Document:

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                                                                   Exhibit 10.5

                     ACCOUNTS RECEIVABLE SECURITY AGREEMENT
                     --------------------------------------

DATE:                May 17, 2002

BORROWER:            TELETOUCH COMMUNICATIONS, INC.,
                     a Delaware corporation

ADDRESS:             110 North College Avenue, Suite 200
                     Tyler, Texas 75702

FCFC:                FIRST COMMUNITY FINANCIAL CORPORATION,
                     an Arizona corporation

ADDRESS:             4000 North Central Avenue, Suite 100
                     Phoenix, Arizona 85012

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         Borrower desires to obtain a Credit Facility and other financial
accommodations from FCFC, and FCFC is willing to make such Credit Facility
available to Borrower on the following terms and conditions to be secured by the
Collateral hereinafter described. Therefore, the parties agree as follows:

1.       Definitions.
         -----------

         1.1. "Accounts" means whatever is encompassed by the Code's definition
of that term, and includes all presently existing and hereafter arising
accounts, instruments, contract rights, documents, chattel paper (including
security agreements and leases), and all other forms of obligations owing to
Borrower, all guaranties of such Accounts and other security therefor, the
proceeds of such Accounts, all Inventory returned to or reclaimed by Borrower,
and Borrower's Books relating to each of the foregoing.

         1.2. "Agreement" means and includes this Accounts Receivable Security
Agreement, any concurrent or subsequent Rider hereto and any extensions,
supplements, amendments or modifications thereto.

         1.3. "All" includes "any" and "any" includes "all."

         1.4. "Borrower's Books" means and includes all of Borrower's books and
records including but not limited to, all customer lists and lists of account
debtors, all ledgers; records reflecting, summarizing or evidencing Borrower's
assets, accounts, business operations or financial condition, computer programs,
computer discs, computer printouts, and other computer prepared information and
computer equipment of any kind.

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         1.5. "Change of Control" means any "person," within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 (the
"Exchange Act") and the rules, regulations and interpretations of the Securities
and Exchange Commission thereunder, or group of Persons (other than Borrower or
TLL Partners, LLC, a Delaware limited liability company), who becomes the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act and
the rules, regulations and interpretations of the Securities and Exchange
Commission thereunder), directly or indirectly, of securities of Borrower
representing in excess of 24.9% of the combined voting power entitled to be cast
generally of Borrower's then outstanding voting securities.

         1.6. "Code" means the Uniform Commercial Code prepared under the joint
sponsorship of the American Law Institute and the National Conference of
Commissioners on Uniform State Laws, as amended from time to time. Any and all
terms used in this Agreement shall be construed and defined in accordance with
the meaning and definitions set forth herein or, to the extent not inconsistent
herewith, as such terms are defined in the Arizona Uniform Commercial Code, as
amended from time to time; provided, however, with respect to any term used
herein that is defined in (i) Article 9 of the Uniform Commercial Code as in
force in the jurisdiction in which this Agreement was signed by the Borrower at
the time that it was signed, or (ii) Article 9 as in force at any relevant time
in the jurisdiction in which a financing statement given pursuant to this
Agreement is filed, or (iii) Article 9 as in force at any relevant time in the
jurisdiction in which the terms of this Agreement are enforced, the meaning to
be ascribed thereto with respect to any particular item of property shall be
that under the more encompassing of the three definitions.

         1.7. "Collateral" means and includes, without limitation, all of the
following properties, assets and rights of the Borrower and, whatever is
encompassed by the Code's definition of the following terms, wherever located,
whether now owned or existing or hereafter acquired or arising, and all
proceeds, products, replacements, substitutes, accessions, additions and
improvements to any thereof:

              All personal property of every kind and nature including,
              without limitation, all furniture, equipment, raw materials,
              inventory, other goods, accounts, contract rights, rights to
              the payment of money, insurance refund claims and all other
              insurance claims and proceeds, chattel paper (including
              security agreements and leases), electronic chattel paper,
              documents, records, instruments, securities and other
              investment property, deposit accounts, rights to proceeds of
              letters of credit, letter-of-credit rights, supporting
              obligations of every nature, and general intangibles
              including, without limitation, all tax refund claims, license
              fees, patents, patent applications, trademarks, trademark
              applications, trade names, copyrights, copyright applications,
              rights to sue and recover for past infringement of patents,
              trademarks and copyrights, computer programs, computer
              software, engineering drawings, service marks, customer lists,
              goodwill, and all licenses, permits, agreements of any kind or
              nature pursuant to which (i) Borrower operates or has
              authority to operate, (excluding however all licenses issued
                                     ---------
              by the Federal Communications Commission, and books and
              records which pertain exclusively to such licenses), (ii)
              Borrower possesses, uses or has authority to possess or use

                                       -2-

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              property (whether tangible or intangible) of others, or (iii)
              others possess, use, or have authority to possess or use
              Borrower's property (whether tangible or intangible), and all
              recorded data of any kind or nature, regardless of the medium
              of recording, including, without limitation, all software,
              writings, plans, specifications and schematics, and Borrower's
              Books;

excluding, however, all corporate stock of Teletouch Licenses, Inc., and all
---------
books and records which pertain exclusively to such stock, books and records
which pertain exclusively to any licenses issued by the Federal Communications
Commission that are now or hereafter held by Teletouch Licenses, Inc., books and
records (including without limitation blue prints, surveys, and drawings), of
and/or concerning any real property of Borrower, including real property in
Tyler, Smith County, Texas, and that certain Amended and Restated Operating
Agreement between Borrower and Teletouch Licenses, Inc.

        1.8.  "Credit Facility" shall mean a revolving line of credit granted by
FCFC to Borrower in the amount of $2,000,000, in accordance with the terms and
conditions set forth in this Agreement.

        1.9.  "Date of Default" means the first day following an Event of
Default and the expiration of any Grace Period applicable to such Event of
Default.

        1.10. "Eligible Accounts" means accounts on selling terms of net thirty
(30) days or less, which have been validly assigned to FCFC and strictly comply
with all of Borrower's warranties and representations set forth in this
Agreement, but excluding those Accounts: (a) not paid within 60 days of their
invoice date; (b) owed by a single account debtor, if any amount owing by said
account debtor remains unpaid for more than 60 days after its invoice date; (c)
the total whose account debtor's total indebtedness to Borrower exceeds ten
percent (10%) of all Eligible Accounts; (d) representing the sale of goods
delivered on consignment, guaranteed sale or on other conditional terms; (e)
subject to any defense, setoff or counterclaim claimed or asserted by the
account debtor; (f) evidenced by an instrument; (g) owed by an account debtor
who is not a resident of the United States; (h) whose account debtor is any
department, agency or instrumentality of the United States other than a
department, agency or instrumentality with whom Borrower has existent contracts
or mercantile business arrangements or relationships as of the date of this
Agreement; (i) whose account debtor is a subsidiary of, related to, affiliated
or has common shareholders, officers or directors with Borrower; (j) whose
account debtor is an officer, employee or agent of Borrower; (k) representing
goods sold and/or transferred where possession and/or control is held,
maintained or retained by Borrower (or its agent) for the account of or subject
to further and/or future direction from the account debtor thereof; and (l) not
creditworthy, in the sole opinion of FCFC. FCFC will not lend against retail
customer accounts.

        1.11. "Event of Default" means the occurrence of one or more of the
acts, omissions or circumstances described in Article 10.
                                              ----------

        1.12. "FCFC's Costs" means and includes: (a) filing, recording,
publication and search fees incurred by FCFC relating to Borrower; all costs and
expenses incurred by FCFC in

                                       -3-

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the enforcement of its rights and remedies under this Agreement, or defending
this Agreement or its security interest in the Collateral; (b) long distance
telephone and facsimile charges, the expenses of field examiners; (c) all
expenses for travel, lodging and food incurred by FCFC's personnel in collecting
the Accounts or realizing upon the Collateral; (d) all costs and expenses
incurred in gaining possession of, maintaining, handling, preserving, storing,
repairing, shipping, selling, preparing for sale and advertising to sell the
Collateral, whether or not a sale is consummated; (e) all expenses involved in
fulfilling in whole or in part any purchase order from an account debtor; and
(f) reasonable attorney's fees and expenses incurred by FCFC as provided for in
this Agreement, including a reasonable fee for the services of attorneys
employed by FCFC for any purpose related to this Agreement or the Obligations,
including consultation, drafting documents, sending notices or instituting,
prosecuting or defending litigation or arbitration.

         1.13. "Grace Period" means the number of calendar days after FCFC gives
notice to Borrower in accordance with Section 14. If an Event of Default
                                      ----------
involves Borrower's obligation to pay money or discharge an indebtedness, the
applicable Grace Period shall be two (2) days. If an Event of Default involves
the performance or non-performance of an act, or the occurrence or
non-occurrence of an event or circumstance, other than the payment of money, the
Grace Period shall be twenty (20) days. Notwithstanding the foregoing, there
shall be no Grace Period applicable to an Event of Default based upon a breach
of a representation or warranty, or a false statement in or a material omission
from any document forming part of the transaction in respect of which this
Agreement was made, or the breach of the covenant to maintain adequate
insurance.

         1.14. "Includes" and "including" are not limiting.

         1.15. "Inventory" means and includes whatever is encompassed by the
Code's definition of that term, and includes all of Borrower's raw materials,
components, work in process, finished merchandise, and packing and shipping
materials, now owned or hereafter acquired, wherever located, all patents,
blueprints and drawings related thereto, all other items hereafter acquired by
Borrower by way of substitution, replacement, return, repossession or otherwise,
all additions and accessions thereto, and the resulting product or mass, and any
documents of title representing any of the above.

         1.16. "Material Impairment" for purposes of Sections 3.14 and 10.1(d)
                                                     -------------------------
means any of the following:

               (a) the collection of the Accounts during any thirty (30) day
         period diminishes by twenty-five percent (25.0%) or more as compared
         with the previous thirty (30) day period, and is less than $1,600,000
         in total collections.

               (b) Accounts Turnover increases by fifty percent (50%) or more
         within a thirty (30) day period as compared with the previous
         thirty-day period. "Accounts Turnover" means the number derived by
         dividing the aggregate amount of all of Borrower's Accounts outstanding
         at the beginning of a month by the aggregate amount of proceeds of all
         Accounts received during that month, and multiplying the result by the
         number of days in that month.

