<PAGE>   1
<TABLE>
<Caption

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<S>            <C>                                                                                      
CONSTRUCTION   [NORWEST BANKS LOGO]                                                                         Commercial
   LOAN                                                                                                  Installment Note
                --------------------------------------------------------------------------------------------------------------
                Borrower's Name                                                                    Date
                                       Transcrypt International, Inc.                              11-15-1996
                --------------------------------------------------------------------------------------------------------------
                Promise to Pay: For value received, the undersigned Borrower promises to pay to the order of
                Norwest Bank Nebraska, National Association                                                         (the "Bank") 
                ----------------------------------------------------------------------------------------------------
                1919 Douglas Street                        Omaha, NE 68102                                   or such other place
                as the Bank or the holder of this promissory note (the "Note") may designate, the principal sum of
                One Million and 00/100                                                                                   Dollars
                ----------------------------------------------------------------------------------------------------------------
                ($1,000,000.00), together with interest on the unpaid balance in accordance with the repayment terms set forth
                below.

                INTEREST: The Borrower will pay interest (calculated on the basis of actual days elapsed in a 360 day year) on
                the unpaid principal balance at the following rate (the "Note Rate"):
  
                  [ ] an annual rate of                 %.
                  [X] an annual rate equal to 0.5000% above the Base Rate, floating.
                  [ ] an annual rate which, for any month hereafter, shall be equal to             %           the Base Rate in
                      effect on the last day of the preceding month, with an initial rate equal to           %.
                  [ ] an annual rate                                                                                              .
                If this [ ] is checked and the Note Rate is variable, the Note Rate shall at no time be less than an annual
                rate of           %, and shall at no time exceed an annual rate (if one is specified) of          %. The interest
                rate on this Note shall never exceed the maximum rate permitted by law.

                *Base Rate* means the rate of interest established by Norwest Bank Nebraska, N.A. National Money Market Rate
                from time to time as its "Prime" rate. "Due Date" means the maturity date on which all unpaid principal and 
                interest is scheduled to be repaid as stated in the Section entitled "Repayment Terms" or the date of the
                acceleration of this Note, whichever is earlier.

                REPAYMENT TERMS: Unless payable sooner as a result of its acceleration, the Borrower shall pay this Note as
                follows:

                [ ] FIXED INSTALLMENTS OF PRINCIPAL AND INTEREST. Principal and interest shall be paid together in     
                    consecutive installments of $               each,                         beginning                          ,
                    and on the same day of each                            thereafter until                                      ,
                    [ ] plus irregular installments as follows:
                    $                       on                          ; $                      on                         ; and
                    $                       on                        . On                          , the entire unpaid balance of
                    principal and accrued but unpaid interest shall be due and payable. Each installment shall be applied first
                    to accrued interest and the balance to principal.

                [X] FIXED PRINCIPAL PAYMENTS PLUS INTEREST. Principal only shall be paid:
                    [ ] in       consecutive installments of $                  each, beginning                           , and on
                    the same day of each                       thereafter until                                , plus a final
                    payment on                               , when the entire unpaid balance of principal shall become due and
                    payable.

                    [X] $1,000,000.00 on 8-15-1997; $                             on                                  ;
                        $                   on                ; $                             on                                  ;
                        $                   on                ; $                             on                                  ;
                    and in addition, interest shall be payable Monthly, beginning 12-01-1996, and on the same day of each
                    subsequent month.

                LATE FEE: [ ] Each time that a scheduled payment is not paid when due or within             days afterwards, the
                Borrower will pay a late fee equal to [ ] $                 ; [ ]                  % of the full amount of the
                late payment; [ ] the lesser of $                  or                   % of the full amount of the late payment.

                [ ] ADDITIONAL INTEREST. Each time a scheduled payment is not paid when due or within       days afterwards, the
                Borrower will pay additional interest ("Additional Interest") which will begin accruing on the next calendar day
                on the entire unpaid principal balance at an annual rate of             % in excess of the Note Rate. The
                Additional Interest will continue to accrue until all past due payments and any Additional Interest are paid
                in full. Acceptance by the Bank of any late fee or Additional Interest shall not constitute a waiver of any
                default hereunder.

                PREPAYMENT: The Borrower may prepay this Note, at any time, in whole or in part, [X] without penalty [ ] provided
                that at the time of prepayment the Borrower pays a prepayment penalty equal to           % of the principal amount
                prepaid. Any partial payment shall be applied against the principal portion of the installments due in inverse
                order of maturity.
                
                OTHER FEES: If this [ ] is checked, the undersigned shall pay to the Bank a nonrefundable: (Mark the applicable 
                fee type(s))

                  [ ] commitment fee of (Choose one) [ ] $                     [ ]            % of the Note Amount
                  [ ] facility fee of (Choose one) [ ] $                   [ ]          % of the Note Amount
                  [ ] documentation fee of (Choose one) [ ] $                     [ ]           % of the Note Amount
                  [ ] application and loan processing fee of (Choose one) [ ] $                [ ]           % of the Note Amount  
                "Note Amount" means the principal amount of this Note, at the time this Note is signed.

                ADDITIONAL TERMS: The terms set forth on the reverse are incorporated into and made a part of this Note.

