EXHIBIT 10.8

THIS  NOTE  REPLACES  A PORTION  OF THAT NOTE  DATED  NOVEMBER  25,  1997 IN THE
PRINCIPAL SUM OF $15,000,000.00

                                FIRST REPLACEMENT
                                 PROMISSORY NOTE

                                               Date of Execution: March 29, 1999
                                                          Amount: $10,000,000.00

FOR VALUE RECEIVED,  the undersigned  ("Borrower")  unconditionally (and jointly
and severally,  if more than one) promise(s) to pay to the order of NATIONSBANK,
N.A., a National Banking Association ("Bank"), Sarasota (Banking Center) without
setoff, at its offices at 1605 Main Street, Suite 101, Sarasota,  Florida, 34236
or at such other place as may be designated by Bank, the principal amount of TEN
MILLION  AND  NO/100  DOLLARS  ($10,000,000.00),  or so much  thereof  as may be
advanced  from  time to time  in  immediately  available  funds,  together  with
interest computed daily on the outstanding  principal balance  hereunder,  at an
annual  interest rate, and in accordance  with the payment  schedule,  indicated
below.

Rate

         1. The  interest  rate  ("Rate")  due under  the Note  shall be one and
one-half  percent  (1.5%) in  excess  of the  Eurodollar  Rate,  as  hereinafter
defined,  which  interest  rate shall adjust with each change in the  Eurodollar
Rate.

         2. a. The  Eurodollar  Rate  shall  mean the  rate per  annum  (rounded
upwards,  if  necessary,  to the nearest 1/100 of 1%) appearing on Telerate Page
3750 (or any successor page) as the London  interbank  offered rate for deposits
of United States Dollars at approximately 11:00 a.m. (Charlotte,  North Carolina
time)  on such  day,  or if such  day is not a  Domestic  Business  Day,  on the
immediately  preceding  Domestic  Business Day, for a one month term. If for any
reason  such rate is not  available  for any day,  the rate per  annum  (rounded
upwards,  if necessary,  to the nearest 1/100 of 1%) shall be the rate appearing
on Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at  approximately  11:00 a.m.  (Charlotte,  North Carolina time) on such
day, or if such day is not a Domestic Business Day, on the immediately preceding
Domestic Business Day, for a one month term; provided, however, if more than one
such rate is  specified on the Reuters  Screen LIBO Page,  the  applicable  rate
shall be the arithmetic mean of all such rates.  The rate shall be adjusted on a
daily basis to reflect  changes in the rate  determined in  accordance  with the
foregoing, effective on the date the change occurs.

                  b. "Domestic  Business Day" means a day other than a Saturday,
Sunday or day on which  commercial banks are authorized or permitted to close in
Charlotte, North Carolina.

                  c. The  Borrower  shall pay to Bank,  from time to time and on
demand, any sum(s) required to compensate the Bank for any additional cost (such
as, but not limited to, a reserve requirement)  incurred by the Bank at any time
which (i) is attributable to the Bank's obtaining a deposit or deposits to cover
the outstanding  principal balance, (ii) decreases the effective spread or yield
represented by the 1.5% component, that would be earned by the Bank but for such
cost,  and  (iii)  is  caused  or  occasioned  by  any  presently   existing  or
subsequently  introduced law, rule,  regulations or other requirement (or by any
change


<PAGE>

therein,  changed effect or interpretation  thereof or change in the Bank's cost
of complying  therewith) imposed,  interpreted,  administered or enforced by any
federal, state or other governmental or monetary authority,  which is imposed on
or applied to the Bank or any assets  held by,  deposits or accounts in or with,
or credits extended by the Bank. The Bank shall notify the Borrower from time to
time of any such additional cost and such notice shall be binding and conclusive
evidence of the Borrower's  obligation to pay the stated sum upon receipt of the
notice.

Notwithstanding any other provision contained in this Note, Bank does not intend
to charge and  Borrower  shall not be  required to pay any amount of interest or
other fees or charges that is in excess of the maximum  permitted by  applicable
law.  Any  payment in excess of such  maximum  shall be  refunded to Borrower or
credited against principal, at the option of Bank.

Accrual Method

Interest  at the Rate set  forth  above,  unless  otherwise  indicated,  will be
calculated on the basis of the 365/360 method,  which computes a daily amount of
interest for a hypothetical year of 360 days, then multiplies such amount by the
actual number of days elapsed in an interest calculation period.

Rate Change Date

Any Rate based on a fluctuating index or base rate will change, unless otherwise
provided, each time and as of the date that the index or base rate changes.