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           (c) Borrower's EBITDA during any of the first four (4) months
     following the date of this Agreement is less than $550,000, or thereafter,
     Borrower's EBITDA is less than $675,000 during two consecutive months.

           (d) Borrower uses a substantial amount of funds from the business for
     a non-business purpose.

     1.17. "Obligations" mean all indebtedness of Borrower, each Person who
hereafter becomes the Borrower and each Person that becomes a "new debtor" (as
defined in A.R.S. (S) 47-9102) that is now or hereafter owing to FCFC,
regardless whether such indebtedness is now existing or hereafter arising,
whether it is voluntary or involuntary, whether due or not, secured or
unsecured, absolute or contingent, liquidated or unliquidated, and whether it is
for principal, interest, fees, expenses or otherwise, and regardless whether the
Person who is or hereafter becomes the Borrower and/or new debtor may be liable
individually or jointly with others, or whether recovery upon any such
obligations may be or hereafter become barred or otherwise unenforceable. The
term, "Obligations," also includes: (a) all amounts which arise after the filing
of a petition by or against Borrower under Title 11 of the United States Code
(the "Bankruptcy Code"), even if the obligations do not accrue because of the
automatic stay under Bankruptcy Code (S) 362 or otherwise, and all amounts which
would become due but for the operation of the automatic stay under (S) 362(a) of
the Bankruptcy Code, and the operation of (S)(S) 502(b) and 506(b) of the
Bankruptcy Code; (b) indebtedness arising under modifications, renewals,
replacements and extensions of the Obligations, and successive transactions
which renew, continue, refinance or refund the Obligations; and (c) all
covenants and duties of Borrower to FCFC of every kind, nature and description,
(whether arising out of the Agreement or any other agreement, instrument,
document, record or contract now existing or hereafter made by Borrower in favor
of FCFC, and whether created by oral agreement or operation of law, and whether
or not for the payment of money), including without limitation any debt,
liability or obligation owing by Borrower to others which FCFC may have acquired
by assignment or otherwise.

     1.18. "Or" is not exclusive.

     1.19. "Permitted Debt" means the specific indebtedness described on
Schedule One hereto.

     1.20. "Permitted Liens" mean those liens and security interests to which
any of the Collateral is subject, and shall consist of only liens on furniture,
fixtures, or equipment to secure the purchase price thereof, and such existent
liens on or security interests in Collateral as is listed on Schedule One
hereto.

     1.21. "Person" means an individual, partnership, corporation, including a
"business trust," limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.

     1.22. "Prime Rate" means the Prime Rate publicly announced by Bank One,
Phoenix, Arizona, from time to time (which may not necessarily be the lowest
rate charged by that bank to its customers).

                                      -5-

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     1.23. "Proceeds" means and includes whatever is encompassed by the Code's
definition of that term, but does not authorize any sale, transfer, or other
disposition of the Collateral by the Borrower.

     1.24. "Record" shall have the meaning given it under the Code.

     1.25. "SOS Report" means a report with respect information on file at the
office of a Secretary of State concerning security interest related filings made
pursuant to the Code.

     1.26. "State" when referring to: (i) the location of Borrower's chief
executive office, will be referred to herein as the "Chief Executive Office
State"; (ii) the location of Borrower's state of incorporation, will be referred
to herein as the "Borrower State"; and (iii) the location of Collateral
consisting of goods, will be referred to herein as the "Collateral State."

     1.27. "Term Note" means that certain promissory note of even date herewith
in the principal amount of $250,000 made by Borrower in favor of FCFC.

2.   Advances and Charges.
     --------------------

     2.1.  Upon request of Borrower from time to time during the term hereof,
FCFC shall loan and advance to Borrower the amount requested, provided that said
amount together with the then outstanding balance of advances previously made
does not exceed seventy-five percent (75%) of the amount of Borrower's Eligible
Accounts defined as commercial accounts and fifty percent (50%) of the amount of
Borrower's Eligible Accounts defined as reseller accounts (less discounts,
credits, allowances, service charges, commissions, and freight charges which may
be granted to or taken by the account debtors). Eligible Accounts will be net of
all credit balance accounts resulting from prepayment of service fees. FCFC
reserves the right at any time and from time to time after an Event of Default
has occurred, to change the percentage to be advanced to Borrower.

     2.2.  The conditions precedent to each advance hereunder are that no Event
of Default hereunder has occurred nor is the effect thereof continuing, and
Borrower is in full, faithful and timely compliance with each and all of the
covenants, conditions, warranties, and representations, contained in this
Agreement and in every other agreement between FCFC and Borrower. As a condition
precedent to the first advance hereunder, FCFC must also receive SOS Reports
from each Collateral State, the Chief Executive Office State and the Borrower
State, indicating that FCFC's security interest in the Collateral is prior to
all other security interests and other interests reflected in the report.

     2.3.  FCFC is hereby authorized to make advances based upon telephonic or
other instructions received from only those officers, employees or
representatives of Borrower that are designated in writing by Borrower delivered
to FCFC.

     2.4.  All Obligations shall be due and payable no later than the earliest
of (a) the last day of the term (or renewal term, if any) of this Agreement, (b)
the Date of Default, and (c) the day the Agreement is terminated by either
party.

                                       -6-

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     2.5.  All Obligations shall bear interest, computed on the basis of a
360-day year for the actual days outstanding, at a fluctuating rate of interest
equal to the sum of the Prime Rate plus five and one-quarter percent (5.25%) per
annum; provided, however, in no event shall the interest rate chargeable on such
       --------
Obligations be less than ten percent (10.00%) per annum, nor shall the minimum
amount of interest payable monthly pursuant to the Credit Facility during the
original and each renewal term of this Agreement be less than $5,000.00 per
month.

     2.6.  In the event of a change in the Prime Rate from time to time, the
rate of interest to be charged to Borrower shall be correspondingly adjusted as
of the date of the Prime Rate change. Interest shall be paid on the tenth day of
each month. Any interest not paid when due shall become a part of the
Obligations, and shall thereafter bear interest as provided herein. If a Date of
Default occurs, or if this Agreement terminates before the second anniversary
date of this Agreement or before the end of any renewal term thereafter,
Borrower shall pay to FCFC upon its demand a sum of money equal to the product
of multiplying the minimum monthly interest payment amount by the number of
months of the initial term (or renewal term, as applicable), of this Agreement
that remain.

     2.7.  FCFC shall render statements to Borrower of the Obligations,
including all principal, interest and FCFC's Costs owing, and such statements
shall be conclusively presumed to be correct and accurate and constitute an
account stated between Borrower and FCFC unless, within thirty (30) days after
receipt thereof by Borrower, Borrower notifies FCFC in writing specifying the
error or errors, if any, contained in any such statements.

     2.8.  In consideration for establishing the Credit Facility on the terms
and conditions provided for herein, Borrower agrees to pay to FCFC a commitment
and funding fee, which shall be deemed earned and non-refundable upon payment
thereof, (i) in the amount of one and one-half percent (1.50%) of the Credit
Facility upon the execution hereof; and (ii) in the amount of one-half of one
percent (0.50%) of the Credit Facility upon each annual anniversary of the date
of this Agreement until such time as the Credit Facility has been terminated. In
the event that the term of this Agreement is renewed as provided in Article 5
                                                                    ---------
below, Borrower shall pay within ten days prior to the anniversary date to FCFC
a renewal fee of one-half of one percent (0.50%) of the Credit Facility each
renewal period. In the event that the amount under the Credit Facility is
increased, Borrower shall pay to FCFC a one percent (1.00%) line increase fee on
the additional commitment amount, which shall be deemed earned and
non-refundable upon payment thereof.

     2.9.  Upon an Event of Default, and for as long as such Event of Default or
the consequences thereof continue, interest shall accrue on the Obligations from
and after such Event of Default at a rate of interest which is four (4)
percentage points greater than the rate then being charged.

     2.10. No provision of this Agreement or any other aspect of the transaction
of which this Agreement is a part is intended to or shall require or permit the
holder, directly or indirectly, to take, receive, contract for or reserve, in
money, goods or things in action, or in any other way, any interest (including
amounts deemed by law to be interest, such amounts to then be deemed to be an
addition to the rate of interest agreed upon) in excess of the maximum rate of
interest permitted by law in the State of Arizona as of the date hereof. If any
such excess shall nevertheless be provided for, or be adjudicated by a court of
competent jurisdiction to be

                                      -7-

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provided for, the undersigned shall not be obligated to pay such excess but, if
paid, then such excess shall be applied against the unpaid principal balance of
this Agreement or, to the extent that the principal balance has been paid in
full by reason of such application or otherwise, such excess shall be remitted
to the undersigned. In the event any amount determined to be excessive interest
is applied against the unpaid principal balance of this Agreement, and
thereafter the rate of interest accruing under this Agreement is less than the
rate permitted by law, this Agreement shall thereafter accrue interest at such
highest lawful rate until such time as the amount accrued at the interest rate
differential equals the amount of excessive interest previously applied against
principal. Notwithstanding anything herein or in any of the other Loan Documents
to the contrary, if any charge or fee for which Borrower or any Guarantor is or
becomes obligated in connection with the Loan Documents constitutes interest and
is not otherwise stated as a rate, such charge or fee shall be deemed an
additional rate of interest to which Borrower and each Guarantor agree, computed
by dividing the amount of such charge or fee by the principal amount of the
Credit Facility. This provision shall control every agreement between Borrower
and each Guarantor and FCFC.

     2.11. Until such time that all Obligations are paid in full, Borrower shall
pay to FCFC, on or before the last day of each calendar quarter, a field
examination fee of $1,000, together with the amount of FCFC's travel expenses
(which shall be read to include air fare, hotel, ground transportation and food)
incurred in connection with all field audits conducted during that calendar year
quarter.

3.   Creation of Security Interest.
     -----------------------------

     3.1.  Borrower grants to FCFC a security interest in the Collateral to
secure the prompt payment and timely performance by Borrower of the Obligations.

     3.2.  To the extent Borrower uses the proceeds of advances to purchase any
of the Collateral, Borrower's repayment of the Obligation shall apply on a
"first-in-first-out" basis so that the portion of the Obligation used to
purchase a particular item of Collateral shall be paid in the chronological
order that the Borrower purchased the Collateral.

