EXHIBIT 10.4

                               SECURITY AGREEMENT


            SURREY, INC. ("Debtor"), a Texas corporation, whose address is 13110
Trails End Road, Leander, Texas 78641, and CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION ("Secured Party"), a national banking association, whose address is
700 Lavaca, Austin, Texas 78701, Attn: Manager, Commercial Lending Division,
agree as follows:

                                    ARTICLE 1
                          CREATION OF SECURITY INTEREST

            In order to secure the prompt and unconditional payment of the
indebtedness herein referred to and the performance of the obligations,
covenants, agreements and undertakings herein described, Debtor hereby grants to
Secured Party a security interest in and mortgages, assigns, transfers,
delivers, pledges, sets over and confirms to Secured Party all of Debtor's
remedies, powers, privileges, rights, titles and interests (including all power
of Debtor, if any, to pass greater title than it has itself) of every kind and
character now owned or hereafter acquired, created or arising in and to the
following:

                                    ACCOUNTS

            (i)         all accounts, receivables, accounts receivable, general
                        intangibles regardless of form (including all choses or
                        things in action, trade names, trademarks, patents,
                        patents pending, infringement claims, service marks,
                        licenses, copyrights, blueprints, draw ings, plans,
                        diagrams, schematics, computer programs, computer tapes,
                        computer discs, reports, catalogs, customer lists,
                        purchase orders, goodwill, route lists, monies due or
                        recoverable from pension funds, tax refunds and all
                        rights to any of the foregoing), book debts, contract
                        rights and rights to payment no matter how evidenced
                        (including those accounts listed on the Schedule or
                        Schedules which may from time to time be attached
                        hereto);

            (ii)        all chattel paper, notes, drafts, acceptances, payments
                        under leases of equipment or sale of inventory, and
                        other forms of obligations received by or belonging to
                        Debtor for goods sold or leased and/or services rendered
                        by Debtor;

            (iii)       all purchase orders, instruments and other documents
                        (including all documents of title) evidencing
                        obligations to Debtor, including those for or
                        representing obligations for goods sold or leased and/or
                        services rendered by Debtor;

            (iv)        all monies due or to become due to Debtor under all
                        contracts, including those for the sale or lease of
                        goods and/or performance of services by Debtor no matter
                        how evidenced and whether or not earned by performance;

            (v)         all accounts, receivables, accounts receivable, contract
                        rights, and general intangibles arising as a result of
                        Debtor's having paid accounts payable (or having had
                        goods sold

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                        to or leased to Debtor or services performed for Debtor
                        giving rise to accounts payable) which accounts payable
                        were paid for or were incurred by Debtor on behalf of
                        any third parties pursuant to an agreement or otherwise;

            (vi)        all goods, the sale and delivery of which give rise to
                        any of the foregoing, including any such goods which are
                        returned to Debtor for credit;

                                    INVENTORY

            all goods, merchandise, raw materials, work in process, finished
            goods, and other tangible personal property of whatever nature now
            owned by Debtor or hereafter from time to time existing or acquired,
            wherever located and held for sale or lease, including those held
            for display or demonstration or out on lease or consignment, or
            furnished or to be furnished under contracts of service or used or
            usable or consumed or consumable in Debtor's business or which are
            finished or unfinished goods and all accessions and appurtenances
            thereto, together with all warehouse receipts and other documents
            evidencing any of the same and all containers, packing, packaging,
            shipping and similar materials;

                                    EQUIPMENT

            all goods, equipment, machinery, furnishings, fixtures, furniture,
            appliances, accessories, leasehold improvements, chattels and other
            articles of personal property of whatever nature (whether or not the
            same constitute fixtures) now owned by Debtor or hereafter acquired,
            and all component parts thereof and all appurtenances thereto;

all accessions, appurtenances and additions to and substitutions for any of the
foregoing and all products and proceeds of any of the foregoing, together with
all renewals and replacements of any of the foregoing, all accounts,
receivables, account receivables, instruments, notes, chattel paper, documents
(including all documents of title), books, records, contract rights and general
intangibles arising in connection with any of the foregoing (including all
insurance and claims for insurance affected or held for the benefit of Debtor or
Secured Party in respect of the foregoing) and together with all general
intangibles now owned by Debtor or existing or hereafter acquired, created or
arising (whether or not related to any of the foregoing property). All of the
properties and interests described in this Article are herein collectively
called the "Collateral." The inclusion of proceeds does not authorize Debtor to
sell, dispose of or otherwise use the Collateral in any manner not authorized
herein. The Collateral includes all property of Debtor this day delivered to and
deposited with Secured Party, and all money and property of Debtor heretofore
delivered or which shall hereafter be delivered to or come into the possession,
custody or control of Secured Party in any manner or for any purpose whatever
during the existence of this Agreement, and whether held in a general or special
account, or deposited for safekeeping or otherwise, and all other property which
Debtor may hereafter become entitled to receive on account of such property, and
in the event Debtor receives any such property, Debtor will immediately deliver
same to Secured Party to be held by Secured Party in the same manner as the
property originally deposited as Collateral. It is expressly contemplated that
additional Collateral may from time to time be pledged to Secured Party 

