<PAGE>   1


                                                                  EXHIBIBI 10.34


--------------------------------------------------------------------------------

--------------------------------------------------------------------------------




                               SECURITY AGREEMENT

                                     Between

                      DOSKOCIL MANUFACTURING COMPANY, INC.
                                    as Debtor

                                       and
                              BANK OF AMERICA, N.A.
                             as Administrative Agent

                                 August 12, 1999





--------------------------------------------------------------------------------

--------------------------------------------------------------------------------







<PAGE>   2



                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                Page
                                                                                ----

                                    I. GRANT
<S>      <C>                                                                   <C>
1.1.     Assignment and Grant of Security........................................1
1.2.     Description of Obligations..............................................4
1.3.     Debtor Remains Liable...................................................5
1.4.     Delivery of Security and Instrument Collateral..........................5

                       II. REPRESENTATIONS AND WARRANTIES

2.1.     Representations and Warranties..........................................6

                                 III. COVENANTS

3.1.     Further Assurances......................................................7
3.2.     Equipment, Fixtures and Inventory.......................................8
3.3.     Insurance...............................................................9
3.4.     Place of Perfection; Records; Collection of Receivables,
         Chattel Paper and Instruments..........................................10
3.5.     Transfers and Other Liens..............................................11
3.6.     Rights to Dividends and Distributions..................................11
3.7.     Right of Administrative Agent to Notify Issuers........................12
3.8.     Administrative Agent Appointed Attorney-in-Fact........................12

                  IV. RIGHTS AND POWERS OF ADMINISTRATIVE AGENT

4.1.     Administrative Agent May Perform.......................................13
4.2.     Administrative Agent's Duties..........................................13
4.3.     Remedies...............................................................13
4.4.     Further Approvals Required.............................................16
4.5.     Indemnity and Expenses.................................................16

                                V. MISCELLANEOUS

5.1.     Cumulative Rights......................................................17
5.2.     Modifications; Amendments; Etc.........................................17
5.3.     Continuing Security Interest...........................................17
</TABLE>


<PAGE>   3


<TABLE>

<S>      <C>      <C>                                                      <C>
5.4.     GOVERNING LAW; TERMS...............................................17
5.5.     WAIVER OF JURY TRIAL...............................................18
5.6.     Administrative Agent's Right to Use Agents.........................18
5.7.     No Interference, Compensation or Expense...........................18
5.8.     Waivers of Rights Inhibiting Enforcement...........................18
5.9.     Notices and Deliveries.............................................18
         (a)      Manner of Delivery........................................18
         (b)      Addresses.................................................19
         (c)      Effectiveness.............................................20
5.10.    Successors and Assigns.............................................20
5.11.    Loan Document......................................................20
5.12.    Consent to Jurisdiction; Waiver of Immunities......................20
5.13.    Severability.......................................................20
5.14.    Obligations Not Affected...........................................21
5.15.    Counterparts.......................................................21
5.16.    Junior Lien........................................................21
5.17.    ENTIRE AGREEMENT...................................................21
</TABLE>



                                     - ii -

<PAGE>   4



SCHEDULES:

     Schedule 1     - Equipment, and Inventory Locations
     Schedule 2     - Trade Names
     Schedule 3     - Restricted Accounts
     Schedule 4     - Rolling Stock




                                     - iii -

<PAGE>   5



                               SECURITY AGREEMENT


         SECURITY AGREEMENT (this "Agreement"), dated as of August 12, 1999,
made by Doskocil Manufacturing Company, Inc., a Texas corporation ("Debtor"), in
favor of Bank of America, N.A., a national banking association, as
Administrative Agent ("Administrative Agent") for itself and each other lender a
party to the Credit Agreement described below (singly, a "Secured Party", and
collectively, the "Secured Parties").

                                   BACKGROUND:

         (1) Debtor, Administrative Agent and Secured Parties have entered or
will enter into the Credit Agreement dated as of August 12, 1999 (as the same
may hereafter be supplemented, amended, modified and restated from time to time,
being the "Credit Agreement"; the terms defined therein and not otherwise
defined herein being used herein as therein defined).

         (2) It is the intention of the parties hereto that this Agreement
create a security interest securing the payment of the obligations set forth in
Section 1.2 hereof, subject only to Permitted Collateral Liens (which includes
the Liens designated in Section 1.2 hereof as senior and superior to the Lien
granted herein) as provided in the Loan Documents.

         (3) It is a condition precedent to the obligation of the Secured
Parties to make the Advances under the Credit Agreement that Debtor shall have
executed and delivered this Agreement.

                                   AGREEMENT.

         NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and in order to induce Secured Parties to make the
Advances under the Credit Agreement, Debtor hereby agrees with Administrative
Agent for its benefit and the ratable benefit of Secured Parties, as hereinafter
set forth.

                                    I. GRANT

         1.1. Assignment and Grant of Security. Debtor hereby assigns, pledges,
hypothecates and transfers to Administrative Agent, for its benefit and the
ratable benefit of Secured Parties, and hereby grants to Administrative Agent,
for its benefit and the ratable benefit of Secured Parties, a security interest
in, the entire right, title and interest of Debtor, in and to the following
assets of Debtor, whether now owned or hereafter acquired ("Collateral"):



<PAGE>   6



         (a) all writings which evidence both a monetary obligation and a
security interest in or a lease of specific goods ("Chattel Paper");

         (b) all documents, warehouse receipts, bills of lading, including,
without limitation, documents of title (as defined in the UCC) or other receipts
covering, evidencing or representing collateral ("Documents");

         (c) all equipment (as defined in the UCC), and (whether or not included
in such definition) all vehicles, tractors, trailers, rolling stock, machinery,
chattels, tools, parts, furniture, furnishings, and supplies, of every nature,
wherever located, all additions, accessories and improvements thereto and
substitutions therefor and all accessories, parts and equipment which may be
attached to or which are necessary for the operation and use of such personal
property, whether or not the same shall be deemed to be affixed to real
property, together with all accessions thereto, and all rights under or arising
out of present or future contracts relating to the foregoing, excluding,
however, any such Equipment or other property which is financed with
Indebtedness permitted to be incurred pursuant to Sections 7.1(c) and 7.1(h) of
the Existing Credit Agreement ("Equipment");

         (d) all equipment, fixtures and articles of personal property now or
hereafter attached to or used in or about any building or buildings now erected
or hereafter to be erected on any real property now or hereafter owned or leased
by Debtor (the "Property"), which are necessary to the complete and comfortable
use and occupancy of such building or buildings for the purposes for which they
were or are to be erected; all materials to be delivered to the Property and
used or to be used in connection with the construction of any building to be
constructed on the Property, including, but not limited to, all masonry, siding,
roof shingles, flooring, doors, windows, tile, shutters, stoves, ovens, awnings,
screens, cabinets, shades, blinds, carpets, draperies, furniture, furnishings,
plumbing, heating, air conditioning, lighting, ventilating, refrigerating,
cooking, laundry and incinerating equipment and all fixtures and appurtenances
thereto, and such other goods and chattels and personal property as are ever
used or furnished in operating such buildings or the activities conducted
therein, and all building materials and equipment now or hereafter delivered to
the Property and intended to be installed thereon ("Fixtures");