     3.3.  Borrower shall execute and deliver to FCFC concurrently with
Borrower's execution of this Agreement, and at any time or times hereafter at
the request of FCFC, promissory notes, financing statements, initial financing
statements, continuation statements, security agreements, mortgages,
assignments, certificates of title, affidavits, reports, notices, schedules of
accounts, letters of authority, and all other documents and records that FCFC
may request, in such form as is satisfactory to FCFC, to further evidence the
Obligations and/or to perfect and maintain FCFC's security interest in the
Collateral and fully comply with this Agreement (collectively, the "Loan
Documents").

     3.4.  Borrower authorizes FCFC to file one or more financing statements and
initial financing statements describing the Collateral. Borrower hereby makes,
constitutes and appoints FCFC (and any of FCFC's officers, employees or agents
designated by FCFC) as Borrower's true and lawful attorney with power, but
without notice to Borrower, to sign the name of Borrower on any Financing
Statement, initial financing statement, continuation statement, security
agreement, mortgage, assignment, certificate of title, affidavit, letter of
authority, or notice or other similar

                                      -8-

<PAGE>

document necessary to perfect or continue the perfection of FCFC's security
interest in the Collateral. Borrower shall make appropriate entries in
Borrower's Books disclosing FCFC's security interest in the Collateral. The
power of attorney created in this section is coupled with an interest, and shall
be irrevocable until all Obligations are fully paid and satisfied.

     3.5.  FCFC (by any of its officers, employees or agents) shall have the
right at any time or times hereafter during Borrower's usual business hours to
inspect the Collateral.

     3.6.  To further evidence the security interest of FCFC in Accounts,
Borrower shall, from time to time, provide FCFC with schedules and written
assignments of its Accounts, in form satisfactory to FCFC. Borrower's failure to
execute and deliver such schedules and/or assignments shall not affect or limit
FCFC's security interest or any other rights in and to the Accounts. Together
with each schedule, Borrower shall furnish FCFC with accurate copies of
Borrower's customers' invoices or the equivalent and accurate copies of shipping
or delivery receipts for all Inventory sold. The foregoing notwithstanding,
Borrower shall furnish to FCFC upon its request the original copy of any such
Record of Borrower when under the circumstances then existent a copy is not
legally sufficient to accomplish the purposes to which FCFC intends to use such
Record.

     3.7.  Borrower authorizes FCFC and FCFC shall have the right at any time or
times to verify the Accounts by mail, telephone, or otherwise in the name of
Borrower or FCFC. In addition, Borrower authorizes FCFC to obtain information
from Borrower's suppliers and customers and, in this regard, Borrower waives any
right or claim against any such supplier or customer for furnishing information
to FCFC.

     3.8.  Borrower shall promptly provide FCFC with all information relating to
the financial condition of any account debtor, and shall notify FCFC of any
nonperformance of contracts, or the assertion by an account debtor of any claim,
offset or counterclaim, and the settlement or adjustment of any dispute or claim
with an account debtor on terms approved by FCFC.

     3.9.  Subject to the provisions of Section 3.14, FCFC, or its agents may at
                                        ------------
any time (and regardless whether an Event of Default has occurred or is
continuing) and without notice thereof to Borrower: (a) notify account debtors
that their Accounts have been assigned to FCFC, and that FCFC has a security
interest therein; (b) direct all account debtors to make payment of all Accounts
to FCFC; (c) demand, collect (by legal means or otherwise), receive, receipt
for, sue for, compromise, adjust, settle or extend the time for payment of any
Account upon such terms as FCFC may reasonably determine under the
circumstances, in its own name or in the name of Borrower (crediting Borrower's
Accounts with only the net amount received by FCFC in payment of the Accounts,
after deducting all FCFC's Costs in connection therewith); (d) take control of
all proceeds from said Accounts; and (e) judicially enforce Borrower's rights
against the account debtors and obligors.

     3.10. Borrower agrees that it will cooperate with FCFC (and execute such
forms or notices as FCFC may request) in notifying account debtors that their
Accounts have been assigned to FCFC and that FCFC has a security interest
therein. Until such time as FCFC exercises its right to collect Accounts,
Borrower shall collect the Accounts, receiving in trust all proceeds therefrom
as FCFC's trustee and each day deliver said proceeds to FCFC in their original
form as received from the account debtors, together with a remittance report, in
form satisfactory to FCFC. To facilitate the

                                      -9-

<PAGE>

process of collection and remittance of proceeds of Accounts, Borrower and
FCFC shall enter into a Depository Account Control Agreement with First
Tennessee Bank, or such other bank as is mutually acceptable to the parties.

     3.11. The receipt of any check or other item of payment by FCFC shall not
be considered payment to FCFC until such check or other item of payment is
actually paid. For the purpose of computing the interest to be charged to
Borrower under Section 2.5 hereof all checks, and other items of payment
               -----------
delivered to FCFC from time to time shall be treated as being paid two business
days after the date FCFC actually receives such check or other item of payment,
subject to reversal of entry in the event such remittance is not paid upon
presentment to the drawee bank. It is further understood that for the purpose of
computing interest to be charged to Borrower, the amount of any credit balance
that Borrower may have with FCFC shall be treated as an advance by FCFC to
Borrower under this Agreement.

     3.12. At such time as the Term Note is paid in full, and provided no Event
of Default shall have occurred or be existent, FCFC shall release its security
interest in Borrower's Inventory, but shall retain its security interest in the
Accounts generated from such Inventory and the proceeds of such Accounts
Receivable.

     3.13. Borrower does hereby irrevocably designate, make, constitute and
appoint FCFC, and any agent designated by FCFC, as Borrower's true and lawful
attorney, with power exercisable subject to the provisions of Section 3.14, to
                                                              ------------
do the following in Borrower's or FCFC's name and at Borrower's expense but
without notice to Borrower, and at such time or times (except as otherwise
provided herein) as FCFC may, in its sole election, determine:

           (a) Endorse Borrower's name on any checks, notes, acceptances, money
     orders, drafts or other forms of payment or security that may come into
     FCFC's possession;

           (b) Exercise all of Borrower's rights and remedies with respect to
     the collection of Accounts;

           (c) Sign Borrower's name on any invoice, freight bill or bill of
     lading relating to any Account, on any draft against an account debtor, on
     any schedule assignment of Accounts, verification of Accounts or on any
     notice to account debtors;

           (d) Prepare, file and sign Borrower's name on any proof of claim in
     bankruptcy or similar document against an account debtor;

           (e) Prepare, file and sign Borrower's name on any notice of lien,
     claim of mechanic's or materialman's lien or similar document or waiver or
     satisfaction thereof in connection with an Account; and

           (f) Execute any other documents that may facilitate the collection,
     liquidation or disposition of the Collateral.

     3.14. FCFC shall not be obligated to do any of the acts or exercise any of
the powers hereinabove authorized, but, if FCFC elects to collect Accounts, or
do any such plural acts or exercise any of the foregoing powers, it may do so in
any manner or means as it may determine,

                                      -10-

<PAGE>

and shall not be liable to Borrower for any error in judgment or mistake of fact
or law, excepting willful misconduct or bad faith. Notwithstanding the
provisions of Sections 3.9 and 3.13, FCFC shall only exercise the rights or
              ------------     ----
powers set forth in said sections if: (a) FCFC reasonably believes, in the
exercise of its best judgment and in good faith, that there has been a Material
Impairment in the value of its Collateral or in the prospect of repayment of the
Obligations, that the priority of its security interest in the Collateral is
being contested, or that Borrower has defaulted under any provision of this
Agreement; and (b) after FCFC: (i) gives Borrower written notice that it intends
to exercise such rights and/or powers; (ii) agrees to meet with Borrower within
twenty-four (24) hours after such notice is given to discuss the action which
FCFC contemplates taking, and (iii) subsequently gives Borrower written notice
that it nevertheless intends to exercise the rights or powers set forth in this
Agreement. All acts by or on behalf of FCFC pursuant hereto are hereby ratified
and approved by Borrower. The above-described power, being coupled with an
interest, is irrevocable until all Obligations are fully paid and satisfied.

4.   Possession and Control of Collateral.
     ------------------------------------

     4.1. Borrower shall have possession of the Collateral, except where
expressly otherwise provided in this Agreement or where FCFC chooses to perfect
its security interests by possession in addition to the filing of a financing
statement. Regardless who has possession, Borrower shall in all events bear the
risk of loss of the Collateral, except for loss occasioned by FCFC's gross
negligence or willful misconduct.

     4.2. FCFC shall have no duty to collect any income accruing on the
Collateral or to preserve any rights relating to the Collateral.

     4.3. Where Collateral is in the possession of a third party, Borrower,
promptly upon receipt of written request from FCFC, will join with FCFC in
notifying the third party of FCFC's security interest and obtaining an
acknowledgment from the third party that it is holding the Collateral for the
benefit of FCFC.

     4.4. Borrower will cooperate with FCFC in obtaining control with respect
Collateral consisting of: (a) deposit accounts; (b) investment property; (c)
letter-of-credit rights; and (d) electronic chattel paper.

     4.5. Borrower will not create any chattel paper without placing a legend on
the chattel paper acceptable to FCFC indicating that FCFC has a security
interest in the chattel paper.

5.   Term.
     ----

     5.1. Unless the Date of Default has occurred, this Agreement shall have a
term of two years commencing with the date hereof and shall be automatically
renewed thereafter from year to year unless terminated by either party on the
anniversary date of this Agreement by written notice to this effect given not
less than thirty (30) days prior to said anniversary date. Borrower may
terminate the Agreement at any time prior to the anniversary date of the
Agreement, by giving written notice to FCFC to that effect not less than thirty
(30) days prior to the effective date of such termination, and by paying to FCFC
on or before the date of termination all Obligations, including the minimum
amount of interest required to be paid by Borrower to FCFC during what would
otherwise be the remainder of the original or renewal term of the Agreement

                                      -11-

<PAGE>

as provided in Section 2.5 above. Upon an Event of Default, FCFC may, at its
               -----------
election, terminate this Agreement at any time, without notice. On the date of
termination, all Obligations, including but not limited to, obligations arising
by reason of the termination of this Agreement, shall become immediately due and
payable without notice or demand. Notwithstanding such termination, until all
Obligations have been fully satisfied, FCFC shall retain its security interest
in all existing Collateral and Collateral arising thereafter, and Borrower shall
continue to turn over all collections from the Accounts to FCFC. It is
understood and agreed that if Borrower has given notice of termination, pursuant
to the provisions of this section, and fails to pay all Obligations to FCFC on
the specified date, or within ten (10) days thereafter, then this Agreement
shall be automatically renewed for an additional one-year term.

