replacement of the damaged or destroyed Collateral,
     Lender shall, upon satisfactory proof of expenditure, pay or reimburse
     Grantor from the proceeds for the reasonable cost of repair or restoration.
     If Lender does not consent to repair or replacement of the Collateral,
     Lender shall retain a sufficient amount of the proceeds to pay all of the
     Indebtedness, and shall pay the balance to Grantor. Any proceeds which have
     not been disbursed within six (6) months after their receipt and which
     Grantor has not committed to the repair or restoration of the Collateral
     shall be used to prepay the Indebtedness.

     INSURANCE REPORTS. Grantor, upon request of Lender, shall furnish to Lender
     reports on each existing policy of insurance showing such information as
     Lender may reasonably request including the following: (a) the name of the
     insurer; (b) the risks insured; (c) the amount of the policy; (d) the
     property insured; (e) the then current value on the basis of which
     insurance has been obtained and the manner of determining that value; and
     (f) the expiration date of the policy.

GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except
as otherwise provided below with respect to accounts, Grantor may have
possession of the tangible personal property and beneficial use of all the
Collateral and may use it in any lawful manner not inconsistent with this
Agreement or the Related Documents, provided that Grantors right to possession
and beneficial use shall not apply to any Collateral where possession of the
Collateral by Lender is required by law to perfect Lender's security interest in
such Collateral. Until otherwise notified by Lender, Grantor may collect any of
the Collateral consisting of accounts. At any time and even though no Event of
Default exists, Lender may exercise its rights to collect the accounts and to
notify account debtors to make payments directly to Lender for application to
the Indebtedness. If Lender at any time has possession of any Collateral,
whether before or after an Event of Default, Lender shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral if
Lender takes such action for that purpose as Grantor shall request or as Lender,
in Lender's sole discretion, shall deem appropriate under the circumstances, but
failure to honor any request by Grantor shall not of itself be deemed to be a
failure to exercise reasonable care. Lender shall not be required to take any
steps necessary to preserve any rights in the Collateral against prior parties,
nor to protect, preserve or maintain any security interest given to secure the
Indebtedness.

EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without limitation
all taxes, liens, security interests, encumbrances, and other claims, at any
time levied or placed on the Collateral. Lender also may (but shall not be
obligated to) pay all costs for insuring, maintaining and preserving the
Collateral. All such expenditures incurred or paid by Lender for such purposes
will then bear interest at the rate charged under the Note from the date
incurred or paid by Lender to the date of repayment by Grantor. All such
expenses shall become a part of the Indebtedness and, at Lender's option, will
(a) be payable on demand, (b) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due
during either (i) the term of any applicable insurance policy or (ii) the
remaining term of the Note, or (c) be treated as a balloon payment which will be
due and payable at the Note's maturity. This Agreement also will secure payment
of these amounts. Such right shall be in addition to all other rights and
remedies to which Lender may be entitled upon the occurrence of an Event of
Default.

EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:

     DEFAULT ON INDEBTEDNESS. Failure of Grantor to make any payment when due on
     the Indebtedness.

     OTHER DEFAULTS. Failure of Grantor to comply with or to perform any other
     term, obligation, covenant or condition contained in this Agreement or in
     any of the Related Documents or in any other agreement between Lender and
     Grantor.

     FALSE STATEMENTS. Any warranty, representation or statement made or
     furnished to Lender by or on behalf of Grantor under this Agreement, the
     Note or the Related Documents is false or misleading in any material
     respect, either now or at the time made or furnished.


<PAGE>   13

12-31-1997                 COMMERCIAL SECURITY AGREEMENT                 PAGE 4
LOAN NO 004615                     (CONTINUED)



     DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related Documents
     ceases to be in full force and effect (including failure of any collateral
     documents to create a valid and perfected security interest or lien) at any
     time and for any reason.

     INSOLVENCY. The dissolution or termination of Grantor's existence as a
     going business, the insolvency of Grantor, the appointment of a receiver
     for any part of Grantor's property, any assignment for the benefit of
     creditors, any type of creditor workout, or the commencement of any
     proceeding under any bankruptcy or insolvency laws by or against Grantor.

     CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
     forfeiture proceedings, whether by judicial proceeding, self-help,
     repossession or any other method, by any creditor of Grantor or by any
     governmental agency against the Collateral or any other collateral securing
     the Indebtedness. This includes a garnishment of any of Grantor's deposit
     accounts with Lender. However, this Event of Default shall not apply if
     there is a good faith dispute by Grantor as to the validity or
     reasonableness of the claim which is the basis of the creditor or
     forfeiture proceeding and if Grantor gives Lender written notice of the
     creditor or forfeiture proceeding and deposits with Lender monies or a
     surety bond for the creditor or forfeiture proceeding, in an amount
     determined by Lender, in its sole discretion, as being an adequate reserve
     or bond for the dispute.

     EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
     to any Guarantor of any of the Indebtedness. Lender, at its option, may,
     but shall not be required to, permit the Guarantor's estate to assume
     unconditionally the obligations arising under the guaranty in a manner
     satisfactory to Lender, and, in doing so, cure the Event of Default.

     ADVERSE CHANGE. A material adverse change-occurs in Grantor's financial
     condition, or Lender believes in good faith the prospect of payment or
     performance of the Indebtedness is impaired.

     RIGHT TO CURE. If any default, other than a Default on Indebtedness, is
     curable and if Grantor has not been given a prior notice of a breach of the
     same provision of this Agreement, it may be cured (and no Event of Default
     will have occurred) if Grantor, after Lender sends written notice demanding
     cure of such default, (a) cures the default within twenty (20) days; or
     (b), if the cure requires more than twenty (20) days, immediately initiates
     steps which Lender deems in Lender's sole discretion to be sufficient to
     cure the default and thereafter continues and completes all reasonable and
     necessary steps sufficient to produce compliance as soon as reasonably
     practical.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the Nebraska Uniform Commercial Code. In addition and without
limitation, Lender may exercise any one or more of the following rights and
remedies:

     ACCELERATE INDEBTEDNESS. Lender may declare the entire Indebtedness,
     including any prepayment penalty which Grantor would be required to pay,
     immediately due and payable, without notice.

     ASSEMBLE COLLATERAL. Lender may require Grantor to deliver to Lender all or
     any portion of the Collateral and any and all certificates of title and
     other documents relating to the Collateral. Lender may require Grantor to
     assemble the Collateral and make it available to Lender at a place to be
     designated by Lender. Lender also shall have full power to enter upon the
     property of Grantor to take possession of and remove the Collateral. If the
     Collateral contains other goods not covered by this Agreement at the time
     of repossession, Grantor agrees Lender may take such other goods, provided
     that Lender makes reasonable efforts to return them to Grantor after
     repossession.

     SELL THE COLLATERAL. Lender shall have full power to sell, lease, transfer,
     or otherwise deal with the Collateral or proceeds thereof in its own name
     or that of Grantor. Lender may sell the Collateral at public auction or
     private sale. Unless the Collateral threatens to decline speedily in value
     or is of a type customarily sold on a recognized market, Lender will give
     Grantor reasonable notice of the time and place of any public sale, or of
     the time after which any private sale or any other intended disposition of
     the Collateral is to be made. The requirements of reasonable notice shall
     be met if such notice is given at least ten (10) days before the time of
     the sale or disposition. All expenses relating to the disposition of the
     Collateral, including without limitation the expenses of retaking, holding,
     insuring, preparing for sale and selling the Collateral, shall become a
     part of the Indebtedness secured by this Agreement and shall be payable on
     demand, with interest at the Note rate from date of expenditure until
     repaid.

     APPOINT RECEIVER. To the extent permitted by applicable law, Lender shall
     have the following rights and remedies regarding the appointment of a
     receiver: (a) Lender may have a receiver appointed as a matter of right,
     (b) the receiver may be an employee of Lender and may serve without bond,
     and (c) all fees of the receiver and his or her attorney shall become part
     of the Indebtedness secured by this Agreement and shall be payable on
     demand, with interest at the Note rate from date of expenditure until
     repaid.

     COLLECT REVENUES, APPLY ACCOUNTS. Lender, either itself or through a
     receiver, may collect the payments, rents, income, and revenues from the
     Collateral. Lender may at any time in its discretion transfer any
     Collateral into its own name or that of its nominee and receive the
     payments, rents, income, and revenues therefrom and hold the same as
     security for the Indebtedness or apply it to payment of the Indebtedness in
     such order of preference as Lender may determine. Insofar as the Collateral
     consists of accounts, general intangibles, insurance policies, instruments,
     chattel paper, chose in action, or similar property, Lender may demand,
     collect, receipt for, settle, compromise, adjust, sue for, foreclose, or
     realize on the Collateral as Lender may determine, whether or not
     Indebtedness or Collateral is then due. For these purposes, Lender may, on
     behalf of and in the name of Grantor, receive, open and dispose of mail
     addressed to Grantor; change any address to which mail and payments are to
     be sent; and endorse notes, checks, drafts, money orders, documents of
     title, instruments and items pertaining to payment, shipment, or storage of
     any Collateral. To facilitate collection, Lender may notify account debtors
     and obligors on any Collateral to make payments directly to Lender.