         (e) all general intangibles (as defined in the UCC), and (whether or
not included in such definition) all contract rights; all trade secrets,
inventions, processes, production methods, proprietary information and know-how;
and all licenses or other agreements granted to Debtor with respect to any of
the foregoing (excluding, however, any such licenses or agreements which
prohibit the assignment thereof or the granting of a security interest therein
or are otherwise terminated or rendered void as a result thereof); all
information, advertising lists, customer lists, identification of suppliers,
data, plans, blueprints, specifications, designs, drawings, recorded knowledge,
surveys, engineering reports, test reports, manuals, materials standards,
processing standards, performance standards, telephone numbers and telephone
listings, catalogs, books, records, computer and automatic machinery software
and programs, and the like pertaining to operations by or the business of
Debtor; all field accounting information and all media in which or on which any
of the information or knowledge or data or records may be recorded or stored and
all computer programs used for the

                                      - 2 -

<PAGE>   7



compilation or printout of such information, knowledge, records or data; all
licenses, consents, permits, variances, certifications and approvals of all
Tribunals now or hereafter held by Debtor pertaining to operations or business
now or hereafter conducted; all rights to receive return of deposits and trust
payments; all rights to payment under letters of credit and similar agreements;
and all causes of action, rights, claims and warranties now or hereafter owned
or acquired by Debtor ("General Intangibles");

         (f) all instruments and letters of credit (each as defined in the UCC,
and (whether or not included in such definitions) all promissory notes, drafts,
bills of exchange and trade acceptances ("Instruments");

         (g) all inventory in all of its forms, wherever located, now or
hereafter existing, including, but not limited to, (i) all raw materials and
work in process therefor, finished goods thereof, and materials used or consumed
in the manufacture or production thereof, (ii) goods in which Debtor has an
interest in mass or a joint or other interest or right of any kind (including,
without limitation, goods in which Debtor has an interest or right as consignee
but only to the extent of Debtor's interest therein), and (iii) goods which are
returned to or repossessed by Debtor, and all accessions thereto and products
thereof and documents therefor (any and all such inventory, accessions, products
and documents being the "Inventory");

         (h) all accounts, contract rights, chattel paper, documents,
instruments, deposit accounts, general intangibles, tax refunds (including,
without limitation, all federal and state income tax refunds and benefits of net
operating loss carry forwards) and other obligations of any kind owing to
Debtor, now or hereafter existing, whether or not arising out of or in
connection with the sale or lease of goods or the rendering of services, and all
rights now or hereafter existing in and to all security agreements, leases, and
other contracts securing or otherwise relating to any such accounts, contract
rights, chattel paper, documents, instruments, deposit accounts, general
intangibles or obligations (any and all such accounts, contract rights, chattel
paper, documents, instruments, deposit accounts, general intangibles and
obligations being the "Receivables");

         (i) all agreements with each manufacturer, vendor, sales agent, sales
representative and each other Person pursuant to which Debtor receives,
maintains, sells, leases or otherwise disposes of Inventory, including all
agreements permitting the use of each such Person's name, logo, trademarks,
tradenames and advertising ("Vendor Agreements");

         (j) all right, title and interest of Debtor in, to and under each
contract and other agreement relating to the lease, sale or other disposition of
Collateral;

         (k) all rights, claims and benefits of Debtor against any Person
arising out of, relating to or in connection with Collateral purchased by
Debtor, including, without limitation, any such rights, claims or benefits
against any Person storing or transporting such Collateral;


                                      - 3 -

<PAGE>   8



         (l) the balance of every deposit account of Debtor under control of
Administrative Agent and each other Secured Party and each of their respective
Affiliates and any other claim of Debtor against Administrative Agent and each
other Secured Party, now or hereafter existing, liquidated or unliquidated, and
all money, instruments, securities, documents, chattel paper, credits, claims,
demands, income, and any other property, rights and interests of Debtor which at
any time shall come into the possession or custody or under the control of
Administrative Agent or any Secured Party or any of its agents, affiliates or
correspondents, for any purpose, and the proceeds of any thereof (Administrative
Agent and each other Secured Party shall be deemed to have possession of any of
the Collateral in transit to or set apart for it or any of its agents,
affiliates or correspondents).

         (m) 100% of the issued and outstanding capital stock of each Domestic
Subsidiary of Debtor, together with all Dividends, cash, proceeds, profits,
instruments, distributions and other property from time to time distributed in
respect thereof, and any subscription rights or warrants to acquire any interest
in such Subsidiary;

         (n) 65% of the issued and outstanding capital stock of each Foreign
Subsidiary of Debtor, together with all Dividends, cash, proceeds, profits,
instruments, distributions and other property from time to time distributed in
respect thereof and any subscription rights or warrants to acquire any interest
in such Subsidiary;

         (o) all insurance policies and bonds and claims and payments under any
Collateral;

         (p) all property similar to the above hereafter acquired by Debtor; and

         (q) all accessions to, substitutions for and replacements, proceeds and
products of any and all of the foregoing Collateral (including, without
limitation, proceeds which constitute property of the types described in this
Section 1.1) and, to the extent not otherwise included, all (i) payments under
insurance (whether or not Administrative Agent is the loss payee thereof), or
any indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral and (ii) cash.

         1.2. Description of Obligations. This Agreement creates a security
interest in the Collateral, subject only to Permitted Collateral Liens (it being
acknowledged and agreed that Bank of America, N.A. as administrative agent under
the Existing Credit Agreement (in such capacity, the "Existing Credit Agreement
Administrative Agent") has a Lien in the Collateral which is and will be at all
times senior and superior to the Lien granted in the Collateral hereunder) as
provided in the Loan Documents, to secure the payment and performance of any and
all obligations now or hereafter existing of Debtor, each other Obligor and any
other Person under the Credit Agreement and the other Loan Documents, including
any extensions, modifications, substitutions, amendments and renewals thereof,
whether for principal, interest, fees, premium, expenses, indemnification or
otherwise (all such obligations of Debtor, each other Obligor and each other
Person being the "Obligations"); provided, however, notwithstanding the
foregoing or anything else herein to the contrary, Purchase Money Advances shall
only be secured by the Equipment, Inventory or other

                                      - 4 -

<PAGE>   9



tangible personal property which is financed or purchased with the proceeds of
Purchase Money Advances as reasonably determined by Debtor in accordance with
the requirements of the Indenture. Without limiting the generality of the
foregoing, this Agreement secures the payment of all amounts which constitute
part of the Obligations and would be owed by Debtor, each other Obligor and any
other Person to Administrative Agent or any Secured Party under any Loan
Document, but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding under any
Debtor Relief Law involving Debtor, any other Obligor or any other Person
(including all such amounts which would become due or would be secured but for
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding of Debtor, any other Obligor or any other
Person under any Debtor Relief Law). Notwithstanding anything herein to the
contrary, the Obligations secured hereby shall be limited to an aggregate amount
which is equal to the largest amount that would not render the Lien granted
herein subject to avoidance under Section 548 of the Bankruptcy Code or any
applicable provisions of comparable state law.