6.   Representations and Warranties.
     ------------------------------

     6.1. Until all Obligations have been fully paid and satisfied, Borrower
does hereby warrant and represent that:

          (a) If Borrower is a corporation or limited liability company, it is
     duly organized and is and all times hereinafter will be in good standing
     under the laws of the state of its incorporation or registration and is
     duly qualified and in good standing in every other state in which the
     nature of its business requires such qualification;

          (b) Borrower is the true and lawful owner of the Collateral and has
     the rights, power and authority to transfer and grant a security interest
     therein to FCFC;

          (c) The Chief Executive Office State, Borrower State, Collateral
     States and the chief place of business and the office where Borrower's
     Books are kept are each accurately identified in Schedule One;

          (d) Borrower is not doing business and has not done business during
     the last six (6) years under any trade name or style, except its name as
     set forth in this Agreement and except the trade names listed on Schedule
     One hereto;

          (e) The execution, delivery and performance hereof does not constitute
     a default under any indenture, agreement or undertaking to which Borrower
     is now or hereafter a party or by which it is or will be bound and, if
     Borrower is a corporation or a limited liability company, the same are
     within Borrower's corporate powers, have been duly authorized and are not
     in contravention of its articles, bylaws, or operating agreement;

          (f) Except as listed on Schedule One, Borrower has no knowledge of any
     actions or proceedings pending by or against Borrower or any guarantor of
     the Obligations in any court or administrative agency and Borrower has no
     knowledge of any pending, threatened or imminent litigation, governmental
     investigation or claim, complaint, action or prosecution involving Borrower
     or any guarantor of Borrower, except as may have been specifically
     disclosed in writing to FCFC and if any of the foregoing arise during the
     term of this Agreement, Borrower shall immediately notify FCFC in writing
     with respect thereto;

          (g) Borrower has duly filed all federal, state and other governmental
     tax returns which it is required by law to file and that all taxes and
     other sums which may be due to the

                                      -12-

<PAGE>

     United States, any state or other governmental authority have been fully
     paid and that Borrower now has and shall hereafter maintain reserves
     adequate in amount to fully pay all such tax liabilities which may
     hereafter accrue;

          (h) All assessments and taxes whether real, personal or otherwise due
     and payable by or imposed, levied or assessed against Borrower or any of
     its assets have been paid and shall hereafter be paid in full before
     delinquency. Borrower shall make due and timely payment or deposit of all
     federal, state and local taxes, assessments or contributions required of it
     by law (including timely payment or deposit of all F.I.C.A. payments and
     withholding taxes) and will execute and deliver to FCFC on demand
     appropriate certificates attesting to the payment or deposit thereof;

          (i) [Intentionally Blank]

          (j) With respect to all Collateral, except for Permitted Liens, FCFC's
     security interest therein is now and shall hereafter at all times
     constitute a perfected, choate and first security interest in the
     Collateral, and is not now and, except as otherwise provided in Section
                                                                     -------
     3.12, will not hereafter become subordinate or junior to the security
     ----
     interest, lien, encumbrance or claim of any Person; and

          (k) All financial statements and information relating to Borrower or
     any guarantor of the Obligations or with respect to the Eligible Accounts
     which have been or may hereafter be delivered by Borrower to FCFC are true,
     complete and correct in all material respects and have been prepared in
     accordance with generally accepted accounting principles consistently
     applied, and there has not been any material adverse change in the
     financial condition of Borrower or any guarantor since the last submission
     of such financial information to FCFC.

     6.2. With respect to each Eligible Account now and from time to time
hereafter created:

          (a) It is genuine, in all respects what it purports to be and
     represents a bona fide, existing, valid and legally enforceable
     indebtedness of the account debtor named therein, payable in the amount,
     time and manner stated in the invoice therefor, and is absolutely owing to
     Borrower subject only to Borrower's future performance of the contract
     giving rise to the account, but is not otherwise contingent for any reason;

          (b) The delivery receipt and invoice therefor represents bona fide
     sale in the ordinary course of Borrower's business, represents the kind,
     quality and quantity of the goods or services described therein, and that
     the goods or services described herein have been or are currently being
     delivered, installed or performed in accordance with the terms of sale;

          (c) Except for payments made by walk-in customers, no payments have
     been or shall be made thereon, except payments that are turned over to FCFC
     by Borrower ;

          (d) There is no setoff, counterclaim or dispute existing or asserted
     with respect to the Account and Borrower has not made any agreement with
     the account

                                      -13-

<PAGE>

     debtor thereof for any deduction or discount of the sum payable thereunder,
     except regular discounts allowed by Borrower in the ordinary course of its
     business for prompt payment;

          (e) The goods sold or transferred or the services rendered as
     evidenced by the Account are not subject to any lien, claim, encumbrance or
     security interest, except that of FCFC and holders of Permitted Liens;

          (f) Borrower has no knowledge of the insolvency of the account debtor
     or of any action or proceeding involving the account debtor under any
     federal or state debtor's relief statute;

          (g) Borrower has no knowledge of any fact or circumstance that would
     impair the validity or collectibility of the Account;

          (h) Borrower has not made any assignment of the Account or granted a
     security interest in the Account to any other Person other than FCFC and
     holders of Permitted Liens; and

          (i) All of Borrower's Books, and all records and documents relating to
     the Account are and will be genuine and in all respects what they purport
     to be, and accurately reflect the amounts owing or to be owing at maturity
     by the account debtor.

     6.3. Each warranty, representation and agreement contained in this
Agreement shall be automatically deemed repeated with each advance and shall be
conclusively presumed to have been relied upon by FCFC regardless of any
investigation made or information possessed by FCFC. The warranties,
representations and agreements set forth herein shall be cumulative and in
addition to any other warranties, representations and agreements which Borrower
shall now or hereafter give, or cause to be given to FCFC.

7.   Affirmative Covenants.
     ---------------------

     7.1. Until all Obligations are fully paid and satisfied, Borrower will do
each of the acts described in this Section 7.1.
                                   -----------

          (a) At all times fully comply in all material respects with all
     federal, state and local laws, rules, orders or regulations pertaining to
     the conduct of its business, including, but not limited to all applicable
     federal, state and local environmental laws and regulations relating to the
     storage, usage and disposal of hazardous substances or toxic chemicals by
     Borrower in its business. In this regard, Borrower agrees to defend,
     indemnify and hold FCFC harmless for and against any and all costs, claims,
     demands, damages including attorneys' fees, court costs, and investigatory
     and laboratory fees which FCFC may suffer or incur in connection with any
     such violation which indemnification shall survive the termination of this
     Agreement.

          (b) Preserve its corporate existence and not, in one transaction or a
     series of related transactions, merge into or consolidate with any other
     entity, or sell all or substantially all of its assets.

                                      -14-

<PAGE>

          (c) Maintain itself in good standing in all jurisdictions in which
     Borrower is doing business, and at the request of FCFC, furnish to FCFC
     evidence of its good standing in all such jurisdictions.

          (d) Maintain Borrower's Books at the address(es) set forth in Schedule
     One.

          (e) Allow FCFC to possess and remove copies of Borrower's Books to
     FCFC's premises or the premises of any agent of FCFC, for so long as FCFC
     may desire in connection with the enforcement of FCFC's rights under this
     Agreement.

          (f) Maintain a standard and modern system of accounting in accordance
     with generally accepted accounting principles which contain such
     information as may be requested by FCFC, and permit FCFC or any of its
     agents, during Borrower's usual business hours or during the usual business
     hours of any third party having control over the records of Borrower, to
     have access to and have the right to examine all of Borrower's Books and in
     connection therewith permit FCFC or any of its agents to copy and make
     extracts therefrom.

          (g) Furnish to FCFC daily or less frequently as FCFC shall permit from
     time to time, written schedules and reports of the status of Borrower's
     Accounts in such form as shall be required by FCFC.

          (h) Promptly furnish to FCFC such records, data and other information
     with respect to the financial condition of Borrower, the Collateral and any
     guarantor, as FCFC may request from time to time, and shall deliver to FCFC
     detailed reports, each in form satisfactory to FCFC and containing a
     statement of the financial condition and operation of Borrower: (i) for
     each calendar month, within thirty (30) days after the end of each month;
     and (ii) for each fiscal year, within ninety (90) days after the end of
     each such fiscal year. Within twenty (20) days after demand by FCFC,
     Borrower shall deliver to FCFC copies of any financial report or statement
     prepared by or for Borrower. Each fiscal year-end statement and audit
     report shall be prepared by an independent CPA and each monthly statement
     and report shall be prepared by an authorized officer of Borrower who shall
     certify that such report, statement or document delivered or caused to be
     delivered to FCFC is complete, correct and thoroughly presents the
     financial condition of Borrower, and that on the date of said certification
     no event or condition exists which constitutes a breach or Event of Default
     under this Agreement.

          (i) Notify FCFC, in writing, of any material adverse change in
     Borrower's financial condition, and of any loss or damage to the Collateral
     that represents twenty-five percent (25%) or more of either the value or
     physical quantity of the Collateral.

          (j) Make timely payment or deposit of all taxes (including F.I.C.A.
     payments and deposits of withholding taxes) and assessments required to be
     paid by Borrower and deliver to FCFC, as requested, evidence of such
     payment or deposit.

          (k) Pay all rent when due and otherwise abide by the terms under which
     Borrower leases or occupies the premises at which the Collateral is
     located; provided further if Borrower fails to do so, FCFC may, without any
     obligation, pay such rent and any sum so paid shall be part of FCFC's
     Costs, secured by the Collateral and payable on demand.

                                      -15-

<PAGE>

                (l)  Cause to be paid all amounts necessary to fund, in
         accordance with their terms, all pension plans presently in existence
         or hereafter created and Borrower will not withdraw from participation
         in, permit the termination or partial termination of, or permit the
         occurrence of any other event with respect to any deferred compensation
         plan maintained for the benefit of its employees under circumstances
         that could result in liability to the Pension Benefit Guarantee
         Corporation, or any of its successors or assigns, or to the entity
         which provides funds for such deferred compensation plan.

