<PAGE>   1
                                                                    EXHIBIT 10.1



                           NOTICE OF FINAL AGREEMENT


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
  PRINCIPAL     LOAN DATE   MATURITY    LOAN NO    CALL    COLLATERAL    ACCOUNT    OFFICER    INITIALS
<S>            <C>         <C>          <C>        <C>     <C>           <C>        <C>        <C>
$3,000,000.00  10-12-1998  10-12-1999                                                 T44
------------------------------------------------------------------------------------------------------------
        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>

<TABLE>
<S>                                          <C>                      <C>
BORROWER: GLOBAL ELECTION SYSTEMS, INC.      (TIN: 85-0394190)        Lender: HIBERNIA NATIONAL BANK OF TEXAS
           1611 WILMETH ROAD                                                  ATTN: LOAN DOCUMENTATION-ALEXANDRIA
           MCKINNEY, TX 75069                                                 2318 RICHMOND RD.
                                                                              TEXARKANA, TX 75503
</TABLE>

================================================================================


  ------------------------------------------------------------------------------
   THE WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
   AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
   SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
   AGREEMENTS BETWEEN THE PARTIES.

   AS USED IN THIS NOTICE, THE FOLLOWING TERMS HAVE THE FOLLOWING MEANINGS:

        LOAN. The term "Loan" means the following described loan: an Article
        1B-1D of the Texas Credit Title and Section 303 of the Texas Finance
        Code (formerly Chapter 1 of the Texas Credit Code) non-precomputed
        Variable Rate (at THE WALL STREET JOURNAL PRIME RATE, making an initial
        rate of 8.250%), Nondisclosable Revolving Line of Credit Loan to a
        Corporation for $3,000,000.00 due on October 12, 1999.

        PARTIES. The term "Parties" means Hibernia National Bank of Texas and
        any and all entities or individuals who are obligated to repay the loan
        or have pledged property as security for the Loan, including without
        limitation the following:

             BORROWER:      GLOBAL ELECTION SYSTEMS, INC.
             GUARANTOR:     GLOBAL ELECTION SYSTEMS INC. CANADA

        LOAN AGREEMENT. The term "Loan Agreement" means one or more promises,
        promissory notes, agreements, undertakings, security agreements, deeds
        of trust or other documents, or commitments, or any combination of those
        actions or documents, relating to the Loan, including without limitation
        the following:

                                 NECESSARY FORMS

<TABLE>
<S>                                                                   <C>
             Corporate Resolution to Borrow                            Corporate Resolution to Guarantee
             Promissory Note / Change in Terms Agr.                    Commercial Guaranty
             Security Agreement                                        UCC - 1
             Disbursement Request and Authorization                    Notice of Final Agreement
</TABLE>
  ------------------------------------------------------------------------------

   THIS NOTICE OF FINAL AGREEMENT IS GIVEN BY HIBERNIA NATIONAL BANK OF TEXAS
   PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE. EACH PARTY
   WHO SIGNS BELOW, OTHER THAN HIBERNIA NATIONAL BANK OF TEXAS, ACKNOWLEDGES,
   REPRESENTS, AND WARRANTS TO HIBERNIA NATIONAL BANK OF TEXAS THAT IT HAS
   RECEIVED, READ AND UNDERSTOOD THIS NOTICE OF FINAL AGREEMENT. THIS NOTICE IS
   DATED OCTOBER 12,1998.

   BORROWER: 

   GLOBAL ELECTION SYSTEMS, INC.

   By:   /s/ HOWARD T. VAN PELT
      ----------------------------------------
      HOWARD T. VAN PELT, PRESIDENT

   GUARANTOR:

   GLOBAL ELECTION SYSTEMS, INC. CANADA

   By:   /s/ HOWARD T. VAN PELT
      ----------------------------------------
      HOWARD T. VAN PELT, PRESIDENT

   LENDER:

   HIBERNIA NATIONAL BANK OF TEXAS

   BY: 
      ----------------------------------------
      AUTHORIZED OFFICER

================================================================================
LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.25a (c) 1998 CFI ProServices, Inc.
All rights reserved. [TX-121 E3.25 F3.25 P3.25 GLOBAL.LN C7.OVL]


<PAGE>   2
                                  BOARDING DATA

================================================================================

 The information contained on this Boarding Data Sheet is for Lender's use only.