     OBTAIN DEFICIENCY. If Lender chooses to sell any or all of the Collateral,
     Lender may obtain a judgment against Grantor for any deficiency remaining
     on the Indebtedness due to Lender after application of all amounts received
     from the exercise of the rights provided in this Agreement. Grantor shall
     be liable for a deficiency even if the transaction described in this
     subsection is a sale of accounts or chattel paper.

     OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and remedies of
     a secured creditor under the provisions of the Uniform Commercial Code, as
     may be amended from time to time. In addition, Lender shall have and may
     exercise any or all other rights and remedies it may have available at law,
     in equity, or otherwise.

     CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether evidenced
     by this Agreement or the Related Documents or by any other writing, shall
     be cumulative and may be exercised singularly or concurrently. Election by
     Lender to pursue


<PAGE>   14


12-31-1997                  COMMERCIAL SECURITY AGREEMENT                PAGE 5
LOAN NO 004615                     (CONTINUED)



     any remedy shall not exclude pursuit of any other remedy, and an election
     to make expenditures or to take action to perform an obligation of Grantor
     under this Agreement, after Grantor's failure to perform, shall not affect
     Lender's right to declare a default and to exercise its remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

     AMENDMENTS. This Agreement, together with any Related Documents,
     constitutes the entire understanding and agreement of the parties as to the
     matters set forth in this Agreement. No alteration of or amendment to this
     Agreement shall be effective unless given in writing and signed by the
     party or parties sought to be charged or bound by the alteration or
     amendment.

     APPLICABLE LAW. This Agreement has been delivered to Lender and accepted by
     Lender in the State of Nebraska. If there is a lawsuit, Grantor agrees upon
     Lender's request to submit to the jurisdiction of the courts of the State
     of Nebraska. This Agreement shall be governed by and construed in
     accordance with the laws of the State of Nebraska.

     ATTORNEYS' FEES; EXPENSES. Grantor agrees to pay upon demand all of
     Lender's costs and expenses, including attorneys' fees and Lender's legal
     expenses, incurred in connection with the enforcement of this Agreement.
     Lender may pay someone else to help enforce this Agreement, and Grantor
     shall pay the costs and expenses of such enforcement. Costs and expenses
     include Lender's attorneys' fees and legal expenses whether or not there is
     a lawsuit, including attorneys' fees and legal expenses for bankruptcy
     proceedings (and including efforts to modify or vacate any automatic stay
     or injunction), appeals, and any anticipated post-judgment collection
     services. Grantor also shall pay all court costs and such additional fees
     as may be directed by the court.

     CAPTION HEADINGS. Caption headings in this Agreement are for convenience
     purposes only and are not to be used to interpret or define the provisions
     of this Agreement.

     MULTIPLE PARTIES; CORPORATE AUTHORITY. All obligations of Grantor under
     this Agreement shall be joint and several, and all references to Grantor
     shall mean each and every Grantor. This means that each of the persons
     signing below is responsible for all obligations in this Agreement.

     NOTICES. All notices required to be given under this Agreement shall be
     given in writing, may be sent by telefacsimile (unless otherwise required
     by law), and shall be effective when actually delivered or when deposited
     with a nationally recognized overnight courier or deposited in the United
     States mail, first class, postage prepaid, addressed to the party to whom
     the notice is to be given at the address shown above. Any party may change
     its address for notices under this Agreement by giving formal written
     notice to the other parties, specifying that the purpose of the notice is
     to change the party's address. To the extent permitted by applicable law,
     if there is more than one Grantor, notice to any Grantor will constitute
     notice to all Grantors. For notice purposes, Grantor will keep Lender
     informed at all times of Grantor's current address(es).

     POWER OF ATTORNEY. Grantor hereby appoints Lender only after the occurrence
     of and during the continuation of an Event of Default, as its true and
     lawful attorney-in-fact, irrevocably, with full power of substitution to do
     the following: (a) to demand, collect, receive, receipt for, sue and
     recover all sums of money or other property which may now or hereafter
     become due, owing or payable from the Collateral; (b) to execute, sign and
     endorse any and all claims, instruments, receipts, checks, drafts or
     warrants issued in payment for the Collateral; (c) to settle or compromise
     any and all claims arising under the Collateral, and, in the place and
     stead of Grantor, to execute and deliver its release and settlement for the
     claim; and (d) to file any claim or claims or to take any action or
     institute or take part in any proceedings, either in its own name or in the
     name of Grantor, or otherwise, which in the discretion of Lender may seem
     to be necessary or advisable. This power is given as security for the
     Indebtedness, and the authority hereby conferred is and shall be
     irrevocable and shall remain in full force and effect until renounced by
     Lender.