                (m)  Maintain a working capital ratio of 1.00:1 and a net worth
         at least equal to ninety percent (90%) of that set forth in the
         financial statements of Borrower dated December 31, 2001.

                (n)  Maintain all Collateral in the Collateral State(s) at the
         address(es) identified in Schedule One and will not, without the prior
         written consent of FCFC, move the Collateral to any other address(es).

                (o)  Keep the Collateral free from any lien, security interest
         or encumbrance, except Permitted Liens, adverse to FCFC and defend, at
         its own expense, the Collateral and the proceeds thereof against all
         claims and demands of all Persons at any time claiming the same or any
         interest therein.

                (p)  Promptly deliver to FCFC copies of all documents and
         instruments relating to the Collateral, including invoices, original
         orders, shipping documents, delivery receipts, as FCFC may request from
         time to time. The foregoing notwithstanding, Borrower shall furnish to
         FCFC upon its request the original copy of any such Records of Borrower
         when under the circumstances then existent a copy is not legally
         sufficient to accomplish the purposes to which FCFC intends to use such
         Record.

                (q)  On request of FCFC, execute and deliver to FCFC any and all
         additional documents which FCFC may request from time to time to
         evidence the advances made hereunder or the security interest granted
         hereby.

8.       Negative Covenants.
         ------------------

         8.1.   Until all Obligations are fully paid and satisfied, and except
as otherwise provided in this Agreement, Borrower will not, without the prior
written consent of FCFC:

                (a)  Grant a security interest in the Collateral, or permit a
         lien, claim or encumbrance, except Permitted Liens, to be imposed on
         any of the Collateral, or allow the Collateral to be possessed by or
         under the control of any another Person;

                (b)  Sell, license, lease, rent or otherwise dispose of, move,
         transfer or relocate outside the Collateral State, whether by sale or
         otherwise, any of Borrower's assets, including the Collateral, but
         excluding Inventory which has been or may be sold, licensed, leased, or
         otherwise disposed of in the ordinary course of Borrower's business,
         provided that FCFC continues to have a security interest in the
         proceeds thereof or lease payments relating thereto;

                                      -16-

<PAGE>

         (c)    [Intentionally Blank]

         (d)    Permit any Collateral to be used in violation of any applicable
law, regulation or policy of insurance;

         (e)    Permit any levy, or attachment to be made on any of Borrower's
assets;

         (f)    Permit any receiver, trustee, custodian, assignee for the
benefit of creditors or any other Person or entity having similar powers or
duties to be appointed or to take possession of any or all of Borrower's assets;

         (g)    Change its business structure, corporate identity or structure,
do business under any additional trade name, or liquidate, merge or consolidate
with or into any other business organization;

         (h)    Change its Borrower State;

         (i)    Change its corporate or trade name without providing FCFC with
thirty (30) days' prior written notice;

         (j)    Change any of its Collateral States without providing FCFC with
30 days' prior written notice;

         (k)    Relocate its place of business, its Chief Executive Office State
or move Borrower's Books from the locations set forth on Schedule One;

         (l)    Acquire any entity or purchase the stock or securities of any
entity (other than securities of any state or federal government);

         (m)    Permit or suffer a Change of Control interest in Borrower or
permit or suffer a change in the senior management of Borrower;

         (n)    Enter into any transaction or incur any debt, other than
Permitted Debt, not in the usual course of Borrower's business;

         (o)    Guarantee or otherwise become in any way liable with respect to
the obligations of any Person except by endorsement of instruments or items of
payment for deposit to the account of Borrower or which are transmitted or
turned over to FCFC on account of the Obligations;

         (p)    Pay or declare any cash dividends upon Borrower's common or
preferred stock;

         (q)    Redeem, retire, purchase or otherwise acquire directly or
indirectly any of Borrower's common or preferred stock during any month
hereafter, except that Borrower may repurchase shares of its common stock so
long as the aggregate consideration given for such shares during any month
hereafter does not exceed $15,000;

                                      -17-

<PAGE>

                (r)   Make any distribution of Borrower's property or assets;

                (s)   [Intentionally Blank];

                (t)   Make any advance, loan, contribution or payment of money
         (other than compensation for personal services), goods or credit to, or
         guarantee any obligation of any subsidiary, or any officer, shareholder
         or employee, or cause or permit any such advance, loan, contribution or
         guarantee to be made by any subsidiary corporation other than the
         guaranty executed in connection herewith with this Agreement.

9.       Insurance.
         ---------

         9.1.   Borrower, at its expense, shall keep the Collateral insured
against loss or damage by fire, theft, and all other hazards and risks
ordinarily insured against by owners in similar businesses for the full
insurable value thereof, public liability and property damage insurance relating
to Borrower's ownership and use of its assets. All such policies of insurance
shall be in such form, with such companies and in such amounts as may be
satisfactory to FCFC. Borrower shall deliver to FCFC certified copies of such
policies of insurance and evidence of the payment of all premiums therefor. All
such policies of insurance (except those of public liability and property
damage) shall contain an endorsement in a form satisfactory to FCFC showing FCFC
as the loss payee. All proceeds payable thereunder shall be payable to FCFC and
upon receipt by FCFC shall, at FCFC's option, be applied on the account of the
Obligations, whether or not then due, or to the repair or replacement of the
Collateral. To secure the payment of the Obligations, Borrower grants FCFC a
security interest in and to all such policies of insurance (except those of
public liability and property damage) and the proceeds thereof, and Borrower
shall direct all insurers under such policies of insurance to pay all proceeds
thereof directly to FCFC. Borrower hereby irrevocably appoints FCFC (and any of
FCFC's officers, employees or agents designated by FCFC) as Borrower's attorney
for the purpose of making, settling and adjusting claims under such policies of
insurance, endorsing the name of Borrower on any check, draft, instrument or
other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect to such policies of
insurance. Each such insurer shall agree, by endorsement upon the policy or
policies of insurance issued by it to Borrower as required above, or by
independent instruments furnished to FCFC, that it will give FCFC at least ten
(10) days written notice before any such policy or policies of insurance shall
be altered or cancelled, and that no act of Borrower or any other Person or the
default hereunder by Borrower, shall affect the right of FCFC to recover under
such policy or policies of insurance. FCFC, without waiving or releasing any
Obligations or default by Borrower hereunder, may, but shall have no obligation
to do so, obtain and maintain such policies of insurance and pay such premiums
and take any other action with respect to such policies which FCFC deems
advisable. All sums so disbursed by FCFC, as well as reasonable attorney's fees,
court costs, expenses and other charges relating thereto, shall be a part of
FCFC's Costs, secured by the Collateral and payable on demand.

10.      Events of Default.
         -----------------

         10.1.  The occurrence of any one or more of the following shall
constitute an "Event of Default" under this Agreement:

                                      -18-

<PAGE>

                (a)   Borrower fails to pay when due and payable or declared to
         be due and payable, any of the Obligations (whether of principal,
         interest, taxes, reimbursement of FCFC's Costs, or otherwise).

                (b)   Borrower fails or neglects to comply with, perform, keep
         or observe any term, provision, condition, or covenant contained in
         this Agreement, or any other present or future agreement between
         Borrower and FCFC.

                (c)   Any representation, statement, report or certificate made
         or delivered by Borrower, or any of its officers or agents, (either
         individually or as an officer or agent of Borrower) to FCFC proves to
         be untrue, inaccurate, incomplete or incorrect in any material respect.

                (d)   There is a Material Impairment in the prospect of
         repayment of the Obligations, or a Material Impairment in the value of
         the Collateral or the priority of FCFC's security interests in the
         Collateral is contested.

                (e)   Any Collateral cannot be located within five (5) days
         after FCFC makes demand upon Borrower to inspect the same, or any
         Collateral has been moved outside the Collateral State, without the
         consent of FCFC.

                (f)   Any of Borrower's assets are attached, seized, or are
         levied upon, and the same are not released, discharged or bonded
         against within ten (10) days thereafter.

                (g)   A notice of lien, levy or assessment is filed of record
         with respect to any or all of Borrower's assets by the United States
         Government, or any department, agency or instrumentality thereof, or by
         any state, county, municipal or other governmental agency, or if any
         taxes or debts owing at any time hereafter to any one or more of such
         entities becomes a lien, whether choate or otherwise, upon any or all
         of the Borrower's assets and the same is not paid on the payment date
         thereof.

                (h)   Borrower is enjoined, restrained or in any way prevented
         by court order from continuing to conduct all or any material part of
         its business affairs.

                (i)   Any proceeding under the Bankruptcy Code or any similar
         remedy under state statutory or common law is filed by or against
         Borrower.

                (j)   Borrower ceases normal business operations.

                (k)   Twenty-five percent (25.0%) or more of either the value or
         physical quantity of the Collateral is stolen, damaged or destroyed.

                (l)   A judgment or other claim becomes a lien or encumbrance
         upon any or all of Borrower's assets and the same is not satisfied,
         dismissed or bonded against within ten (10) days thereafter.

                (m)   If any of Borrower's records are prepared and kept by an
         outside computer service at any time during the term of this Agreement,
         and said computer service fails to

                                      -19-

<PAGE>

         timely provide FCFC with any requested information or financial data
         pertaining to the Collateral, Borrower's financial condition or the
         results of Borrower's operations.

                (n)  If there is a default in any agreement to which Borrower is
         a party with third parties resulting in a right by such third parties
         to accelerate the maturity of any indebtedness of Borrower to such
         third party.

                (o)  Except as provided in the Subordination Agreement, Borrower
         makes any payment on account of indebtedness that has been subordinated
         to the Obligations to FCFC, without FCFC's consent, or if any Person
         subordinating such indebtedness terminates or in any way limits his
         subordination.

                (p)  The chief executive officer of Borrower dies, or is no
         longer associated with the Borrower in that capacity.

                (q)  [Intentionally Blank]

                (r)  Borrower fails to comply with, or become subject to any
         administrative or judicial proceeding under any federal, state or local
         (i) hazardous waste or environmental law, (ii) asset forfeiture or
         similar law which can result in the forfeiture of property, or (iii)
         other law, where noncompliance may have any significant effect on the
         Collateral.

                (s)  FCFC receives a SOS Report indicating that FCFC's security
         interest is not prior to all other security interests or other
         interests reflected in the report.

