SECURITY AGREEMENT

             SECURITY  AGREEMENT,  dated as of June 11,  1997,  made by  ARIZONA
REPAIR SERVICES, INC., an Arizona corporation, having its chief executive office
at 8300 East Raintree Drive, Scottsdale,  Arizona 85260 ("Debtor"),  in favor of
GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation having an office at
1999 Avenue of the Stars, 30th Floor, Los Angeles, California 90067 ("Lender").

                              W I T N E S S E T H:

             WHEREAS,  pursuant  to that  certain  Amended and  Restated  Credit
Agreement  dated  as of April  11,  1994,  by and  among  Vodavi  Communications
Systems, Inc., an Arizona corporation formerly known as V Technology Acquisition
Corp.  ("Borrower") and Lender,  as amended and restated as of June 11, 1997 (as
the same from time to time may be amended,  restated,  supplemented or otherwise
modified,  the "Credit  Agreement"),  Lender has agreed,  among other things, to
make a certain  Revolving  Credit  Loan (as  defined  in the  Credit  Agreement)
available to Borrower; and

             WHEREAS,  pursuant to that certain Guaranty Agreement,  dated as of
June 11, 1997, executed by Debtor and Enhanced Systems,  Inc. in favor of Lender
(the "Guaranty Agreement"), Debtor has guaranteed the payment and performance by
Borrower of all  obligations  of  Borrower  arising  under the Credit  Agreement
(including without limitation payment of the Revolving Credit Loan); and

             WHEREAS,  Lender is willing to make the  Revolving  Credit Loan and
any other extension of credit provided for in the Credit Agreement  available to
Borrower,  but only upon the  condition,  among  others,  that Debtor shall have
executed and delivered this Security Agreement in favor of Lender; and

             NOW,  THEREFORE,  in consideration of the premises and the Lender's
commitment to make the Revolving Credit Loan available to Borrower,  the parties
hereto agree as follows:

             1. DEFINED TERMS.  Unless  otherwise  defined  herein,  capitalized
terms defined in the Credit Agreement are used herein as therein defined.

             2. GRANT OF SECURITY INTEREST.

             a. To secure the  prompt  and  complete  payment,  performance  and
observance of all of the  obligations,  indebtedness  and  liabilities of Debtor
under the Guaranty Agreement (collectively,  the "Secured Obligations"),  and to
induce Lender to enter into the Credit Agreement, to issue the Commitment and to
make the Revolving  Credit Loan and any other  extensions of credit provided for
therein  available to Borrower in accordance with the respective  terms thereof,
Debtor  hereby  grants to Lender a security  interest in all of Debtor's  right,
title and interest in, to and under the following  whether now owned by or owing
to, or hereafter acquired by or arising in favor of Debtor  (including,  without
limitation, under any trade names, styles or
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divisions  thereof),  and  regardless  of  where  located  (all of  which  being
hereinafter collectively referred to as the "Collateral"):

                    (i) all Accounts;

                    (ii) all Chattel Paper;

                    (iii) all Contracts;

                    (iv) all Documents;

                    (v) all Equipment;
  
                    (vi) all General Intangibles;

                    (vii) all Instruments;

                    (viii) all Inventory;

                    (ix) all other money, cash or cash equivalents of Debtor;

                    (x) all  books and  records  (including  without  limitation
             credit files,  customer lists,  computer files,  computer programs,
             computer   printouts,   or  other  computer   material)  of  Debtor
             identifying,  evidencing  or  otherwise  pertaining  to  any of the
             Collateral described above; and

                    (xi) all Proceeds of any of the Collateral described above.

             b.  In  addition,  to  secure  the  prompt  and  complete  payment,
performance  and  observance of the Secured  Obligations  and in order to induce
Lender as aforesaid,  Debtor hereby grants to Lender, a security interest in all
property of Debtor held by Lender, including,  without limitation,  all property
of every  description,  now or hereafter in the  possession  or custody of or in
transit to Lender for any purpose, including safekeeping,  collection or pledge,
for the account of Debtor, or as to which Debtor may have any right or power.

             3. LENDER'S RIGHTS; LIMITATIONS ON LENDER'S SECURED
                OBLIGATIONS.

             a. It is expressly  agreed by Debtor that,  anything  herein to the
contrary notwithstanding, Debtor shall remain liable under each of its Contracts
and  each  of its  Licenses  to  observe  and  perform  all the  conditions  and
obligations  to be observed and performed by it thereunder and Lender shall have
no obligation or liability under any Contract or License by reason of or arising
out of this  Security  Agreement or the granting  herein of a security  interest
therein or the  receipt by Lender of any  payment  relating  to any  Contract or
License pursuant hereto, nor shall Lender be required or obligated in any manner
to perform or fulfill any of the  obligations of Debtor under or pursuant to any
Contract or License,  or to make any  payment,  or to make any inquiry as to the
nature or the sufficiency of any payment received by it or the
                                       -2-
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sufficiency of any performance by any party under any Contract or License, or to
present or file any  claims,  or to take any  action to  collect or enforce  any
performance  or the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times.

             b.  Lender  may at any time  after the  occurrence  and  during the
continuation  of an Event of Default and upon 24 hours  prior  notice to Debtor,
notify Account  Debtors,  parties to the  Contracts,  and obligors in respect of
Instruments,  that the Accounts  and the right,  title and interest of Debtor in
and under such Contracts and  Instruments  have been assigned to Lender and that
payments  shall be made  directly  to  Lender,  and upon the  request of Lender,
Debtor shall so notify Account  Debtors,  parties to Contracts,  and obligors in
respect of  Instruments.  Lender may at any time after the occurrence and during
the continuation of an Event of Default and upon notice to the Debtor (which may
be  simultaneous  with notice to Obligors on chattel  paper) notify  obligors in
respect of Chattel  Paper that the right,  title and  interest  of Debtor in and
under such Chattel Paper have been assigned to Lender and that payments shall be
made directly to Lender.

