SECURITY AGREEMENT


          THIS  SECURITY  AGREEMENT,  dated as of October  3, 1999,  is made and
given by POORE  BROTHERS,  INC., a Delaware  corporation  ("PBI") POORE BROTHERS
ARIZONA,  INC., an Arizona corporation  ("PBAI"),  POORE BROTHERS  DISTRIBUTING,
INC., an Arizona corporation ("PBDI"),  TEJAS PB DISTRIBUTING,  INC., an Arizona
corporation  ("Tejas"),  and WABASH  FOODS,  LLC, a Delaware  limited  liability
company  ("Wabash")  (PBI,  PBAI,  PBDI,  Tejas and Wabash each a "Grantor"  and
collectively,  the "Grantors") to U.S. BANCORP REPUBLIC COMMERCIAL FINANCE, INC.
a Minnesota corporation (the "Secured Party").

                                    RECITALS

          A. The  Grantors  and the  Secured  Party have  entered  into a Credit
Agreement  dated as of the date of this  Agreement (as the same may hereafter be
amended,  supplemented,  extended,  restated, or otherwise modified from time to
time, the "Credit Agreement")  pursuant to which the Secured Party has agreed to
extend to the Grantors certain credit accommodations on the terms and conditions
set forth in the Credit Agreement.

          B.  It is a  condition  precedent  to  the  extension  of  any  credit
accommodations pursuant to the terms of the Credit Agreement that this Agreement
be executed and delivered by the Grantors.

          C. The  Grantors  find it  advantageous,  desirable  and in their best
interests  to comply  with the  requirement  that it execute  and  deliver  this
Security Agreement to the Secured Party.

          NOW,  THEREFORE,  in  consideration  of the  premises  and in order to
induce the Secured Party to enter into the Credit Agreement and to extend credit
accommodations  to the Grantors  thereunder,  the Grantors hereby agree with the
Secured Party for the Secured Party's benefit as follows:

          SECTION 1. DEFINED TERMS.

               1(a) As used in this  Agreement,  the following  terms shall have
     the meanings indicated:

          "ACCOUNTS"  shall mean each and every  right to  payment of  Grantors,
     whether  such  right to  payment  arises out of a sale or lease of goods by
     Grantors, or other disposition of goods or other property of Grantors,  out
     of a rendering of services by Grantors,  out of a loan by Grantors,  out of
     damage to or loss of goods in the possession of a railroad or other carrier

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     or any other bailee,  out of overpayment  of taxes or other  liabilities of
     Grantors,  or which  otherwise  arises under any contract or agreement,  or
     from any other cause, whether such right to payment now exists or hereafter
     arises  and  whether  such  right to  payment  is or is not yet  earned  by
     performance and howsoever such right to payment may be evidenced,  together
     with all other  rights  and  interest  (including  all  liens and  security
     interests) which Grantors may at any time have by law or agreement  against
     any account debtor (as defined in the Uniform  Commercial Code in effect in
     the State of Minnesota) or other obligor obligated to make any such payment
     or against any of the  property of such  account  debtor or other  obligor;
     specifically  (but without  limitation),  the term includes all present and
     future instruments, documents, chattel papers, accounts and contract rights
     of Grantors.

          "ACCOUNT  DEBTOR" shall mean a Person who is obligated on or under any
     Account, Chattel Paper, Instrument or General Intangible.

          "CHATTEL PAPER" shall mean a writing or writings which evidence both a
     monetary  obligation and a security interest in or lease of specific goods;
     when a transaction is evidenced by both a security agreement or a lease and
     by an Instrument or a series of  Instruments,  the group of writings  taken
     together constitutes Chattel Paper.

          "COLLATERAL"  shall mean all personal  property and rights in personal
     property now owned or hereafter at any time  acquired by the Grantors in or
     upon which a Security  Interest  is  granted  to the  Secured  Party by the
     Grantors under this Agreement.

          "DOCUMENT" shall mean any bill of lading, dock warrant,  dock receipt,
     warehouse  receipt or order for the  delivery of goods,  together  with any
     other  document  or receipt  which in the  regular  course of  business  or
     financing is treated as adequately evidencing that the Person in possession
     of it is  entitled to receive,  hold and  dispose of the  document  and the
     goods it covers.

          "EQUIPMENT"   shall   mean  all   machinery,   equipment,   furniture,
     furnishings  and  fixtures,  including  all  accessions,   accessories  and
     attachments thereto, and any guaranties,  warranties, indemnities and other
     agreements  of  manufacturers,  vendors  and  others  with  respect to such
     Equipment.

          "EVENT  OF  DEFAULT"  shall  have the  meaning  given to such  term in
     Section 20 hereof.

          "FINANCING  STATEMENT"  shall have the  meaning  given to such term in
     Section 4 hereof.

          "GENERAL  INTANGIBLES"  shall mean any personal  property  (other than
     goods, Accounts, Chattel Paper, Documents, Instruments and money) including
     choses in action,  causes of action,  contract rights,  corporate and other
     business  records,  inventions,   designs,  patents,  patent  applications,
     service  marks,  trademarks,  trademark  applications,   tradenames,  trade
     secrets,  engineering  drawings,  good  will,  registrations,   copyrights,

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     licenses,  franchises,   customer  lists,  tax  refund  claims,  royalties,
     licensing and product rights, rights to the retrieval from third parties of
     electronically  processed  and  recorded  data and all  rights  to  payment
     resulting from an order of any court.

          "INSTRUMENT" shall mean a draft, check,  certificate of deposit, note,
     bill of exchange,  security or any other writing which evidences a right to
     the payment of money and is not itself a security agreement or lease and is
     of a type  which is  transferred  in the  ordinary  course of  business  by
     delivery with any necessary endorsement or assignment.