================================================================================

<TABLE>
<S>                                          <C>                  <C>
BORROWER:   GLOBAL ELECTION SYSTEMS, INC.    (TIN: 85-0394190)    LENDER:   HIBERNIA NATIONAL BANK OF TEXAS    
            1611 WILMETH ROAD                                               ATTN: LOAN DOCUMENTATION-ALEXANDRIA
            MCKINNEY, TX 75069                                              2318 RICHMOND RD.                  
                                                                            TEXARKANA, TX 75503                
</TABLE>

   COUNTY:  COLLIN

   TIN: 85-0394190

   OFFICERS:                                         ADDRESS:

   HOWARD T. VAN PELT, PRESIDENT

   ACCOUNT/CUSTOMER NUMBER:                    BUS. PHONE:

   LOAN DESCRIPTION: This is an Article 1B-1D of the Texas Credit Title and
   Section 303 of the Texas Finance Code (formerly Chapter 1 of the Texas Credit
   Code) non-precomputed Variable Rate (at THE WALL STREET JOURNAL PRIME RATE,
   making an initial rate of 8.250%), Nondisclosable Revolving Line of Credit
   Loan to a Corporation for $3,000,000.00 due on October 12, 1999.

================================================================================

  GUARANTORS:                                           AMOUNT

  GLOBAL ELECTION SYSTEMS INC. CANADA                   Unlimited
  1562 RAND AVENUE
  VANCOUVER, BC V6P3G2

================================================================================

FEES AND CHARGES:

<TABLE>
<S>                                                                <C>          
                         UNDISBURSED FUNDS:                        $3,000,000.00
                         NOTE PRINCIPAL:                           $3,000,000.00
                         PREPAID FINANCE CHARGES:                  $        0.00
                         AMOUNT FINANCED:                          $3,000,000.00
</TABLE>

================================================================================

PAYMENT INFORMATION:

<TABLE>
<CAPTION>
    NO. OF
   PAYMENTS            AMOUNT            DUE

<S>             <C>                      <C> 
                                         Quarterly interest payments beginning 01-12-1999
       1        $3,000,000.00            10-12-1999 plus all accrued unpaid interest.
</TABLE>

   APR: 8.365
   INTEREST RATE: 8.250 @ 365/360 at THE WALL STREET JOURNAL PRIME RATE adjusted
                    each day
   CURRENT INDEX: 8.250
   NOT ROUNDED

   POST MATURITY RATE. The maximum rate allowed by applicable law.

   TOTAL OF PAYMENTS: $3,125,468.75 (estimate)
   LOAN TYPE: Line of Credit / Multiple Advance
   TYPE(S) OF INSURANCE PURCHASED: No Insurance Purchased.

================================================================================

CLASSIFICATION DATA: NON DISCLOSABLE CORPORATION

<TABLE>
<S>                                 <C>                  <C>                     <C>                  <C>
   LOAN NUMBER:                     LOAN DATE:           10-12-1998              DEPARTMENT / BRANCH: 1
   CALL CODE:                       DISBURSEMENT DATE:   10-12-1998              OFFICER:             T44
   PURPOSE CODE:                    MATURITY DATE:       10-12-1999              LAST EDIT:           LADSUE
   COLLATERAL CODE:                                                              PORTFOLIO:           8028
   LOAN NAME:       GLOBAL
   STD. LOAN:       COMMERCIAL MISCELLANEOUS SECURED
   ARTICLE:         Article 1B-1D
   PURPOSE:         PURPORT GROWTH OF ACCOUNT RECEIVABLES AND INVENTORY
</TABLE>