             c.  Lender  at  any  time  after  the  occurrence  and  during  the
continuation  of an  Event  of  Default  shall  have  the  right  to  make  test
verifications  of the Accounts and  verifications  and  appraisals  of the other
Collateral  in any manner and through any medium  that it  reasonably  considers
advisable,  and Debtor agrees to furnish all such  assistance and information as
Lender may reasonably  require in connection  therewith.  Lender may at any time
after the  occurrence  and during the  continuation  of an Event of Default,  in
Lender's own name or in the name of Debtor,  communicate  with Account  Debtors,
parties to Contracts, obligors in respect of Instruments and obligors in respect
of Chattel  Paper to verify with such  Persons,  to Lender's  satisfaction,  the
existence,  amount and terms of any such  Accounts,  Contracts,  Instruments  or
Chattel  Paper.  Upon the occurrence  and  continuation  of an Event of Default,
Debtor,  at its own expense,  shall cause the certified  public  accountant then
engaged by Debtor, to prepare and deliver to Lender at any time and from time to
time promptly upon Lender's request the following reports:  (i) a reconciliation
of all Accounts, (ii) an aging of all Accounts, (iii) trial balances, and (iv) a
test verification of such Accounts as Lender reasonably may request.

             4.  REPRESENTATIONS  AND WARRANTIES.  Debtor hereby  represents and
warrants that:

             a. Except for the  security  interest  granted to Lender under this
Security  Agreement,  and the  Liens  set forth on  Schedule  7.6 to the  Credit
Agreement and Permitted Exceptions, Debtor is the sole owner of each item of the
Collateral in which it purports to grant a security interest  hereunder,  having
good and marketable title thereto free and clear of any and all liens,  security
interests or other encumbrances.

             b. No effective security agreement, financing statement, equivalent
security or lien instrument or continuation  statement  covering all or any part
of the Collateral is on file or of record in any public office, except as may be
set forth on Schedule 7.6 to the Credit Agreement or such as may have been filed
by Debtor in favor of Lender pursuant to this Security Agreement.

             c. As a result of the filing of appropriate financing statements in
the filing  offices  listed on Schedule I hereto,  this  Security  Agreement  is
effective to create a valid and
                                       -3-
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continuing  lien on and  perfected  security  interest in favor of Lender in the
Collateral with respect to which a security  interest may be perfected by filing
pursuant  to the UCC,  which lien and  security  interest  is prior to all other
Liens,  except only for Liens  specifically  designated on Schedule 7.6 as being
prior to Lender's Liens and Permitted  Prior  Exceptions,  and is enforceable as
such as against  creditors of and purchasers  from Debtor (other than purchasers
of  Inventory  in the  ordinary  course of  business).  All action  necessary or
desirable  to protect and  perfect  such  security  interest in each item of the
Collateral has been duly taken.

             d. Schedule II hereto lists all  Instruments of Debtor.  All action
necessary or desirable to protect and perfect the security interest of Lender in
each item set forth on Schedule  II,  including  the  delivery of all  originals
thereof to Lender,  has been duly taken. The security  interest of Lender in the
Collateral listed on Schedule II hereto is prior to all other Liens except those
Liens  specifically  designated on Schedule 7.6 as being prior to Lender's Liens
and Permitted Prior  Exceptions and is enforceable as such against  creditors of
and purchasers from Debtor.

             e. Debtor's chief  executive  office,  principal place of business,
corporate offices, all warehouses and premises within which Collateral is stored
and located and the locations of all of its records  concerning  the  Collateral
are set  forth  on the  Credit  Party  Questionnaire  completed  by  Debtor  and
delivered  to Lender,  and Debtor shall not change its chief  executive  office,
principal  place of business,  corporate  offices or  Collateral  locations,  or
remove such records unless it shall have notified the Lender in writing at least
30 days prior to such  change  and shall  have  taken such  action as the Lender
deems  reasonably  necessary  to cause the Lien of Lender in the  Collateral  to
continue to be perfected.