          "INVENTORY" shall mean any and all of the Grantors' goods,  including,
     without limitation,  goods in transit, wherever located which are or may at
     any time be leased  by the  Grantors  to a lessee,  held for sale or lease,
     furnished  under any contract of service or held as raw materials,  work in
     process,  or  supplies  or  materials  used or  consumed  in the  Grantors'
     business,  or which are held for use in  connection  with the  manufacture,
     packing, shipping, advertising, selling or finishing of such goods, and all
     goods,  the  sale  or  other  disposition  of  which  has  given  rise to a
     Receivable,  which are  returned to and/or  repossessed  and/or  stopped in
     transit by the Grantors or the Secured  Party,  or at any time hereafter in
     the  possession or under the control of the Grantors or the Secured  Party,
     or any agent or bailee of either  thereof,  and all  documents  of title or
     other documents representing the same.

          "LIEN"  shall mean any  security  interest,  mortgage,  pledge,  lien,
     charge,  encumbrance,  title retention agreement or analogous instrument or
     device  (including the interest of the lessors under  capitalized  leases),
     in, of or on any assets or properties of the Person referred to.

          "OBLIGATIONS"  shall  mean  (a)  all  indebtedness,   liabilities  and
     obligations  of the Grantors to the Secured Party of every kind,  nature or
     description under the Credit Agreement,  including the Grantors' obligation
     on any promissory note or notes under the Credit  Agreement and any note or
     notes  hereafter  issued in substitution  or replacement  thereof,  (b) all
     liabilities of the Grantors under this Agreement, and (c) any and all other
     liabilities  and  obligations of the Grantors to the Secured Party of every
     kind,  nature and  description,  whether  direct or indirect  or  hereafter
     acquired by the  Secured  Party from any  Person,  absolute or  contingent,
     regardless of how such liabilities arise or by what agreement or instrument
     they may be evidenced,  and in all of the foregoing cases whether due or to
     become due, and whether now existing or hereafter arising or incurred.

          "PERSON" shall mean any individual, corporation,  partnership, limited
     partnership,  limited liability company, joint venture, firm,  association,
     trust,  unincorporated  organization,  government or governmental agency or
     political subdivision or any other entity, whether acting in an individual,
     fiduciary or other capacity.

          "SECURITY  INTEREST" shall have the meaning given such term in Section
     2 hereof.

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               1(b)  All  other  terms  used in  this  Agreement  which  are not
     specifically  defined herein shall have the meaning  assigned to such terms
     in the Uniform  Commercial  Code in effect in the State of  Minnesota as of
     the date of this  Agreement  to the  extent  such other  terms are  defined
     therein.

               1(c)  Unless the  context  of this  Agreement  otherwise  clearly
     requires,  references to the plural include the singular, the singular, the
     plural  and  "or"  has the  inclusive  meaning  represented  by the  phrase
     "and/or." The words "include",  "includes" and "including"  shall be deemed
     to be  followed by the phrase  "without  limitation."  The words  "hereof,"
     "herein,"  "hereunder,"  and similar terms in this Agreement  refer to this
     Agreement as a whole and not to any particular provision of this Agreement.
     References  to  Sections  are  references  to  Sections  in  this  Security
     Agreement unless otherwise provided.

          SECTION 2. GRANT OF SECURITY INTEREST. As security for the payment and
performance of all of the Obligations,  the Grantors hereby grant to the Secured
Party a security  interest  (the  "Security  Interest")  in all of the Grantors'
right,  title,  and interest in and to the  following,  whether now or hereafter
owned, existing, arising or acquired and wherever located:

               2(a) All Accounts.

               2(b) All Chattel Paper.

               2(c) All Documents.

               2(d) All Equipment.

               2(e) All General Intangibles.

               2(f) All Instruments.

               2(g) All Inventory.

               2(h) To the extent not otherwise  included in the foregoing,  (i)
     all other  rights to the payment of money,  including  rents and other sums
     payable to the Grantors under leases,  rental  agreements and other Chattel
     Paper and insurance proceeds; (ii) all books, correspondence, credit files,
     records,  invoices, bills of lading, and other documents relating to any of
     the foregoing,  including,  without  limitation,  all tapes,  cards, disks,
     computer  software,  computer  runs,  and other papers and documents in the
     possession  or control of the Grantors or any computer  bureau from time to
     time  acting  for the  Grantors;  (iii)  all  rights  in,  to and under all
     policies  insuring  the  life  of any  officer,  director,  stockholder  or
     employee  of the  Grantors,  the  proceeds  of  which  are  payable  to the
     Grantors; and (iv) all accessions and additions to, parts and appurtenances
     of, substitutions for and replacements of any of the foregoing.

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               2(i) To the extent  not  otherwise  included,  all  proceeds  and
     products of any and all of the foregoing.

          SECTION 3. GRANTORS  REMAIN  LIABLE.  Anything  herein to the contrary
notwithstanding,  (a) the  Grantors  shall  remain  liable  under the  Accounts,
Chattel Paper, General Intangibles and other items included in the Collateral to
the extent set forth  therein to  perform  all of their  duties and  obligations
thereunder to the same extent as if this  Agreement had not been  executed,  (b)
the  exercise  by the  Secured  Party of any of the rights  hereunder  shall not
release the  Grantors  from any of their duties or  obligations  under any items
included in the  Collateral,  and (c) the Secured Party shall have no obligation
or liability under Accounts,  Chattel Paper, General Intangibles and other items
included in the  Collateral by reason of this  Agreement,  nor shall the Secured
Party be obligated to perform any of the  obligations  or duties of the Grantors
thereunder  or to take any action to collect  or enforce  any claim for  payment
assigned hereunder.