================================================================================

COLLATERAL INFORMATION:

<TABLE>
<CAPTION>
                                                         OWNER      INSURANCE      COVERAGE
                        DESCRIPTION                      CODE         AMOUNT         BASIS         DEDUCTIBLE

<S>                                                      <C>        <C>            <C>            <C>
   All Accounts and General Intangibles                    2
</TABLE>

================================================================================
LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.25a(c) 1998 CFI ProServices, Inc.
All rights reserved. [TX-140 E3.25 F3.25 P3.25 GLOBAL.LN C7.OVL]

<PAGE>   3

                                 PROMISSORY NOTE


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
  PRINCIPAL     LOAN DATE   MATURITY    LOAN NO    CALL    COLLATERAL    ACCOUNT    OFFICER    INITIALS
<S>            <C>         <C>          <C>        <C>     <C>           <C>        <C>        <C>
$3,000,000.00  10-12-1998  10-12-1999                                                 T44
------------------------------------------------------------------------------------------------------------
        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>

<TABLE>
<S>                                          <C>
BORROWER:    GLOBAL ELECTION SYSTEMS, INC.          LENDER:  HIBERNIA NATIONAL BANK OF TEXAS
             (TIN: 85-0394190)                               ATTN: LOAN DOCUMENTATION-ALEXANDRIA
             1611 WILMETH ROAD                               2318 RICHMOND RD.
             MCKINNEY, TX 75069                              TEXARKANA, TX 75503
</TABLE>

================================================================================

<TABLE>
<S>                                     <C>                        <C>
  PRINCIPAL AMOUNT: $3,000,000.00        INITIAL RATE: 8.250%       DATE OF NOTE: OCTOBER 12, 1998
</TABLE>

  PROMISE TO PAY. GLOBAL ELECTION SYSTEMS, INC. ("BORROWER") PROMISES TO PAY TO
  HIBERNIA NATIONAL BANK OF TEXAS ("LENDER"), OR ORDER, IN LAWFUL MONEY OF THE
  UNITED STATES OF AMERICA, THE PRINCIPAL AMOUNT OF THREE MILLION & 00/100
  DOLLARS ($3,000,000.00) 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 OR MATURITY, WHICHEVER OCCURS FIRST.

  CHOICE OF USURY CEILING AND INTEREST RATE. The interest rate on this Note has
  been implemented under the "Weekly Rate" as referred to in Section 303.201 of
  the Texas Finance Code and Articles 1D.002 and 1D.003 of the Texas Credit
  Title. The terms, including the rate, or index, formula, or provision of law
  used to compute the rate on the Note, will be subject to revision as to
  current and future balances, from time to time by notice from Lender in
  compliance with Section 303.403 of the Texas Finance Code.

  PAYMENT. BORROWER WILL PAY THIS LOAN ON DEMAND, OR IF NO DEMAND IS MADE, IN
  ONE PAYMENT OF ALL OUTSTANDING PRINCIPAL PLUS ALL ACCRUED UNPAID INTEREST ON
  OCTOBER 12, 1999. IN ADDITION, BORROWER WILL PAY REGULAR QUARTERLY PAYMENTS OF
  ACCRUED UNPAID INTEREST BEGINNING JANUARY 12, 1999, AND ALL SUBSEQUENT
  INTEREST PAYMENTS ARE DUE ON THE SAME DAY OF EACH QUARTER 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, unless such calculation
  would result in a usurious rate, in which case interest shall be calculated on
  a per diem basis of a year of 365 or 366 days, as the case may be. 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. Notwithstanding any other provision of this Note, Lender will
  not charge interest on any undisbursed loan proceeds. No scheduled payment,
  whether of principal or interest or both, will be due unless sufficient loan
  funds have been disbursed by the scheduled payment date to justify the
  payment.