             f.  During  the  five (5) year  period  preceding  the date of this
Agreement,  Debtor has not been known as or used and Debtor  presently  does not
use any corporate  name other than its name as set forth in its signature  below
and  those  other  corporate,  fictitious  or trade  names (if any) of Debtor as
disclosed on the Credit Party Questionnaire completed by Debtor and delivered to
Lender.  If such  schedule  sets forth any  fictitious or trade names for Debtor
(collectively,  the "Trade Names"), Debtor represents and warrants to and agrees
with Lender that: (i) any  Collateral  arising out of any sales under any of the
Trade Names is the  property  of and  belongs to Debtor,  (ii) each of the Trade
Names  is a trade  name or  trade  style  (and not an  independent  or  separate
corporation or other legal entity) by which Debtor may identify or market itself
or under which  Debtor may sell certain  products,  render  certain  services or
otherwise conduct some or all of its business, (iii) any Collateral which arises
from any sales made,  services rendered or other business conducted under any of
the Trade Names shall be owned solely by Debtor, and (iv) Debtor hereby appoints
Lender to be its attorney-in-fact to file such certificates  disclosing Debtor's
use of the Trade  Names and to take such  other  actions on  Debtor's  behalf as
Lender  reasonably  considers   appropriate  to  comply  with  any  statutes  or
regulations relating to the use of fictitious or assumed business names.
                                       -4-
<PAGE>
             g. (i) The  Accounts  represent  bona fide  sales of  Inventory  or
services  rendered  by  Debtor  in the  ordinary  course  of  Debtor's  business
completed in accordance with the terms and provisions contained in the documents
available  to Lender with respect  thereto and are not  evidenced by a judgment,
Instrument  or Chattel  Paper,  (ii) the  amounts  shown on any  Borrowing  Base
Certificate,  summary or  schedules  of Account  or any aged  receivables  trial
balance  delivered  by Debtor to Lender  pursuant to the terms of this  Security
Agreement  or the Credit  Agreement  and on  Debtor's  books and records and all
invoices  and  statements  which may be  delivered  to the Lender  with  respect
thereto  are  actually  and  absolutely  owing to Debtor  and are not in any way
contingent,  (iii) to the best of  Debtor's  knowledge,  there are no  set-offs,
claims or disputes  existing or asserted with respect thereto and Debtor has not
made any agreement with any Account Debtor for any deduction  therefrom except a
discount or allowance  allowed by Debtor in the ordinary  course of its business
for prompt payment, (iv) to the best of Debtor's knowledge,  there are no facts,
events or occurrences that in any way impair the validity or enforcement thereof
or tend to reduce the amount payable  thereunder as shown on the respective aged
receivable  trial  balances,  Debtor's  books and records and all  invoices  and
statements delivered to Lender with respect thereto, (v) to the best of Debtor's
knowledge,  all Account  Debtors have the capacity to contract,  (vi) Debtor has
received no notice of  proceedings  or actions  which are  threatened or pending
against any Account Debtor which might result in any material  adverse change in
such Account Debtor's financial condition and (vii) Debtor has no knowledge that
any Account Debtor is unable generally to pay its debts as they become due.

             h. With respect to all Inventory and  Equipment,  (i) such property
is located at one of the locations  set forth on the Credit Party  Questionnaire
completed  by  Debtor  and  delivered  to  Lender,  (ii)  Debtor  has  good  and
merchantable title to such property and such property is not subject to any lien
or security  interest or document  whatsoever  except for the security  interest
granted  to Lender  hereunder  and any set forth on  Schedule  7.6 to the Credit
Agreement  and Permitted  Exceptions,  (iii) such property is not subject to any
licensing,  patent, royalty,  trademark, trade name or copyright agreements with
any third parties except as described on Schedule III, which agreements will not
materially  interfere with the sale or use of the Collateral by the Lender, (iv)
with respect to Inventory,  such property is of good and  merchantable  quality,
(v) with respect to Inventory,  such property is free from material defects, and
(vi) with respect to the Inventory, the completion of manufacture, sale or other
disposition  of such property by Lender  following an Event of Default shall not
require the consent of any Person and shall not  constitute  a breach or default
under any  contract  or  agreement  to which  Debtor is a party or to which such
property is subject.

             5. COVENANTS. Debtor covenants and agrees with Lender that from and
after the date of this Security Agreement and until the Termination Date:

             a. Further Assurances;  Pledge of Instruments. At any time and from
time to time,  upon the  written  request of Lender  and at the sole  expense of
Debtor,  Debtor  shall  promptly  and duly  execute and deliver any and all such
further  instruments  and documents  and take such further  action as Lender may
reasonably deem desirable to obtain the full benefits of this Security Agreement
and of the  rights  and  powers  herein  granted,  including  (i) using its best
efforts to secure all consents and approvals  necessary or  appropriate  for the
assignment  to or for the benefit of Lender of any  License or Contract  held by
Debtor or in which Debtor has any
                                       -5-
<PAGE>
rights not  heretofore  assigned,  (ii)  filing any  financing  or  continuation
statements  under  the UCC with  respect  to the liens  and  security  interests
granted  hereunder  or  under  any  other  Loan  Document,   (iii)  transferring
Collateral to Lender's  possession (if such Collateral consists of Chattel Paper
or  if a  security  interest  in  such  Collateral  can  be  perfected  only  by
possession,  or, if  requested  by Lender),  and (iv) using its best  efforts to
obtain  waivers of liens from  landlords  and  mortgagees.  Debtor  also  hereby
authorizes  Lender to file any such financing or continuation  statement without
the signature of Debtor to the extent permitted by applicable law. If any amount
payable  under or in  connection  with any of the  Collateral is or shall become
evidenced by any Instrument, such Instrument,  other than checks received in the
ordinary course of business (which shall be deposited to a Collection  Account),
shall be duly  endorsed  in a manner  satisfactory  to Lender  immediately  upon
Debtor's receipt thereof and delivered to Lender.

             b. Maintenance of Records.  Debtor shall keep and maintain,  at its
own cost and  expense,  satisfactory  and  complete  records of the  Collateral,
including  a record of any and all  payments  received  and any and all  credits
granted  with  respect  to the  Collateral  and  all  other  dealings  with  the
Collateral. Debtor shall mark its books and records pertaining to the Collateral
to evidence this Security  Agreement and the security  interests granted hereby.
All Chattel Paper shall be marked with the following  legend:  "This writing and
the obligations evidenced or secured hereby are subject to the security interest
of General Electric Capital Corporation".  For Lender's further security, Debtor
agrees that Lender shall have a special property right and security  interest in
all of Debtor's  books and records  pertaining to the  Collateral  and, upon the
occurrence  and during the  continuation  of any Event of Default,  Debtor shall
deliver  and  turn  over  any  such  books  and  records  to  Lender  or to  its
representatives at any time on demand of Lender;  provided, that the Lender will
provide the Debtor with copies of such books and records at Debtor's request and
expense.  Prior to the  occurrence  of an Event of Default  and upon  reasonable
notice from Lender,  Debtor shall permit any representative of Lender to inspect
such books and records and shall provide  photocopies  thereof to Lender as more
specifically set forth in Section 5(g) below.