          SECTION 4. TITLE TO COLLATERAL. The Grantors have (or will have at the
time it acquires  rights in Collateral  hereafter  acquired or arising) and will
maintain so long as the Security Interest may remain outstanding,  title to each
item of Collateral (including the proceeds and products thereof), free and clear
of all Liens  except the Security  Interest  and except  Liens  permitted by the
Credit Agreement.  The Grantors will defend the Collateral against all claims or
demands of all Persons (other than the Secured Party) claiming the Collateral or
any interest therein. As of the date of execution of this Security Agreement, no
effective  financing  statement or other  similar  document  used to perfect and
preserve a security  interest under the laws of any  jurisdiction  (a "Financing
Statement")  covering  all or any  part  of the  Collateral  is on  file  in any
recording office, except such as may have been filed (a) in favor of the Secured
Party  relating to this  Agreement,  or (b) to perfect  Liens  permitted  by the
Credit Agreement.

          SECTION 5. LOCK BOX, COLLATERAL ACCOUNT. Each Grantor will direct each
of its  Account  Debtors  or other  obligors  to make  payments  due  under  any
Collateral  directly to a special lock box to be  established  and maintained by
Secured Party (the "Lockbox").  The Grantors hereby authorize and direct Secured
Party to  deposit  into a  special  collateral  account  to be  established  and
maintained by Secured Party (the  "Collateral  Account") all checks,  drafts and
cash  payments  received in said  Lockbox.  All deposits from the Lockbox to the
Collateral  Account  shall  constitute  proceeds  of  Collateral  and  shall not
constitute  payment of any Obligation.  The Grantors agree that it will promptly
deliver to Secured Party, for deposit into said Collateral Account, all payments
on  Accounts  and  Chattel  Paper  received  by it. All such  payments  shall be
delivered  to  Secured  Party in the form  received  (except  for the  Grantors'
endorsement where necessary).  Until so delivered,  all payments on Accounts and
Chattel  Paper  received by the Grantors  shall be held in trust by the Grantors
for and as the property of Secured  Party and shall not be  commingled  with any
funds or property of the Grantors.

          SECTION 6. COLLECTION RIGHTS OF SECURED PARTY. Notwithstanding Secured
Party's rights under Section 5 with respect to any and all Instruments,  Chattel
Paper,  Accounts and other rights to payment constituting  Collateral (including
proceeds),  Secured Party may, at any time (after the  occurrence of an Event of
Default)  notify any Account  Debtor,  or any other person  obligated to pay any

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amount due, that such Chattel Paper, Account, or other right to payment has been
assigned or transferred to Secured Party for security and shall be paid directly
to Secured Party. If Secured Party so requests at any time, the Grantors will so
notify such Account  Debtors and other  obligors in writing and will indicate on
all invoices to such Account  Debtors or other  obligors  that the amount due is
payable  directly  to  Secured  Party.  At any time after  Secured  Party or the
Grantors give such notice to an account debtor or other  obligor,  Secured Party
may (but need not), in its own name or in the Grantors' name,  demand,  sue for,
collect or receive any money or property at any time  payable or  receivable  on
account of, or securing,  any such  chattel  paper,  account,  or other right to
payment,  or grant any extension to, make any  compromise or settlement  with or
otherwise agree to waive,  notify,  amend or change the  obligations  (including
collateral  obligations)  of any  such  account  debtor  or other  obligor.  The
Grantors hereby  irrevocably  make,  constitute and appoint the Secured Party or
any person whom the Secured Party may  designate,  the Grantors' true and lawful
attorney  with power to receive,  open and dispose of all mail  addressed to the
Grantors;  to endorse  the  Grantors'  name on any notes,  acceptances,  checks,
drafts,  money  orders or other means of payment  that may come into the Secured
Party's  possession  as  payment  of or upon  Accounts,  Chattel  Paper or other
Collateral;  to endorse the  Grantors'  name on any invoice,  freight or express
bill or bill of lading relating to any  Collateral;  to sign the Borrower's name
to drafts against Account  Debtors,  to assignments and verification of accounts
and notices thereof to Account  Debtors,  and to documents of title covering any
Collateral,  and to do all  other  things  necessary  or proper to carry out the
intent of this Agreement.

          SECTION 7.  DISPOSITION  OF  COLLATERAL.  The Grantors  will not sell,
transfer,  lease or otherwise  dispose of, or discount or factor with or without
recourse,  any Collateral,  except for sales and leases of items of Inventory in
the ordinary course of business, and except for sales of Equipment having a fair
market value not to exceed  $50,000 in the aggregate per calendar year where the
proceeds of such Equipment are used to reduce the amount of the obligations.

          SECTION 8. NAMES,  OFFICES,  LOCATIONS.  The  Grantors  does  business
solely under their own name and the trade names and styles, if any, set forth on
Schedule  II hereto.  Except as noted on said  Schedule,  no such trade names or
styles and no  trademarks  or other  similar  marks  owned by the  Grantors  are
registered  with any  governmental  unit.  The chief place of business and chief
executive  office  and the  office  where  they keep  their  books  and  records
concerning the Accounts and General Intangibles and the originals of all Chattel
Paper, Documents and Instruments are located at their addresses set forth on the
signature page hereof. All items of Equipment and Inventory existing on the date
of this Agreement are located at the places specified on Schedule I hereto.  The
Grantors will  immediately  notify the Secured Party of any additional  state in
which any item of Inventory or Equipment is hereafter located. The Grantors will
from time to time at the request of the Secured  Party provide the Secured Party
with current  lists as to the  locations of the  Equipment  and  Inventory.  The
Grantors will not permit any Inventory, Equipment, Chattel Paper or Documents or
any records pertaining to Accounts and General  Intangibles to be located in any
state or area in which,  in the event of such  location,  a financing  statement
covering  such  Collateral  would be  required  to be, but has not in fact been,
filed in order to perfect the Security  Interest.  The Grantors  will not change
their name or the location of their chief place of business and chief  executive
office  unless the Secured  Party has been given at least 30 days' prior written

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notice thereof and the Grantors have executed and delivered to the Secured Party
such  Financing  Statements  and other  instruments  required or  appropriate to
continue the perfection of the Security Interest.