<PAGE>


as additional security for the Debt (hereinafter defined), and the term
"Collateral" as used herein shall be deemed for all purposes hereof to include
all such Collateral, together with all other property of the types described
above related to the Collateral.

                                    ARTICLE 2
                              SECURED INDEBTEDNESS

            2.1 This Agreement is made to secure all of the following present
and future debt and obligations:

            (a) Note A. All indebtedness now or hereafter evidenced and to be
evidenced by (i) the promissory note dated concurrently herewith in the face
amount of TWO MILLION THREE HUNDRED THOUSAND DOLLARS AND NO/100 ($2,300,000.00),
bearing interest at the rate or rates therein stated, principal and interest
payable to the order of Secured Party on the dates therein stated, with final
payment due on April 8, 2005, executed by Debtor, and (ii) any and all past,
concurrent or future modifications, extensions, renewals, rearrangements,
replacements and increases of such note (collectively, the "Note A").

            (b) Note B. All indebtedness now or hereafter evidenced and to be
evidenced by (i) the promissory note dated concurrently herewith in the face
amount of ONE MILLION DOLLARS AND NO/100 ($1,000,000.00), bearing interest at
the rate or rates therein stated, principal and interest payable to the order of
Secured Party on the dates therein stated, with final payment due on April 8,
2000, executed by Debtor, and (ii) any and all past, concurrent or future
modifications, extensions, renewals, rearrangements, replacements and increases
of such note (collectively, "Note B").

            (c) All obligations and indebtedness of Debtor now or hereafter
created or incurred under the Loan Agreement dated concurrently herewith between
Debtor and Secured Party, as the same may be amended, supplemented, restated or
replaced from time to time.

            (d) All obligations and indebtedness of Debtor now or hereafter
created or incurred under the Construction Loan Agreement dated concurrently
herewith between Debtor and Secured Party, as the same may be amended,
supplemented, restated or replaced from time to time (collectively, the "Loan
Agreement").

            (e) All obligations and indebtedness of Debtor under (i) any ISDA
Master Agreement, or other similar agreement, however designated, now existing
or hereafter entered into between Debtor and Secured Party, as the same may be
amended, supplemented, restated or replaced from time to time and (ii) all
related writings or agreements now or hereafter executed by Debtor.

            (f) All other obligations, if any, described or referred to in any
other place in this Agreement.

<PAGE>


            (g) Any and all sums and the interest which accrues on them as
provided in this Agreement which Secured Party may advance or which Debtor may
owe Secured Party pursuant to this Agreement on account of Debtor's failure to
keep, observe or perform any of Debtor's covenants under this Agreement.

            (h) All present and future debts and obligations under or pursuant
to (1) any papers ("Credit Documents") now or in the future governing,
evidencing, guaranteeing or securing or otherwise relating to payment of all or
any part of the debt evidenced by Note A, Note B and/or any of the other
indebtedness herein described, or (2) all supplements, amendments, restatements,
renewals, extensions, rearrangements, increases, expansions or replacements of
them.

            (i) All other present and future debt or other obligations of Debtor
now or hereafter held or owned by Secured Party, whether direct or indirect,
primary or secondary, fixed or contingent, several, joint or joint and several,
and regardless of how incurred, evidenced, guaranteed or otherwise secured,
including any present or future debt under any credit or loan agreement, any
letter of credit application, any reimbursement, repurchase, reverse repurchase,
swap or other agreement which absolutely or contingently creates any financial
obligation, any guaranty or any other papers previously, concurrently or later
executed by Debtor, or accepted by Debtor as binding upon Debtor. Debtor and
Secured Party presently contemplate that Secured Party may at Secured Party's
election lend sums or extend other financial accommodations to Debtor or for
Debtor's account or benefit in the future and may acquire and become the owner
and holder of other debt or obligations of Debtor from time to time, but that
Secured Party has no obligation to do so. Debtor agrees that if Debtor should
thus become indebted to Secured Party in any such additional sums (except in
cases where Debtor and Secured Party have expressly agreed in writing to a
different rate, a different maturity or both) all such other or future debt
shall be due and payable on demand, the principal of such debt shall bear
interest at the Past Due Rate (as defined in Section 4.2 below) from the date of
its accrual, however it accrues, until paid, and all such other debt, both
principal and interest, shall be secured by this Agreement as well as by any and
all other security which Secured Party may now or hereafter hold for it.