             c.  Indemnification.  In any suit,  proceeding or action brought by
Lender relating to any Account,  Chattel Paper,  Contract,  General  Intangible,
Instrument or Document for any sum owing thereunder, or to enforce any provision
of any Account,  Chattel Paper,  Contract,  General Intangible,  Instrument,  or
Document, Debtor shall save, indemnify and keep Lender harmless from and against
all  expense,  loss or  damage  suffered  by  reason  of any  defense,  set-off,
counterclaim,  recoupment  or reduction of liability  whatsoever  of the obligor
thereunder  arising out of a breach by Debtor of any  obligation  thereunder  or
arising out of any other agreement,  indebtedness or liability at any time owing
to, or in favor of, such obligor or its  successors  from  Debtor,  and all such
obligations of Debtor shall be and remain enforceable against, and only against,
Debtor and shall not be enforceable  against  Lender;  provided,  however,  that
Debtor  shall not be  required  to  indemnify  Lender  with  respect to any such
expense,  loss or damage suffered by Lender as a result of its gross  negligence
or willful  misconduct  in collecting  any sum owing under any Account,  Chattel
Paper, Contract, General Intangible, Instrument or Document.

             d.  Compliance  with  Terms  of  Accounts,  etc.  In  all  material
respects,  Debtor shall  perform and comply with all  obligations  in respect of
Accounts, Chattel Paper, Contracts, Licenses, Instruments and Documents, and all
other agreements to which it is a party or by which it or any of its property is
bound.
                                       -6-
<PAGE>
             e.  Limitation  on Liens on  Collateral.  Debtor  shall not create,
permit or suffer to exist, and shall defend the Collateral against and take such
other  action as is necessary to remove,  any Lien on the  Collateral  except as
otherwise  permitted  pursuant to Section 7.6 of the Credit Agreement and except
for  Permitted  Exceptions.  Debtor shall  further  defend the right,  title and
interest of Lender in and to any of Debtor's rights under the Accounts,  Chattel
Paper,  Contracts,  Documents,  General  Intangibles  and Instruments and to the
Inventory,  and in and to the Proceeds  thereof,  against the Liens,  claims and
demands of all Persons whomsoever.

             f. Limitations on  Modifications of Accounts.  Subject to the terms
of the Credit Agreement,  upon the occurrence and during the continuation of any
Event of Default,  Debtor shall not, without Lender's prior written consent, (i)
grant any  extension  of the time of  payment  of any of the  Accounts,  Chattel
Paper,  Instruments or amounts due under any Contract, (ii) compromise or settle
the same for less than the full amount  thereof,  (iii) release,  in whole or in
part,  any Person  liable for the payment  thereof,  or (iv) allow any credit or
discount  whatsoever  thereon other than trade discounts granted in the ordinary
course of business of Debtor.

             g. Right of Inspection. Upon reasonable notice to Debtor (unless an
Event of Default  has  occurred  and is  continuing,  in which case no notice is
necessary),  Lender shall at all times have full and free access  during  normal
business hours to all the books and records and  correspondence  of Debtor,  and
Lender or its  representatives may examine the same, take extracts therefrom and
make  photocopies  thereof,  and Debtor agrees to render to Lender,  at Debtor's
cost and  expense,  such  clerical  and other  assistance  as may be  reasonably
requested with regard thereto. Upon reasonable notice to Debtor (unless an Event
of  Default  has  occurred  and is  continuing,  in  which  case  no  notice  is
necessary),  Lender and its  representatives  shall also have the right to enter
into and upon any  premises  where  any of the  Collateral  is  located  for the
purpose  of  inspecting  the same,  observing  its use or  otherwise  protecting
Lender's interests in the Collateral.

             h.  Continuous  Perfection.  Debtor  shall  not  change  its  name,
identity or corporate  structure in any manner which might make any financing or
continuation  statement filed in connection herewith seriously misleading within
the  meaning  of  section  9-402(7)  of the  UCC or any  other  then  applicable
provision of the UCC unless  Debtor shall have given Lender at least thirty (30)
days'  prior  written  notice  thereof  and shall have taken all action (or made
arrangements to take such action  substantially  simultaneously with such change
if it is  impossible  to take such action in advance)  necessary  or  reasonably
requested by Lender to amend such financing statement or continuation  statement
so that it is not seriously misleading.
                                       -7-
<PAGE>
             6. LENDER'S APPOINTMENT AS ATTORNEY-IN-FACT.

             a. Debtor hereby  irrevocably  constitutes  and appoints Lender and
any officer or agent thereof,  with full power of substitution,  as its true and
lawful  attorney-in-fact  with full irrevocable power and authority in the place
and stead of Debtor  and in the name of Debtor or in its own name,  from time to
time in Lender's  reasonable  discretion,  for the  purpose of carrying  out the
terms of this Security Agreement,  to take any and all appropriate action and to
execute and deliver any and all documents and  instruments  which may reasonably
be necessary or desirable to accomplish the purposes of this Security  Agreement
and, without  limiting the generality of the foregoing,  hereby grants to Lender
the power and  right,  on behalf of Debtor,  upon  notice to or assent by Debtor
(which  notice  may be  simultaneous  with such  action),  at any time after the
occurrence  and  during  the  continuation  of an  Event of  Default,  to do the
following:

                    (i) in the name of  Debtor,  in its own  name or  otherwise,
             take  possession  of,  endorse and  receive  payment of any checks,
             drafts, notes, acceptances, or other Instruments for the payment of
             monies due under any Collateral;

                    (ii) continue any insurance  existing  pursuant to the terms
             of the  Loan  Documents,  and pay all or any  part of the  premiums
             therefor and the costs thereof; and

                    (iii)  receive  payment of any and all monies,  claims,  and
             other amounts due or to become due at any time arising out of or in
             respect of any Collateral.