         1.3. Debtor Remains Liable. Anything herein to the contrary
notwithstanding, (a) Debtor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by Administrative Agent of any
of the rights hereunder shall not release Debtor from any of its duties or
obligations under the contracts and agreements included in the Collateral, and
(c) neither Administrative Agent nor any Secured Party shall have any obligation
or liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall Administrative Agent or any Secured Party be
obligated to perform any of the obligations or duties of Debtor thereunder or to
take any action to collect or enforce any claim for payment assigned hereunder.

         1.4. Delivery of Security and Instrument Collateral. To the extent not
required to be delivered to the Existing Credit Agreement Administrative Agent,
all certificates (except certificates of title with respect to motor vehicles
shall only be required to be delivered upon request of Administrative Agent) or
instruments representing or evidencing the Collateral shall be delivered to and
held by or on behalf of Administrative Agent pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Administrative Agent. Administrative Agent, subject to the
rights of the Existing Credit Agreement Administrative Agent, shall have the
right, as provided in Section 3.6, after the occurrence, and during the
continuance, of an Event of Default, but without any requirement for prior
written notice to Debtor, to transfer to or to register in the name of
Administrative Agent or any of its nominees any or all of such Collateral. In
addition, Administrative Agent, subject to the rights of the Existing Credit
Agreement Administrative Agent, shall have the right at any time after the
occurrence, and during the continuance, of an Event of Default to exchange
certificates or instruments representing or evidencing Collateral for
certificates or instruments of smaller or larger denominations.



                                      - 5 -

<PAGE>   10



                       II. REPRESENTATIONS AND WARRANTIES

         2.1. Representations and Warranties. Debtor represents and warrants to
Administrative Agent and each Secured Party, with respect to itself and the
Collateral, as follows:

         (a) All of the Equipment, Fixtures and Inventory pledged by Debtor
hereunder are located at the places specified on Schedule 1 hereto (as
supplemented from time to time by Debtor by written notice to Administrative
Agent) or in transit to a place specified on Schedule 1 hereto (as supplemented
from time to time by Debtor by written notice to Administrative Agent) or in
transit for sale to a third-party purchaser that upon such sale will become the
obligor under a Receivable or promptly pay for such Equipment, Fixtures and
Inventory. The chief place of business and chief executive office of Debtor and
the office where Debtor keeps all of its records concerning the Receivables, are
located at the place specified on Schedule 1 hereto. Schedule 1 is a complete
and correct list of, as to any leased property on which any Collateral is
located, the lease or other agreement (and all amendments thereto) pursuant to
which Debtor has use of such property (complete and correct copies of which have
been provided to Administrative Agent), the lessor pursuant to such agreement,
the recording information for such agreement, the description of such property
sufficient for recording and the name of the record owner of such property.

         (b) Debtor is the legal and beneficial owner of the Collateral pledged
by it free and clear of any Lien, security interest, option or other charge or
encumbrance except for Permitted Liens. No effective financing statement or
other similar document used to perfect and preserve a security interest under
the laws of any jurisdiction covering all or any part of the Collateral is on
file in any recording office, except such as may have been filed in favor of
Administrative Agent relating to this Agreement and with respect to any
Permitted Lien. As of the date hereof, Debtor has the trade names set forth on
Schedule 2 (and no others). To the best of Debtor's knowledge, Debtor (including
any corporate or partnership predecessor) has not existed or operated under any
name other than as stated on Schedule 2 since the date three years preceding the
date of this Agreement.

         (c) This Agreement and the pledge of the Collateral pursuant hereto,
together with the filing of financing statements containing the description of
the Collateral in the jurisdictions set forth on Schedule 1, which will be made
immediately following the date of closing, creates a valid and perfected
security interest in the Collateral in which a security interest can be
perfected by filing a UCC financing statement, securing the payment of the
Obligations; provided that additional actions may be required with respect to
the perfection of proceeds of the Collateral; further provided that Secured
Party retains physical possession of any Collateral, the possession of which is
required for perfection.

         (d) No consent of any Person that has not been obtained and no
authorization, approval or other action by, and no notice to or filing with, any
Tribunal is required (i) for the pledge by Debtor of the Collateral pledged by
it hereunder, for the grant by Debtor of the security interest granted hereby or
for the execution, delivery or performance of this Agreement by Debtor, (ii) for
the perfection or maintenance of the pledge, assignment and security interest
created hereby (except

                                      - 6 -

<PAGE>   11



for the filing of financing and continuation statements under the UCC, fixture
filings and filings with the United States Patent and Trademark Office) or (iii)
for the exercise by Administrative Agent of the rights provided for in this
Agreement (except for consents of landlords pursuant to the Landlords' Waivers
and as otherwise required by law, including pursuant to Section 4.4 of this
Agreement).

         (e) None of the Collateral described in Sections 1.1(m) and 1.1(n)
("Securities Collateral") is subject to any unpaid capital call or dispute, any
buy-sell, voting trust, transfer restriction, preferential right to purchase or
similar agreement or any option, warrant, put or call or similar agreement
except to the extent permitted by the Credit Agreement. All of the Securities
Collateral are duly authorized, validly issued and non-assessable and were not
issued in violation of the Rights of any Person.

         (f) All Inventory produced in the United States of America has been
produced in substantial compliance with the Fair Labor Standards Act.

                                 III. COVENANTS

         3.1. Further Assurances.

         (a) Debtor agrees that where any agreement existing as of the date
hereof or hereafter to which Debtor is a party contains any restriction that
could reasonably be expected to prohibit Debtor from granting any security
interest under this Agreement, at Administrative Agent's request, Debtor will
use its best efforts to obtain the necessary consent to or waiver of such
restriction from any Person so as to enable Debtor to effectively grant to
Administrative Agent such security interest under this Agreement.

         (b) Debtor agrees that from time to time, at the expense of Debtor, at
Administrative Agent's request, Debtor will promptly execute and deliver all
further instruments and documents (including supplements to all schedules), and
take all further action, that may be necessary or desirable, and that
Administrative Agent may reasonably request, in order to perfect and protect any
pledge, assignment or security interest granted or purported to be granted
hereby, and the priority thereof, or to enable Administrative Agent to exercise
and enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, upon reasonable written
request by Administrative Agent, Debtor will: (i) mark conspicuously each
Chattel Paper included in Receivables, and, at the reasonable request of
Administrative Agent, each of its records pertaining to the Collateral with the
following legend:

         THIS INSTRUMENT IS SUBJECT TO A SECURITY INTEREST AND LIEN
         PURSUANT TO A SECURITY AGREEMENT DATED AUGUST 12, 1999 (AS
         THE SAME HAS BEEN AND MAY HEREAFTER BE AMENDED,
         MODIFIED OR RESTATED) MADE BY DOSKOCIL MANUFACTURING
         COMPANY, INC. IN FAVOR OF BANK OF AMERICA, N.A., AS

                                      - 7 -

<PAGE>   12



         ADMINISTRATIVE AGENT FOR CERTAIN LENDERS, AND PURSUANT
         TO A CREDIT AGREEMENT DATED AS OF AUGUST 12, 1999 (AS THE
         SAME HAS BEEN AND MAY HEREAFTER BE AMENDED, MODIFIED OR
         RESTATED)

or such other legend, in form and substance reasonably satisfactory to and as
specified by Administrative Agent, indicating that such Chattel Paper or
Collateral is subject to the pledge, assignment and security interest granted
hereby; (ii) if any Collateral shall be evidenced by a promissory note or other
instrument or be Chattel Paper, to the extent not required to be delivered to
the Existing Credit Agreement Administrative Agent, deliver and pledge to
Administrative Agent hereunder such note, instrument or Chattel Paper duly
indorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance reasonably satisfactory to Administrative Agent; and
(iii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as Administrative Agent may reasonably request, in order to
perfect and preserve the pledge, assignment and security interest granted or
purported to be granted hereby.