Payment Schedule

All payments  received  hereunder  shall be applied  first to the payment of any
expense or charges payable  hereunder or under any other  documents  executed in
connection with this Note ("Loan Documents"),  then to interest due and payable,
with the  balance  being  applied to  principal,  or in such other order as Bank
shall determine at its option.

1.       Commencing  April  29,  1999,  and  on  the  same  day  of  each  month
         thereafter,  except  for months  containing  less than 30 days in which
         case  payment  shall  be made on the last  day of such  months  through
         November 29, 2002, payments of all accrued and unpaid interest shall be
         made until maturity as set forth below.

2.       The entire  principal  balance,  together  with all  accrued and unpaid
         interest shall be due and payable in full on November 29, 2002.

Revolving Feature

         Borrower may borrow,  repay and reborrow hereunder at any time, up to a
         maximum  aggregate  amount  outstanding  at any one  time  equal to the
         principal amount of this Note; provided,  however, that Borrower is not
         in default under any provision of this Note, any Loan Document,  or any
         other  obligation of Borrower to Bank, and provided that the borrowings
         hereunder  do not exceed any  borrowing  base or other  limitations  on
         borrowings by Borrower. Bank shall have no liability for its refusal to
         advance funds based upon its determination  that any conditions of such
         further  advances  have not  been  met.  Bank  records  of the  amounts
         borrowed from time to time shall be conclusive proof thereof.


                                       2
<PAGE>

Automatic Payment

         Borrower  has elected to authorize  Bank to effect  payment of sums due
         under  this  Note  by  means  of  debiting  Borrower's  account  number
         ____________________________________.   This  authorization  shall  not
         affect the  obligation  of Borrower to pay such sums when due,  without
         notice,  if there are  insufficient  funds in such account to make such
         payment in full on the due date thereof,  or if Bank fails to debit the
         account.

Borrower  represents  to Bank  that  the  proceeds  of this  loan are to be used
primarily  for  business,   commercial  or   agricultural   purposes.   Borrower
acknowledges having read and understood, and agrees to be bound by all terms and
conditions of this Note, including the Additional Terms and Conditions set forth
in the Addendum attached hereto and made a part hereof, and hereby executes this
Note under seal.

                 BORROWER:

                 ELCOTEL, INC., a Delaware
                 corporation

                 By: s/s William H. Thompson
                     ---------------------------------------
                     William Thompson, Senior Vice President

                          (CORPORATE SEAL)

                 ELCOTEL DIRECT, INC., a Delaware
                 corporation

                 By: s/s William H. Thompson
                     --------------------------------
                     William Thompson, Vice President

                          (CORPORATE SEAL)

                 TECHNOLOGY SERVICE GROUP, INC. (successor by merger with
                 ELCOTEL HOSPITALITY SERVICES, INC.), a Delaware corporation

                 By: s/s William H. Thompson
                     --------------------------------
                     William Thompson, Vice President

                          (CORPORATE SEAL)


                                       3
<PAGE>

                                    ADDENDUM

                                       OF

                         ADDITIONAL TERMS AND CONDITIONS

1.    Waivers,  Consents and  Covenants.  Borrower,  any indorser,  or guarantor
      hereof or any other party  hereto  (collectively  "Obligors")  and each of
      them  jointly and  severally:  (a) waive  presentment,  demand,  notice of
      demand,  notice of intent to  accelerate,  and notice of  acceleration  of
      maturity,  protest,  notice of protest,  notice of non-payment,  notice of
      dishonor,  and any other notice  required to be given under the law to any
      of Obligors,  in connection  with the delivery,  acceptance,  performance,
      default or  enforcement  of this Note, of any  indorsement  or guaranty of
      this Note or of any Loan  Documents;  (b)  consent to any and all  delays,
      extensions,  renewals  or  other  modifications  of this  Note or the Loan
      Documents,  or waivers  of any term  hereof or of the Loan  Documents,  or
      releases or discharge by Bank of any of Obligors or release, substitution,
      or exchange of any security for the payment hereof,  or the failure to act
      on the part of Bank or any indulgence shown by Bank, from time to time and
      in one or more instances  (without notice to or further assent from any of
      Obligors)  and agree  that no such  action,  failure  to act or failure to
      exercise  any right or remedy on the part of Bank  shall in any way affect
      or impair the  obligations  of any Obligors or be construed as a waiver by
      Bank of, or otherwise affect,  any of Bank's rights under this Note, under
      any  indorsement  or  guaranty  of this  Note  or  under  any of the  Loan
      Documents;  and (c) agree to pay,  on demand,  all costs and  expenses  of
      collection of this Note or of any  indorsement  or guaranty  hereof and/or
      the  enforcement of Bank's rights with respect to, or the  administration,
      supervision,   preservation,  protection  of,  or  realization  upon,  any
      property securing payment hereof, including without limitation, reasonable
      attorneys'  fees,  including  fees  related  to  any  trial,  arbitration,
      bankruptcy, appeal or other proceeding.