            2.2 The term "Note" means, collectively, Note A and Note B. The term
"Debt" means and includes every Note and all other debt and obligations
described or referred to in Section 2.1. The Debt includes interest and other
obligations accruing or arising after (a) commencement of any case under any
bankruptcy or similar laws by or against Debtor or any other person or entity
now or hereafter primarily or secondarily obligated to pay all or any part of
the Debt (Debtor and each such other person or entity being herein called an
"Obligor") or (b) the obligations of any Obligor shall cease to exist by
operation of law or for any other reason. The Debt also includes all reasonable
attorneys' fees and any other expenses incurred by Secured Party in enforcing
any of the Credit Documents.

                                    ARTICLE 3
                         REPRESENTATIONS AND WARRANTIES

            Debtor represents and warrants as follows:

<PAGE>


            (a) Debtor is the legal and equitable owner and holder of good and
marketable title to the Collateral free of any adverse claim and free of any
security interest or encumbrance except only for the security interest granted
hereby in the Collateral, those other security interests (if any) expressly
referred to or described in this Agreement, those security interests in favor of
Norwest Bank Texas, N.A. to be released contemporaneously with the execution of
this Agreement and those security interests permitted under the Loan Agreements
(such warranty to supersede any provision contained in this Agreement limiting
the liability of Debtor). Debtor agrees to defend the Collateral and its
proceeds against all claims and demands of any person at any time claiming the
Collateral, its proceeds or any interest in either. Debtor has not heretofore
signed any financing statement directly or indirectly affecting the Collateral
or any part of it which has not been completely terminated of record, and no
such financing statement signed by Debtor is now on file in any public office
except only those statements (if any) true and correct copies of which Debtor
has actually delivered to Secured Party.

            (b) The location of Debtor is the address set forth at the beginning
of this Agreement and in this regard, Debtor's location is defined to mean (i)
Debtor's place of business if Debtor has only one such place of business; (ii)
Debtor's chief executive office if Debtor has more than one place of business;
or (iii) Debtor's residence if Debtor has no place of business.

            (c) All of Debtor's books and records with regard to the Collateral
are maintained and kept at the address of Debtor set forth in this Agreement.

            (d) Except for automobiles of Debtor which constitute Equipment, no
part of the Collateral is covered by a certificate of title or subject to any
certificate of title law.

            (e) No part of the Collateral consists or will consist of consumer
goods, farm products, timber, minerals and the like (including oil and gas) or
accounts resulting from the sale thereof.

            (f) Debtor has not changed its name, whether by amendment of its
organizational documents or otherwise, during the last five (5) years.

            (g) Except as otherwise expressly permitted by this Agreement or the
Loan Agreement, the liens and security interests of this Agreement will
constitute valid and perfected first and prior liens and security interests on
the Collateral, subject to no other liens, security interests or charges
whatsoever. The Collateral is free from damage caused by fire or other casualty.

                                    ARTICLE 4
                                    COVENANTS

            4.1 Debtor covenants and agrees with Secured Party as follows:

            (a) Debtor shall furnish to Secured Party such instruments as may be
required by Secured Party to assure the transferability of the Collateral when
and as often as may be requested by Secured Party.

<PAGE>


            (b) Debtor will cause to be paid before delinquency all taxes,
charges, liens and assessments heretofore or hereafter levied or assessed
against the Collateral, or any part thereof, or against Secured Party for or on
account of the Debt or the interest created by this Agreement; provided,
however, nothing contained herein shall require payment of such taxes and
assessments so long as any claims which may be asserted against Debtor with
respect to such taxes and assessments shall be contested diligently and in good
faith and reserves with respect thereto deemed adequate by Secured Party shall
be established. Debtor will furnish Secured Party with receipts showing payment
of such taxes and assessments (except to the extent being so contested) at least
ten (10) days before the applicable default date therefor.