  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 THE
  WALL STREET JOURNAL PRIME RATE (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 8.250% PER ANNUM. THE INTEREST RATE TO BE
  APPLIED PRIOR TO MATURITY TO THE UNPAID PRINCIPAL BALANCE OF THIS NOTE WILL BE
  AT A RATE EQUAL TO THE INDEX, RESULTING IN AN INITIAL RATE OF 8.250% PER
  ANNUM. NOTICE: Under no circumstances will the interest rate on this Note be
  more than the maximum rate allowed by applicable law. For purposes of this
  Note, the "maximum rate allowed by applicable law" means the greater of (a)
  the maximum rate of interest permitted under federal or other law applicable
  to the indebtedness evidenced by this Note, or (b) the "Weekly Rate" as
  referred to in Section 303.201 of the Texas Finance Code and Articles 1D.002
  and 1D.003 of the Texas Credit Title.

  PREPAYMENT. Borrower may pay without penalty all or a portion of the amount
  owed earlier than it is due. 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.

  POST MATURITY RATE. The Post Maturity Rate on this Note is the maximum rate
  allowed by applicable law. Borrower will pay interest on all sums due after
  final maturity, whether by acceleration or otherwise, at that rate, with the
  exception of any amounts added to the principal balance of this Note based on
  Lender's payment of insurance premiums, which will continue to accrue interest
  at the pre-maturity rate.

  DEFAULT. Borrower will be in default if any of the following happens: (a)
  Borrower fails to make any payment when due. (b) Borrower breaks any promise
  Borrower has made to Lender, or 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
  guarantor dies or 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. (h) Lender
  in good faith deems itself insecure.

  LENDER'S RIGHTS. Upon default, Lender may declare the entire indebtedness,
  including the unpaid principal balance on this Note, all accrued unpaid
  interest, and all other amounts, costs and expenses for which Borrower is
  responsible under this Note or any other agreement with Lender pertaining to
  this loan, immediately due, without notice, and then Borrower will pay that
  amount. Lender may hire an attorney to help collect this Note if Borrower does
  not pay, and Borrower will pay Lender's reasonable attorneys' fees. Borrower
  also will pay Lender all other amounts actually incurred by Lender as court
  costs, lawful fees for filing, recording, or releasing to any public office
  any instrument securing this loan; the reasonable cost actually expended for
  repossessing, storing, preparing for sale, and selling any security; and fees
  for noting a lien on or transferring a certificate of title to any motor
  vehicle offered as security for this loan, or premiums or identifiable charges
  received in connection with the sale of authorized insurance. THIS NOTE HAS
  BEEN DELIVERED TO LENDER AND ACCEPTED BY LENDER IN THE STATE OF TEXAS. IF
  THERE IS A LAWSUIT, AND IF THE TRANSACTION EVIDENCED BY THIS NOTE OCCURRED IN
  BOWIE COUNTY, BORROWER AGREES UPON LENDER'S REQUEST TO SUBMIT TO THE
  JURISDICTION OF THE COURTS OF BOWIE COUNTY, THE STATE OF TEXAS. LENDER AND
  BORROWER HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION, PROCEEDING,
  OR COUNTERCLAIM BROUGHT BY EITHER LENDER OR BORROWER AGAINST THE OTHER. THIS
  NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
  STATE OF TEXAS AND APPLICABLE FEDERAL LAWS.

  DISHONORED CHECK CHARGE. Borrower will pay a processing fee of $25.00 if any
  check given by Borrower to Lender as a payment on this loan is dishonored.

  RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in,
  and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
  Borrower's 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 this Note against any
  and all such accounts, and, at Lenders option, to administratively freeze all
  such accounts to allow Lender to protect Lender's charge and setoff rights
  provided on this paragraph.

  LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
  this Note, as well as directions for payment from Borrower's accounts, may be
  requested orally or in writing by Borrower or by an authorized person. Lender
  may, but need not, require that all oral requests be confirmed in writing. The
  following party or parties are authorized 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: HOWARD T. VAN PELT,
  PRESIDENT. 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, or (e) Lender
  in good faith deems itself insecure under this Note or any other agreement
  between Lender and Borrower. THIS REVOLVING LINE OF CREDIT SHALL NOT BE
  SUBJECT TO SEC. 346 OF THE TEXAS FINANCE CODE.

  YEAR 2000 COMPLIANT. Borrower represents and warrants that all material
  systems and software used in the conduct of its business will have appropriate
  capabilities and compatibility to handle calendar dates falling on or after
  January 1, 2000, and all information pertaining to such calendar dates. Upon
  reasonable request, Borrower agrees to provide to Lender documentation
  satisfactory to Lender to establish that its systems and software are year
  2000 compliant, or that Borrower is in the process of implementing a plan to
  ensure that its systems and software will be year 2000 compliant before
  December 31, 1999.

<PAGE>   4

10-12-1998                          PROMISSORY NOTE                       PAGE 2
LOAN NO                              (Continued)

================================================================================

   GENERAL PROVISIONS. This Note is payable on demand. The inclusion of specific
   default provisions or rights of Lender shall not preclude Lender's right to
   declare payment of this Note on its demand. If any part of this Note cannot
   be enforced, this fact will not affect the rest of the Note. In particular,
   this section means (among other things) that Borrower does not agree or
   intend to pay, and Lender does not agree or intend to contract for, charge,
   collect, take, reserve or receive (collectively referred to herein as "charge
   or collect"), any amount in the nature of interest or in the nature of a fee
   for this loan, which would in any way or event (including demand, prepayment,
   or acceleration) cause Lender to charge or collect more for this loan than
   the maximum Lender would be permitted to charge or collect by federal law or
   the law of the State of Texas (as applicable). Any such excess interest or
   unauthorized fee shall, instead of anything stated to the contrary, be
   applied first to reduce the principal balance of this loan, and when the
   principal has been paid in full, be refunded to Borrower. The right to
   accelerate maturity of sums due under this Note does not include the right to
   accelerate any interest which has not otherwise accrued on the date of such
   acceleration, and Lender does not intend to charge or collect any unearned
   interest in the event of acceleration. All sums paid or agreed to be paid to
   Lender for the use, forbearance or detention of sums due hereunder shall, to
   the extent permitted by applicable law, be amortized, prorated, allocated and
   spread throughout the full term of the loan evidenced by this Note until
   payment in full so that the rate or amount of interest on account of the loan
   evidenced hereby does not exceed the applicable usury ceiling. 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, notice of dishonor, notice of intent to accelerate the
   maturity of this Note, and notice of acceleration of the maturity of this
   Note. 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 Lenders security
   interest in the collateral 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:

   GLOBAL ELECTION SYSTEMS, INC.

   By:   /s/ HOWARD T. VAN PELT
      ----------------------------------------
      HOWARD T. VAN PELT, PRESIDENT

================================================================================
Variable Rate. Line of Credit. LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver.
3.25a(c)1998 CFI ProServices, Inc. All rights reserved. [TX-D20 E3.25 F3.25
P3.25 GLOBAL.LN C7.OVL]

<PAGE>   5
                               COMMERCIAL GUARANTY
<TABLE>
<CAPTION>

<S>            <C>           <C>            <C>            <C>       <C>            <C>         <C>           <C>
PRINCIPAL      LOAN DATE      MATURITY       LOAN NO        CALL      COLLATERAL     ACCOUNT     OFFICER      INITIALS
                                                                                                   T44


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>

<TABLE>

<S>      <C>                                                       <C> 
         BORROWER:     GLOBAL ELECTION SYSTEMS, INC.                      LENDER:       HIBERNIA NATIONAL BANK OF TEXAS
                       (TIN: 85-0394190)                                                ATTN: LOAN DOCUMENTATION-ALEXANDRIA
                       1611 WILMETH ROAD                                                2318 RICHMOND RD.
                       MCKINNEY, TX 75069                                               TEXARKANA, TX 75503
                                                                                        
         GUARANTOR:    GLOBAL ELECTION SYSTEMS INC. CANADA
                       1562 RAND AVENUE
                       VANCOUVER, BC V6P3G2
==================================================================================================================================
</TABLE>

          AMOUNT OF GUARANTY. THE AMOUNT OF THIS GUARANTY IS UNLIMITED.