             b. Debtor hereby  irrevocably  constitutes  and appoints Lender and
any officer or agent thereof,  with full power of substitution,  as its true and
lawful  attorney-in-fact  with full irrevocable power and authority in the place
and stead of Debtor  and in the name of Debtor or in its own name,  from time to
time in Lender's  reasonable  discretion,  for the  purpose of carrying  out the
terms of this Security Agreement,  to take any and all appropriate action and to
execute and deliver any and all documents and  instruments  which may reasonably
be necessary or desirable to accomplish the purposes of this Security  Agreement
and, without  limiting the generality of the foregoing,  hereby grants to Lender
the power and right,  on behalf of Debtor,  upon notice to (which  notice may be
simultaneous  with such  action)  but  without  the assent of  Debtor,  upon the
occurrence  and  during  the  continuation  of an  Event of  Default,  to do the
following:

                    (i) ask, demand, collect,  receive and give acquittances and
             receipts  for any and all  money  due or to  become  due  under any
             Collateral;

                    (ii) pay or discharge taxes,  liens,  security interest,  or
             other  encumbrances  levied or placed on or threatened  against the
             Collateral;

                    (iii)  obtain any  insurance  called for by the terms of the
             Loan Documents and pay all or any part of the premiums therefor and
             costs thereof;

                    (iv)  direct any party  liable for any  payment  under or in
             respect  of any of the  Collateral  to make  payment of any and all
             monies due or to become due thereunder,
                                       -8-
<PAGE>
             directly to Lender or as Lender shall direct;

                    (v) sign and endorse any invoices, freight or express bills,
             bills of lading,  storage or  warehouse  receipts,  drafts  against
             debtors, assignments, verifications, and notices in connection with
             accounts  and  other  documents  constituting  or  related  to  the
             Collateral;

                    (vi)  settle,  compromise  or adjust  any suit,  action,  or
             proceeding described above and, in connection therewith,  give such
             discharges or releases as Lender may deem appropriate;

                    (vii) file any claim or take or commence any other action or
             proceeding  in any court of law or equity or  otherwise  reasonably
             deemed  appropriate by Lender for the purpose of collecting any and
             all such monies due under any Collateral whenever payable;

                    (viii)   commence  and  prosecute  any  suits,   actions  or
             proceedings of law or equity in any court of competent jurisdiction
             to collect the  Collateral  or any part  thereof and to enforce any
             other right in respect of any Collateral;

                    (ix) defend any suit,  action or proceeding  brought against
             Debtor  with  respect to any  Collateral  if Debtor does not defend
             such suit,  action or proceeding or if Lender  reasonably  believes
             that  Debtor is not  pursuing  such  defense in a manner  that will
             maximize the recovery with respect to such Collateral;

                    (x) license  or, to the extent  permitted  by an  applicable
             license,  sublicense  whether general,  specific or otherwise,  and
             whether  on an  exclusive  or  non-exclusive  basis,  any Patent or
             Trademark throughout the world for such or terms on such conditions
             and in such manner as Lender shall,  in its reasonable  discretion,
             determine; and

                    (xi) sell, transfer, pledge, make any agreement with respect
             to,  or  otherwise  deal  with any of the  Collateral  as fully and
             completely as though Lender were the absolute owner thereof for all
             purposes,  and to do, at Lender's option and Debtor's  expense,  at
             any time,  or from time to time,  all acts and things  which Lender
             reasonably  deems necessary to perfect,  preserve,  or realize upon
             the  Collateral  and  Lender's  Lien thereon in order to effect the
             intent of this Security Agreement,  all as fully and effectively as
             Debtor might do.

             c. Debtor hereby ratifies, to the extent permitted by law, all that
said attorneys shall lawfully do or cause to be done by virtue hereof. The power
of  attorney  granted  pursuant  to this  Section 6 is a power  coupled  with an
interest and shall be irrevocable until the Termination Date.
                                       -9-
<PAGE>
             d. The powers  conferred on Lender  hereunder are solely to protect
Lender's  interests in the  Collateral  and shall not impose any duty upon it to
exercise any such powers.  Lender shall be accountable  only for amounts that it
actually  receives as a result of the exercise of such powers.  None of Lender's
officers,  directors,  employees, agents or representatives shall be responsible
to Debtor for any failure to act,  and in taking  affirmative  action,  shall be
liable only to the extent that such Persons are finally determined by a court of
competent jurisdiction to be guilty of gross negligence or willful misconduct.

             e. Following the occurrence and during the continuation of an Event
of Default, Debtor also authorizes Lender, at any time and from time to time, to
(i)  communicate  in its own name with any party to any Contract  with regard to
the  assignment  of the  right,  title and  interest  of Debtor in and under the
Contracts and other  matters  relating  thereto and (ii) execute,  in connection
with the sale provided for in Section 8 hereof, any endorsements, assignments or
other instruments of conveyance or transfer with respect to the Collateral.

             7. PERFORMANCE BY LENDER OF DEBTOR'S SECURED OBLIGATIONS. If Debtor
fails to perform or comply with any of its agreements contained herein or in any
of the other Loan  Documents,  and Lender,  as provided for by the terms of this
Security  Agreement or any of the other Loan Documents,  shall itself perform or
comply,  or otherwise cause  performance of or compliance,  with such agreement,
the  reasonable  expenses,  including  attorneys'  fees,  of Lender  incurred in
connection with such  performance or compliance,  together with interest thereon
at the rate then in effect in respect of the  Revolving  Credit  Loan,  shall be
payable by Debtor to Lender on demand and shall constitute  Secured  Obligations
secured hereby.