                LOAN PURPOSE: The Borrower certifies that the proceeds of this loan will be used for business or
                agricultural purposes.
                -----------------------------------------------------------------------------------------------------------------
                SIGNATURES
                -----------------------------------------------------------------------------------------------------------------
                Signature                                                       Signature

                X    /s/ JOHN T. CONNOR                                         X
                -----------------------------------------------------------------------------------------------------------------
                Name and Title (if applicable)                                  Name and Title (if applicable)
                
                John T. Connor, Chief Executive Officer
                -----------------------------------------------------------------------------------------------------------------
                Borrower's name                                                 Signature

                Transcrypt International, Inc.                                  X
                -----------------------------------------------------------------------------------------------------------------
                Address                                                         Name and Title (if applicable)

                4800 NW 1st Street
                -----------------------------------------------------------------------------------------------------------------
                City, State, Zip code                                           [ ] This Note is given as a replacement for, and
                                                                                not in satisfaction of, Note Number             ,
                Lincoln, NE 68521                                               given by the Borrower and dated                 .
                ------------------------------------------------------------------------------------------------------------------

</TABLE>


<PAGE>   2
ADDITIONAL TERMS

DEFAULT AND ACCELERATION: Upon the occurrence of any one or more of the
following events of default, or at any time thereafter unless such default is
cured, the Bank may at its option declare all unpaid principal, accrued
interest, fees and all other amounts payable under this Note to be immediately
due and payable, without notice or demand to the Borrower:

-       Default by the Borrower in the payment when due of any principal,
        interest or other amounts due under this Note; or
-       The Borrower fails to perform or observe any term or covenant of this
        Note or any related documents or perform any other agreement with the
        Bank; or
-       The Borrower fails to perform or observe any agreement with any other
        creditor that relates to indebtedness or contingent liabilities which
        would allow the maturity of such indebtedness or obligation to be
        accelerated; or
-       The Borrower changes its legal form of organization; or
-       If the holder of this Note at any time, in good faith, believes that
        the undersigned will not be able to pay this Note when it is due; or
-       Any representation or warranty made by the Borrower in applying for
        this loan is untrue in any material respect; or
-       A garnishment, levy or writ of attachment, or any local, state or
        federal notice of tax lien or levy is served upon the Bank for the
        attachment of property of the Borrower in the Bank's possession or
        indebtedness owned to the Borrower by the Bank.

AUTOMATIC ACCELERATION: If, with or without the Borrower's consent, a
custodian, trustee or receiver is appointed for any of the Borrower's
properties or if a petition is filed by or against the Borrower under the
United States Bankruptcy Code, or if the Borrower is dissolved or liquidated
(if an entity), or dies (if an individual), the unpaid principal, accrued
interest and all other amounts payable under this Note will automatically
become due and payable without notice or demand.

WAIVER OF DEMAND, PRESENTMENT, NOTICE OF DISHONOR AND PROTEST: Each maker,
accommodation party, endorser or guarantor of this Note, and any other party
liable for its repayment, hereby severally waives demand, presentment, notice
of dishonor and protest.

AMENDMENT OR MODIFICATION OF TERMS: Any amendment or modification of this Note
must be in writing and signed by the party against whom enforcement of such
amendment or modification is sought. The Bank may also change any of the
repayment terms of this Note, including extensions of time and renewals, and
release or add any party liable on this Note, or agree to the substitution or
release of any security collateralizing this Note without notifying or
releasing from liability any maker, accommodation party, endorser or guarantor.
The Bank may suspend or waive any rights or remedies that it may have against
any person who may be liable for its repayment.

NO WAIVER OF DEFAULTS OR REMEDIES: No delay on the part of the Bank in the
exercise of any right or remedy shall operate as a waiver thereof. No single or
partial exercise by the Bank of any right or remedy shall preclude any further
exercise of that or any other right or remedy, and no waiver or indulgence by
the Bank of any default shall be effective unless in writing and signed by the
Bank. 

SUBSEQUENT HOLDERS, MULTIPLE BORROWERS, AND GOVERNING LAW: Any reference to the
Bank in this Note shall be deemed to include any subsequent holder of this
Note. The undersigned Borrower, if more than one, shall be jointly and
severally liable hereunder and the term "Borrower" shall mean any one or more
of them. This Note will be governed by the substantive laws of the state where
the Bank's principal office is located, and any mortgage securing this Note
will be governed by the state where the real property subject to the Mortgage
is located.

ATTORNEYS' FEES: In the event the Bank is required to collect this Note
following its Due Date or the bankruptcy of any maker hereof, the Borrower will
pay to the Bank such further amounts as shall be sufficient to cover the costs
and expenses incurred in collecting this Note and liquidating any security or
guaranties given in support hereof, including reasonable attorneys' fees and
expenses required to take such actions in any court, including any bankruptcy
court. 

FINANCIAL REPORTING: While any amounts are due under this Note, the Borrower
agrees to provide to the Bank annual financial statements and such other
financial information as the Bank may request.

ARBITRATION

AGREEMENT TO ARBITRATE: The Bank and Borrower agree to submit to binding
arbitration all claims, disputes and controversies (whether in tort, contract
or otherwise, except "core proceedings" under the U.S. Bankruptcy Code) arising
between themselves and their respective employees, officers, directors,
attorneys and other agents, which relate in any way without limitation to this
Note, including by way of example but not by way of limitation the negotiation,
collateralization, administration, repayment, modification, default,
termination and enforcement of the loans or credit evidenced by this Note.

RULES GOVERNING ARBITRATION AND SELECTION OF ARBITRATOR: Arbitration under this
Agreement will be governed by the Federal Arbitration Act and proceed in the
city where the Bank's principal office is located, or such other location as
the Bank and Borrower may agree in accordance with the American Arbitration
Association's commercial arbitration rules ("AAA Rules"). Arbitration will be
conducted before a single neutral arbitrator selected in accordance with AAA
Rules and who shall be an attorney who has practiced commercial law for at
least ten years.