          CONTINUING UNLIMITED GUARANTY. FOR GOOD AND VALUABLE CONSIDERATION,
          GLOBAL ELECTION SYSTEMS INC. CANADA ("GUARANTOR") ABSOLUTELY AND
          UNCONDITIONALLY GUARANTEES AND PROMISES TO PAY TO HIBERNIA NATIONAL
          BANK OF TEXAS ("LENDER") OR ITS ORDER, ON DEMAND, IN LEGAL TENDER OF
          THE UNITED STATES OF AMERICA, THE INDEBTEDNESS (AS THAT TERM IS
          DEFINED BELOW) OF GLOBAL ELECTION SYSTEMS, 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 GLOBAL ELECTION SYSTEMS,
               INC..

               GUARANTOR. The word "Guarantor" means GLOBAL ELECTION SYSTEMS
               INC. CANADA.

               GUARANTY. The word "Guaranty" means this Guaranty made by
               Guarantor for the benefit of Lender dated October 12, 1998.

               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, attorneys' fees, 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 Hibernia National Bank of Texas,
               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 and Lender's written
          acknowledgment of receipt. 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. This Guaranty shall
          bind the estate of Guarantor as to Indebtedness created both before
          and after the death or incapacity of Guarantor, regardless of Lender's
          actual notice of Guarantor's death. Subject to the foregoing,
          Guarantor's executor or administrator or other legal representative
          may terminate this Guaranty in the same manner in which Guarantor
          might have terminated it and with the same effect. 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 or otherwise affecting 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 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


<PAGE>   6







            10-12-1998                 COMMERCIAL GUARANTY
            LOAN NO                        (CONTINUED)                   PAGE 2


          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 waives all rights of Guarantor under Chapter 34 of the Texas
          Business and Commerce Code. 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 waiver 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 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 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 Texas. If there is a lawsuit,
                and if the transaction evidenced by this Guaranty occurred in
                Bowie County, Guarantor agrees upon Lender's request to submit
                to the jurisdiction of the courts of Bowie County, State of
                Texas. Lender and Guarantor hereby waive the right to any jury
                trial in any action, proceeding, or counterclaim brought by
                either Lender or Guarantor against the other. This Guaranty
                shall be governed by and construed in accordance with the laws
                of the State of Texas and applicable Federal laws.

                ATTORNEYS' FEES. In addition to the amount of this Guaranty set
                forth above, Lender may hire an attorney to help enforce this
                Guaranty if Guarantor does not pay, and Guarantor will pay
                Lender's reasonable attorneys' fees. Guarantor also will pay
                Lender all other amounts actually incurred by Lender as court
                costs, lawful fees for filing, recording, or releasing to any
                public office any instrument securing this Guaranty; the
                reasonable cost actually expended for repossessing, storing,
                preparing for sale, and selling any security; and fees for
                noting a lien on or transferring a certificate of title to any
                motor vehicle offered as security for this Guaranty.

                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.













<PAGE>   7
10-12-1998                    COMMERCIAL GUARANTY                        Page 3
Loan No                          (Continued)
===============================================================================
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 OCTOBER 12, 1998.