11.      FCFC's Rights and Remedies.
         --------------------------

         11.1.  At any time when an Event of Default shall have occurred or
exist, and after the expiration of any "Grace Period" applicable to such Event
of Default, in addition to all rights and remedies provided for under the other
Loan Documents, FCFC shall have all rights and remedies provided to it by law,
hereunder, and each other document under which Borrower shall be obligated to
FCFC and, without limiting the generality of the foregoing, FCFC may do any one
or more acts described in this Section 11.1, or under the other Loan Documents
                               ------------
and in any order it deems appropriate.

                (a)  Declare any or all of the Obligations, whether evidenced by
         note(s), or otherwise, immediately due and payable;

                (b)  Terminate this Agreement, but without affecting FCFC's
         rights and security interests in the Collateral, and the Obligations;

                (c)  Cease making advances to or for benefit of Borrower under
         the Credit Facility or reduce the Credit Facility;

                (d)  Continue making advances to Borrower in such amounts as\
         FCFC may determine, in its sole discretion, without waiving any default
         by Borrower under this Agreement;

                                      -20-

<PAGE>

         (e)  Proceed to collect the Accounts, and, in this regard, notify the
     post office authorities to change the address for delivery of Borrower's
     mail to an address designated by FCFC, and receive, open and distribute all
     mail addressed to Borrower, retaining all mail relating to Collateral and
     forwarding all other mail to Borrower;

         (f)  Exercise any and all of the rights accruing to a secured party
     under the Code and any other applicable law;

         (g)  Require Borrower to assemble the Collateral, hold the same in
     trust for FCFC's account and, at Borrower's expense, deliver the same to
     FCFC or to a third party as FCFC's bailee at a place or places to be
     designated by FCFC which is reasonably convenient to the parties, or store
     the same in a warehouse in FCFC's name and deliver to FCFC documents of
     title representing said Collateral;

         (h)  Enter, with or without process of law, and without further
     permission of Borrower, upon any premises where the Collateral is or
     believed by FCFC to be located, using all necessary force to accomplish the
     same without committing a breach of the peace (Borrower hereby waiving all
     claims for damages or otherwise due to, arising from or connected with such
     entry and/or seizure), and: (i) take possession of said premises and of the
     Collateral located therein; (ii) place a custodian in exclusive control of
     said premises and of any of the Collateral located therein; (iii) remove
     from the premises the Collateral and any of Borrower's Books, materials and
     supplies in any way relating to the Collateral or useful by FCFC in
     enforcing its rights hereunder; (iv) remain upon said premises and use the
     same (together with said Borrower's Books, materials and supplies) for the
     purpose of collecting the Collateral and/or preparing the Collateral for
     disposition and/or disposing of the Collateral;

         (i)  Make (without any obligation to do so) any payment and take such
     action as FCFC considers necessary or reasonable to protect or preserve the
     Collateral or its security interests therein, including paying, purchasing,
     contesting or compromising any encumbrance, charge or lien which, in the
     opinion of FCFC, interferes with the enforcement of its security interests
     or the liquidation or disposition of the Collateral;

         (j)  Ship, reclaim, recover, store, finish, maintain, repair and
     prepare for sale all or any portion of the Collateral;

         (k)  Sell at one or more public or private sales, lease or otherwise
     dispose of the Collateral (regardless whether FCFC has taken possession
     thereof or whether the Collateral is present at any such sale or
     disposition) in its then condition, or after further manufacturing,
     processing or preparation thereof (utilizing, in connection therewith,
     without charge or liability to FCFC therefor, any of Borrower's assets), by
     means of one or more contracts or transactions, for cash or on terms, in
     such manner and at such places (including Borrower's premises) as is
     commercially reasonable, in the opinion of FCFC;

         (l)  Seek temporary or permanent injunctive relief without the
     necessity of proving actual damages, as no remedy at law will provide
     adequate relief to FCFC and, in

                                      -21-

<PAGE>

     this regard, the bond which FCFC may be required to post shall be no more
     than $500.00; and

          (m)  Require Borrower to pay all FCFC's Costs incurred in connection
     with FCFC's enforcement and exercise of any of its rights and remedies as
     herein provided, whether or not suit is commenced by FCFC.

     11.2. Any deficiency that exists after disposition of the Collateral as
provided herein shall be due and payable by Borrower upon demand, with any
excess to be paid by FCFC to Borrower.

     11.3. FCFC shall give Borrower such notice of any private or public sale,
lease or other disposition as may be required by the Code, unless notice has
been waived after an Event of Default pursuant to the Code.

     11.4. FCFC shall have no obligation to clean up or otherwise prepare the
Collateral for sale. FCFC shall have no obligation to attempt to satisfy the
Obligations by collecting them from any other Person liable for them, and FCFC
may release, modify or waive any of the Collateral provided by any other Person
to secure any of the Obligations, all without affecting FCFC's rights against
Borrower. Borrower waives any right it may have to require FCFC to pursue any
third Person for any of the Obligations. FCFC has no obligation to marshal any
assets in favor of Borrower, or against or in payment of the Obligations or any
other obligation owed to FCFC by Borrower or any other Person. FCFC may comply
with any applicable state or federal law requirements in connection with a
disposition of the Collateral and compliance will not be considered adversely to
affect the commercial reasonableness of any sale of the Collateral.

     11.5. FCFC may dispose of the Collateral without giving any warranties as
to the Collateral. FCFC may specifically disclaim any warranties of title or the
like. This procedure will not be considered adversely to affect the commercial
reasonableness of any sale of the Collateral.

     11.6. If FCFC sells any of the Collateral upon credit, Borrower will be
credited only with payments actually made by the purchaser, received by FCFC and
applied to the indebtedness of the purchaser. In the event the purchaser fails
to pay for the Collateral, FCFC may resell the Collateral and Borrower shall be
credited with the proceeds of the sale.

     11.7. In the event FCFC purchases any of the Collateral being sold, FCFC
may pay for the Collateral by crediting against the purchase price some or all
of the Obligations.

     11.8. FCFC's rights and remedies under this Agreement and all other
agreements shall be cumulative and may be exercised simultaneously or
successively, in such order as FCFC shall determine. In addition, FCFC shall
have all other rights and remedies not inconsistent herewith as provided by law
or in equity. No exercise by FCFC of one right or remedy shall be deemed an
election, and no waiver by FCFC of any default on Borrower's part shall be
deemed a continuing waiver. No delay by FCFC shall constitute a waiver, election
or acquiescence by it.

                                      -22-

<PAGE>

12.  Taxes and Expenses Regarding Borrower's Property.
     ------------------------------------------------

     12.1. If Borrower fails to pay any assessments, taxes, contributions, or
make any deposits, or furnish any required proof thereof as set forth in Section
                                                                         -------
7(j) hereof or in any other provision of this Agreement, FCFC may, in its sole
----
and absolute discretion and without notice to Borrower (a) make payment of the
same or any part thereof, or (b) set up such reserves in Borrower's account as
FCFC deems necessary to satisfy the liability therefor, or both. If Borrower
fails to promptly pay when due to any other Person, any sum which Borrower is
required to pay by reason of any provision in this Agreement, FCFC may, but is
not obligated to, advance any sums which it deems appropriate for the protection
or preservation of the Collateral or its security interests therein, and the
amount so advanced by FCFC shall bear interest at the rate provided for in
Section 2.9 above, and shall constitute FCFC's Costs, payable on demand, and
-----------
shall be secured by the Collateral. Any payment made by FCFC shall not
constitute (a) an agreement by it to make similar payments in the future, or (b)
a waiver by FCFC of any default under this Agreement. FCFC need not contest nor
inquire as to the validity of any such expense, tax, security interest,
encumbrance or lien, and the receipt of the usual official notice for the
payment thereof shall be conclusive evidence that the same was validly due and
owing.

13.  Waivers By Borrower.
     -------------------

     13.1. FCFC shall not be deemed to have waived any provision of this
Agreement, or any right or remedy which it may have hereunder, or at law or
equity, unless such waiver is in writing and signed by FCFC.

     13.2. Borrower waives the right to direct the application of any payments
at any time or times received by FCFC on account of the Obligations and Borrower
agrees that FCFC shall have the continuing exclusive right to apply and reapply
such payments in any manner as FCFC may deem advisable.

     13.3. Except as otherwise provided for in this Agreement, Borrower waives
demand, protest, notice of protest, notice of default or dishonor, notice of
payment and nonpayment, notice of any default, nonpayment at maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, documents, instruments, chattel paper and guaranties at any time held
by FCFC on which Borrower may in any way be liable.

     13.4. Failure or delay by FCFC in exercising or enforcing any right, power,
privilege, lien, option or remedy hereunder shall not operate as a waiver
thereof and a waiver by FCFC of any default by Borrower under this Agreement
shall not be construed to create any right or expectation of future waiver of
any subsequent breach or default by Borrower under this Agreement whether of the
same or of a different nature.

     13.5. FCFC shall not in any way or manner be liable or responsible for (a)
the safekeeping of the Collateral; (b) any loss or damage thereto occurring or
arising in any manner or fashion from any cause; (c) any diminution in the value
thereof; or (d) any act or default of any carrier, warehouseman, bailee,
forwarding agency or other Person whomsoever. All such risk or loss, damage or
destruction of the Collateral shall be borne by Borrower.

                                      -23-

<PAGE>

     13.6. Borrower waives (to the extent the same may be lawfully waived): any
and all causes of action and claims which it may now or ever have against FCFC
for failing to protect any Collateral in its possession, or failing to collect
or sell any of the Collateral, notwithstanding the effect of such possession,
collection or sale upon the business of Borrower. In addition, Borrower hereby
releases FCFC of and from (a) any and all liabilities or penalties for failure
of FCFC to perfect or maintain the priority of its security interest or to
comply with any statutory or other requirement imposed on FCFC; and (b) any
error of judgment or mistake of fact or law.

     13.7. In the event FCFC seeks to obtain possession of any of the Collateral
by replevin or other judicial process, Borrower hereby waives (a) any bond or
security required to be posted by any statute, court rule or otherwise as an
incident to such possession; and (b) any demand for possession of the Collateral
prior to the commencement of any suit or action to recover possession thereof.