             8. REMEDIES; RIGHTS UPON DEFAULT.

             a. If any Event of Default  shall occur and be  continuing,  Lender
may exercise in addition to all other  rights and  remedies  granted to it under
this Security  Agreement,  the Credit  Agreement,  the other Loan  Documents and
under any other instrument or agreement  securing,  evidencing,  guaranteeing or
otherwise relating to the Secured  Obligations,  all rights and remedies that it
has as a secured  party under the UCC.  Without  limiting the  generality of the
foregoing, Debtor expressly agrees that in any such event Lender, without demand
of performance or other demand,  advertisement or notice of any kind (except the
notice  specified  below of time and  place of public  or  private  sale and any
notice  expressly  required by the Guaranty  Agreement) to or upon Debtor or any
other  Person  (all and each of which  demands,  advertisements  and notices are
hereby  expressly  waived to the maximum  extent  permitted by the UCC and other
applicable  law),  may  forthwith  enter upon the  premises of Debtor  where any
Collateral is located through self-help, without judicial process, without first
obtaining a final judgment or giving Debtor notice and opportunity for a hearing
on Lender's  claim or action,  and without  paying rent to Debtor,  and collect,
receive, assemble, process,  appropriate and realize upon the Collateral, or any
part thereof,  and may forthwith sell, lease,  assign, give an option or options
to purchase,  or sell or otherwise  dispose of and deliver said  Collateral  (or
contract to do so),  or any part  thereof,  in one or more  parcels at public or
private sale or sales,  at any exchange at such prices as it may deem best,  for
cash or on credit or for future delivery without  assumption of any credit risk.
Lender shall have the right upon any such public sale or sales,
                                      -10-
<PAGE>
and, to the extent  permitted by law,  upon any such  private sale or sales,  to
purchase for the benefit of Lender the whole or any part of said  Collateral  so
sold,  free of any right or equity of  redemption,  which  equity of  redemption
Debtor hereby  releases.  Such sales may be adjourned and continued from time to
time with or without  notice.  Lender shall have the right to conduct such sales
on  Debtor's  premises  or  elsewhere  and shall have the right to use  Debtor's
premises  without  charge  for such  time or times as  Lender  reasonably  deems
necessary or advisable.

             Debtor  further  agrees,  at  Lender's  request,  to  assemble  the
Collateral  and make it  available  to  Lender  at  places  which  Lender  shall
reasonably  select,  whether at Debtor's premises or elsewhere.  Until Lender is
able to effect a sale, lease, or other  disposition of Collateral,  Lender shall
have the right to use, operate or administer  Collateral on behalf of Lender, or
any part thereof,  to the extent that it reasonably  deems  appropriate  for the
purpose  of  preserving  Collateral  or its  value  or  for  any  other  purpose
reasonably  deemed  appropriate  by Lender.  Lender shall have no  obligation to
Debtor to  maintain or preserve  the rights of Debtor as against  third  parties
with respect to  Collateral  while  Collateral  is in the  possession of Lender.
Lender may, if it so elects and, to the extent not prohibited by applicable law,
seek the  appointment  of a receiver or keeper to take  possession of Collateral
and to enforce any of Lender's remedies with respect to such appointment without
prior  notice  or  hearing.  Lender  shall  apply the net  proceeds  of any such
collection, recovery, receipt, appropriation, realization or sale as provided in
Section 8(d) hereof, Debtor remaining liable for any deficiency remaining unpaid
after such  application,  and only after so paying  over such net  proceeds  and
after the payment by Lender of any other  amount  required by any  provision  of
law,  including  section  9-504(1)(c)  of the UCC (but  only  after  Lender  has
received  what  Lender  considers  reasonable  proof  of a  subordinate  party's
security  interest),  need Lender account for the surplus, if any, to Debtor. To
the maximum  extent  permitted  by  applicable  law,  Debtor  waives all claims,
damages,  and demands against Lender arising out of the repossession,  retention
or sale of the  Collateral  except  to the  extent  that a  court  of  competent
jurisdiction  issues a final  determination  that such  claims or damages  arise
solely out of the gross negligence or willful  misconduct of such party.  Debtor
agrees that ten (10) days'  prior  notice by Lender of the time and place of any
public  sale or of the  time  after  which a  private  sale  may  take  place is
reasonable  notification  of such  matters.  Debtor shall remain  liable for any
deficiency  if the proceeds of any sale or  disposition  of the  Collateral  are
insufficient  to pay all amounts to which Lender is entitled,  Debtor also being
liable for any  reasonable  attorneys'  fees  incurred by Lender to collect such
deficiency.

             b.  Debtor  agrees to pay any and all  reasonable  costs of Lender,
including,   without  limitation,   reasonable   attorneys'  fees,  incurred  in
connection with the enforcement of any of its rights and remedies hereunder.

             c. Except as otherwise  specifically provided herein or in the Loan
Documents,  Debtor hereby waives presentment,  demand, protest or any notice (to
the maximum extent  permitted by applicable  law) of any kind in connection with
the Loan Documents, the Security Agreement or any Collateral.

             d. The Proceeds of any sale,  disposition or other realization upon
all or any part of the  Collateral  shall be distributed by Lender upon receipt,
in the following order of priorities:
                                      -11-
<PAGE>
                    first, to Lender in an amount  sufficient to pay in full the
             reasonable  expenses  of  Lender  in  connection  with  such  sale,
             disposition   or  other   realization,   including   all  expenses,
             liabilities  and advances  incurred or made by Lender in connection
             therewith, including reasonable attorney's fees;

                    second,  to Lender  in an  amount  equal to the then due and
             unpaid accrued interest,  fees and prepayment premiums,  if any, on
             the Secured Obligations;

                    third,  to  Lender in an  amount  equal to any other  unpaid
             Secured Obligations or amounts owed, if any, in connection with the
             Secured Obligations; and

                    finally,  upon  payment  in  full  of  all  of  the  Secured
             Obligations,  to Debtor or its representatives or to whomsoever may
             be  lawfully  entitled  to  receive  the  same,  or as a  court  of
             competent jurisdiction may direct.