         (c) In addition to such other information as shall be specifically
provided for herein, Debtor will furnish to Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other lists, documents, reports, and product, service and sales documents
in connection with the Collateral as Secured Party may reasonably request, all
in reasonable detail. In connection with its enforcement of the security
interest, Administrative Agent may use such information or transfer it to any
assignee permitted hereunder for such assignee's use.

         (d) Debtor hereby authorizes Administrative Agent to file one or more
financing or continuation statements relating to all or any part of the
Collateral without the signature of Debtor where permitted by law provided
Administrative Agent shall give reasonably prompt notice of any such filings to
Debtor. A photocopy or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.

         (e) Debtor will not, and will not permit any Person to, materially
revise, modify, amend or restate the articles of incorporation of any
corporation the stock or other interest in which is Collateral or the
partnership, joint venture or other organizational document of any partnership
or joint venture any interest in which is Collateral or terminate, cancel or
dissolve any such Person, except as permitted under the Credit Agreement.

         3.2. Equipment, Fixtures and Inventory.

         (a) Debtor shall not keep the Equipment, Fixtures and Inventory pledged
by it hereunder (other than Inventory sold in the ordinary course of business)
in any location other than the places specified in Schedule 1 unless the Debtor
has delivered to Administrative Agent a financing statement for such Equipment,
Fixtures and Inventory kept by Debtor at such location or such other

                                      - 8 -

<PAGE>   13



documentation in the opinion of Administrative Agent which is necessary to
properly perfect or maintain the perfection of the security interest granted
herein in such Collateral.

         (b) Debtor shall cause the Equipment and Fixtures pledged by it
hereunder that are necessary for Debtor's business to be maintained and
preserved in the same condition, repair and working order as when purchased,
ordinary wear and tear excepted in accordance with Debtor's past practices, and
shall forthwith, or in the case of any material loss or damage to any of the
Equipment or Fixtures as quickly as practicable after the occurrence thereof,
make or cause to be made all reasonable repairs, replacements, and other
improvements in connection therewith which are necessary or desirable to such
end. Debtor shall promptly furnish to Administrative Agent a statement
respecting any loss or damage which singly or in the aggregate equals or exceeds
$150,000 for any fiscal year to any of the Equipment pledged by it hereunder.
Debtor shall promptly furnish to Administrative Agent a statement respecting any
loss or damage which singly or in the aggregate equals or exceeds $150,000 for
any fiscal year to any of the Inventory pledged by it hereunder.

         (c) Debtor shall comply with all requirements of the Fair Labor
Standards Act.

         3.3. Insurance. Debtor shall, at its own expense, maintain insurance
with respect to the Collateral in accordance with the terms set forth in Section
5.5 of the Existing Credit Agreement. Debtor further covenants and agrees to
keep the Collateral which is Inventory, Equipment, Fixtures and other tangible
personal property insured in such amounts, against such risks and with such
insurers as is consistent with customary industry practice, provided that none
of such insurance shall be in amounts less than the greater of (i) the
replacement value and (ii) the original cost of the covered property (less any
deduction standard in the industry for such type of property), subject in the
case of any property damage insurance to normal and customary rights granted in
the ordinary course of business to (A) any landlord (with respect to the
property covered by any lease), (B) in the case of any equipment financing, to
any equipment lessor or lender (with respect to the equipment covered thereby),
or (C) mortgagees of any real property. All such policies of insurance shall be
written for the benefit of Administrative Agent and Debtor, as their interests
may appear, and shall provide for at least thirty days' prior written notice of
cancellation or change of coverage to Administrative Agent. Debtor shall
promptly furnish to Administrative Agent evidence of such insurance in form and
content satisfactory to Administrative Agent. If Debtor fails to maintain the
insurance it is required to maintain with respect to the Collateral in
accordance with this Section 3.3, upon notice to Debtor, Administrative Agent
may at its own option obtain insurance on only Administrative Agent's interest
in such Collateral, any premium thereby paid by Administrative Agent to become
part of the Obligations, bear interest prior to the existence of an Event of
Default, at the then applicable Base Rate Basis, and during the existence of an
Event of Default, at the Default Rate. In the event Administrative Agent
maintains such substitute insurance, the additional premium for such insurance
shall be due on demand and payable by Debtor to Administrative Agent in
accordance with any notice delivered to Debtor by Administrative Agent. Debtor
hereby grants Administrative Agent a security interest in any refunds of
unearned premiums in connection with any cancellation, adjustment or termination
of any policy of insurance required by Administrative Agent and in all proceeds
of such insurance and hereby appoints Administrative Agent its attorney-in-fact
(exercisable

                                      - 9 -

<PAGE>   14



from and after the occurrence of an Event of Default which is continuing) to
endorse any check or draft that may be payable to Debtor in order to collect
such refunds or proceeds. To the extent not required to be applied in accordance
with the General Security Agreement (as defined in the Existing Credit Agreement
and used herein), proceeds of insurance shall be applied as follows: first, to
reimburse Administrative Agent for all costs and expenses, if any, including
reasonable attorneys' fees, incurred in connection with the collection of such
proceeds; second, if an Event of Default has not occurred and is continuing or
the amount of proceeds in respect of any one loss or damage does not exceed
$750,000, the proceeds shall be used to repair or replace the Collateral and
Debtor shall provide Administrative Agent with evidence satisfactory to
Administrative Agent of such use; and third, if an Event of Default has occurred
and is continuing or the proceeds in respect of any one loss or damage is equal
to or greater than $750,000, the proceeds shall, at Administrative Agent's
direction, be used to repair or replace the Collateral or applied to the
Obligations as provided in the Credit Agreement.

         3.4. Place of Perfection; Records; Collection of Receivables, Chattel
Paper and Instruments.

         (a) Debtor shall keep its chief place of business and chief executive
office and the office where it keeps its records concerning the Receivables, and
the originals of all Chattel Paper and Instruments, at the location therefor
specified in Section 2.1(a), in each case which may be changed upon written
notice to the Administrative Agent at least 30 days prior to such change. Debtor
will hold and preserve such records and Chattel Paper and Instruments and will
permit representatives of Administrative Agent at any time during normal
business hours and after reasonable notice to inspect and make abstracts from
and copies of such records and Chattel Paper and Instruments.