GUARANTOR:

GLOBAL ELECTION SYSTEMS INC. CANADA

BY:  /s/ HOWARD T. VAN PELT
   -------------------------------
   HOWARD T. VAN PELT, PRESIDENT



================================================================================
<PAGE>   8

                          COMMERCIAL SECURITY AGREEMENT
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------------
<S>             <C>            <C>            <C>            <C>       <C>            <C>         <C>           <C>
  PRINCIPAL      LOAN DATE      MATURITY       LOAN NO        CALL      COLLATERAL     ACCOUNT     OFFICER      INITIALS
$3,000,000.00   10-12-1998     10-12-1999                                                            T44
--------------------------------------------------------------------------------------------------------------------------

 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>

<TABLE>

<S>                                                       <C>
BORROWER: GLOBAL ELECTION SYSTEMS, INC.                          LENDER: HIBERNIA NATIONAL BANK OF TEXAS
          (TIN: 85-0394190)                                              ATTN: LOAN DOCUMENTATION-ALEXANDRIA
          1611 WILMETH ROAD                                              2318 RICHMOND RD.
          MCKINNEY, TX 75069                                             TEXARKANA, TX 75503

============================================================================================================================
</TABLE>



        THIS COMMERCIAL SECURITY AGREEMENT IS ENTERED INTO BETWEEN GLOBAL
        ELECTION SYSTEMS, INC. (REFERRED TO BELOW AS "GRANTOR"); AND HIBERNIA
        NATIONAL BANK OF TEXAS (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 ACCOUNTS 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 accessions, accessories, 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 GLOBAL ELECTION SYSTEMS, 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 earned 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. In addition, the word "Indebtedness" includes
            all other obligations, debts and liabilities, plus interest thereon,
            of Grantor, or any one or more of them, to Lender, as well as all
            claims by Lender against Grantor, or any one or more of them,
            whether existing now or later; whether they are voluntary or
            involuntary, due or not due, direct or indirect, absolute or
            contingent, liquidated or unliquidated; whether Grantor may be
            liable individually or jointly with others; whether Grantor may be
            obligated as guarantor, surety, accommodation party or otherwise.

            LENDER. The word "Lender" means Hibernia National Bank of Texas, its
            successors and assigns.

            NOTE. The word "Note" means the note or credit agreement dated
            October 12, 1998, in the principal amount of $3,000,000.00 from
            GLOBAL ELECTION SYSTEMS, 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 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: 

            ORGANIZATION. Grantor is a corporation which is duly organized,
            validly existing, and in good standing under the laws of the State
            of Texas. Grantor has its chief executive office at 1611 WILMETH
            ROAD, MCKINNEY, TX 75069. Grantor will notify Lender of any change
            in the location of Grantor's chief executive office.

            AUTHORIZATION. The execution, delivery, and performance of this
            Agreement by Grantor have been duly authorized by all necessary
            action by Grantor 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 Grantor or (b) any law, governmental
            regulation, court decree, or order applicable to Grantor.

            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 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.


            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 Grantors 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 Texas, without the prior written consent of



<PAGE>   9
10-12-1998                 COMMERCIAL SECURITY AGREEMENT                  PAGE 2
LOAN NO                             (CONTINUED)