     SEVERABILITY. If a court of competent jurisdiction finds any provision of
     this Agreement to be invalid or unenforceable as to any person or
     circumstance, such finding shall not render that provision invalid or
     unenforceable as to any other persons or circumstances. If feasible, any
     such offending provision shall be deemed to be modified to be within the
     limits of enforceability or validity; however, if the offending provision
     cannot be so modified, it shall be stricken and all other provisions of
     this Agreement in all other respects shall remain valid and enforceable.

     SUCCESSOR INTERESTS. Subject to the limitations set forth above on transfer
     of the Collateral, this Agreement shall be binding upon and inure to the
     benefit of the parties, their successors and assigns.

     WAIVER. Lender shall not be deemed to have waived any rights under this
     Agreement unless such waiver is given in writing and signed by Lender. No
     delay or omission on the part of Lender in exercising any right shall
     operate as a waiver of such right or any other right. A waiver by Lender of
     a provision of this Agreement shall not prejudice or constitute a waiver of
     Lender's right otherwise to demand strict compliance with that provision or
     any other provision of this Agreement. No prior waiver by Lender, nor any
     course of dealing between Lender and Grantor, shall constitute a waiver of
     any of Lenders rights or of any of Grantor's obligations as to any future
     transactions. Whenever the consent of Lender is required under this
     Agreement, the granting of such consent by Lender in any instance shall not
     constitute continuing consent to subsequent instances where such consent is
     required and in all cases such consent may be granted or withheld in the
     sole discretion of Lender.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT, AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS DATED DECEMBER
31, 1997.

GRANTOR:

TRANSCRYPT INTERNATIONAL, INC.


BY:   /S/  JEFFERY L. FULLER
    ---------------------------------
     JEFFERY L. FULLER, PRESIDENT AND CHIEF EXECUTIVE OFFICER


LENDER:
U.S. BANK NATIONAL ASSOCIATION D/B/A FIRST BANK N.A.



<PAGE>   15

12-31-1997               COMMERCIAL SECURITY AGREEMENT                    PAGE 6
LOAN NO 004615                   (CONTINUED)



BY: /s/ DANIEL S. BLACK                    
   --------------------------------------
AUTHORIZED OFFICER
<PAGE>   16

                               COMMERCIAL GUARANTY


<TABLE>
<CAPTION>
      PRINCIPAL        LOAN DATE  MATURITY   LOAN NO.     CALL   COLLATERAL    ACCOUNT      OFFICER  INITIALS
<S>                    <C>        <C>        <C>          <C>    <C>          <C>           <C>      <C>
                                                                              1735058640      B85
</TABLE>

References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

<TABLE>
<S>                                            <C>
BORROWER:   TRANSCRYPT INTERNATIONAL, INC.     LENDER:  U.S. BANK NATIONAL ASSOCIATION D/B/A FIRST BANK N.A.
            4800 N W 1ST STREET                                   1700 FARNAM STREET
            LINCOLN, NE 68521                                      OMAHA, NE 68102

GUARANTOR:  E.F. JOHNSON COMPANY
            438 GATEWAY BLVD
            BURNSVILLE, MN 55337
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AMOUNT OF GUARANTY.  THE AMOUNT OF THIS GUARANTY IS UNLIMITED.

CONTINUING UNLIMITED GUARANTY. FOR GOOD AND VALUABLE CONSIDERATION, E.F. JOHNSON
COMPANY ("GUARANTOR") ABSOLUTELY AND UNCONDITIONALLY GUARANTEES AND PROMISES TO
PAY TO U.S. BANK NATIONAL ASSOCIATION D/B/A FIRST BANK N.A. ("LENDER") OR ITS
ORDER, IN LEGAL TENDER OF THE UNITED STATES OF AMERICA, THE INDEBTEDNESS (AS
THAT TERM IS DEFINED BELOW) OF TRANSCRYPT INTERNATIONAL, INC. ("BORROWER") TO
LENDER ON THE TERMS AND CONDITIONS SET FORTH IN THIS GUARANTY. UNDER THIS
GUARANTY, THE LIABILITY OF GUARANTOR IS UNLIMITED AND THE OBLIGATIONS OF
GUARANTOR ARE CONTINUING.