            (c) If the validity or priority of this Agreement or of any rights,
titles, security interests or other interests created or evidenced hereby shall
be attacked, endangered or questioned or if any legal proceedings are instituted
with respect thereto, Debtor will give prompt written notice thereof to Secured
Party and at Debtor's own cost and expense will diligently endeavor to cure any
defect that may be developed or claimed, and will take all necessary and proper
steps for the defense of such legal proceedings, and Secured Party (whether or
not named as a party to legal proceedings with respect thereto) is hereby
authorized and empowered to take such additional steps as in its judgment and
discretion may be necessary or proper for the defense of any such legal
proceedings or the protection of the validity or priority of this Agreement and
the rights, titles, security interests and other interests created or evidenced
hereby, and all expenses so incurred of every kind and character shall
constitute sums advanced pursuant to Section 4.2 of this Agreement.

            (d) Debtor will, on request of Secured Party, (i) promptly correct
any defect, error or omission which may be discovered in the contents of this
Agreement or in any other instrument executed in connection herewith or in the
execution or acknowledgment thereof; (ii) execute, acknowledge, deliver and
record or file such further instruments (including further security agree ments,
financing statements and continuation statements) and do such further acts as
may be necessary, desirable or proper to carry out more effectively the purposes
of this Agreement and such other instruments and to subject to the security
interests hereof and thereof any property intended by the terms hereof and
thereof to be covered hereby and thereby including specifically any renewals,
additions, substitutions, replacements or appurtenances to the then Collateral;
and (iii) execute, acknowledge, deliver, procure and record or file any document
or instrument (including specifically any financing statement) deemed advisable
by Secured Party to protect the security interest hereunder against the rights
or interests of third persons, and Debtor will pay all costs connected with any
of the foregoing.

            (e) Notwithstanding the security interest in proceeds granted
herein, except for the sale of inventory in the ordinary course of business,
Debtor will not, except as otherwise expressly permitted herein, sell, lease,
exchange, lend, rent, assign, transfer or otherwise dispose of, or pledge,
hypothecate or grant any security interest in, or permit to exist any lien,
security interest, charge or encumbrance against, all or any part of the
Collateral or any interest therein or permit any of the foregoing to occur or
arise or permit title to the Collateral, or any interest therein, to be vested
in any other party, in any manner whatsoever, by operation of law or otherwise,
without the prior written 

<PAGE>


consent of Secured Party. Except as permitted in the Loan Agreement, Debtor
shall not, without the prior written consent of Secured Party, (i) acquire any
such Collateral under any arrangement whereby the seller or any other person
retains or acquires any security interest in such Collateral or (ii) return or
give possession of any such Collateral to any supplier or any other person
except in the ordinary course of business.

            (f) Debtor shall account fully and faithfully for and, if Secured
Party so elects, shall promptly pay or turn over to Secured Party (subject to
any prior rights of holders of purchase money security interests in any
equipment comprising a portion of the Collateral) the proceeds in whatever form
received from the sale or disposition or realization in any manner of any of the
Collateral, whether the Debt is mature or not; provided, however, (1) proceeds
from the sale of inventory in the ordinary course of business will not be
required to be delivered to Secured Party unless an Event of Default exists and
(2) proceeds from the sale of equipment will not be required to be delivered to
Secured Party unless an Event of Default exists, as long as such proceeds are
reinvested by Debtor in replacement equipment with a value at least equal to
that of the replaced equipment. Debtor shall at all times keep the Collateral
and its proceeds separate and distinct from other property of Debtor and shall
keep accurate and complete records of the Collateral and its proceeds. Debtor
shall, where applicable, at Debtor's own expense take all reasonable and
appropriate steps to enforce the collection of the Collateral and items
representing proceeds thereof.

            (g) Debtor shall from time to time at the request of Secured Party
furnish Secured Party with a schedule of the Collateral constituting the
Collateral, containing such information as Secured Party may specify, and a list
of all those liable on checks, notes, drafts and other instruments representing
the proceeds of any of the Collateral. Secured Party shall also have the right
to make test verifications of the Collateral or any portion thereof.

            (h) Debtor shall at all times keep accurate books and records
reflecting all facts concerning the Collateral including those pertaining to
Debtor's warranties, representations and agreements under this Agreement.
Immediately upon the execution of this Agreement, Debtor will make or allow
Secured Party to make written designation on Debtor's books and records to
reflect thereon the assignment to Secured Party of the Collateral covered by
this Agreement; provided, however, that the failure of Debtor and/or Secured
Party to make such a written designation shall not affect the rights of Secured
Party to any of the Collateral.