STATUTES OF LIMITATION, PROCEDURAL ISSUES, COSTS AND FEES: The arbitrator will
determine whether an issue is arbitratable and will give effect to applicable
statutes of limitation. Judgment upon the arbitrator's award may be entered in
any court having jurisdiction. The arbitrator has the discretion to decide,
upon documents only or with a hearing, any motion to dismiss for failure to
state a claim or any motion for summary judgment. The arbitrator will award
costs and expenses in accordance with the provisions of this Note.

DISCOVERY: Discovery will be governed by the rules of civil procedure in effect
in the state where the Bank's principal office is located. Discovery must be
completed at least 20 days before the hearing date and within 180 days of the
commencement of arbitration. Each request for an extension and all other
discovery disputes will be determined by the arbitrator upon a showing that the
request is essential for the party's presentation and that no alternative means
for obtaining information are available during the initial discovery period.

EXCEPTIONS TO ARBITRATION: This Agreement does not limit the right of either
party to a) foreclose against real or personal property collateral; b) exercise
self-help remedies such as setoff or repossession; or c) obtain provisional
remedies such as replevin, injunctive relief, attachment or the appointment of a
receiver during the pendency or before or after any arbitration proceeding.
These exceptions do not constitute a waiver of the right or obligation of
either party to submit any dispute to arbitration, including those arising from
the exercise of these remedies.
<PAGE>   3
                       ENVIRONMENTAL INDEMNITY AGREEMENT

        This Agreement is made and entered into this 19th day of November, 1996,
by and between TRANSCRYPT INTERNATIONAL, INC., a Delaware Corporation which has
its principal place of business in Lincoln, Nebraska ("Transcrypt") and NORWEST
BANK NEBRASKA, NATIONAL ASSOCIATION, a national banking association which has
its principal place of business in Omaha, Nebraska ("Norwest"). 

                                   Recitals:

A.      Transcrypt is the owner of the real estate described as Lot 1, Highlands
        Coalition Second Addition, as surveyed, platted, and recorded in
        Lancaster County, Nebraska (the "Property"). 

B.      Norwest is loaning the principal sum of One Million Dollars
        ($1,000,000.00) to Transcrypt to finance the construction of certain
        improvements to the Property, which such loan is evidenced by a
        Promissory Note of even date executed and delivered by Transcrypt to
        and in favor of Norwest (the "Note"). 

C.      The Note is secured by a Deed of Trust and Construction Security
        Agreement of even date covering the Property (the "Deed of Trust") under
        which Transcrypt is Trustor and Norwest is Trustee and Beneficiary. 

D.      Norwest has required this Agreement in consideration of and as a
        condition of the loan evidenced by the Note. 

        NOW, THEREFORE, in consideration of the foregoing Recitals, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Transcrypt hereby agrees, covenants, and represents to Norwest as
follows: 

        1.      For purposes of this Agreement, "Pollutant" shall mean any
pollutant, contaminant, solid waste, or hazardous or toxic waste, substance, or
material defined as such under the Resource Conservation and Recovery Act (42
U.S.C. Sections 6901, et seq.), the Comprehensive Environmental Response
Compensation and Liability Act (42 U.S.C. Sections 9601, et seq.), or any
other federal, state, or local environmental law, statute, code, rule,
regulation, order, decree, or ordinance.

        2.      Transcrypt represents and warrants that there is no Pollutant
above, in, on, under, or around the Property and that neither Transcrypt nor
any previous owner of the Property generated, used, had, managed, or released
any Pollutant above, in, on, under, or around the Property.
<PAGE>   4
        3.      Transcrypt warrants and covenants that it will not allow any
Pollutant to be above, in, on, under, or around the Property or to generate,
use, have, manage, release, or allow any Pollutant above, in, on, under, or
around the Property.

        4.      Transcrypt hereby agrees to indemnify and hold Norwest harmless
from any actions, claims, damages, liabilities, remedial action, costs,
attorney fees, damages, and civil and criminal penalties which may result from
or in connection with any Pollutant which is now or hereafter may be located
above, in, on, under, or around the Property. This indemnification shall
survive the termination of the Deed of Trust and the Note referenced in the
Recitals in this Agreement.

        5.      Transcrypt shall immediately notify Norwest in writing of any
proceeding or inquiry by any governmental authority with respect to any
Pollutant relating to the Property and immediately notify Norwest in writing of
any claims made or threatened by any third party relating to any damage, loss,
or injury resulting from any Pollutant relating to the Property. In the event
of any proceeding or inquiry by any governmental authority with respect to a
Pollutant relating to the Property, Transcrypt shall take such abatement,
corrective, remedial, or response action as may be required by law or by
direction or order of any governmental authority or court.

        6.      In the event Norwest reasonably suspects the presence of any
Pollutant above, in, on, under, or around the Property, or in the event of any
Event of Default under the Deed of Trust referred to in the Recitals to this
Agreement, Norwest may require Transcrypt, at the sole cost and expense of
Transcrypt, to employ a qualified independent environmental auditor, acceptable
to Norwest, to conduct an environmental audit of the Property to determine
whether there is any Pollutant above, in, on, under, or around the Property.

        IN WITNESS WHEREOF, this instrument was executed on the date first set
forth above.

NORWEST BANK NEBRASKA,                  TRANSCRYPT INTERNATIONAL, INC.
NATIONAL ASSOCIATION

By: /s/ DeeAnn K. Wenger                By: /s/ John T. Connor
    --------------------------              ----------------------------
        DeeAnn K. Wenger,               Its: Chairman
        Assistant Vice President             ---------------------------
        Corporate Banking Division           

                                      -2-

<PAGE>   5
                                 DEED OF TRUST
                        CONSTRUCTION SECURITY AGREEMENT

THIS DEED OF TRUST CONSTITUTES A CONSTRUCTION SECURITY AGREEMENT WITHIN THE
PURVIEW OF THE NEBRASKA CONSTRUCTION LIEN ACT, AND SECURES AN OBLIGATION WHICH
TRUSTOR INCURRED FOR THE PURPOSE OF MAKING AN IMPROVEMENT OF THE REAL ESTATE IN
WHICH THE SECURITY INTEREST IS GIVEN AND IS A CONSTRUCTION SECURITY
INTEREST.   