         (b) Except as otherwise provided in this Section 3.4(b), Debtor shall
continue to collect, at its own expense, all amounts due or to become due Debtor
under the Receivables, Chattel Paper and Instruments. In connection with such
collections, Debtor may take (and, upon the occurrence and during the
continuance of an Event of Default at Administrative Agent's direction, but
subject to the rights of the Existing Credit Agreement Administrative Agent,
shall take) such action as Debtor or, after the occurrence and during the
continuance of an Event of Default, Administrative Agent, may deem necessary or
advisable to enforce collection of the Receivables, Chattel Paper and
Instruments; provided, however, but subject to the rights of the Existing Credit
Agreement Administrative Agent, that Administrative Agent shall have the right
(upon an Event of Default which has occurred and is continuing and upon notice
to Debtor) to notify the account debtors or obligors under any Receivables,
Chattel Paper and Instruments of the assignment of such Receivables, Chattel
Paper and Instruments to Administrative Agent and to direct such account debtors
or obligors to make payment of all amounts due or to become due to Debtor
thereunder directly to Administrative Agent and, upon such notification at the
expense of Debtor, to enforce collection of any such Receivables, Chattel Paper
and Instruments, and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as Debtor might have done or
as Administrative Agent deems appropriate. To the extent not required to be
delivered pursuant to the Existing Credit Agreement Administrative Agent, upon
the occurrence and during the continuance

                                     - 10 -

<PAGE>   15



of an Event of Default, all amounts and proceeds (including Instruments)
received by Debtor in respect of the Receivables, Chattel Paper and Instruments
shall be received in trust for the benefit of Administrative Agent hereunder,
shall be segregated from other funds of Debtor and, after receipt of notice from
Administrative Agent, shall be forthwith paid over to Administrative Agent in
the same form as so received (with any necessary indorsement) to be applied as
provided in the Credit Agreement. Upon the occurrence and during the
continuation of an Event of Default, Debtor shall not adjust, settle or
compromise the amount or payment of any Receivable, Chattel Paper or Instrument,
release wholly or partly any account debtor or obligor thereof, or allow any
credit or discount thereon other than those made in the ordinary course of
business.

         3.5. Transfers and Other Liens. Debtor shall not (i) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, any of the Collateral, except as permitted under the Credit
Agreement, or (ii) create or permit to exist any Lien, security interest, option
or other charge or encumbrance upon or with respect to any of the Collateral,
except for the security interest under this Agreement (and except as provided
for in the Credit Agreement).

         3.6. Rights to Dividends and Distributions. With respect to any
certificates, bonds, or other instruments or securities constituting a part of
the Collateral, Administrative Agent, but shall subject to the rights of the
Existing Credit Agreement Administrative Agent, shall have authority during the
continuance of an Event of Default, either to have the same registered in
Administrative Agent's name or in the name of a nominee, and, with or without
such registration, upon such notification to demand of the issuer thereof, and
to receive and receipt for, any and all Dividends (including any stock or
similar dividend or distribution) payable in respect thereof, whether they be
ordinary or extraordinary. If Debtor shall become entitled to receive or shall
receive any interest in or certificate (including, without limitation, any
interest in or certificate representing a Dividend or a distribution in
connection with any reclassification, increase, or reduction of capital, or
issued in connection with any reorganization), or any option or rights arising
from or relating to any of the Collateral that is evidenced by a certificate or
other instrument or security, whether as an addition to, in substitution of, as
a conversion of, or in exchange for any of the Collateral, or otherwise, Debtor
agrees to accept the same as Administrative Agent's agent and to hold the same
in trust on behalf of and for the benefit of Administrative Agent, and, to the
extent not required to be delivered pursuant to the Existing Credit Agreement
Agent, to deliver the same immediately to Administrative Agent in the exact form
received, with appropriate undated stock or similar powers, duly executed in
blank, to be held by Administrative Agent, subject to the terms hereof, as
Collateral. Unless an Event of Default is in existence, Debtor shall be entitled
to receive all cash Dividends paid in respect of any of the Collateral (subject
to the restrictions of any other Loan Document). Upon the occurrence and during
the continuance of an Event of Default, Administrative Agent, but shall subject
to the rights of the Existing Credit Agreement Administrative Agent, shall be
entitled to all Dividends, and to any sums paid upon or in respect of any
Collateral, and to any additional securities issued in respect of the Securities
Collateral, upon the liquidation, dissolution, or reorganization of the issuer
thereof, all of which shall be paid to Administrative Agent to be held by it as
additional collateral security for the Obligations and application to the
Obligations at the discretion of Administrative Agent. Subject to the rights of
the Existing Credit Agreement Agent, all Dividends paid or distributed in
respect of the

                                     - 11 -

<PAGE>   16



Collateral which are received by Debtor in violation of this Agreement shall,
until paid or delivered to Administrative Agent, be held by Debtor in trust as
additional Collateral for the Obligations.

         3.7. Right of Administrative Agent to Notify Issuers. At any time
during the continuance of an Event of Default, Administrative Agent, subject to
the rights of the Existing Credit Agreement Agent, may notify issuers of the
Securities Collateral to make payments of all Dividends directly to
Administrative Agent and Administrative Agent, subject to the rights of the
Existing Credit Agreement Agent, may take control of all proceeds of any
Securities Collateral. Until Administrative Agent elects to exercise such
rights, during the continuance of an Event of Default, Debtor, as agent of
Administrative Agent, shall collect and segregate all Dividends and other
amounts paid or distributed with respect to the Securities Collateral. To the
extent that Administrative Agent has notified any issuer of Securities
Collateral of an Event of Default and such Event of Default is cured or
otherwise waived, Administrative Agent shall promptly notify such issuer of such
fact.

         3.8. Administrative Agent Appointed Attorney-in-Fact. Debtor hereby
irrevocably appoints Administrative Agent Debtor's attorney-in-fact (exercisable
from and after the occurrence of an Event of Default which is continuing), with
full authority in the place and stead of Debtor and in the name of Debtor or
otherwise, but subject to the rights of the Existing Credit Agreement Agent, to
take any action and to execute any instrument which Administrative Agent may
deem necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation:

         (a) to obtain and adjust insurance required to be paid to
Administrative Agent in accordance with Section 3.3,

         (b) to ask for, demand, collect, sue for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under or in
connection with the Collateral,

         (c) to receive, indorse, and collect any drafts or other Instruments,
documents and Chattel Paper, in connection with clauses (a) or (b) above, and

         (d) to file any claims or take any action or institute any proceedings
which Administrative Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce compliance with the terms and
conditions of any Collateral or the rights of Administrative Agent with respect
to any of the Collateral. DEBTOR HEREBY IRREVOCABLY GRANTS TO ADMINISTRATIVE
AGENT DEBTOR'S PROXY (EXERCISABLE FROM AND AFTER THE OCCURRENCE OF AN EVENT OF
DEFAULT WHICH IS CONTINUING) TO, SUBJECT TO THE RIGHTS OF THE EXISTING CREDIT
AGREEMENT AGENT, VOTE ANY SECURITIES COLLATERAL AND APPOINTS ADMINISTRATIVE
AGENT DEBTOR'S ATTORNEY-IN-FACT (EXERCISABLE FROM AND AFTER THE OCCURRENCE OF AN
EVENT OF DEFAULT WHICH IS CONTINUING) TO PERFORM, SUBJECT TO THE RIGHTS OF THE
EXISTING CREDIT AGREEMENT AGENT, ALL OBLIGATIONS OF DEBTOR UNDER THIS AGREEMENT
AND TO EXERCISE ALL OF ADMINISTRATIVE AGENT'S RIGHTS HEREUNDER. THE PROXY AND
EACH

                                     - 12 -

<PAGE>   17



POWER OF ATTORNEY HEREIN GRANTED ARE COUPLED WITH AN INTEREST AND ARE
IRREVOCABLE PRIOR TO FINAL PAYMENT IN FULL OF THE OBLIGATIONS.