================================================================================

     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.
     Grantor shall not pledge, mortgage, encumber or otherwise permit the
     Collateral to be subject to any lien, security interest, encumbrance, or
     charge, other than the security interest provided for in this Agreement,
     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, 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. 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 Lender's 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 governmental
     authorities, now or hereafter in effect, applicable to the ownership,
     production, disposition, 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
     indemnify 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. GRANTOR MAY FURNISH THE REQUIRED INSURANCE WHETHER
     THROUGH EXISTING POLICIES OWNED OR CONTROLLED BY GRANTOR OR THROUGH
     EQUIVALENT INSURANCE FROM ANY INSURANCE COMPANY AUTHORIZED TO TRANSACT
     BUSINESS IN THE STATE OF TEXAS. If Grantor fails to provide any required
     insurance or fails to continue such insurance in force, Lender may, but
     shall not be required to, do so at Grantor's expense, and the cost of the
     insurance will be added to the Indebtedness. If any such insurance is
     procured by Lender at a rate or charge not fixed or approved by the State
     Board of Insurance, Grantor will be so notified, and Grantor will have the
     option for five (5) days of furnishing equivalent insurance through any
     Insurer authorized to transact business in Texas. 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 thirty (30) days' prior written notice to Lender and not including
     any disclaimer of the insurer's liability for failure to give such a
     notice. Each insurance policy also shall include an endorsement providing
     that coverage in favor of Lender will not be impaired in any way by any
     act, omission or default of Grantor or any other person. 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 fails 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 RESERVES. Lender may require Grantor to maintain with Lender
     reserves for payment of insurance premiums, which reserves shall be created
     by monthly payments from Grantor of a sum estimated by Lender to be
     sufficient to produce, at least fifteen (15) days before the premium due
     date, amounts at least equal to the insurance premiums to be paid. If
     fifteen (15) days before payment is due, the reserve funds are
     insufficient, Grantor shall upon demand pay any deficiency to Lender. The
     reserve funds shall be held by Lender as a general deposit and shall
     constitute a non-interest-bearing account which Lender may satisfy by
     payment of the insurance premiums required to be paid by Grantor as they
     become due. Lender does not hold the reserve funds in trust for Grantor,
     and Lender is not the agent of Grantor for payment of the insurance
     premiums required to be paid by Grantor. The responsibility for the payment
     of premiums shall remain Grantor's sole responsibility.

     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. In addition, Grantor shall upon
     request by Lender (however not more often than annually) have an
     independent appraiser satisfactory to Lender determine, as applicable, the
     cash value or replacement cost of the Collateral.

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 Grantor's 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




<PAGE>   10

10-12-1998                 COMMERCIAL SECURITY AGREEMENT                  PAGE 3
LOAN NO                             (CONTINUED)                          

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preserving the Collateral. All such expenditures incurred or paid by Lender for
such purposes will then bear interest at the Note rate 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.

     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.

     EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
     to any Guarantor of any of the Indebtedness or such Guarantor dies or
     becomes incompetent.

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

     INSECURITY. Lender, in good faith, deems itself insecure.

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 Texas 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
     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, provided
     Lender does so without a breach of the peace or a trespass, 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 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, choses in action, or similar property, Lender may demand,
     collect, receipt for, settle, compromise, adjust, sue for, foreclose, or 
     realize on the Collateral as Lander 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 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 Texas. If there is a lawsuit, Grantor agrees upon
     Lender's request to submit to the jurisdiction of the courts of the State
     of Texas. Lender and Grantor hereby waive the right to any jury trial in
     any action, proceeding, or counterclaim brought by either Lender or Grantor
     against the other. This Agreement shall be governed by and construed in
     accordance with the laws of the State of Texas and applicable Federal laws.

     ATTORNEYS' FEES AND OTHER COSTS. Lender may hire an attorney to help
     collect the Note if Grantor does not pay, and Grantor will pay Lender's
     reasonable attorneys' fees. Grantor also will pay Lender all other amounts
     actually incurred by Lender as court costs, lawful fees for filing,
     recording, or releasing to any public office any instrument securing the
     Note; the reasonable cost actually expended for repossessing, storing,
     preparing for sale, and selling any security; and fees for noting a lien on
     or transferring a certificate of title to any motor vehicle offered as
     security for the Note, or premiums or identifiable charges received in
     connection with the sale of authorized insurance. 

     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.

     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 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





<PAGE>   11

10-12-1998                 COMMERCIAL SECURITY AGREEMENT                  Page 4
LOAN NO                             (CONTINUED)

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     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
     Lenders 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 Lender's 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 
OCTOBER 12, 1998.

GRANTOR:
GLOBAL ELECTION SYSTEMS, INC.

By: /s/ HOWARD T. VAN PELT
   -----------------------------------
        HOWARD T. VAN PELT, PRESIDENT

================================================================================
LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.25a (c) 1998 CFI ProServices, 
Inc. All rights reserved. ETX-E40 E3.25 F3.25 P3.25 GLOBAL.LN C7.OVL]