          SECTION 9. RIGHTS TO PAYMENT.  Except as the  Grantors  may  otherwise
advise the Secured Party in writing,  each  Account,  Chattel  Paper,  Document,
General Intangible and Instrument  constituting or evidencing Collateral is (or,
in the case of all future Collateral, will be when arising or issued) the valid,
genuine  and  legally  enforceable  obligation  of the  Account  Debtor or other
obligor named therein or in the Grantors'  records  pertaining  thereto as being
obligated  to pay or perform  such  obligation.  The  Grantors  will perform and
comply  in all  material  respects  with all their  obligations  under any items
included in the  Collateral and exercise  promptly and  diligently  their rights
thereunder.

          SECTION 10. FURTHER ASSURANCES.

               10(a)  The  Grantors  agree  that  from  time to  time,  at their
     expense,  it will promptly execute and deliver all further  instruments and
     documents,  and take all further action,  that may be necessary or that the
     Secured Party may reasonably  request,  in order to perfect and protect the
     Security  Interest  granted or purported to be granted  hereby or to enable
     the Secured Party to exercise and enforce its rights and remedies hereunder
     with respect to any  Collateral  (but any failure to request or assure that
     the Grantors  execute and deliver such  instrument  or documents or to take
     such  action  shall not  affect  or impair  the  validity,  sufficiency  or
     enforceability of this Agreement and the Security  Interest,  regardless of
     whether any such item was or was not executed and delivered or action taken
     in a  similar  context  or  on a  prior  occasion).  Without  limiting  the
     generality of the foregoing,  the Grantors will,  promptly and from time to
     time at the request of the Secured  Party:  (i) mark, or permit the Secured
     Party to mark,  conspicuously its books,  records,  and accounts showing or
     dealing with the Collateral, and each item of Chattel Paper included in the
     Collateral,  with a  legend,  in form  and  substance  satisfactory  to the
     Secured Party,  indicating  that each such item of Collateral and each such
     item of Chattel Paper is subject to the Security  Interest  granted hereby;
     (ii)  deliver  and  pledge  to  the  Secured  Party,  all  Instruments  and
     Documents,  duly indorsed or  accompanied  by duly executed  instruments of
     transfer or assignment, with full recourse to the Grantors, all in form and
     substance  satisfactory  to the Secured Party;  (iii) execute and file such
     Financing  Statements or  continuation  statements in respect  thereof,  or
     amendments  thereto,  and such  other  instruments  or  notices  (including
     fixture  filings  with any  necessary  legal  descriptions  as to any goods
     included in the  Collateral  which the Secured  Party  determines  might be
     deemed to be fixtures,  and instruments and notices with respect to vehicle
     titles),  as may be necessary  or  desirable,  or as the Secured  Party may
     request, in order to perfect,  preserve,  and enhance the Security Interest
     granted or purported to be granted hereby; and (iv) obtain waivers, in form
     satisfactory  to the Secured Party, of any claim to any Collateral from any
     landlords or mortgagees of any property where any Inventory or Equipment is
     located.

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               10(b) The Grantors hereby authorize the Secured Party to file one
     or more Financing Statements or continuation statements in respect thereof,
     and  amendments  thereto,  relating  to all or any  part of the  Collateral
     without the signature of the Grantors  where  permitted by law. 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.

               10(c) The Grantors will furnish to the Secured Party from time to
     time  statements  and schedules  further  identifying  and  describing  the
     Collateral and such other reports in connection  with the Collateral as the
     Secured Party may reasonably request,  all in reasonable detail and in form
     and substance reasonably satisfactory to the Secured Party.

          SECTION 11. TAXES AND CLAIMS. The Grantors will promptly pay all taxes
and other governmental charges levied or assessed upon or against any Collateral
or upon or against the  creation,  perfection  or  continuance  of the  Security
Interest,  as well as all other claims of any kind (including  claims for labor,
material and supplies) against or with respect to the Collateral,  except to the
extent (a) such taxes,  charges or claims are being  contested  in good faith by
appropriate proceedings, (b) such proceedings do not involve any material danger
of the sale, forfeiture or loss of any of the Collateral or any interest therein
and (c) such taxes,  charges or claims are  adequately  reserved  against on the
Grantors' books in accordance with generally accepted accounting principles.

          SECTION 12. BOOKS AND RECORDS.  The Grantors will keep and maintain at
their own cost and expense  satisfactory and complete records of the Collateral,
including a record of all payments  received and credits granted with respect to
all Accounts, Chattel Paper and other items included in the Collateral.

          SECTION 13. INSPECTION, REPORTS,  VERIFICATIONS.  The Grantors will at
all reasonable times permit the Secured Party or its  representatives to examine
or inspect any  Collateral,  any evidence of Collateral and the Grantors'  books
and records concerning the Collateral,  wherever located. The Grantors will from
time to time when  requested by the Secured Party furnish to the Secured Party a
report on its Accounts,  Chattel Paper,  General  Intangibles  and  Instruments,
naming the Account  Debtors or other  obligors  thereon,  the amount due and the
aging  thereof.  The  Secured  Party or its  designee is  authorized  to contact
Account Debtors and other Persons  obligated on any such Collateral from time to
time to verify the existence, amount and/or terms of such Collateral.

          SECTION 14.  NOTICE OF LOSS.  The Grantors  will  promptly  notify the
Secured  Party  of any  loss  of or  material  damage  to any  material  item of
Collateral  or of any  substantial  adverse  change,  known to Grantors,  in any
material item of Collateral or the prospect of payment or performance thereof.

          SECTION  15.  INSURANCE.  The  Grantors  will keep the  Equipment  and
Inventory  insured  against  "all risks" for the full  replacement  cost thereof
subject  to a  deductible  in an  amount,  and  with  an  insurance  company  or

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companies,  satisfactory  to the  Secured  Party,  the  policies  to protect the
Secured  Party as its interests may appear with Lender to be named as Loss Payee
("Accord 27"),  with such policies or  certificates  with respect  thereto to be
delivered  to the  Secured  Party  at  its  request.  Each  such  policy  or the
certificate  with respect  thereto  shall  provide that such policy shall not be
cancelled  or allowed to lapse unless at least 30 days prior  written  notice is
given to the Secured Party.