2.    Indemnification.  Obligors agree to promptly pay,  indemnify and hold Bank
      harmless  from  all  state  and  federal  taxes  of  any  kind  and  other
      liabilities  with respect to or resulting  from  advances made pursuant to
      this Note; provided however this shall not apply to income taxes, Federal,
      State or otherwise,  of the Bank. If this Note has a revolving feature and
      is secured by a mortgage,  Obligors  expressly consent to the deduction of
      any applicable taxes from each taxable advance extended by Bank.

3.    Prepayments.  Prepayment  may be made in whole or in part at any time. All
      prepayments  of  principal  shall  be  applied  in the  inverse  order  of
      maturity,  or in such  other  order as Bank  shall  determine  in its sole
      discretion.

4.    Events of Default. The following are events of default hereunder:  (a) the
      failure to make any payment due under this Note within ten (10) days after
      the due date or the failure to pay or perform any obligation, liability or
      indebtedness of any Obligor to Bank, or to any affiliate of Bank,  whether
      under  this  Note  or any  other  agreement,  note  or  instrument  now or
      hereafter  existing,  as and when due (whether upon demand, at maturity or
      by acceleration);  (b) the failure to pay or perform any other obligation,
      liability or indebtedness of any of Obligors whether to Bank or some other
      party,  the security for which  constitutes an encumbrance on the security
      for  this  Note;  (c)  death  of  any  Obligor  (if an  individual),  or a
      proceeding being filed or commenced against any Obligor for dissolution or
      liquidation,  or any Obligor  voluntarily or involuntarily  terminating or
      dissolving or being  terminated or dissolved;  (d) insolvency of, business
      failure  of,  the  appointment  of a  custodian,  trustee,  liquidator  or
      receiver for or for any other property of, or an assignment for

<PAGE>

      the benefit of creditors by, or the filing of a petition under bankruptcy,
      insolvency or debtor's  relief law or for any adjustment of  indebtedness,
      composition  or  extension  by or  against  any  Obligor;  (e) any lien or
      additional  security  interest being placed upon any of the property which
      is security  for this Note;  (f)  acquisition  at any time or from time to
      time of  title  to the  whole  of or any  part of the  property  which  is
      security for this Note by any person,  partnership,  corporation  or other
      entity;  (g) Bank determining that any  representation or warranty made by
      any Obligor in any Loan Documents or otherwise to Bank is, or was,  untrue
      or  materially  misleading;  (h) failure of any Obligor to timely  deliver
      such financial statements,  including tax returns, and other statements of
      condition or other information as Bank shall request from time to time;(i)
      any default under any Loan Documents;  (j) entry of a judgment against any
      Obligor  which  Bank  deems to be of a  material  nature,  in Bank's  sole
      discretion;  (k) the seizure or forfeiture of, or the issuance of any writ
      of possession,  garnishment  or attachment,  or any turnover order for any
      property of any  Obligor;  (l) the  determination  by Bank that a material
      adverse change has occurred in the financial condition of any Obligor; or,
      (m) the  failure  to  comply  with any law or  regulation  regulating  the
      operation of Borrower's business which has a material effect on Borrower's
      business.

5.    Remedies Upon Default.  Whenever  there is a default under this Note,  (a)
      the entire  balance  outstanding  and all other  obligations of Obligor to
      Bank (however  acquired or evidenced) shall, at the option of Bank, become
      immediately  due and payable,  and/or (b) to the extent  permitted by law,
      the Rate of interest on the unpaid principal shall, at the option of Bank,
      be increased at Bank's  discretion  up to the maximum rate allowed by law,
      or if none,  twenty-five  percent  (25%) per annum (the  "Default  Rate");
      and/or (c) to the extent  permitted  by law, a  delinquency  charge may be
      imposed in an amount not to exceed  five  percent  (5%) of any  payment in
      default  for more than  fifteen  (15) days.  The  provisions  herein for a
      Default  Rate or a  delinquency  charge  shall not be deemed to extend the
      time for any payment  hereunder or to constitute a "grace  period"  giving
      the Obligors a right to cure any default.  At Bank's  option,  any accrued
      and unpaid  interest,  fees or charges may, for purposes of computing  and
      accruing  interest  on a daily basis after the due date of the Note or any
      installment  thereof, be deemed to be a part of the principal balance, and
      interest shall accrue on a daily  compounded  basis after such date at the
      rate  provided  in this  Note  until the  entire  outstanding  balance  of
      principal and interest is paid in full.  Bank is hereby  authorized at any
      time to setoff and charge against any deposit accounts of any Obligor,  as
      well as any other  property of such party at or under the control of Bank,
      without notice or demand, any and all obligations due hereunder.