        THIS DEED OF TRUST and CONSTRUCTION SECURITY AGREEMENT ("Deed of
Trust") made this 19th day of November, 1996, among TRANSCRYPT INTERNATIONAL,
INC., whose mailing address is 4800 NW 1st Street, Lincoln, Nebraska 68521, as
Trustor; NORWEST BANK NEBRASKA, NATIONAL ASSOCIATION, a national banking
association, whose mailing address is 1919 Douglas Street, P.O. Box 3408,
Omaha, Nebraska 68103, as Trustee; and NORWEST BANK NEBRASKA, NATIONAL
ASSOCIATION, a national banking association, whose mailing address is 1919
Douglas Street, P.O. Box 3408, Omaha, Nebraska 68103, as Beneficiary:

                              W I T N E S S E T H:

        That Trustor irrevocably grants, transfers, and assigns to Trustee IN
TRUST WITH POWER OF SALE all of Trustor's estate, right, title, and interest
in and to the real estate in Lancaster County, Nebraska, legally described as: 
        
                Lot 1, Highlands Coalition Second Addition, as surveyed,
                platted, and recorded in Lancaster County, Nebraska

(the "Real Estate"), together with all interests which Trustor now has or may
hereafter acquire in and to the Real Estate and in and to:

        (a)     all easements and rights of way appurtenant thereto and all of
                the state, right, title, interest, claim, and demand whatsoever
                of Trustor in the Real Estate, either at law or in equity, now
                or hereafter acquired; 

        (b)     all structures, buildings, and improvements of every kind and
                description now or at any time hereafter located or placed on
                the Real Estate (the "Improvements"); 


        (c)     all fixtures now or hereafter located in, upon, or under the
                Real Estate or the Improvements, or any part thereof, and used
                or usable in connection with any present or future operation
                thereof, and all additions thereto and replacements thereof; 
<PAGE>   6
        (d)  all building materials and supplies now or hereafter placed on the
             Real Estate or in the Improvements;

        (e)  all proceeds of the conversion, voluntary or involuntary, of any of
             the foregoing into cash or liquidated claims, including, without
             limitation, proceeds of insurance and condemnation awards; and

        (f)  all other or greater rights and interests of every nature in the
             Real Estate and the Improvements and in the possession or use
             thereof and income therefrom, whether now owned or subsequently
             acquired by Trustor.

        The property so conveyed hereunder is hereinafter referred to as the
"Trust Property."

FOR THE PURPOSE OF SECURING THE FOLLOWING (the "Obligations"):

        A.   Payment of the principal sum of One Million Dollars
             ($1,000,000.00), together with interest thereon (the "Loan"), as
             evidenced by that certain Promissory Note dated of even date
             herewith, in the principal amount of One Million Dollars
             ($1,000,000.00), executed and delivered by Trustor to Beneficiary
             (the "Promissory Note").

        B.   Payment of late charges and other sums due under the terms of the
             Promissory Note.

        C.   Performance, discharge of, and compliance with every debt,
             obligation, covenant, and agreement of Trustor to Beneficiary (all
             of which are collectively hereinafter called the "Loan Documents").

        D.   Payment of future advances to be made at the option of Beneficiary
             and Trustor.

TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS:

        1.   TITLE.  That it is lawfully seized and possessed of a good and
indefeasible title and estate in the Real Estate and the other Trust Property,
and will forever warrant and defend the title thereto against the claims and
demands of all persons whomsoever; that it will, at its expense, maintain and
preserve the lien of this Deed of Trust as a third lien upon the Trust Property,
subject only to the following:

        (a)  Deed of Trust Construction Security Agreement executed by
             Transcrypt International, Ltd., as Trustor, and Norwest Bank
             Nebraska, N.A., as Trustee and Beneficiary, to secure the principal
             sum of $850,000.00, dated

                                      -2-
<PAGE>   7
                January 15, 1994, and filed January 31, 1994, as Instrument No.
                94-5296 in the office of the Register of Deeds of Lancaster
                County, Nebraska; and 

        (b)     Deed of Trust executed by Transcrypt International, Ltd., as
                Trustor, and Norwest Bank Nebraska, N.A., as Trustee and
                Beneficiary, to secure the principal sum of $700,000.00, dated
                May 18, 1994, and filed June 20, 1994, as Instrument No.
                94-28725, in the office of the Register of Deeds of Lancaster
                County, Nebraska.

        2.      MAINTENANCE. To keep the Trust Property in good condition and
repair; to complete or restore promptly and in good and workmanlike manner any
building which may be constructed, damaged, or destroyed thereon, and to pay,
when due, all claims for labor performed and materials furnished therefor and
for any alterations thereof; not to remove, demolish, or materially alter any
building, or the character or use thereof at any time thereon; not to drill or
extract nor permit the drilling for or extraction of oil, gas, or other
hydrocarbon substances or any mineral of any kind unless the written consent of
Beneficiary is first had and obtained; not to commit or permit any waste
thereof or any act upon the Trust Property in violation of law; to do all other
acts in a timely and proper manner which from the character or use of the Trust
Property may be reasonably necessary to protect and preserve the same, the
specific enumerations herein not excluding the general.