     13.8. BORROWER WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY TRANSACTIONS HEREUNDER.

14.  Notices.
     -------

     14.1. Unless otherwise provided in this Agreement, all notices, demands or
other communications to either party shall be in writing and shall be mailed,
telecopied or communicated by means of facsimile transmission (followed by a
mailed or delivered hard copy), or delivered by hand or courier service, at
their respective addresses set forth in this Agreement, or at such other
addresses as shall be designated by such party in a written notice to the other
party. All notices and other communications shall be deemed delivered and
effective when a record has been sent by telecopy or other facsimile
transmission, or upon hand delivery or upon the third (3rd) business day after
deposit in a United States postal box if postage is prepaid, and the notice
properly addressed to the intended recipient.

15.  Destruction of Borrower's Documents.
     -----------------------------------

     15.1. Any documents, schedules, invoices or other papers delivered to FCFC,
may be destroyed or otherwise disposed of by FCFC five (5) months after they are
delivered to or received by FCFC, unless Borrower requests, in writing, the
return of the said documents, schedules, invoices or other papers and makes
arrangements, at Borrower's expense, for their return.

16.  Release.
     -------

     16.1. At such time as all Obligations shall have been fully paid and
satisfied and Borrower and all guarantors of the Obligations execute a release
acknowledging that Borrower does not have any claims against FCFC and provides
FCFC with an appropriate indemnity indemnifying FCFC for any remittances for
which Borrower has received credit and which are not paid, FCFC shall release
its security interest in the Collateral and deliver to Borrower an appropriate
termination statement.

                                      -24-

<PAGE>

17.  General Provisions.
     ------------------

     17.1. The parties intend and agree that their respective rights, duties,
powers, liabilities, obligations and discretions shall be performed, carried
out, discharged and exercised reasonably and in good faith.

     17.2. If at any time or times hereafter FCFC employs counsel for advice or
other representation (a) with respect to any of the Collateral or this
Agreement; (b) to represent FCFC in any litigation, contest, dispute, suit or
proceeding or to commence, defend, or intervene or to take any other action in
or with respect to any litigation, contest, dispute, suit or proceeding (whether
instituted by FCFC, Borrower or any other party) in any way relating to any of
the Collateral, this Agreement or Borrower's affairs; (c) to protect, collect,
lease, sell, take possession of or liquidate any of the Collateral; (d) to
attempt to enforce any security interest of FCFC in any of the Collateral; or
(e) to enforce any rights of FCFC against Borrower or against any other Person
which may be obligated to FCFC by virtue of this Agreement including Borrower's
account debtors, then, in any of the foregoing events, all of the reasonable
attorneys' fees arising from such services and all expenses, costs and charges
in any way arising in connection therewith or relating thereto shall constitute
a part of FCFC's Costs secured by the Collateral and be payable on demand.

     17.3. Neither this Agreement nor any uncertainty or ambiguity herein shall
be construed or resolved against FCFC or Borrower, whether under any rule of
construction or otherwise; on the contrary, this Agreement has been reviewed by
all parties and shall be construed and interpreted according to the ordinary
meaning of the words used so as to fairly accomplish the purposes and intentions
of all parties hereto. When permitted by the context, the singular includes the
plural and vice versa.

     17.4. THE VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION, INTERPRETATION AND
ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HEREUNDER AND CONCERNING THE
COLLATERAL, SHALL BE DETERMINED UNDER AND ACCORDING TO THE LAWS OF ARIZONA,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, AND EXCEPT TO THE EXTENT THAT
THE CODE PROVIDES FOR THE APPLICATION OF THE LAW OF THE BORROWER STATE.

     17.5. IN ANY LITIGATION INVOLVING FCFC AND BORROWER, BORROWER DOES HEREBY
IRREVOCABLY SUBMIT ITSELF TO THE PROCESS, JURISDICTION AND VENUE OF THE COURTS
OF THE STATE OF ARIZONA, MARICOPA COUNTY OR TO THE PROCESS, JURISDICTION AND
VENUE OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA FOR THE
PURPOSES OF SUIT, ACTION OR OTHER PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE SUBJECT MATTER HEREOF, AND WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, DEFENSE
OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT BORROWER IS
NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT SUCH SUIT,
ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF
SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER.

                                      -25-

<PAGE>

     17.6.  The provisions of this Agreement are independent of and separate
from each other. If any provision hereof shall for any reason be held invalid or
unenforceable, it is the intent of the parties that such invalidity or
unenforceability shall not affect the validity or unenforceability of any other
provision hereof and that this Agreement shall be construed as if such invalid
or unenforceable provision had never been contained herein.

     17.7.  Article and section headings and numbers have been set forth herein
for convenience only; unless the contrary is compelled by the context,
everything contained in each section applies equally to this entire Agreement.
17.8. This Agreement cannot be changed or terminated orally. All prior
agreements, understandings, representations, warranties, and negotiations, if
any, are merged into this Agreement.

     17.9.  FCFC shall have the right, without the consent of or notice to
Borrower to grant participation interests in the Credit Facility and in this
regard may provide the participant with any and all information with respect to
Borrower and the Credit Facility. In addition, FCFC may assign this Agreement
and its rights and duties hereunder at any time, without the consent of or
notice to Borrower. This Agreement shall inure to the benefit of FCFC, its
successors and assigns. Borrower may not assign this Agreement or any rights
hereunder, without FCFC's prior written consent and any such assignment shall be
void and have no effect whatsoever. No consent to any assignment by FCFC shall,
without the written consent of FCFC, release Borrower or any guarantor of its
Obligations to FCFC.

     17.10. This Agreement shall inure to the benefit of FCFC and any successors
or assigns of FCFC, including any participant in the Credit Facility. This
Agreement shall bind and inure to the benefit of the successors and assigns of
FCFC and shall bind all Persons who become bound as a debtor to this Agreement.
Borrower may not assign this Agreement or any rights hereunder without FCFC's
prior written consent and any prohibited assignment shall be absolutely void. No
consent to any assignment by FCFC shall release Borrower or any guarantor of its
Obligations to FCFC. FCFC may assign this Agreement and its rights and duties
hereunder, and if an assignment is made, Borrower shall render performance under
this Agreement to the assignee. Borrower waives and will not assert against any
assignee of FCFC any claims, defenses (except defenses which cannot be waived)
or set-offs which Borrower could assert against FCFC.

                                      -26-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed at Phoenix, Arizona, as of the date written above.

                                        FIRST COMMUNITY FINANCIAL CORPORATION,
                                        an Arizona corporation

                                        By:_____________________________________
                                               James C. Adamany

                                        Title: President
                                               ---------

                                        TELETOUCH COMMUNICATIONS, INC.,
                                        a Delaware corporation

                                        By:_____________________________________
                                               James K. Crotty

                                        Title: President
                                               ---------

                                      -27-<PAGE>

                                                                 Exhibit 10.6

                                              This Agreement is made, effective
                                        as of May 17, 2002, among the following
                                        parties: FIRST COMMUNITY FINANCIAL
                                        CORPORATION, an Arizona corporation
                                        ("FCFC "); TELETOUCH COMMUNICATIONS,
                                        INC., a Delaware corporation
                                        ("Borrower"); TLL Partners, L.L.C., a
                                        Delaware limited liability company ("TLL
                                        Partners").

     RECITALS:
     --------

     A.  Borrower is obligated to TLL Partners under a Subordinated Promissory
Note dated May 17, 2002 in the principal amount of $2,200,000 (the "TLL Note");

     B.  Borrower desires to obtain from FCFC a revolving Line of Credit in the
amount of $2,000,000 and a term loan in the amount of $250,000.00 (collectively,
the "FCFC Loans") to be secured by a security interest in certain personal
property of the Borrower hereafter described and referred to as the "FCFC
Collateral;"

     C.  FCFC is willing to make the FCFC Loans to Borrower, provided that,
                                                             --------
among other conditions, FCFC is granted security interests in the FCFC
Collateral that are prior in right and superior to all security interests now
existing and/or hereafter arising in favor of TLL Partners; and

     D.  To induce FCFC to grant to Borrower the FCFC Loans, TLL Partners is
willing to subordinate its security interests in and rights with respect to the
FCFC Collateral, upon the terms and conditions hereinafter set forth.

AGREEMENT:
---------

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which is acknowledged by the execution hereof, the parties hereto
do hereby agree as follows:

         1. Definitions. Any and all terms used in this Agreement shall be
            -----------
construed and defined in accordance with the meaning and definitions set forth
in this Agreement or, to the extent not inconsistent herewith, as such terms are
defined in then current version of the Code (hereafter defined) adopted by the
State of Arizona, and as amended from time to time; provided, however, with
                                                    --------
respect to any term used herein that is defined in Article 9 of the Code as in
force (i) in the jurisdiction in which a financing statement is signed by
Borrower in connection with the FCFC Loans, at the time that it is signed, or
(ii) at any relevant time in the jurisdiction in which a financing statement
signed by Borrower in connection with the FCFC Loans is filed, or (iii) at any
relevant time in the jurisdiction in which the terms of FCFC `s Loan Documents
(hereafter defined) are enforced, the meaning to be ascribed thereto with
respect to any particular item of property shall be that under the more
encompassing of the three definitions:

<PAGE>

         (a) "Borrower's Books" means and includes all of Borrower's books and
records including, but not limited to, all customer lists and lists of account
debtors, all ledgers, records reflecting, summarizing or evidencing Borrower's
assets, accounts, business operations or financial condition, all computer
programs, computer discs, computer printouts and other computer prepared
information and its related computer equipment, of any kind.

         (b) "Code" means the Uniform Commercial Code prepared under the joint
sponsorship of the American Law Institute and the National Conference of
Commissioners on Uniform State Laws, as amended from time to time.