6.    Non-waiver. The failure at any time of Bank to exercise any of its options
      or any other rights  hereunder shall not constitute a waiver thereof,  nor
      shall it be a bar to the  exercise  of any of its  options  or rights at a
      later date. All rights and remedies of Bank shall be cumulative and may be
      pursued  singly,  successively  or  together,  at the option of Bank.  The
      acceptance by Bank of any partial payment shall not constitute a waiver of
      any default or of any of Bank's  rights under this Note.  No waiver of any
      of its rights  hereunder,  and no  modification or amendment of this Note,
      shall be deemed to be made by Bank  unless the same  shall be in  writing,
      duly signed on behalf of Bank;  and each such wavier,  if any, shall apply
      only with respect to the specific instance  involved,  and shall in no way
      impair  the  rights of Bank or the  obligations  of Obligor to Bank in any
      other respect at any other time.

7.    Applicable  Law. This Note shall be construed  under the internal laws and
      judicial  decisions  of the State of  Florida,  and the laws of the United
      States as the same may be applicable.


                                       2
<PAGE>

8.    Partial Invalidity. The unenforceability or invalidity of any provision of
      this Note shall not affect the enforceability or the validity of any other
      provision herein and the invalidity or  unenforceability  of any provision
      of this Note or of the Loan Documents to any person or circumstance  shall
      not affect the  enforceability  or  validity of such  provision  as it may
      apply to other persons or circumstances.

9.    Jurisdiction and Venue. In any litigation in connection with or to enforce
      this  Note  or any  indorsement  or  guaranty  of this  Note  or any  Loan
      Documents,  Obligors,  and each of them, irrevocably consent to and confer
      personal  jurisdiction on the courts of the State of Florida or the United
      States courts located within the State of Florida, and expressly waive any
      objections  as to venue in any such  courts,  and agree  that  service  of
      process  may be made on  Obligors  by  mailing a copy of the  summons  and
      complaint by registered or certified mail,  return receipt  requested,  to
      their  respective  addresses.  Nothing  contained  herein shall,  however,
      prevent Bank from bringing any action or exercising  any rights within any
      other state or jurisdiction or from obtaining personal jurisdiction by any
      other means available by applicable law.

10.   ARBITRATION.  ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO
      INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS NOTE
      OR ANY  RELATED  NOTES OR  INSTRUMENTS,  INCLUDING  ANY CLAIM  BASED ON OR
      ARISING FROM AN ALLEGED TORT,  SHALL BE DETERMINED BY BINDING  ARBITRATION
      IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE,  THE
      APPLICABLE  STATE  LAW),  THE  RULES OF  PRACTICE  AND  PROCEDURE  FOR THE
      ARBITRATION OF COMMERCIAL  DISPUTES OR JUDICIAL  ARBITRATION AND MEDIATION
      SERVICES,  INC. (J.A.M.S.) AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE
      EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON
      ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY
      PARTY TO THE NOTICE MAY BRING AN ACTION,  INCLUDING A SUMMARY OR EXPEDITED
      PROCEEDING,  TO COMPEL  ARBITRATION  OF ANY  CONTROVERSY OR CLAIM TO WHICH
      THIS NOTE APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.

      1.  SPECIAL  RULES.  THE  ARBITRATION  SHALL BE  CONDUCTED  IN THE CITY OF
      BRADENTON,  FLORIDA  AND  ADMINISTERED  BY  J.A.M.S.  WHO WILL  APPOINT AN
      ARBITRATOR;  IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING
      THE ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL
      ARBITRATION  HEARINGS  WILL BE  COMMENCED  WITHIN  NINETY (90) DAYS OF THE
      DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING
      OF CAUSE,  BE PERMITTED TO EXTEND THE  COMMENCEMENT OF SUCH HEARING FOR AN
      ADDITIONAL SIXTY (60) DAYS.