         Secured Party shall not exercise any powers granted pursuant to this
appointment as attorney-in-fact at any time that Debtor is fully performing its
obligations hereunder or without the consent of the Existing Credit Agreement
Agent. This appointment as attorney-in-fact shall terminate upon the termination
of this Agreement pursuant to Section 5.3 hereof.

                  IV. RIGHTS AND POWERS OF ADMINISTRATIVE AGENT

         4.1. Administrative Agent May Perform. If Debtor fails to perform any
agreement contained herein, Administrative Agent may itself perform, or cause
performance of, such agreement, and the reasonable expenses of Administrative
Agent incurred in connection therewith shall be payable by Debtor under Section
4.5.

         4.2. Administrative Agent's Duties. The powers conferred on
Administrative Agent hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the duty to exercise reasonable care in respect of any Collateral in
its possession and the accounting for moneys actually received by it hereunder,
Administrative Agent shall have no duty as to any Collateral, as to ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not
Administrative Agent has or is deemed to have knowledge of such matters, or as
to the taking of any necessary steps to preserve rights against prior parties.
The Administrative Agent shall be deemed to have exercised reasonable care in
the custody and preservation of any Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which
Administrative Agent accords its own property, except to the extent of any gross
negligence or willful misconduct of the Administrative Agent. Except as provided
in this Section 4.2, Administrative Agent shall not have any duty or liability
to protect or preserve any Collateral or to preserve rights pertaining thereto.
Nothing contained in this Agreement shall be construed as requiring or
obligating Administrative Agent, and Administrative Agent shall not be required
or obligated, to (i) present or file any claim or notice or take any action,
with respect to any Collateral or in connection therewith or (ii) notify Debtor
of any decline in the value of any Collateral.

         4.3. Remedies. If any Event of Default shall have occurred and be
continuing:

         (a) Subject to the rights of the Existing Credit Agreement
Administrative Agent, Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code in effect in the State of Texas at
that time (the "UCC") (whether or not the UCC applies to the affected
Collateral), and also may (i) require Debtor to, and Debtor hereby agrees that
it will at its expense and upon request of Administrative Agent

                                     - 13 -

<PAGE>   18



forthwith, assemble all or part of the Collateral which is capable of being
assembled as directed by Administrative Agent and make it available to
Administrative Agent at a place to be designated by Administrative Agent which
is reasonably convenient to both parties or (ii) without notice, except as
specified below, sell the Collateral or any portion thereof in one or more
parcels at public or private sale, at any of Administrative Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such other terms
as Administrative Agent may deem commercially reasonable. Debtor agrees that, to
the extent notice of sale shall be required by law, ten days' written notice to
Debtor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification.
Administrative Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Administrative Agent may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.

         (b) All cash proceeds received by Administrative Agent upon any sale
of, collection of, or other realization upon, all or any part of the Collateral
shall be applied as follows:

         First: To the payment of all reasonable out-of-pocket costs and
         expenses incurred in connection with the sale of, collection of or
         other realization upon Collateral, including reasonable attorneys' fees
         and disbursements;

         Second: To the payment of the Obligations as provided in the Credit
         Agreement and in such order and in such manner consistent with
         Applicable Laws as Administrative Agent in its discretion shall decide
         (with Debtor remaining liable for any deficiency); and

         Third: To the extent of the balance (if any) of such proceeds, to
         Debtor or other Person legally entitled thereto.

         (c) Subject to the rights of the Existing Credit Agreement
Administrative Agent, all payments received by Debtor under or in connection
with any Collateral shall be received in trust for the benefit of Administrative
Agent, shall be segregated from other funds of Debtor and shall be forthwith
paid over to Administrative Agent in the same form as so received (with any
necessary indorsement).

         (d) Because of the Securities Act of 1933, as amended ("Securities
Act"), and other laws, including without limitation state "blue sky" laws, or
contractual restrictions or agreements, there may be legal restrictions or
limitations affecting Administrative Agent in any attempts to dispose of the
Collateral and the enforcement of its rights hereunder. For these reasons,
subject to the rights of the Existing Credit Agreement Administrative Agent,
Administrative Agent is hereby authorized by Debtor, but not obligated, during
the continuance of any Event of Default, to sell or otherwise dispose of any of
the Collateral at private sale, subject to an investment letter, or in any other
manner which will not require the Collateral, or any part thereof, to be
registered in accordance with the Securities Act, or the rules and regulations
promulgated thereunder, or any other law. Debtor clearly understands that
Administrative Agent may in its discretion approach a restricted number of
potential

                                     - 14 -

<PAGE>   19



purchasers and that a sale under such circumstances may yield a lower price for
the Collateral than would otherwise be obtainable if same were registered and
sold in the open market. No sale so made in good faith by Administrative Agent
shall be deemed to be not "commercially reasonable" because so made. Debtor
agrees that in the event Administrative Agent shall, during the continuance of
an Event of Default, sell the Collateral or any portion thereof at any private
sale or sales, Administrative Agent shall have the right to rely upon the advice
and opinion of appraisers and other Persons, which appraisers and other Persons
are acceptable to Administrative Agent, as to the best price reasonably
obtainable upon such a private sale thereof. In the absence of actual fraud,
such reliance shall be conclusive evidence that Administrative Agent handled
such matter in a commercially reasonable manner under Applicable Law.

         (e) Subject to the rights of the Existing Credit Agreement Agent, if
Administrative Agent shall determine to exercise its right to sell any or all of
the Collateral, and if in the opinion of counsel for Administrative Agent it is
necessary, or if in the opinion of Administrative Agent it is advisable, to have
the Collateral or that portion thereof to be sold, registered under the
provisions of the Securities Act, Debtor will, to the fullest extent it has the
capability to do so, cause the issuers of the Collateral contemplated to be sold
to execute and deliver, and cause the directors and officers of each thereof to
execute and deliver, all at Debtor's expense, all such instruments and
documents, and to do or cause to be done all such other acts and things, as may
be necessary or, in the opinion of Administrative Agent, advisable to register
the Collateral or that portion thereof to be sold, under the provisions of the
Securities Act and to cause the registration statement relating thereto to
become effective and to remain effective for such period as Administrative Agent
may deem appropriate to facilitate the sale or other disposition of such
Collateral from the date of the first public offering of the Collateral or that
portion thereof to be sold, and to make all amendments thereto and/or to the
related prospectus which, in the opinion of Administrative Agent, are necessary
or advisable, all in conformity with the requirements of the Securities Act.
Debtor shall use its reasonable best efforts to cause each issuer of Collateral
to comply with the provisions of the securities or "blue sky" laws of any
jurisdiction which Administrative Agent shall designate and to cause each Issuer
to make available to its security holders, as soon as practicable, an earnings
statement which will satisfy the provisions of the Securities Act and applicable
"blue sky" laws.

         (f)

                  (i) To the extent not required under the General Security
         Agreement, Debtor will maintain the accounts listed as restricted and
         blocked accounts on Schedule 3 (the "Restricted Accounts") with
         Administrative Agent, in the name of Debtor, but such Restricted
         Accounts shall be under the sole control and dominion of Administrative
         Agent.