DEFINITIONS. The following words shall have the following meanings when used in
this Guaranty:

     BORROWER. The word "Borrower" means Transcrypt International, Inc.

     GUARANTOR. The word "Guarantor" means E.F. Johnson Company.

     GUARANTY. The word "Guaranty" means this Guaranty made by Guarantor for the
     benefit of Lender dated December 31, 1997.

     INDEBTEDNESS. The word "Indebtedness" is used in its most comprehensive
     sense and means and includes any and all of Borrower's liabilities,
     obligations, debts, and indebtedness to Lender, now existing or hereinafter
     incurred or created, including, without limitation, all loans, advances,
     interest, costs, debts, overdraft indebtedness, credit card indebtedness,
     lease obligations, other obligations, and liabilities of Borrower, or any
     of them, and any present or future judgments against Borrower, or any of
     them; and whether any such Indebtedness is voluntarily or involuntarily
     incurred, due or not due, absolute or contingent, liquidated or
     unliquidated, determined or undetermined; whether Borrower may be liable
     individually or jointly with others, or primarily or secondarily, or as
     guarantor or surety; whether recovery on the Indebtedness may be or may
     become barred or unenforceable against Borrower for any reason whatsoever;
     and whether the Indebtedness arises from transactions which may be voidable
     on account of infancy, insanity, ultra vires, or otherwise.

     LENDER. The word "Lender" means U.S. Bank National Association d/b/a First
     Bank N.A., its successors and assigns.

     RELATED DOCUMENTS. The words "Related Documents" mean and include without
     limitation all promissory notes, credit agreements, loan agreements,
     environmental agreements, guaranties, security agreements, mortgages, deeds
     of trust, and all other instruments, agreements and documents, whether now
     or hereafter existing, executed in connection with the Indebtedness.

NATURE OF GUARANTY. Guarantor's liability under this Guaranty shall be open and
continuous for so long as this Guaranty remains in force. Guarantor intends to
guarantee at all times the performance and prompt payment when due, whether at
maturity or earlier by reason of acceleration or otherwise, of all Indebtedness.
Accordingly, no payments made upon the Indebtedness will discharge or diminish
the continuing liability of Guarantor in connection with any remaining portions
of the Indebtedness or any of the Indebtedness which subsequently arises or is
thereafter incurred or contracted.

DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, or any notice to Guarantor or
to Borrower, and will continue in full force until all Indebtedness incurred or
contracted before receipt by Lender of any notice of revocation shall have been
fully and finally paid and satisfied and all other obligations of Guarantor
under this Guaranty shall have been performed in full. If Guarantor elects to
revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written
notice of revocation must be mailed to Lender, by certified mail, at the address
of Lender listed above or such other place as Lender may designate in writing.
Written revocation of this Guaranty will apply only to advances or new
Indebtedness created after actual receipt by Lender of Guarantor's written
revocation. For this purpose and without limitation, the term "new Indebtedness"
does not include Indebtedness which at the time of notice of revocation is
contingent, unliquidated, undetermined or not due and which later becomes
absolute, liquidated, determined or due. This Guaranty will continue to bind
Guarantor for all Indebtedness incurred by Borrower or committed by Lender prior
to receipt of Guarantor's written notice of revocation, including any
extensions, renewals, substitutions or modifications of the Indebtedness. All
renewals, extensions, substitutions, and modifications of the Indebtedness
granted after Guarantor's revocation, are contemplated under this Guaranty and,
specifically will not be considered to be new Indebtedness. Release of any other
guarantor or termination of any other guaranty of the Indebtedness shall not
affect the liability of Guarantor under this Guaranty. A revocation received by
Lender from any one or more Guarantors shall not affect the liability of any
remaining Guarantors under this Guaranty. IT IS ANTICIPATED THAT FLUCTUATIONS
MAY OCCUR IN THE AGGREGATE AMOUNT OF INDEBTEDNESS COVERED BY THIS GUARANTY, AND
IT IS SPECIFICALLY ACKNOWLEDGED AND AGREED BY GUARANTOR THAT REDUCTIONS IN THE
AMOUNT OF INDEBTEDNESS, EVEN TO ZERO DOLLARS ($0.00), PRIOR TO WRITTEN
REVOCATION OF THIS GUARANTY BY GUARANTOR SHALL NOT CONSTITUTE A TERMINATION OF
THIS GUARANTY. THIS GUARANTY IS BINDING UPON GUARANTOR AND GUARANTOR'S HEIRS,
SUCCESSORS AND ASSIGNS SO LONG AS ANY OF THE GUARANTEED INDEBTEDNESS REMAINS
UNPAID AND EVEN THOUGH THE INDEBTEDNESS GUARANTEED MAY FROM TIME TO TIME BE ZERO
DOLLARS ($0.00).

GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before
or after any revocation hereof, WITHOUT NOTICE OR DEMAND AND WITHOUT LESSENING
GUARANTOR'S LIABILITY UNDER THIS GUARANTY, FROM TIME TO TIME: (A) PRIOR TO
revocation as set forth above, to make one or more additional secured or
unsecured loans to Borrower, to lease equipment or other goods to Borrower, or
otherwise to extend additional credit to Borrower; (b) to alter, compromise,
renew, extend, accelerate, or otherwise change one or more times the time for
payment or other terms of the Indebtedness or any part of the Indebtedness,
including increases and decreases of the rate of interest on the Indebtedness;
extensions may be repeated and may be for longer than the original loan term;
(c) to take and hold security for the payment of this Guaranty or the
Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to
perfect, and release any such security, with or without the substitution of new
collateral; (d) to release, substitute, agree not to sue, or deal with any one
or more of Borrower's sureties, endorsers, or other guarantors on any terms or
in any manner Lender may choose; (e) to determine how, when and what


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LOAN NO 004615                 (CONTINUED)


application of payments and credits shall be made on the Indebtedness; (f) to
apply such security and direct the order or manner of sale thereof, including
without limitation, any nonjudicial sale permitted by the terms of the
controlling security agreement or deed of trust, as Lender in its discretion may
determine; (g) to sell, transfer, assign, or grant participations in all or any
part of the Indebtedness; and (h) to assign or transfer this Guaranty in whole
or in part.

GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to
Lender that (a) no representations or agreements of any kind have been made to
Guarantor which would limit or qualify in any way the terms of this Guaranty;
(b) this Guaranty is executed at Borrower's request and not at the request of
Lender; (c) Guarantor has full power, right and authority to enter into this
Guaranty; (d) the provisions of this Guaranty do not conflict with or result in
a default under any agreement or other instrument binding upon Guarantor and do
not result in a violation of any law, regulation, court decree or order
applicable to Guarantor; (e) Guarantor has not and will not, without the prior
written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer,
or otherwise dispose of all or substantially all of Guarantor's assets, or any
interest therein; (f) upon Lender's request, Guarantor will provide to Lender
financial and credit information in form acceptable to Lender, and all such
financial information which currently has been, and all future financial
information which will be provided to Lender is and will be true and correct in
all material respects and fairly present the financial condition of Guarantor as
of the dates the financial information is provided; (g) no material adverse
change has occurred in Guarantor's financial condition since the date of the
most recent financial statements provided to Lender and no event has occurred
which may materially adversely affect Guarantor's financial condition; (h) no
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Guarantor is pending or threatened;
(i) Lender has made no representation to Guarantor as to the creditworthiness of
Borrower; and (j) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis information regarding Borrower's financial
condition. Guarantor agrees to keep adequately informed from such means of any
facts, events, or circumstances which might in any way affect Guarantor's risks
under this Guaranty, and Guarantor further agrees that, absent a request for
information, Lender shall have no obligation to disclose to Guarantor any
information or documents acquired by Lender in the course of its relationship
with Borrower.

GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender (a) to continue lending money or to extend other
credit to Borrower; (b) to make any presentment, protest, demand, or notice of
any kind, including notice of any nonpayment of the Indebtedness or of any
nonpayment related to any collateral, or notice of any action or nonaction on
the part of Borrower, Lender, any surety, endorser, or other guarantor in
connection with the Indebtedness or in connection with the creation of new or
additional loans or obligations; (c) to resort for payment or to proceed
directly or at once against any person, including Borrower or any other
guarantor; (d) to proceed directly against or exhaust any collateral held by
Lender from Borrower, any other guarantor, or any other person; (e) to give
notice of the terms, time, and place of any public or private sale of personal
property security held by Lender from Borrower or to comply with any other
applicable provisions of the Uniform Commercial Code; (f) to pursue any other
remedy within Lender's power; or (g) to commit any act or omission of any kind,
or at any time, with respect to any matter whatsoever.

If now or hereafter (a) Borrower shall be or become insolvent, and (b) the
Indebtedness shall not at all times until paid be fully secured by collateral
pledged by Borrower, Guarantor hereby forever waives and relinquishes in favor
of Lender and Borrower, and their respective successors, any claim or right to
payment Guarantor may now have or hereafter have or acquire against Borrower, by
subrogation or otherwise, so that at no time shall Guarantor be or become a
"creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any
successor provision of the Federal bankruptcy laws.