         (c) "FCFC Collateral" means and includes all of the following
properties, assets and rights of the Borrower and whatever is encompassed by the
Code's definition of the following terms, wherever located, whether now owned or
existing, or hereafter acquired or arising, and all proceeds, products,
replacements, substitutes, accessions, additions and improvements to any
thereof:

         All personal property of every kind and nature including, without
         limitation, all furniture, equipment, raw materials, inventory, other
         goods, accounts, contract rights, rights to the payment of money,
         insurance refund claims and all other insurance claims and proceeds,
         chattel paper (including security agreements and leases), electronic
         chattel paper, documents, records, instruments, securities and other
         investment property, deposit accounts, rights to proceeds of letters of
         credit, letter-of-credit rights, supporting obligations of every
         nature, and general intangibles including, without limitation, all tax
         refund claims, license fees, patents, patent applications, trademarks,
         trademark applications, trade names, copyrights, copyright
         applications, rights to sue and recover for past infringement of
         patents, trademarks and copyrights, computer programs, computer
         software, engineering drawings, service marks, customer lists,
         goodwill, and all licenses, permits, agreements of any kind or nature
         pursuant to which (i) Borrower operates or has authority to operate,
         (excluding however all licenses issued by the Federal Communications
          ---------
         Commission, and books and records which pertain exclusively to such
         licenses), (ii) Borrower possesses, uses or has authority to possess or
         use property (whether tangible or intangible) of others, or (iii)
         others possess, use, or have authority to possess or use Borrower's
         property (whether tangible or intangible), and all recorded data of any
         kind or nature, regardless of the medium of recording, including,
         without limitation, all software, writings, plans, specifications and
         schematics, and Borrower's Books;

excluding, however, all corporate stock of Teletouch Licenses, Inc., and all
---------
books and records which pertain exclusively to such stock, books and records
which pertain exclusively to any licenses issued by the Federal Communications
Commission that are now or hereafter held by Teletouch Licenses, Inc., books and
records (including without limitation blue prints, surveys, and drawings), of
and/or concerning any real property of Borrower, including real property in

                                       -2-

<PAGE>

Tyler, Smith County, Texas, and that certain Amended and Restated Operating
Agreement between Borrower and Teletouch Licenses, Inc.

         (d) "FCFC 's Loan Documents" means all agreements, documents and
instruments which have been or may hereafter be executed by Borrower and others
in connection with the FCFC Loans, including all modifications, extensions and
revisions thereof.

         (e) "FCFC Debt" means all indebtedness, obligations and liability of
Borrower and each Person who hereafter becomes Borrower, that is now or
hereafter owing to FCFC , regardless whether such indebtedness, obligation or
liability is now existing or hereafter arising, whether it is voluntary or
involuntary, whether due or not, secured or unsecured, absolute or contingent,
liquidated or unliquidated, and whether it is for principal, interest, fees,
expenses or otherwise, and regardless whether the Person who is or hereafter
becomes Borrower may be liable individually or jointly with others, or whether
recovery upon any such obligations may be or hereafter become barred or
otherwise unenforceable. The term, "FCFC Debt," also includes: (a) all amounts
which arise after the filing of a petition by or against Borrower under Title 11
of the United States Code (the "Bankruptcy Code"), even if the obligations do
not accrue because of the automatic stay under Bankruptcy Code (S) 362 or
otherwise, and all amounts which would become due but for the operation of the
automatic stay under (S) 362(a) of the Bankruptcy Code, and the operation of
(S)(S) 502(b) and 506(b) of the Bankruptcy Code; (b) indebtedness arising under
modifications, renewals, replacements and extensions of the FCFC Debt, and
successive transactions which renew, continue, refinance or refund the FCFC
Debt; and (c) all covenants and duties of Borrower to FCFC of every kind, nature
and description, (whether arising out of FCFC `s Loan Documents, this Agreement
or any other agreement, instrument, document, record or contract now existing or
hereafter made by Borrower in favor of FCFC , and whether created by oral
agreement or operation of law, and whether or not for the payment of money),
including without limitation any debt, liability or obligation owing by Borrower
to others which FCFC may have acquired by assignment or otherwise.

         (f) "Person" means an individual, partnership, corporation, including a
"business trust," limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.

         (g) "TLL Partners' Collateral" means any property of Borrower in which
TLL Partners has or acquires a security interest.

     2.  Priority of Security Interests. Subject to the terms and conditions of
         ------------------------------
this Agreement, all existent and hereafter existing security interests of FCFC
in the FCFC Collateral are hereby made prior and superior to every security
interest in the FCFC Collateral of TLL Partners and TLL Partners's security
interest in the FCFC Collateral is hereby subordinated and made junior and
inferior to the security interest of FCFC in the FCFC Collateral. In furtherance
of the foregoing, each party to this Agreement shall execute and deliver any
instrument or document reasonably requested and prepared from time to time by
another party to confirm the foregoing subordination.

                                      -3-

<PAGE>

     3.  Forbearance by TLL Partners. Until all FCFC Debt has been fully paid
         ---------------------------
and satisfied, and the FCFC Loans have been terminated:

         (a) TLL Partners shall not take any action, without the prior written
consent of FCFC , to enforce any of their respective security interests and
rights in any of the FCFC Collateral, including but not limited to notifying
account debtors of the existence of TLL Partners's security interest, or
attempting to collect or realize upon any of the FCFC Collateral, or foreclosing
any security interest in any of the FCFC Collateral; and

         (b) in the event that TLL Partners obtains possession of any proceeds
of the FCFC Collateral, said proceeds shall be held in trust by TLL Partners as
the property of FCFC , and TLL Partners shall promptly deliver the same to FCFC
in precisely the form received.

Notwithstanding the foregoing, nothing herein contained shall be construed to
inhibit or limit in any way TLL Partners's rights with respect to the
enforcement of its security interest in TLL Partners's FCFC Collateral, except
that TLL Partners shall give FCFC prior written notice of such action.

     4.  Enforcement of FCFC `s Security Interest. FCFC may at any time exercise
         ----------------------------------------
all rights and remedies with respect to the FCFC Collateral as are granted to it
by law and/or FCFC `s Loan Documents, without the consent of or prior notice to
TLL Partners. FCFC shall account to TLL Partners for any surplus received from a
liquidation or disposition of the FCFC Collateral in excess of the FCFC Debt. In
liquidating or disposing of the FCFC Collateral, or any of it, FCFC needs only
to use its reasonable best judgment with respect thereto and shall not be liable
to TLL Partners for any act or omission with respect to the liquidation of the
FCFC Collateral, or the fact that the proceeds realized from a liquidation of
the FCFC Collateral could, under any circumstances, have been greater.

     5.  Continuing Agreement and Waiver. This Agreement shall continue until
         -------------------------------
all FCFC Debt shall has been fully paid and satisfied and the FCFC Loans have
been terminated. FCFC `s rights and priority of interest granted under this
Agreement shall not be effected or impaired, regardless of any lack of notice to
or consent of TLL Partners (all of which is hereby waived) by:

         (a) any act or failure to act on the part of Borrower under the terms
of the FCFC Loan Documents and/or this Agreement; or

         (b) any extension or indulgence in respect of any payment or prepayment
of any FCFC Debt to FCFC , or any part thereof, or in respect of any other
amount payable to FCFC ; or

         (c) any amendment, modification, or waiver of, or addition or
supplement to, or deletion from, or compromise, release, consent or other action
in respect of, any of the terms of the FCFC `s Loan Documents or any agreement
which may be made relating to any of the FCFC Debt; or

         (d) any increase from time to time of the maximum principal amount of
the FCFC Loans; or

                                       -4-

<PAGE>

         (e) any extension of credit from time to time to Borrower regardless of
Borrower's present or future financial condition; or

         (f) any failure to furnish to TLL Partners any information in FCFC `s
possession concerning Borrower's financial condition; or

         (g) any exercise or non-exercise by FCFC of any right, power, privilege
or remedy under or in respect of any FCFC Debt or the subordination provisions
of this Agreement, or any waiver of any such right, power, privilege or remedy,
or of any default in respect of the FCFC Debt or the subordination provisions of
this Agreement, or any receipt by FCFC of any security, or any failure by FCFC
to perfect a security interest in, or any release by FCFC of, any security or
guaranty for the payment of the FCFC Debt; or

         (h) any merger or consolidation of Borrower into or with any other
Person, or any sale, lease or transfer of any or all of the assets of the
Borrower to any other Person; or

         (i) absence of any notice to, or knowledge by, FCFC of the existence or
occurrence of any of the matters or events set forth in the foregoing
subdivisions (a) through (h).

The obligations of Creditor under this Agreement shall continue to be effective,
or be reinstated, as the case may be, if at any time any payment in respect of
any FCFC Debt is rescinded or must otherwise be restored or returned by Lender
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, the Borrower or any substantial part of
its property, or otherwise, all as though such payment had not been made.

     6.  Benefit of Agreement. This Agreement shall be binding upon and inure to
         --------------------
the benefit of all parties hereto and their respective successors and assigns.

     7.  Governing Law and Forum Selection. This Agreement shall be governed,
         ---------------------------------
construed and enforced in accordance with the laws of the State of Arizona
(without regard to principles of conflict of laws), and in the event of any
dispute arising out of this Agreement, the parties agree that the only proper
forums for the resolution of any such dispute shall be state or federal courts
within the State of Arizona.

     8.  Attorneys' Fees and Costs. If any proceeding is brought for the
         -------------------------
enforcement, interpretation, modification, termination or breach of this
Agreement, the prevailing party shall be entitled to recover from the
non-prevailing party or parties reasonable attorneys' fees and costs incurred in
addition to any other costs or relief to which it may be entitled.

     9.  Amendments. This Agreement may be amended or modified only by a writing
         ----------
executed by all parties hereto.

     10. Counterparts. This Agreement may be executed in counterparts, each of
         ------------
which shall be deemed an original and it shall not be necessary in making proof
of this Agreement to produce or account for more than one such counterpart.
Facsimile transmission to a party of a signed copy of this Agreement shall
constitute and be deemed delivery of the signature copy of this Agreement to the
recipient.

                                       -5-

<PAGE>

     11. Headings. Section headings in this Agreement are for convenience and
         --------
reference only and shall not govern the interpretation of any of the provisions
of this Agreement.

     12. Waiver of Jury Trial. All parties hereby knowingly, voluntarily, and
         --------------------
intentionally, waives any rights they may have to require a trial by jury in any
court action involving any of the parties and pertaining to their obligations
hereunder or the FCFC Collateral, and agree that any such action or proceeding
shall be tried before a court and not before a jury.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.

                                   FIRST COMMUNITY FINANCIAL CORPORATION

                                   By ________________________________________

                                   Its _______________________________________

                                   TELETOUCH COMMUNICATIONS, INC.

                                   By ________________________________________

                                   Its _______________________________________

                                   TLL PARTNERS, L.L.C.

                                   By ________________________________________

                                   Its _______________________________________

                                       -6-

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