          SECTION 16.  LAWFUL USE; FAIR LABOR  STANDARDS  ACT. The Grantors will
use and keep the  Collateral,  and will  require  that  others  use and keep the
Collateral, only for lawful purposes, without material violation of any federal,
state or local law,  statute or  ordinance.  All Inventory of the Grantors as of
the date of this  Agreement that was produced by the Grantors or with respect to
which the Grantors  performed any manufacturing or assembly process was produced
by the Grantors (or such  manufacturing  or assembly  process was  conducted) in
compliance  in all material  respects  with all  requirements  of the Fair Labor
Standards  Act, and all  Inventory  produced,  manufactured  or assembled by the
Grantors after the date of this Agreement will be so produced,  manufactured  or
assembled, as the case may be.

          SECTION 17. ACTION BY THE SECURED  PARTY.  If the Grantors at any time
fail to perform or observe any of the  foregoing  agreements,  the Secured Party
shall have (and the Grantors hereby grant to the Secured Party) the right, power
and authority  (but not the duty) to perform or observe such agreement on behalf
and in the name,  place and stead of the  Grantors  (or, at the Secured  Party's
option, in the Secured Party's name) and to take any and all other actions which
the Secured Party may reasonably  deem necessary to cure or correct such failure
(including, without limitation, the payment of taxes, the satisfaction of Liens,
the  procurement  and  maintenance of insurance,  the execution of  assignments,
security   agreements  and  Financing   Statements,   and  the   indorsement  of
Instruments);  and the  Grantors  shall  thereupon  pay to the Secured  Party on
demand the amount of all monies  expended and all costs and expenses  (including
reasonable  attorneys' fees and legal expenses) incurred by the Secured Party in
connection  with  or as a  result  of the  performance  or  observance  of  such
agreements  or the taking of such action by the  Secured  Party,  together  with
interest  thereon from the date expended or incurred at the highest  lawful rate
then applicable to any of the Obligations,  and all such monies expended,  costs
and expenses and interest  thereon shall be part of the  Obligations  secured by
the Security Interest.

          SECTION 18. INSURANCE CLAIMS.  As additional  security for the payment
and  performance of the  Obligations,  the Grantors hereby assign to the Secured
Party any and all  monies  (including  proceeds  of  insurance  and  refunds  of
unearned  premiums)  due or to become  due  under,  and all other  rights of the
Grantors  with respect to, any and all policies of insurance  now or at any time
hereafter  covering  the  Collateral  or any  evidence  thereof or any  business
records or valuable papers pertaining  thereto.  At any time,  whether before or
after the  occurrence  of any Event of Default,  the Secured Party may (but need
not),  in the Secured  Party's  name or in Grantors'  name,  execute and deliver

                                        9
<PAGE>
proofs of claim,  receive all such monies,  indorse checks and other instruments
representing payment of such monies, and adjust, litigate, compromise or release
any claim  against  the issuer of any such  policy,  except  for  amounts in the
aggregate of less than $50,000  which the Secured  Party may (but need not),  in
the Secured  Party's name or in Grantor's  name,  execute and deliver  proofs of
claim,   receive  all  such  monies,   indorse  checks  and  other   instruments
representing payment of such monies, and adjust, litigate, compromise or release
any claim against the issuer of any such policy, only after the occurrence of an
Event of Default.  Notwithstanding any of the foregoing,  so long as no Event of
Default  exists the Grantors  shall be entitled to all  insurance  proceeds with
respect to Equipment or Inventory provided that such proceeds are applied to the
cost of replacement Equipment or Inventory.

          SECTION 19. THE SECURED  PARTY'S DUTIES.  The powers  conferred on the
Secured Party hereunder are solely to protect its interest in the Collateral and
shall not impose any duty upon it to exercise any such powers. The Secured Party
shall be deemed to have  exercised  reasonable  care in the  safekeeping  of any
Collateral  in  its  possession  if  such   Collateral  is  accorded   treatment
substantially  equal to the safekeeping  which the Secured Party accords its own
property  of like kind.  Except for the  safekeeping  of any  Collateral  in its
possession  and the  accounting  for  monies and for other  properties  actually
received  by it  hereunder,  the  Secured  Party  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 the Secured Party has or is deemed to have knowledge
of such matters,  or as to the taking of any necessary  steps to preserve rights
against  any  Persons or any other  rights  pertaining  to any  Collateral.  The
Secured  Party  will  take  action  in the  nature  of  exchanges,  conversions,
redemptions,  tenders and the like  requested  in writing by the  Grantors  with
respect to the Collateral in the Secured Party's possession if the Secured Party
in its  reasonable  judgment  determines  that such  action  will not impair the
Security  Interest or the value of the Collateral,  but a failure of the Secured
Party to comply with any such request shall not of itself be deemed a failure to
exercise reasonable care.

          SECTION 20.  EVENTS OF DEFAULT.  The  occurrence of any one or more of
the following events shall constitute an Event of Default under this Agreement:

               20(a) The Grantors  shall fail to make payment when due,  whether
     upon demand, or at a scheduled due date, or otherwise,  any principal of or
     interest  on their  obligations  under the  Credit  Agreement  or any other
     obligations of any Grantor to the Secured Party.

               20(b) Any  representation or warranty made by or on behalf of any
     Grantor in this Agreement or the Credit Agreement or by or on behalf of any
     Grantor in any  certificate,  statement,  report or  document  herewith  or
     hereafter  furnished to the Secured Party pursuant to this Agreement or the
     Credit  Agreement  shall  prove to have  been  false or  misleading  in any
     material  respect on the date as of which the facts set forth are stated or
     certified.

               20(c) The Grantors  shall fail to comply with Sections 5.2 or 5.3
     or any Section of Article VI of the Credit Agreement.