             9. GRANT OF LICENSE TO USE PATENT AND TRADEMARK COLLATERAL. For the
purpose of  enabling  Lender to exercise  rights and  remedies  under  Section 8
hereof  (including,  without limiting the terms of Section 8 hereof, in order to
take possession of, hold, preserve,  process, assemble, prepare for sale, market
for sale, sell or otherwise  dispose of Collateral) at such time as Lender shall
be lawfully entitled to exercise such rights and remedies,  Debtor hereby grants
to Lender an irrevocable,  non-exclusive license (exercisable without payment of
royalty or other compensation to Debtor) to use, transfer, license or sublicense
any  Patent,  Trademark,  trade  secret,  or  copyright  now owned or  hereafter
acquired by Debtor, and wherever the same may be located,  and including in such
license reasonable access to all media in which any of the licensed items may be
recorded or stored and to all  computer  and  automatic  machinery  software and
programs  used for the  compilation  or  printout  thereof;  provided  that such
license  shall be  exercisable  only at such time as the  Lender  shall have the
right to exercise its rights and remedies under Section 8 hereof.

             10.  LIMITATION ON LENDER'S DUTY IN RESPECT OF  COLLATERAL.  Lender
shall use  reasonable  care with respect to the  Collateral in its possession or
under its control.  Lender shall not have any other duty as to any Collateral in
its  possession  or  control  or in the  possession  or  control of any agent or
nominee of Lender,  or any income  thereon or as to the  preservation  of rights
against  prior  parties or any other  rights  pertaining  thereto.  Lender shall
account for any monies  received by Lender in respect of any  foreclosure  on or
disposition of the Collateral.

             11.  REINSTATEMENT.  This Agreement  shall remain in full force and
effect and continue to be  effective  should any petition be filed by or against
Debtor for liquidation or reorganization, should Debtor become insolvent or make
an  assignment  for the benefit of  creditors or should a receiver or trustee be
appointed for all or any significant part of Debtor's assets, and shall continue
to be effective or be reinstated, as the case may be, if at any time payment and
performance of the Secured  Obligations,  or any part thereof,  is,  pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned  by any  obligee of the  Secured  Obligations,  whether as a  "voidable
preference,"  "fraudulent  conveyance," or otherwise, all as though such payment
or performance had not been made. In
                                      -12-
<PAGE>
the event that any payment, or any part thereof, is rescinded, reduced, restored
or returned, the Secured Obligations shall be reinstated and deemed reduced only
by such amount paid and not so rescinded, reduced, restored or returned.

             12. NOTICES.  Except as otherwise  provided herein,  whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other  communication  shall or may be given to or served  upon  either of the
parties by the other party, or whenever either of the parties desires to give or
serve upon the other  party any  communication  with  respect  to this  Security
Agreement, each such notice, demand, request, consent, approval,  declaration or
other  communication  shall be in writing and shall be given in the manner,  and
deemed received, as provided for in Section 11 of the Guaranty Agreement.

             13.  SEVERABILITY;   COMPLETE  AGREEMENT.  Any  provision  of  this
Security  Agreement  which is prohibited or  unenforceable  in any  jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability  without  invalidating the remaining  provisions hereof, and
any  such  prohibition  or   unenforceability  in  any  jurisdiction  shall  not
invalidate or render  unenforceable  such  provision in any other  jurisdiction.
This Security  Agreement is to be read,  construed and applied together with the
Credit Agreement and the other Loan Documents,  which, taken together, set forth
the complete  understanding  and  agreement of Lender and Debtor with respect to
the matters  referred to herein and therein and supersede all prior  agreements,
understandings or inducements whether express or implied, or oral or written.

             14. NO WAIVER;  CUMULATIVE  REMEDIES.  Lender shall not by any act,
delay,  omission  or  otherwise  be deemed to have  waived  any of its rights or
remedies  hereunder,  and no waiver shall be valid unless in writing,  signed by
Lender and then only to the extent  therein set forth. A waiver by Lender of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any  right or  remedy  which  Lender  would  otherwise  have  had on any  future
occasion.  No failure to  exercise  nor any delay in  exercising  on the part of
Lender,  any right,  power or  privilege  hereunder,  shall  operate as a waiver
thereof,  nor shall any  single  or  partial  exercise  of any  right,  power or
privilege  hereunder  preclude  any  other or  future  exercise  thereof  or the
exercise  of any other  right,  power or  privilege.  The  rights  and  remedies
hereunder  provided are cumulative and may be exercised  singly or concurrently,
and are not  exclusive of any rights and remedies  provided by law.  None of the
terms or provisions of this Security Agreement may be waived, altered,  modified
or amended  except by an  instrument  in  writing,  duly  executed by Lender and
Debtor.

             15.  LIMITATION BY LAW; TIME OF ESSENCE.  All rights,  remedies and
powers  provided in this Security  Agreement may be exercised only to the extent
that the exercise thereof does not violate any applicable  provision of law, and
all the provisions of this Security  Agreement are intended to be subject to all
applicable mandatory provisions of law that may be controlling and to be limited
to the extent  necessary so that they shall not render this  Security  Agreement
invalid,  unenforceable,  in whole or in part,  or not  entitled to be recorded,
registered,  or filed under the provisions of any applicable law. Time is of the
essence of this Security Agreement.

             16. TERMINATION OF THIS SECURITY AGREEMENT. Subject to
                                      -13-
<PAGE>
             Section 11 hereof, this Security Agreement shall terminate upon the
Termination Date and all of Lender's rights,  titles and interests in and to the
Collateral  hereunder  shall be  automatically  terminated  and released on such
date.