Guarantor also waives any and all rights or defenses arising by reason of (a)
any "one action" or "anti-deficiency" law or any other law which may prevent
Lender from bringing any action, including a claim for deficiency, against
Guarantor, before or after Lender's commencement or completion of any
foreclosure action, either judicially or by exercise of a power of sale; (b) any
election of remedies by Lender which destroys or otherwise adversely affects
Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower
for reimbursement, including without limitation, any loss of rights Guarantor
may suffer by reason of any law limiting, qualifying, or discharging the
Indebtedness; (c) any disability or other defense of Borrower, of any other
guarantor, or of any other person, or by reason of the cessation of Borrower's
liability from any cause whatsoever, other than payment in full in legal tender,
of the Indebtedness; (d) any right to claim discharge of the Indebtedness on the
basis of unjustified impairment of any collateral for the Indebtedness; (e) any
statute of limitations, if at any time any action or suit brought by Lender
against Guarantor is commenced there is outstanding Indebtedness of Borrower to
Lender which is not barred by any applicable statute of limitations; or (f) any
defenses given to guarantors at law or in equity other than actual payment and
performance of the Indebtedness. If payment is made by Borrower, whether
voluntarily or otherwise, or by any third party, on the Indebtedness and
thereafter Lender is forced to remit the amount of that payment to Borrower's
trustee in bankruptcy or to any similar person under any federal or state
bankruptcy law or law for the relief of debtors, the Indebtedness shall be
considered unpaid for the purpose of enforcement of this Guaranty.

Guarantor further waives and agrees not to assert or claim at any time any
deductions to the amount guaranteed under this Guaranty for any claim of setoff,
counterclaim, counter demand, recoupment or similar right, whether such claim,
demand or right may be asserted by the Borrower, the Guarantor, or both.

GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees
that each of the waivers set forth above is made with Guarantor's full knowledge
of its significance and consequences and that, under the circumstances, the
waivers are reasonable and not contrary to public policy or law. If any such
waiver is determined to be contrary to any applicable law or public policy, such
wavier shall be effective only to the extent permitted by law or public policy.

LENDER'S RIGHT OF SETOFF. In addition to all liens upon and rights of setoff
against the moneys, securities or other property of Guarantor given to Lender by
law, Lender shall have, with respect to Guarantor's obligations to Lender under
this Guaranty and to the extent permitted by law, a contractual possessory
security interest in and a right of setoff against, and Guarantor hereby
assigns, conveys, delivers, pledges, and transfers to Lender all of Guarantor's
right, title and interest in and to, all deposits, moneys, securities and other
property of Guarantor now or hereafter in the possession of or on deposit with
Lender, whether held in a general or special account or deposit, whether held
jointly with someone else, or whether held for safekeeping or otherwise,
excluding however all IRA, Keogh, and trust accounts. Every such security
interest and right of setoff may be exercised without demand upon or notice to
Guarantor. No security interest or right of setoff shall be deemed to have been
waived by any act or conduct on the part of Lender or by any neglect to exercise
such right of setoff or to enforce such security interest or by any delay in so
doing. Every right of setoff and security interest shall continue in full force
and effect until such right of setoff or security interest is specifically
waived or released by an instrument in writing executed by Lender.

SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
Indebtedness of Borrower to Lender, whether now existing or hereafter created,
shall be prior to any claim that Guarantor may now have or hereafter acquire
against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby
expressly subordinates any claim Guarantor may have against Borrower, upon any
account whatsoever, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the assets of
Borrower, through bankruptcy, by an assignment for the benefit


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12-31-1997                     COMMERCIAL GUARANTY                        PAGE 3
LOAN NO 004615                    (CONTINUED)


of creditors, by voluntary liquidation, or otherwise, the assets of Borrower
applicable to the payment of the claims of both Lender and Guarantor shall be
paid to Lender and shall be first applied by Lender to the Indebtedness of
Borrower to Lender. Guarantor does hereby assign to Lender all claims which it
may have or acquire against Borrower or against any assignee or trustee in
bankruptcy of Borrower; provided however, that such assignment shall be
effective only for the purpose of assuring to Lender full payment in legal
tender of the Indebtedness. If Lender so requests, any notes or credit
agreements now or hereafter evidencing any debts or obligations of Borrower to
Guarantor shall be marked with a legend that the same are subject to this
Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender hereby
is authorized, in the name of Guarantor, from time to time to execute and file
financing statements and continuation statements and to execute such other
documents and to take such other actions as Lender deems necessary or
appropriate to perfect, preserve and enforce its rights under this Guaranty.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Guaranty:

     AMENDMENTS. This Guaranty, together with any Related Documents, constitutes
     the entire understanding and agreement of the parties as to the matters set
     forth in this Guaranty. No alteration of or amendment to this Guaranty
     shall be effective unless given in writing and signed by the party or
     parties sought to be charged or bound by the alteration or amendment.