                                       10
<PAGE>
               20(d) The Grantors shall fail to comply with any other agreement,
     covenant,  condition,  provision or term contained in this Agreement or the
     Credit  Agreement  (other than those  hereinabove set forth in this Section
     20) and such  failure to comply shall  continue for 30 calendar  days after
     whichever of the following dates is the earliest:  (i) the date any Grantor
     gives  notice of such  failure to the Secured  Party,  or (ii) the date the
     Secured Party gives notice of such failure to the Grantors.

               20(e)  Any  Grantor  shall  apply  for or  consent  to,  or shall
     acquiesce in the  appointment  of a  custodian,  trustee or receiver of any
     Grantor  or for a  substantial  part of the  property  thereof  or,  in the
     absence of such application,  consent or acquiescence, a custodian, trustee
     or receiver shall be appointed for any Grantor or for a substantial part of
     the property  thereof and shall not be  discharged  within 45 days,  or any
     Grantor shall make an assignment for the benefit of creditors.

               20(f) Any bankruptcy,  reorganization,  debt arrangement or other
     proceedings  under any  bankruptcy or insolvency law shall be instituted by
     or against any Grantor and, if instituted  against any Grantor,  shall have
     been  consented  to or  acquiesced  in by  the  Grantors  or  shall  remain
     undismissed  for 60 days,  or an order for relief  shall have been  entered
     against any Grantor.

               20(g)  Any  dissolution  or  liquidation   proceeding   shall  be
     instituted  by or against  any  Grantor  and,  if  instituted  against  any
     Grantor,  shall be  consented to or  acquiesced  in by any Grantor or shall
     remain for 45 days undismissed.

               20(h) A judgment or judgments  for the payment of money in excess
     of the sum of  $50,000  in the  aggregate  shall be  rendered  against  any
     Grantor and either (i) the judgment  creditor  executes on such judgment or
     (ii) such judgment  remains  unpaid or  undischarged  for more than 60 days
     from the date of entry thereof or such longer period during which execution
     of such judgment shall be stayed during an appeal from such judgment.

               20(i) Any  execution or  attachment  shall be issued  whereby any
     substantial part of the property of any Grantor shall be taken or attempted
     to be taken and the same shall not have been  vacated  or stayed  within 30
     days after the issuance thereof.

               20(j) Any  default or event of default  (however  denominated  or
     defined)  shall  occur with  respect to any  indebtedness  of the  Grantors
     (other than the Obligations) permitted under the Credit Agreement.

THE FOREGOING  EVENTS OF DEFAULT,  AND THE REMEDIES UPON EVENT OF DEFAULT AS SET
FORTH BELOW IN SECTION 21, ARE IN ADDITION TO AND  SUPPLEMENT  THE RIGHTS OF THE
SECURED PARTY UNDER THE CREDIT AGREEMENT.

                                       11
<PAGE>
          SECTION 21.  REMEDIES ON DEFAULT.  Upon the  occurrence of an Event of
Default and at any time thereafter:

               21(a) The  Secured  Party may  exercise  and  enforce any and all
     rights and remedies  available  upon  default to a secured  party under the
     Uniform Commercial Code.

               21(b) The  Secured  Party  shall have the right to enter upon and
     into and take  possession of all or such part or parts of the properties of
     the Grantors, including lands, plants, buildings,  Equipment, Inventory and
     other  property as may be necessary or  appropriate  in the judgment of the
     Secured  Party to  permit  or  enable  the  Secured  Party to  manufacture,
     produce,  process,  store or sell or complete the manufacture,  production,
     processing,  storing or sale of all or any part of the  Collateral,  as the
     Secured Party may elect,  and to use and operate said  properties  for said
     purposes  and for  such  length  of  time as the  Secured  Party  may  deem
     necessary  or  appropriate  for said  purposes  without  the payment of any
     compensation  to  Grantors  therefor.  The  Secured  Party may  require the
     Grantors to, and the Grantors hereby agree that they will, at their expense
     and upon request of the Secured  Party  forthwith,  assemble all or part of
     the  Collateral  as directed by the Secured  Party and make it available to
     the  Secured  Party at a place or places to be  designated  by the  Secured
     Party.

               21(c) Any sale of  Collateral  may be in one or more  parcels  at
     public or private sale, at any of the Secured Party's offices or elsewhere,
     for cash, on credit,  or for future delivery,  and upon such other terms as
     the Secured Party may reasonably believe are commercially  reasonable.  The
     Secured  Party  shall  not be  obligated  to make  any  sale of  Collateral
     regardless  of notice of sale having been given,  and the Secured Party may
     adjourn any public or private sale from time to time by  announcement  made
     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.

               21(d)  The  Secured  Party is hereby  granted a license  or other
     right to use,  without charge,  all of the Grantors'  property,  including,
     without limitation,  all of the Grantors' labels,  trademarks,  copyrights,
     patents and advertising  matter, or any property of a similar nature, as it
     pertains to the Collateral,  in completing  production of,  advertising for
     sale and  selling  any  Collateral,  and the  Grantors'  rights  under  all
     licenses and all franchise  agreements  shall inure to the Secured  Party's
     benefit until the Obligations are paid in full.

               21(e) If notice to the  Grantors of any intended  disposition  of
     Collateral or any other intended  action is required by law in a particular
     instance,  such notice shall be deemed commercially  reasonable if given in
     the manner specified for the giving of notice in Section 25 hereof at least
     ten  calendar  days  prior to the  date of  intended  disposition  or other
     action,  and the  Secured  Party may  exercise or enforce any and all other
     rights or remedies  available by law or agreement  against the  Collateral,
     against the Grantors, or against any other Person or property.

                                       12
<PAGE>
          SECTION 22. APPLICATION OF PROCEEDS. All cash proceeds received by the
Secured Party in respect of any sale of,  collection from, or other  realization
upon all or any part of the  Collateral  may, in the  discretion  of the Secured
Party,  be held by the Secured Party as  collateral  for, or then or at any time
thereafter be applied in whole or in part by the Secured Party  against,  all or
any part of the Obligations (including,  without limitation, any expenses of the
Secured Party payable pursuant to Section 23 hereof).