        3.      FIRE AND CASUALTY INSURANCE.

        (a)     To keep the Trust Property insured against loss or damage by
                fire with extended coverage, vandalism, and malicious mischief
                endorsement and business interruption insurance in an amount
                acceptable to Beneficiary, and against such other risks or
                hazards which, in the reasonable opinion of Beneficiary, should
                be insured against (including, during any period of
                construction, builder's risk insurance), to the amount of the
                full insurable value thereof on a replacement cost basis with a
                company or companies and in such form and with such endorsements
                as may be approved or required by Beneficiary. Proceeds under
                all such insurance shall be payable to Trustor and Beneficiary,
                as their interests may appear, and all such insurance policies
                shall be endorsed with a standard, noncontributory mortgagee's
                clause in favor of Beneficiary and with a lender's loss payee
                endorsement as to loss of rental income. Trustor shall also
                carry public liability insurance in such form, amount, and with
                such companies as to protect Beneficiary against any liability
                incident to the use of or resulting from any incident occurring
                in or about the Trust Property. Initially, such public liability
                insurance shall provide for comprehensive general liability
                coverage with limits of not less than $1,000,000.00 combined
                single limit per occurrence for personal injury, death, and
                property damage. However, such


                                      -3-
<PAGE>   8
                amount shall be increased from time to time as Beneficiary may
                hereafter require. Said policies or copies thereof, at
                Beneficiary's request, shall be delivered to, and remain in
                possession of, Beneficiary as further security for the faithful
                performance of the Obligations, which delivery shall constitute
                an assignment by Trustor to Beneficiary of all rights
                thereunder, including all return premiums; to deliver to
                Beneficiary a policy or policies renewing or extending any
                expiring insurance with a receipt showing premiums paid at least
                thirty (30) days before expiration. If Trustor fails to so
                deliver any renewal policies, Beneficiary may procure such
                insurance as it may elect and may make payment of premiums
                thereon, which payment is reimbursable on demand. Neither
                Trustee nor Beneficiary shall be responsible for obtaining or
                maintaining such insurance. Beneficiary, from time to time, may
                furnish to any insurance agency or company, or any other person,
                any information contained in or extracted from any insurance
                policy theretofore delivered to Beneficiary pursuant hereto, and
                any information concerning the Loan. In no event, and whether or
                not an Event of Default (as hereinafter defined) has occurred
                hereunder, shall Beneficiary, by the fact of approving,
                accepting, or obtaining such insurance, incur any liability for
                the amount of such insurance, the form or legal sufficiency of
                insurance contracts, solvency of insurers, or payment of losses
                by insurers, and Trustor hereby expressly assumes full
                responsibility therefor. Trustor shall give immediate written
                notice of any loss to Beneficiary, and Beneficiary may, but is
                not obligated to, make proof of loss if not made promptly by
                Trustor. Said policies shall require sixty (60) days' prior
                written notice of cancellation or modification by given to
                Beneficiary.

        (b)     In case of any loss, the amount collected under any policy of
                insurance on the Trust Property may, at the option of
                Beneficiary, be applied by Beneficiary to satisfaction of any
                Obligations and in such order and amount as Beneficiary may
                determine; or said amount, or any portion thereof may, at the
                option of Beneficiary, either be used in replacing or restoring
                the Trust Property to a condition satisfactory to Beneficiary,
                or said amount or any portion thereof, may be released to
                Trustor. In any such event, neither Trustee nor Beneficiary
                shall be obligated to see to the proper application thereof; nor
                shall the amount so released or used by deemed a payment on any
                Obligation. Such application, use, and/or release shall not cure
                or waive any Event of Default or notice of default hereunder or
                invalidate any act done pursuant to such notice. Any unexpired
                insurance and all returnable insurance premiums shall inure to
                the benefit of, and pass to, the purchaser of the Trust Property
                covered thereby at any Trustee's sale or judicial foreclosure
                sale held hereunder. If the Trust Property is sold pursuant to
                the power of sale contained herein or pursuant to any decree of
                foreclosure, all right, title, and interest of Trustor in and to
                the proceeds of fire and other

                                      -4-
<PAGE>   9
                insurance policies for damage prior to the sale, which proceeds
                are not received prior to the date of said sale, shall belong to
                Beneficiary.

        4.      TAXES AND OTHER SUMS DUE. To pay, satisfy, and discharge at
least ten (10) days before delinquency, any and all of the following sums:

        (a)     all general and special taxes and assessments and public charges
                affecting or levied against the Trust Property;

        (b)     all encumbrances, charges, and liens, with interest, on the
                Trust Property, or any part thereof, which are, or appear to
                Beneficiary to be, prior to or superior hereto;

        (c)     all costs, fees, and expenses of this trust, whether or not
                described herein;

        (d)     fees or charges for any statement regarding any Obligation in
                any amount demanded by Beneficiary, not to exceed the maximum
                amount allowed by law therefor at the time when such request is
                made;

        (e)     such other charges as the Beneficiary may deem reasonable for
                services rendered by Beneficiary and furnished at the request of
                Trustor or any successor in interest to Trustor.

        5.      SUMS ADVANCED TO BEAR INTEREST. To pay immediately upon demand
any sums advanced or paid by Beneficiary or Trustee under any clause or
provision of this Deed of Trust. Any such sums, until so repaid, shall be
considered a portion of the Obligations secured hereby and bear interest from
the date advanced or paid at the same rate specified in the Promissory Note and
shall be secured by this Deed of Trust.