                  (ii) It shall be a term and condition of each Restricted
         Account, notwithstanding any term or condition to the contrary in any
         other agreement relating to such Restricted Account, that no amount
         (including interest and other proceeds of the cash and other property
         in the Restricted Account) shall be paid or released to or for the
         account of, or withdrawn by or for the account of, Debtor or any other
         Person from such Restricted Account.

                                     - 15 -

<PAGE>   20



                  (iii) After the occurrence and continuance of an Event of
         Default, Debtor will promptly instruct each account debtor in respect
         of Receivables arising from any sale of Inventory in the ordinary
         course of business to make payment to the Restricted Accounts.

Debtor understands and acknowledges that Administrative Agent may and permits
Administrative Agent to remove amounts from the Restricted Accounts from time to
time and use the amounts to reduce the Obligations.

         4.4. Further Approvals Required.

         (a) In connection with the exercise by Administrative Agent of its
rights hereunder that effects the disposition of or use of any Collateral, it
may be necessary to obtain the prior consent or approval of Tribunals and other
Persons to a transfer or assignment of Collateral.

         (b) Debtor hereby agrees, during the continuance of an Event of
Default, to execute, deliver, and file, and hereby appoints Administrative Agent
as its attorney-in-fact, during the continuance of an Event of Default, to
execute, deliver, and file on Debtor's behalf and in Debtor's name, all
applications, certificates, filings, instruments, and other documents (including
without limitation any application for an assignment or transfer of control or
ownership) that may be necessary or appropriate, in Administrative Agent's
opinion, to obtain such consents, waivers, or approvals. Upon request by
Administrative Agent, Debtor further agrees to use its reasonable best efforts
to obtain the foregoing consents, waivers, and approvals, including receipt of
consents, waivers, and approvals under applicable agreements prior to a Default
or Event of Default. Debtor acknowledges that there is no adequate remedy at law
for failure by it to comply with the provisions of this Section 4.4 and that
such failure would not be adequately compensable in damages, and therefore
agrees that this Section 4.4 may be specifically enforced. This appointment as
attorney-in-fact shall terminate upon the termination of this Agreement pursuant
to Section 5.3 hereof.

         4.5.     Indemnity and Expenses.

         (a) Debtor agrees to indemnify Administrative Agent and each Secured
Party from and against any and all claims, losses and liabilities (including
reasonable attorneys' fees) growing out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), expressly
including such claims, losses or liabilities arising out of mere negligence of
Administrative Agent or any Secured Party, except claims, losses or liabilities
as finally judicially determined by a court of competent jurisdiction to have
resulted from Administrative Agent's or any Secured Party's gross negligence or
willful misconduct.

         (b) Debtor will upon demand pay to Administrative Agent the amount of
any and all reasonable expenses, including the reasonable fees and expenses of
its counsel and of any experts and agents, which Administrative Agent may incur
in connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other

                                     - 16 -

<PAGE>   21



realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of Administrative Agent hereunder or (iv) the failure by
Debtor to perform or observe any of the provisions hereof.

                                V. MISCELLANEOUS

         5.1. Cumulative Rights. All rights of Administrative Agent and each
other Secured Party under the Loan Documents are cumulative of each other and of
every other right which Administrative Agent and each other Secured Party may
otherwise have at law or in equity or under any other contract or other writing
for the enforcement of the security interest herein or the collection of the
Obligations. The exercise of one or more rights shall not prejudice or impair
the concurrent or subsequent exercise of other rights.

         5.2. Modifications; Amendments; Etc. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by Debtor here
from, shall in any event be effective unless the same shall be in writing and
signed by Administrative Agent (and Debtor, in case of amendment), and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

         5.3. Continuing Security Interest. This Agreement shall create a
continuing security interest in the Collateral and shall (a) remain in full
force and effect until the later of (i) the final payment in full of the
Obligations and all amounts payable under this Agreement and (ii) the expiration
or termination of the obligation of all Secured Parties to extend credit to
Debtor, (b) be binding upon Debtor, its successors and assigns, and (c) inure to
the benefit of, and be enforceable by, Administrative Agent and its successors,
transferees and assigns. Upon any such termination, Administrative Agent will,
at Debtor's expense, execute and deliver to Debtor such documents as Debtor
shall reasonably request to evidence such termination. Debtor agrees that to the
extent that Administrative Agent or any Secured Party receives any payment or
benefit and such payment or benefit, or any part thereof, is subsequently
invalidated, declared to be fraudulent or preferential, set aside or is required
to be repaid to a trustee, receiver, or any other party under any Debtor Relief
Law, common law or equitable cause, then to the extent of such payment or
benefit, the Obligations or part thereof intended to be satisfied shall be
revived and continued in full force and effect as if such payment or benefit had
not been made and, further, any such repayment by Administrative Agent or any
Secured Party, to the extent that Administrative Agent or any Secured Party did
not directly receive a corresponding cash payment, shall be added to and be
additional Obligations payable upon demand by Administrative Agent or any
Secured Party and secured hereby, and, if the lien and security interest hereof
shall have been released, such lien and security interest shall be reinstated
with the same effect and priority as on the date of execution hereof all as if
no release of such lien or security interest had ever occurred.

         5.4. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF

                                     - 17 -

<PAGE>   22



TEXAS (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT
THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF TEXAS. UNLESS OTHERWISE DEFINED HEREIN OR
IN THE CREDIT AGREEMENT, TERMS USED IN ARTICLE 9 OF THE UCC ARE USED HEREIN AS
THEREIN DEFINED.

         5.5. WAIVER OF JURY TRIAL. ADMINISTRATIVE AGENT AND DEBTOR HEREBY WAIVE
TRIAL BY JURY IN ANY JUDICIAL PROCEEDINGS INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER.

         5.6. Administrative Agent's Right to Use Agents. Administrative Agent
may exercise its rights under this Agreement through an agent or other designee.

         5.7. No Interference, Compensation or Expense. Administrative Agent may
exercise its rights under this Agreement (a) without resistance or interference
by Debtor and (b) without payment of any rent, license fee or compensation of
any kind to Debtor.

         5.8. Waivers of Rights Inhibiting Enforcement. To the extent not
prohibited by Applicable Law, Debtor waives (a) any claim that, as to any part
of the Collateral, a public sale, should Administrative Agent elect so to
proceed, is, in and of itself, not a commercially reasonable method of sale for
such Collateral, (b) except as otherwise provided in this Agreement, NOTICE OR
JUDICIAL HEARING IN CONNECTION WITH ADMINISTRATIVE AGENT'S DISPOSITION OF ANY OF
THE COLLATERAL INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY
PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT DEBTOR WOULD OTHERWISE
HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE,
AND ALL OTHER REQUIREMENTS AS TO THE TIME, PLACE AND TERMS OF SALE OR OTHER
REQUIREMENTS WITH RESPECT TO THE ENFORCEMENT OF ADMINISTRATIVE AGENT'S RIGHTS
HEREUNDER and (c) all rights of redemption, appraisal, valuation or to the
marshaling of assets.