          SECTION 23. COSTS AND  EXPENSES;  INDEMNITY.  The Grantors will pay or
reimburse the Secured Party on demand for all out-of-pocket  expenses (including
in each case all filing and recording fees and taxes and all reasonable fees and
expenses of counsel and of any experts and agents) incurred by the Secured Party
in  connection  with  the  creation,   perfection,   protection,   satisfaction,
foreclosure  or  enforcement  of the  Security  Interest  and  the  preparation,
administration, continuance, amendment or enforcement of this Agreement, and all
such costs and expenses shall be part of the Obligations secured by the Security
Interest.  The Grantors shall indemnify and hold the Secured Party harmless from
and against any and all claims,  losses and  liabilities  (including  reasonable
attorneys'  fees)  growing  out of or  resulting  from  this  Agreement  and the
Security  Interest hereby created  (including  enforcement of this Agreement) or
the  Secured  Party's  actions  pursuant  hereto,   except  claims,   losses  or
liabilities  resulting  from the Secured  Party's  gross  negligence  or willful
misconduct  as  determined  by  a  final   judgment  of  a  court  of  competent
jurisdiction.  Any  liability of the Grantors to indemnify  and hold the Secured
Party  harmless  pursuant  to  the  preceding  sentence  shall  be  part  of the
Obligations  secured by the Security  Interest.  The obligations of the Grantors
under this Section shall survive any termination of this Agreement.

          SECTION 24.  WAIVERS;  REMEDIES;  MARSHALLING.  This  Agreement can be
waived, modified,  amended,  terminated or discharged, and the Security Interest
can be released,  only  explicitly in a writing  signed by the Secured  Party. A
waiver so signed  shall be effective  only in the specific  instance and for the
specific  purpose  given.  Mere delay or failure to act shall not  preclude  the
exercise or  enforcement  of any rights and  remedies  available  to the Secured
Party.  All rights and remedies of the Secured Party shall be cumulative and may
be exercised singly in any order or sequence,  or  concurrently,  at the Secured
Party's  option,  and the  exercise or  enforcement  of any such right or remedy
shall  neither be a  condition  to nor bar the  exercise or  enforcement  of any
other.  The Grantors hereby waive all  requirements of law, if any,  relating to
the  marshalling  of assets which would be  applicable  in  connection  with the
enforcement by the Secured Party of its remedies hereunder, absent this waiver.

          SECTION 25. NOTICES. Any notice or other communication to any party in
connection  with this Agreement  shall be in writing and shall be sent by manual
delivery,  telegram, telex, facsimile transmission,  overnight courier or United
States mail (postage  prepaid)  addressed to such party at the address specified
on the signature page hereof,  or at such other address as such party shall have
specified to the other party  hereto in writing.  All periods of notice shall be
measured from the date of delivery thereof if manually delivered,  from the date
of sending thereof if sent by telegram,  telex or facsimile  transmission,  from
the first  business day after the date of sending if sent by overnight  courier,
or from four days after the date of mailing if mailed.

                                       13
<PAGE>
          SECTION 26. GRANTORS' ACKNOWLEDGMENTS. The Grantors hereby acknowledge
that  (a)  they  has  been  advised  by (or has had  full  opportunity  to avail
themselves of the advice of) counsel in the negotiation,  execution and delivery
of this  Agreement,  (b) the Secured Party has no fiduciary  relationship to the
Grantors,  the relationship being solely that of debtor and creditor, and (c) no
joint venture exists between the Grantors and the Secured Party.

          SECTION 27.  CONTINUING  SECURITY  INTEREST;  ASSIGNMENTS UNDER CREDIT
AGREEMENT. This Agreement shall (a) create a continuing security interest in the
Collateral  and shall remain in full force and effect  until  payment in full of
the Obligations, (b) be binding upon the Grantors, their successors and assigns,
and (c) inure to the benefit of, and be  enforceable  by, the Secured  Party and
its successors, transferees, and assigns. Without limiting the generality of the
foregoing clause (c), the Secured Party may assign or otherwise  transfer all or
any  portion of its rights and  obligations  under the Credit  Agreement  to any
other Persons to the extent and in the manner  provided in the Credit  Agreement
and may similarly  transfer all or any portion of its rights under this Security
Agreement to such Persons.

          SECTION 28. TERMINATION OF SECURITY INTEREST.  Upon payment in full of
the Obligations,  the Security Interest granted hereby shall terminate. Upon any
such  termination,  the Secured  Party will return to the  Grantors  such of the
Collateral  then in the  possession  of the Secured Party as shall not have been
sold or otherwise  applied  pursuant to the terms hereof and execute and deliver
to the  Grantors  such  documents as the Grantors  shall  reasonably  request to
evidence  such   termination.   Any  reversion  or  return  of  Collateral  upon
termination  of this  Agreement and any  instruments  of transfer or termination
shall be at the expense of the  Grantors  and shall be without  warranty  by, or
recourse on, the Secured Party. As used in this Section, "Grantors" includes any
assigns of Grantors,  any Person holding a subordinate  security interest in any
of the  Collateral  or whoever else may be lawfully  entitled to any part of the
Collateral.

          SECTION 29.  CONFIDENTIALITY  OF INFORMATION.  The Secured Party shall
use  reasonable  efforts to assure  that  information  about the Grantor and its
operations,  affairs and financial  condition,  not  generally  disclosed to the
public or to trade and other creditors,  which is furnished to the Secured Party
pursuant  to the  provisions  hereof  is  used  only  for the  purposes  of this
Agreement and any other  relationship  between Secured Party and the Grantor and
shall be divulged to any Person other than the  Affiliates  of the Secured Party
and their respective  officers,  directors employees and agents,  except: (a) to
their attorneys and  accountants,  (b) in connection with the enforcement of the
rights of the Secured Party  hereunder and under the Loan Documents or otherwise
in connection with applicable litigation, (c) in connection with assignments and
participations  and the  solicitation of prospective  assignees and participants
referred to in Section 8.6 of the Credit Agreement,  and (d) as may otherwise be
required or requested  by any  regulatory  authority  having  jurisdiction  over
Secured Party or by any applicable  law, rule,  regulation or judicial  process,
the opinion of Secured Party's counsel  concerning the making of such disclosure
to be binding on the parties hereto.