        6.      EVENTS OF DEFAULT. Upon the occurrence of any one of the
following (hereinafter an "Event of Default" or "default"), the payment of all
principal, interest, and any other sums due under the terms of the Promissory
Note shall, at the option of Beneficiary, be accelerated and such principal,
interest, and other sums shall immediately be due and payable without notice or
demand, and Beneficiary shall have the option to foreclose judicially or
extrajudicially through power of sale any and all liens securing the payment
thereof: 

        (a)     Default in the payment of principal or interest under the
                Promissory Note;

        (b)     Default in the payment of principal or interest under any of the
                other Obligations;

        (c)     Any default under any of the other Loan Documents; or

                                      -5-
<PAGE>   10
(d)  Trustor fails to keep or perform any of its agreements, undertakings,
     obligations, covenants, or conditions under this Deed of Trust;

(e)  Any default under the Amended and Restated Loan Agreement between Norwest
     Bank Nebraska, N.A. and Transcrypt International, Ltd. dated May 18, 1994,
     as amended by the First Amendment to Amended and Restated Loan Agreement
     dated June 1, 1995, the Second Amendment to Amended and Restated Loan
     Agreement dated April 10, 1996, the Third Amendment to Amended and Restated
     Loan Agreement dated October 22, 1996, and the Fourth Amendment to Amended
     and Restated Loan Agreement dated of even date with this Deed of Trust;

(f)  Any default under the Environmental Indemnification Agreement of even date
     with this Deed of Trust;

(g)  Any warranty, representation, or financial statement made or furnished by
     Trustor to Beneficiary is discovered to have been false in any material
     respect when made or furnished; or

(h)  Trustor shall:

     (i)    have an order for relief entered with respect to it under any law
            relating to bankruptcy, insolvency, reorganization, or relief of
            debtors ("Bankruptcy Law");

     (ii)   not pay, or admit in writing its inability to pay, its debts
            generally as they become due;

     (iii)  make an assignment for the benefit of its creditors;

     (iv)   apply for, seek, consent to, or acquiesce in the appointment of a
            receiver, custodian, trustee, examiner, liquidator, or similar
            official for it or any of its property; or

     (v)    institute any proceedings seeking an order for relief under any
            Bankruptcy Law, or a proceeding seeking to adjudicate it a bankrupt
            or insolvent or seeking a dissolution, winding up, liquidation,
            reorganization, arrangement, adjustment, or composition of it, or
            its debts, under any Bankruptcy Law; or fail to file an answer or
            other pleading denying the material allegations of any such
            proceeding filed against it;


                                      -6-

<PAGE>   11
        (i)     Should it be discovered after the execution and delivery of this
                Deed of Trust that there is a defect in the title to, or a lien
                or encumbrance of any nature on the Real Estate or other Trust
                Property described in the Loan Documents prior to the lien of
                the Beneficiary evidenced by the Loan Documents, and not
                disclosed in the policy of title insurance issued to the
                Beneficiary insuring the priority of the Deed of Trust covering
                the Real Estate, unless such defect is cured within thirty (30)
                days after written notice of such defect from Beneficiary to
                Trustor; or

        (j)     Should Trustor be divested of title to the Real Estate, or any
                part thereof, of any interest therein, either voluntarily or
                involuntarily; or

        (k)     If title to the Trust Property be subjected to any lien or
                charge, whether superior or inferior to the lien of the Loan
                Documents, voluntarily or involuntarily, contractual or
                statutory, except as permitted by the Loan Documents, without
                the prior written consent of Beneficiary in each such instance
                first had and obtained, and if any such lien or charge is not
                released of record within thirty (30) days following written
                notice to Trustor; or

        (l)     If the Trust Property or any part thereof or beneficial interest
                therein is sold, assigned, transferred, conveyed, encumbered,
                hypothecated, mortgaged, or otherwise alienated by Trustor,
                whether voluntarily or involuntarily, or by operation of law, in
                either or any case without the prior written consent of
                Beneficiary.

        7.      COMPLIANCE WITH LAWS, ETC.  Trustor shall comply promptly and
fully with all present and future laws, ordinances, rules, and regulations and
any governmental authority having jurisdiction of or over the Trust Property or
any part thereof or any use of the Trust Property, including, without
limitation, laws, ordinances, rules, or regulations relating to asbestos,
petroleum products, or hazardous or toxic wastes or materials.

IT IS MUTUALLY AGREED THAT:

        8.      LITIGATION.  Trustor shall defend this Deed of Trust in any
action or proceeding purporting to affect the Trust Property, whether or not it
affects the security hereof, or purporting to affect the rights or powers of
Beneficiary or Trustee, and shall file and prosecute all necessary claims and
actions to prevent or recover for any damage to or destruction of the Trust
Property, and either Trustee or Beneficiary is hereby authorized, without
obligation so to do, to commence, appear in, or defend any such action, whether
brought by or against Trustor, Beneficiary, or Trustee, or with or without suit,
to exercise or enforce any other right, remedy, or power available or conferred
hereunder, whether or not judgment be entered in any action or proceeding; and
Trustee or Beneficiary may appear or intervene in any action or proceeding, and
retain counsel therein; and take such 

                                      -7-
<PAGE>   12
action therein as either may be advised and may settle, compromise, or pay the
same or any other claims and, in the behalf and for any of said purposes, may
expend and advance such sums of money as either may deem necessary. Whether or
not Trustor so appears or defends, Trustor on written demand, shall pay all
actual and reasonable costs and expenses of Beneficiary and Trustee, including
costs of evidence of title and attorneys' fees, in any such action or proceeding
in which Beneficiary or Trustee may appear by virtue of being made a party
defendant or otherwise and irrespective of whether the interest of Beneficiary
or Trustee in the Trust Property is directly questioned by such action,
including but not limited to any action for the condemnation or partition of the
Trust property.

     9.  CASUALTY AND CONDEMNATION. All sums due, paid, or payable to Trustor,
or any successor in interest of Trustor, whether by way of judgment, settlement,
or otherwise:

     (a)  for injury or damage to the Trust Property;

     (b)  in connection with any condemnation for public use or injury to the
          Trust Property or any part thereof;

are hereby absolutely and irrevocably assigned and shall be paid to Beneficiary.