         5.9. Notices and Deliveries.

         (a) Manner of Delivery. All notices and other communications provided
for hereunder shall be in writing and mailed, telecopied or delivered by
reputable overnight delivery service or by hand, if to the Debtor, addressed to
it at its address specified on the signature pages hereof, if to the
Administrative Agent, addressed to it at its address specified in the Credit
Agreement, or, as to each party, at such other address as shall be designated by
such party in a written notice to each other party complying as to delivery with
the terms of this Section 5.9. All such notices and other

                                     - 18 -

<PAGE>   23



communications shall, when mailed, telecopied, or delivered, be effective three
days after being deposited in the mails, when telecopied with confirmation of
receipt, or when delivered by reputable overnight delivery service or by hand to
the addressee or its agent, respectively.

         (b) Addresses. All notices, communications and materials to be given or
delivered pursuant to this Agreement shall be given or delivered at the
following respective addresses and telecopier and telephone numbers and to the
attention of the following individuals or departments:

                  (i)      if to Debtor, to it at:

                           Doskocil Manufacturing Company, Inc.
                           4209 Barnett
                           Arlington, Texas 76017
                           Telephone No.:  (817) 467-5116
                           Telecopier No.: (817) 472-9810

                           Attention:  John Casey
                                       Chief Financial Officer

                           with a copy to:

                           Westar Capital II LLC
                           949 South Coast Drive, Suite 650
                           Costa Mesa, California 92626
                           Telephone No.:  (714) 481-5161
                           Telecopier No.: (714) 481-5166

                           Attention:  Alan Sellers

                  (ii)     if to Administrative Agent, to it at:

                           Bank of America, N.A.
                           100 North Tryon Street
                           Charlotte, North Carolina 28225
                           Telephone No.:  (704) 388-5045
                           Telecopier No.: (704) 386-9607

                           Attention:  John J. O'Neill

or at such other address or, telecopier or telephone number or to the attention
of such other individual or department as the party to which such information
pertains may hereafter specify for the purpose in a notice to the other
specifically captioned "Notice of Change of Address".


                                     - 19 -

<PAGE>   24



         (c) Effectiveness. Each notice, communication and any material to be
given or delivered to Administrative Agent or Debtor pursuant to this Agreement
shall be effective or deemed delivered or furnished (i) if sent by mail, on the
fifth Business Day after such notice, communication or material is deposited in
the mail, addressed as above provided, (ii) if sent by telecopier, when such
notice, communication or material is transmitted to the appropriate number
determined as above provided in this Section 5.9 and the appropriate receipt is
received or otherwise acknowledged and (iii) if sent by hand delivery or
overnight courier, when left at the address of the addressee addressed as above
provided.

         5.10. Successors and Assigns. All of the provisions of this Agreement
shall be binding and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

         5.11. Loan Document. This Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof.

         5.12. Consent to Jurisdiction; Waiver of Immunities.

         (a) Debtor hereby irrevocably submits to the non-exclusive jurisdiction
of any United States Federal or Texas State courts sitting in Dallas, Texas in
any action or proceeding arising out of or relating to this Agreement, and
Debtor hereby irrevocably waives any objection it may now or hereafter have as
to the venue of any such suit, action or proceeding brought in such court or
that such court is an inconvenient forum.

         (b) Nothing in this section shall limit the right of Administrative
Agent or any Secured Party to bring any action or proceeding against Debtor or
its property in the courts of any other jurisdictions.

         (c) Any judicial proceeding by Debtor against Administrative Agent or
any Secured Party involving, directly or indirectly, any matter in any way
arising out of, related to, or connected with this Agreement shall be brought
only in a court in Dallas, Texas to the extent that jurisdiction may be effected
against such Person in Dallas, Texas.

         5.13. Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws during the term
thereof, such provision shall be fully severable, this Agreement shall be
construed and enforced as if such illegal, invalid, or unenforceable provision
had never comprised a part hereof, and the remaining provisions hereof shall
remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance herefrom. Furthermore,
in lieu of such illegal, invalid, or unenforceable provision there shall be
added automatically as a part of this Agreement a legal, valid, and enforceable
provision as similar in terms to the illegal, invalid, or unenforceable
provision as may be possible.


                                     - 20 -

<PAGE>   25



         5.14. Obligations Not Affected. To the fullest extent permitted by
Applicable Law, the obligations of Debtor under this Agreement shall remain in
full force and effect without regard to, and shall not be impaired or affected
by:

         (a) any amendment or modification or addition or supplement to any
other Loan Document, any instrument delivered in connection therewith or any
assignment or transfer thereof;

         (b) any exercise, non-exercise, or waiver by Administrative Agent or
any Secured Party of any right, remedy, power or privilege under or in respect
of, or any release of any guaranty, any collateral or the Collateral or any part
thereof provided pursuant to, this Agreement or any other Loan Document;

         (c) any waiver, consent, extension, indulgence or other action or
inaction in respect of this Agreement or any other Loan Document or any
assignment or transfer of any thereof; or

         (d) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of Debtor, any other Obligor
or any other Person, whether or not Debtor shall have notice or knowledge of any
of the foregoing.

         5.15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.

         5.16. Junior Lien. The Lien granted in the Collateral herein shall at
all times be junior and second to the Lien granted in the Collateral pursuant to
the General Security Agreement. Said priority shall be applicable irrespective
of the time or order of attachment or perfection of any Lien or the time or
order of filing of any financing statements or other documents, or any statutes,
rules or law, or court decisions to the contrary. Notwithstanding anything
herein to the contrary, until the Obligations (as defined in the Existing Credit
Agreement) have been paid and performed in full and all commitments to lend
thereunder have terminated, the Administrative Agent shall not collect, take
possession of, foreclose upon, or exercise any other rights or remedies with
respect to, the Collateral, judicially or non-judicially, or attempt to do any
of the foregoing unless such rights or remedies have been or are being exercised
with respect to the General Security Agreement and are exercised hereunder in a
manner that is not inconsistent with the status of the junior and second Liens
granted hereunder.

         5.17. ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER
LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.


                                     - 21 -

<PAGE>   26



================================================================================
                   REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
================================================================================



                                     - 22 -

<PAGE>   27



         IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of the
date first above written.

                                     DEBTOR:

                                     DOSKOCIL MANUFACTURING COMPANY, INC.



                                     By:
                                        ---------------------------------------
                                        Name:
                                             ----------------------------------
                                        Title:
                                              ---------------------------------


                                     ADMINISTRATIVE AGENT:

                                     BANK OF AMERICA, N.A.



                                     By:
                                        ---------------------------------------
                                        Name:
                                             ----------------------------------
                                        Title:
                                              ---------------------------------




                                     - 23 -

<PAGE>   28



                                   Schedule 1

                        Equipment and Inventory Locations

               Chief Place of Business, Chief Executive Office and
                          Location of Books and Records

                           *To Be Provided By Debtor*

================================================================================
             THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
================================================================================




<PAGE>   29



                                   Schedule 2

                                   Trade Names


                           *To Be Provided By Debtor*


================================================================================
             THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
================================================================================





<PAGE>   30



                                   Schedule 3


                               Restricted Accounts


                           *To Be Provided By Debtor*



================================================================================
             THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
================================================================================






<PAGE>   31


                                   Schedule 4


                                  Rolling Stock


                           *To Be Provided By Debtor*



================================================================================
             THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
================================================================================