     APPLICABLE LAW. This Guaranty has been delivered to Lender and accepted by
     Lender in the State of Nebraska. If there is a lawsuit, Guarantor agrees
     upon Lender's request to submit to the jurisdiction of the courts of
     Douglas County, State of Nebraska. This Guaranty shall be governed by and
     construed in accordance with the laws of the State of Nebraska.

     ATTORNEYS' FEES; EXPENSES. Guarantor agrees to pay upon demand all of
     Lender's costs and expenses, including attorneys' fees and Lender's legal
     expenses, incurred in connection with the enforcement of this Guaranty.
     Lender may pay someone else to help enforce this Guaranty, and Guarantor
     shall pay the costs and expenses of such enforcement. Costs and expenses
     include Lender's attorneys' fees and legal expenses whether or not there is
     a lawsuit, including attorneys' fees and legal expenses for bankruptcy
     proceedings (and including efforts to modify or vacate any automatic stay
     or injunction), appeals, and any anticipated post-judgment collection
     services. Guarantor also shall pay all court costs and such additional fees
     as may be directed by the court.

     NOTICES. All notices required to be given by either party to the other
     under this Guaranty shall be in writing, may be sent by telefacsimile
     (unless otherwise required by law), and, except for revocation notices by
     Guarantor, shall be effective when actually delivered or when deposited
     with a nationally recognized overnight courier, or when deposited in the
     United States mail, first class postage prepaid, addressed to the party to
     whom the notice is to be given at the address shown above or to such other
     addresses as either party may designate to the other in writing. All
     revocation notices by Guarantor shall be in writing and shall be effective
     only upon delivery to Lender as provided above in the section titled
     "DURATION OF GUARANTY." If there is more than one Guarantor, notice to any
     Guarantor will constitute notice to all Guarantors. For notice purposes,
     Guarantor agrees to keep Lender informed at all times of Guarantor's
     current address.

     INTERPRETATION. In all cases where there is more than one Borrower or
     Guarantor, then all words used in this Guaranty in the singular shall be
     deemed to have been used in the plural where the context and construction
     so require; and where there is more than one Borrower named in this
     Guaranty or when this Guaranty is executed by more than one Guarantor, the
     words "Borrower" and "Guarantor" respectively shall mean all and any one or
     more of them. The words "Guarantor," "Borrower," and "Lender" include the
     heirs, successors, assigns, and transferees of each of them. Caption
     headings in this Guaranty are for convenience purposes only and are not to
     be used to interpret or define the provisions of this Guaranty. If a court
     of competent jurisdiction finds any provision of this Guaranty to be
     invalid or unenforceable as to any person or circumstance, such finding
     shall not render that provision invalid or unenforceable as to any other
     persons or circumstances, and all provisions of this Guaranty in all other
     respects shall remain valid and enforceable. If any one or more of Borrower
     or Guarantor are corporations or partnerships, it is not necessary for
     Lender to inquire into the powers of Borrower or Guarantor or of the
     officers, directors, partners, or agents acting or purporting to act on
     their behalf, and any Indebtedness made or created in reliance upon the
     professed exercise of such powers shall be guaranteed under this Guaranty.

     WAIVER. Lender shall not be deemed to have waived any rights under this
     Guaranty unless such waiver is given in writing and signed by Lender. No
     delay or omission on the part of Lender in exercising any right shall
     operate as a waiver of such right or any other right. A waiver by Lender of
     a provision of this Guaranty shall not prejudice or constitute a waiver of
     Lender's right otherwise to demand strict compliance with that provision or
     any other provision of this Guaranty. No prior waiver by Lender, nor any
     course of dealing between Lender and Guarantor, shall constitute a waiver
     of any of Lender's rights or of any of Guarantor's obligations as to any
     future transactions. Whenever the consent of Lender is required under this
     Guaranty, the granting of such consent by Lender in any instance shall not
     constitute continuing consent to subsequent instances where such consent is
     required and in all cases such consent may be granted or withheld in the
     sole discretion of Lender.

EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY
IS DATED DECEMBER 31, 1997.

GUARANTOR:
E.F. JOHNSON COMPANY

BY:   /S/  JEFFERY L. FULLER
    --------------------------------
      AUTHORIZED SIGNER, President & CEO