      2.  RESERVATION  OF  RIGHTS.  NOTHING  IN THIS NOTE SHALL BE DEEMED TO (I)
      LIMIT  THE   APPLICABILITY  OF  ANY  OTHERWISE   APPLICABLE   STATUTES  OF
      LIMITATIONS OR REPOSE AND ANY WAIVERS CONTAINED IN THIS NOTE; OR (II) BE A
      WAIVER BY THE BANK OF THE PROTECTION  AFFORDED TO IT BY 12 U.S.C. ss.91 OR
      ANY  SUBSTANTIALLY  EQUIVALENT  STATE LAW; OR (III) LIMIT THE RIGHT OF THE
      BANK HERETO (A) TO EXERCISE  SELF HELP  REMEDIES  SUCH AS (BUT NOT LIMITED
      TO) SETOFF,  OR


                                       3
<PAGE>

      (B) TO FORECLOSURE  AGAINST ANY REAL OR PERSONAL PROPERTY  COLLATERAL,  OR
      (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY  REMEDIES SUCH AS (BUT
      NOT LIMITED TO) INJUNCTIVE  RELIEF,  WRIT OF POSSESSION OR THE APPOINTMENT
      OF A RECEIVER.  THE BANK MAY EXERCISE  SUCH SELF HELP RIGHTS,  FORECLOSURE
      UPON SUCH PROPERTY,  OR OBTAIN SUCH  PROVISIONALLY  OR ANCILLARY  REMEDIES
      BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT
      PURSUANT TO THIS NOTE.  NEITHER THE EXERCISE OF SELF HELP REMEDIES NOR THE
      INSTITUTION OR MAINTENANCE OF AN ACTION FOR  FORECLOSURE OR  PROVISIONALLY
      OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY,
      INCLUDING  THE  CLAIMANT IN SUCH ACTION,  TO  ARBITRATE  THE MERITS OF THE
      CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.

11.   Binding  Effect.  This Note shall be binding upon and inure to the benefit
      of Borrower,  Obligors and Bank and their respective successors,  assigns,
      heirs and personal representatives; provided, however, that no obligations
      of the Borrower or the Obligor  hereunder  can be assigned  without  prior
      written consent of Bank.

12.   NOTICE OF FINAL  AGREEMENT.  THIS  WRITTEN  PROMISSORY  NOTE AND ANY OTHER
      DOCUMENTS  EXECUTED IN CONNECTION  HEREWITH  REPRESENT 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.

13.   Year 2000 Representations,  Covenants and Warranties. (1) Borrower has (i)
      begun  analyzing  the  operations  of Borrower  and its  subsidiaries  and
      affiliates that could be adversely affected by failure to become Year 2000
      compliant (that is, that computer  applications,  imbedded  microchips and
      other systems will be able to perform  date-sensitive  functions  prior to
      and after  December 31, 1999) and; (ii) developed a plan for becoming Year
      2000  compliant  in a timely  manner,  the  implementation  of which is on
      schedule in all material respects.  Borrower  reasonably  believes that it
      will  become  Year  2000  compliant  for its  operations  and those of its
      subsidiaries  and affiliates on a timely basis except to the extent that a
      failure  to do so could not  reasonably  be  expected  to have a  material
      adverse  effect upon the  financial  condition of  Borrower.  (2) Borrower
      reasonably  believes  any  suppliers  and vendors that are material to the
      operations of Borrower or its  subsidiaries  and  affiliates  will be Year
      2000  compliant for their own computer  applications  except to the extent
      that a  failure  to do so  could  not  reasonably  be  expected  to have a
      material  adverse  effect upon the  financial  condition of Borrower.  (3)
      Borrower will promptly  notify Bank in the event Borrower  determines that
      any computer  application which is material to the operations of Borrower,
      its  subsidiaries or any of its material  vendors or suppliers will not be
      fully Year 2000  compliant  on a timely  basis,  except to the extent that
      such failure could not  reasonably be expected to have a material  adverse
      effect upon the financial condition of Borrower."


                                       4
<PAGE>

                  BORROWER:

                  ELCOTEL, INC., a Delaware
                  corporation

                  By: /s/ William H. Thompson
                      ---------------------------------------
                      William Thompson, Senior Vice President

                          (CORPORATE SEAL)

                  ELCOTEL DIRECT, INC., a Delaware
                  corporation

                  By: /s/ William H. Thompson
                      ----------------------------
                  William Thompson, Vice President

                          (CORPORATE SEAL)

                  TECHNOLOGY  SERVICE  GROUP,  INC.  (successor  by merger  with
                  ELCOTEL HOSPITALITY SERVICES, INC.), a Delaware corporation

                  By: /s/ William H. Thompson
                      ----------------------------
                  William Thompson, Vice President

                          (CORPORATE SEAL)


                                       5