             17.  SUCCESSORS  AND  ASSIGNS.  This  Security  Agreement  and  all
obligations of Debtor hereunder shall be binding upon the successors and assigns
of Debtor, and shall, together with the rights and remedies of Lender hereunder,
inure to the benefit of Lender, all future holders of any instrument  evidencing
any of the Secured  Obligations and their respective  successors and assigns. No
sales  of  participations,   other  sales,   assignments,   transfers  or  other
dispositions  of any agreement  governing or instrument  evidencing  the Secured
Obligations  or any  portion  thereof or  interest  therein  shall in any manner
affect the security interest granted to Lender hereunder. Debtor may not assign,
sell or otherwise transfer an interest in this Security Agreement.

             18.  EXECUTION IN  COUNTERPARTS.  This  Security  Agreement  may be
executed in any number of  counterparts,  each of which shall  collectively  and
separately constitute one agreement.

             19.  GOVERNING LAW;  CONSENT TO JURISDICTION  AND VENUE.  EXCEPT AS
OTHERWISE  EXPRESSLY  PROVIDED IN ANY OF THE LOAN  DOCUMENTS,  IN ALL  RESPECTS,
INCLUDING ALL MATTERS OF CONSTRUCTION,  VALIDITY AND PERFORMANCE,  THIS SECURITY
AGREEMENT AND THE SECURED  OBLIGATIONS  ARISING  HEREUNDER SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE  TO CONTRACTS  MADE AND PERFORMED IN SUCH STATE,  AND ANY  APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA. DEBTOR HEREBY CONSENTS AND AGREES THAT THE
STATE OR FEDERAL  COURTS  LOCATED IN THE BOROUGH OF MANHATTAN,  NEW YORK,  SHALL
HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
DEBTOR AND LENDER PERTAINING TO THIS SECURITY AGREEMENT OR TO ANY MATTER ARISING
OUT OF OR RELATING TO THIS SECURITY  AGREEMENT,  THE CREDIT  AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS,  PROVIDED, THAT LENDER AND DEBTOR ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE
BOROUGH OF  MANHATTAN,  NEW YORK AND,  PROVIDED,  FURTHER,  THAT NOTHING IN THIS
AGREEMENT  SHALL BE DEEMED OR OPERATE TO PRECLUDE  LENDER FROM  BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL
OR ANY OTHER SECURITY FOR THE SECURED  OBLIGATIONS,  OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF LENDER AND,  PROVIDED,  FURTHER,  THAT  NOTHING IN
THIS  AGREEMENT  SHALL BE  DEEMED TO  PRECLUDE  THE  DEBTOR  FROM  PURSUING  ANY
COMPULSORY  COUNTERCLAIM  IN ANY  PROCEEDING  BROUGHT  BY THE LENDER IN ANY SUCH
OTHER  JURISDICTION.  DEBTOR  EXPRESSLY  SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION  IN ANY  ACTION OR SUIT  COMMENCED  IN ANY SUCH  COURT,  AND DEBTOR
HEREBY  WAIVES ANY  OBJECTION  WHICH DEBTOR MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
                                      -14-
<PAGE>
CONSENTS  TO THE  GRANTING  OF SUCH  LEGAL  OR  EQUITABLE  RELIEF  AS IS  DEEMED
APPROPRIATE BY SUCH COURT. DEBTOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT  AND OTHER  PROCESS  ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
SERVICE OF SUCH SUMMONS,  COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED
OR  CERTIFIED  MAIL  ADDRESSED TO DEBTOR IN  ACCORDANCE  WITH SECTION 12 OF THIS
SECURITY  AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED  COMPLETED UPON THE
EARLIER OF DEBTOR'S  ACTUAL  RECEIPT  THEREOF OR FIVE DAYS AFTER  DEPOSIT IN THE
U.S. MAILS, PROPER POSTAGE PREPAID.

             21.  MUTUAL  WAIVER OF JURY  TRIAL.  BECAUSE  DISPUTES  ARISING  IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN  EXPERIENCED  AND EXPERT  PERSON AND THE PARTIES WISH  APPLICABLE
STATE AND FEDERAL LAWS TO APPLY  (RATHER THAN  ARBITRATION  RULES),  THE PARTIES
DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE,  TO ACHIEVE THE BEST  COMBINATION  OF THE  BENEFITS  OF THE  JUDICIAL
SYSTEM AND OF  ARBITRATION,  THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION,  SUIT,  OR  PROCEEDING  BROUGHT TO RESOLVE ANY  DISPUTE,  WHETHER
SOUNDING IN CONTRACT,  TORT, OR OTHERWISE,  BETWEEN THE PARTIES  ARISING OUT OF,
CONNECTED  WITH,  RELATED  TO, OR  INCIDENTAL  TO THE  RELATIONSHIP  ESTABLISHED
BETWEEN THEM IN CONNECTION WITH, THIS SECURITY AGREEMENT,  THE CREDIT AGREEMENT,
OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
                                      -15-
<PAGE>
             IN WITNESS WHEREOF, Debtor has caused this Security Agreement to be
executed and delivered by its duly  authorized  officer as of the date first set
forth above.

                                        ARIZONA REPAIR SERVICES, INC.



                                         By: /s/ Greg Roeper
                                            ------------------------------------
                                         Title: CFO and V.P.
                                               ---------------------------------

ACCEPTED AS OF JUNE 11, 1997:

GENERAL ELECTRIC CAPITAL
CORPORATION



By: /s/ Timothy Morris
   ------------------------------------
Title: Duly Authorized Signatory
      ---------------------------------
                                      -16-