     Beneficiary shall be entitled, at its option, to commence, intervene in,
appear in, and prosecute in its own name, any action or proceeding, or to make
any compromise or settlement, in connection with any such taking or damage.
Trustor agrees to execute such further assignments of any compensation, award,
damages, rights of action, and proceeds as Beneficiary may require.

     All amounts received by Beneficiary pursuant to this Deed of Trust, in
connection with any condemnation for public use of, or injury to, the Trust
Property, may, at the option of the beneficiary, be applied by Beneficiary upon
any indebtedness secured hereby or other Obligation, and in such order and
amount as Beneficiary may determine; or said amount or any portion thereof, may
at the option of Beneficiary, be used in replacing or restoring the Trust
Property to a condition satisfactory to Beneficiary, or be released to Trustor,
to be applied, at the option of Beneficiary, upon any indebtedness secured
hereby. No such application, use, or release shall cure or waive any Event of
Default, or notice of default hereunder, or invalidate any act done pursuant to
such notices.

     10.  JUDICIAL FORECLOSURE OR TRUSTEE'S SALE ON DEFAULT.

     (a)  Upon the occurrence of one or more Events of Default, or default by
          Trustor in the performance of any other covenant or agreement
          hereunder, or any covenant or agreement under any Loan Document or
          under any instrument or document now or hereafter executed by Trustor
          to further secure payment


                                      -8-

<PAGE>   13
        
             of and performance of the Obligations, Beneficiary may declare all
             indebtedness secured hereby immediately due and payable and, at the
             option of Beneficiary this Deed of Trust may be foreclosed in the
             manner provided by law for the foreclosure of mortgages on real
             property or, at the option of Trustee and Beneficiary, may be sold
             in the manner provided in the Nebraska Trust Deeds Act, under the
             power of sale conferred upon the Trustee hereunder.

        (b)  If the Trust Property is sold pursuant to the power of sale
             conferred upon Trustee hereunder, Trustee shall cause to be filed
             of record a written notice of default and election to sell the
             Trust Property. After the lapse of such time as then may be
             required by law following recordation of such notice of default,
             and notice of sale having been given as then required by law,
             Trustee, without demand on Trustor, shall sell the Trust Property,
             either as a whole or in separate parcels, and in such order as it
             or Beneficiary may determine, at public auction to the highest
             bidder. Trustee may postpone the sale of all or any portion of the
             Trust Property by public announcement at the time and place of
             sale, and from time to time thereafter may postpone the sale by
             public announcement at the time and place fixed by the preceding
             postponement. Trustee shall deliver to such purchaser its deed
             conveying any Trust Property so sold, but without any covenant or
             warranty, express or implied. The recital in such deed of any
             matters of fact or otherwise shall be conclusive proof of the
             truthfulness thereof. Any person, including Trustor, Trustee, or
             Beneficiary, may purchase at such sale. Trustee shall first apply
             the proceeds of the Trustee's sale to the costs and expenses of
             exercising the power of sale and of the sale, including the payment
             of Trustee's fees actually incurred, and second to the payment of
             any Obligations, and third to the payment of junior trust deeds,
             mortgages, or other liens, and the balance, if any, to the person
             or persons legally entitled thereto.

        (c)  Trustor agrees, for itself and any and all persons or concerns
             claiming by, through, or under Trustor, that if it, or any one or
             more of them, shall hold possession of the Trust Property, or any
             part thereof, subsequent to the Trustee's or judicial sale
             hereunder, it, or the parties so holding possession, shall become,
             and be considered as, tenants at will of the purchaser or
             purchasers at either such sale; and any such tenant failing or
             refusing to surrender possession upon demand shall be guilty of
             forcible detainer and shall be liable to such purchaser or
             purchasers for reasonable rental of the Real Estate, and shall be
             subject to eviction and removal, forcible or otherwise, with or
             without process of law, and all damages which may be sustained by
             any such tenant as a result thereof are hereby expressly waived. 

                                      -9-



<PAGE>   14
        11.  SECURITY INTEREST IN FIXTURES.  This Deed of Trust is also
intended to create, and Trustor does hereby grant to Beneficiary, a security
interest in any and all now owned and hereafter acquired fixtures now or
hereafter located on or used in connection with the Trust Property. Beneficiary
shall have, cumulative of all other rights and remedies of Beneficiary
hereunder, all of the rights and remedies of a secured party under the Nebraska
Uniform Commercial Code. Trustor hereby agrees to execute and deliver on demand
and hereby irrevocably constitutes and appoints Beneficiary the
attorney-in-fact of Trustor to execute and deliver and, if appropriate, to file
with the appropriate filing officer or officers such security agreements,
financing statements, continuation statements, or other instruments as
Beneficiary may request or require in order to perfect or continue the
perfection of the lien or security interest created hereby.

        12.  FIXTURE FINANCING STATEMENT.  This Deed of Trust is intended to be
a financing statement with the purview of the Nebraska Uniform Commercial Code
with respect to those items of the Trust Property that constitute fixtures to
the Real Estate. The address of Trustor (Debtor) and Beneficiary (Secured
Party) are set forth on the first page of this Deed of Trust. This Deed of
Trust is to be filed for record in the office of the Register of Deeds of
Lancaster County, Nebraska, where the Real Estate is located. Trustor is the
record owner of the Real Estate.

        13.  SUBSTITUTION OF TRUSTEE.  Beneficiary may, from time to time, by
instrument in writing, substitute a successor or successors to any Trustee
named herein or acting hereunder, which instrument, executed and acknowledged
by Beneficiary and recorded in the office of the Register of Deeds of Lancaster
County, Nebraska, shall be conclusive proof of proper substitution of such
Trustee or Trustees, who shall, without conveyance from the Trustee
predecessor, succeed to all its title, estate, rights, power, and duties.