                                       14
<PAGE>
          SECTION 30. GOVERNING LAW AND CONSTRUCTION. THE VALIDITY, CONSTRUCTION
AND  ENFORCEABILITY OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF  MINNESOTA,  WITHOUT  GIVING EFFECT TO CONFLICT OF LAWS  PRINCIPLES  THEREOF,
EXCEPT TO THE EXTENT THAT THE VALIDITY OR  PERFECTION  OF THE SECURITY  INTEREST
HEREUNDER,  OR REMEDIES HEREUNDER,  IN RESPECT OF ANY PARTICULAR  COLLATERAL ARE
MANDATORILY  GOVERNED  BY THE LAWS OF A  JURISDICTION  OTHER  THAN THE  STATE OF
MINNESOTA.  Whenever  possible,  each  provision of this Agreement and any other
statement,  instrument or  transaction  contemplated  hereby or relating  hereto
shall be  interpreted  in such  manner as to be  effective  and valid under such
applicable law, but, if any provision of this Agreement or any other  statement,
instrument or transaction  contemplated  hereby or relating hereto shall be held
to be prohibited or invalid under such  applicable  law, such provision shall be
ineffective  only to the  extent  of such  prohibition  or  invalidity,  without
invalidating the remainder of such provision or the remaining provisions of this
Agreement or any other statement,  instrument or transaction contemplated hereby
or relating hereto.

          SECTION  31.  CONSENT TO  JURISDICTION.  AT THE OPTION OF THE  SECURED
PARTY,  THIS  AGREEMENT MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA  STATE
COURT SITTING IN HENNEPIN  COUNTY;  AND THE GRANTOR CONSENTS TO THE JURISDICTION
AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS
NOT  CONVENIENT.  IN THE EVENT  THE  GRANTOR  COMMENCES  ANY  ACTION IN  ANOTHER
JURISDICTION  OR VENUE UNDER ANY TORT OR  CONTRACT  THEORY  ARISING  DIRECTLY OR
INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, THE SECURED PARTY AT
ITS  OPTION  SHALL  BE  ENTITLED  TO HAVE  THE  CASE  TRANSFERRED  TO ONE OF THE
JURISDICTIONS  AND  VENUES  ABOVE-DESCRIBED,  OR  IF  SUCH  TRANSFER  CANNOT  BE
ACCOMPLISHED   UNDER  APPLICABLE  LAW,  TO  HAVE  SUCH  CASE  DISMISSED  WITHOUT
PREJUDICE.

          SECTION 32.  WAIVER OF NOTICE AND HEARING.  THE GRANTOR  HEREBY WAIVES
ALL  RIGHTS TO A  JUDICIAL  HEARING  OF ANY KIND  PRIOR TO THE  EXERCISE  BY THE
SECURED  PARTY OF ITS RIGHTS TO POSSESSION OF THE  COLLATERAL  WITHOUT  JUDICIAL
PROCESS OR OF ITS RIGHTS TO REPLEVY, ATTACH, OR LEVY UPON THE COLLATERAL WITHOUT
PRIOR NOTICE OR HEARING.  THE GRANTOR  ACKNOWLEDGES  THAT IT HAS BEEN ADVISED BY
COUNSEL OF ITS CHOICE WITH RESPECT TO THIS PROVISION AND THIS AGREEMENT.

          SECTION 33. WAIVER OF JURY TRIAL.  EACH OF THE GRANTOR AND THE SECURED
PARTY, BY ITS ACCEPTANCE OF THIS AGREEMENT, IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL  PROCEEDING  ARISING  OUT OF OR  RELATING  TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                                       15
<PAGE>
          SECTION 34. 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.

          SECTION 35. GENERAL.  All representations and warranties  contained in
this  Agreement or in any other  agreement  between the Grantors and the Secured
Party shall survive the  execution,  delivery and  performance of this Agreement
and the creation and payment of the  Obligations.  The Grantors  waive notice of
the  acceptance  of  this  Agreement  by the  Secured  Party.  Captions  in this
Agreement  are for  reference  and  convenience  only and shall not  affect  the
interpretation or meaning of any provision of this Agreement.

            [The remainder of this page is left intentionally blank]

                                       16
<PAGE>
          IN WITNESS WHEREOF,  the Grantors have caused this Security  Agreement
to be duly executed and delivered by their officer  thereunto duly authorized as
of the date first above written.

                                         POORE BROTHERS, INC.

                                         By
                                            ------------------------------------
                                            Title
3500 South La Cometa Drive
Goodyear, AZ 85338
                                         POORE BROTHERS ARIZONA, INC.

                                         By
                                            ------------------------------------
                                            Title
3500 South La Cometa Drive
Goodyear, AZ 85338
                                         POORE BROTHERS DISTRIBUTING, INC.

                                         By
                                            ------------------------------------
                                            Title
3500 South La Cometa Drive
Goodyear, AZ 85338
                                         TEJAS PB DISTRIBUTING, INC.

                                         By
                                            ------------------------------------
                                            Title
3500 South La Cometa Drive
Goodyear, AZ 85338
                                         WABASH FOODS, LLC

                                         By
                                            ------------------------------------
                                            Title
3500 South La Cometa Drive
Goodyear, AZ 85338

Grantors' Tax ID # 86-0786101


Address for Secured Party :
U.S. Bancorp Republic Commercial Finance, Inc.
2338 Central Avenue NE, Suite 200
Minneapolis, MN  55418
Fax: (612) 782-1801

                                       16