        14.  NO WAIVER BY BENEFICIARY.  No waiver by Beneficiary of any right
under this Deed of Trust shall be effective unless in writing. Any waiver by
Beneficiary of any right granted to Beneficiary under this Deed of Trust or of
any provision of this Deed of Trust as to any transaction or occurrence shall
not be deemed a waiver as to any future transaction or occurrence. By accepting
payment of any Obligation after its due date, or by making any payment or
performing any act on behalf of Trust or for which Trustor was obligated
hereunder, but failed to make or perform, or by adding any payment so made by
Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its
right to require prompt payment when due of, or to require prompt performance
of, any Obligation, or to declare a default for failure so to pay or perform.

        15.  TIME OF THE ESSENCE.  Time is of the essence in all Trustor's
obligations hereunder.

        16.  REMEDIES.  No remedy herein provided shall be exclusive of any
other remedy herein or now or hereafter existing by law, but shall be
cumulative. Every power

                                      -10-
<PAGE>   15
or remedy hereby given to trustee or Beneficiary, or to which either of them
may be otherwise entitled, may be exercised from time to time and as often as
may be deemed expedient by them, and either of them may pursue inconsistent
remedies. If Beneficiary holds any additional security for any Obligation, it
may enforce the sale thereof at its option, either before, contemporaneously
with, or after any sale is made hereunder, and on any default of Trustor,
Beneficiary may, at its option, offset against any indebtedness secured hereby,
and the Beneficiary is hereby authorized and empowered at its option, without
any obligation so to do, and without affecting the enforceability of any
Obligation, to apply toward the payment of any indebtedness of the Trustor to
the Beneficiary any and all sums of money of Trustor which Beneficiary may have
in its possession or under its control, including without limiting the
generality of the foregoing, any savings account, deposit, investment
certificate, escrow or trust funds.

        17.  ILLEGALITY. In the event that any provision or clause of this Deed 
of Trust conflicts with applicable law, such conflict shall not affect other
provisions of this Deed of Trust which can be given effect without the
conflicting provision, and to this end the provisions of this Deed of Trust are
declared to be severable.

        18.  ADDRESS FOR MAILING NOTICES.  Trustor hereby requests that a copy
of any notice of default and a copy of any notice of sale hereunder shall be
mailed to each person below at the address indicated:

        If to Trustor:          Mr. John T. Connor, Chairman of the Board
                                Transcrypt International, Inc.
                                4800 N.W. 1st Street
                                Lincoln, NE 68521-9918

        If to Beneficiary       Norwest Bank Nebraska, National Association
        or Trustee:             1919 Douglas Street
                                P.O. Box 3408
                                Omaha, NE 68103
                                Attention: DeeAnn K. Wenger, Assistant Vice
                                   President Corporate Banking Division




                                      -11-

 
<PAGE>   16
        IN WITNESS WHEREOF, this instrument was executed on the date first set
forth above.

TRUSTOR:                                TRUSTEE:

TRANSCRYPT INTERNATIONAL, INC.          NORWEST BANK NEBRASKA,
                                        NATIONAL ASSOCIATION


By: /s/ John T. Connor                  By: /s/ DeeAnn K. Wenger
   ---------------------------             ------------------------------
Its: Chairman                                   DeeAnn K. Wenger,
    --------------------------                  Assistant Vice President
                                                Corporate Banking Division

                                        BENEFICIARY:

                                        NORWEST BANK NEBRASKA,
                                        NATIONAL ASSOCIATION

                                        By: /s/ DeeAnn K. Wenger
                                           ------------------------------
                                                DeeAnn K. Wenger,
                                                Assistant Vice President
                                                Corporate Banking Division


STATE OF NEBRASKA  )
                   )  ss.
COUNTY OF DOUGLAS  )

        The foregoing instrument was acknowledged before me this 19 day of
November, 1996, by John T. Connor, the Chairman of Transcrypt International,
Inc., a Delaware Corporation, on behalf of the corporation.

                                        /s/ Stephanie Lampe
                                        ---------------------------------
                                        Notary Public

----------------------------------------
GENERAL NOTARY-State of Nebraska [STAMP]
[SEAL]    STEPHANIE LAMPE 
My Comm. Exp. July 23, 1998
----------------------------------------
My commission expires 7/23/93

                                      -12-
<PAGE>   17
STATE OF NEBRASKA   )
                    )  ss.
COUNTY OF DOUGLAS   )


        The foregoing instrument was acknowledged before me this 22 day of
November, 1996, by DeeAnn K. Wenger, Assistant Vice President of Norwest Bank
Nebraska, National Association, Trustee, on behalf of said bank.

----------------------------------------
GENERAL NOTARY-State of Nebraska [STAMP]        /s/ Bobbi L. Chandler
[SEAL]  BOBBI L. CHANDLER                       --------------------------------
My Comm. Exp. Feb. 16, 1997                     Notary Public
----------------------------------------
My commission expires 2-16-97.

STATE OF NEBRASKA   )
                    )  ss.
COUNTY OF DOUGLAS   )


        The foregoing instrument was acknowledged before me this 22 day of
November, 1996, by DeeAnn K. Wenger, Assistant Vice President of Norwest Bank
Nebraska, National Association, Beneficiary, on behalf of said bank.

----------------------------------------
GENERAL NOTARY-State of Nebraska [STAMP]        /s/ Bobbi L. Chandler
[SEAL]  BOBBI L. CHANDLER                       --------------------------------
My Comm. Exp. Feb. 16, 1997                   Notary Public
----------------------------------------                             
My commission expires 2-16-97.