            (i) If the Collateral is evidenced by promissory notes, trade
acceptances or other instruments for the payment of money, Debtor will, at the
request of Secured Party, immediately deliver them to Secured Party,
appropriately endorsed in blank, and regardless of the form of endorsement,
Debtor waives presentment, demand, notice of dishonor, protest and notice of
protest.

            (j) Debtor will not use, or allow the use of, the Collateral in any
manner which constitutes a public or private nuisance or which makes void,
voidable or cancelable, or increases the premium of, any insurance then in force
with respect thereto. Debtor will not do or suffer to be done any act whereby
the value of any part of the Collateral may be lessened.

<PAGE>


            (k) Debtor agrees to provide, maintain and keep in force casualty,
liability and other insurance for that portion of the Collateral which is
tangible personal property as required by Secured Party. Debtor agrees that all
required insurance will be written on forms acceptable to Secured Party and by
companies having a Best's Insurance Guide Rating of not less than A or A+ and
which are otherwise acceptable to Secured Party, and that such insurance (other
than third party liability insurance) shall be written or endorsed so that all
losses are payable to Secured Party. Original certificates evidencing such
insurance and, if requested by Secured Party, copies of the insurance policies
evidencing such insurance shall be delivered by Debtor to Secured Party and held
by Secured Party. Each such policy shall expressly prohibit cancellation or
modification of insurance without thirty (30) days' written notice to Secured
Party. Debtor agrees to furnish due proof of payment of the premiums for all
such insurance to Secured Party promptly after each such payment is made and in
any case at least fifteen (15) days before payment becomes delinquent. Debtor
hereby assigns to Secured Party the exclusive right to collect any and all
monies that may become payable under any insurance policies covering any part of
the Collateral, or any risk to or about the Collateral. Foreclosure of this
Agreement shall automatically constitute foreclosure upon all policies of
insurance insuring any part of or risk to the Collateral and all claims
thereunder arising from post-foreclosure events. The successful bidder or
bidders for the Collateral at foreclosure, as their respective interests may
appear, shall automatically accede to all of Debtor's rights in, under and to
such policies and all post-foreclosure event claims, and such bidder(s) shall be
named as insured(s) on request, whether or not the bill of sale to any such
successful bidder mentions insurance. All proceeds of insurance which was paid
for by Debtor or by anyone other than Secured Party or another holder of any of
the Debt and which proceeds are actually received by Secured Party before
foreclosure shall be applied in payment of the Debt or, at the option of Secured
Party, shall be paid to Debtor or to such other person as is legally entitled to
them. Unless Secured Party or Secured Party's representative reserves at the
foreclosure sale the right to collect any uncollected insurance proceeds
recoverable for events occurring before foreclosure (in which event the
successful bidder at the sale, if not Secured Party, shall have no interest in
such proceeds and Secured Party shall apply them, if and when collected, to the
Debt in such order and manner as Secured Party shall then elect and remit any
remaining balance to Debtor or to such other person or entity as is legally
entitled to them), all proceeds of all such insurance which are not so reserved
by Secured Party at the foreclosure sale and are not actually received by
Secured Party until after foreclosure shall be the property of the successful
bidder or bidders at foreclosure, as their interests may appear, and Debtor
shall have no interest in them and shall receive no credit for them. Secured
Party shall have no duty to Debtor or anyone else to either require or provide
any insurance or to determine the adequacy or disclose any inadequacy of any
insurance. If Secured Party elects at any time or for any reason to purchase
insurance relating to the Collateral, it shall have no obligation to cause
Debtor or anyone else to be named as an insured, to cause Debtor's or anyone
else's interests to be insured or protected or to inform Debtor or anyone else
that his or its interests are uninsured or underinsured.

            (l) Except as otherwise expressly permitted herein, the Collateral
is and shall remain in Debtor's possession or control at all times at Debtor's
risk of loss at Debtor's location as stated herein, where Secured Party may
inspect it at any time, except in connection with any sale thereof permitted
hereby and except for its temporary removal in connection with its ordinary use
or unless

<PAGE>


Debtor notifies Secured Party in writing and Secured Party consents in writing
in advance of its removal to another location.

            (m) Immediately upon obtaining knowledge of the institution of any
proceedings arising out of injury or damage to the Collateral, or any portion
thereof, Debtor will notify Secured Party in writing of the pendency of such
proceedings. Secured Party may participate in any such proceedings, and Debtor
shall from time to time deliver to Secured Party all instruments requested by it
to permit such participation. Debtor shall, at its expense, diligently prosecute
any such proceedings, and shall consult with Secured Party, its attorneys and
experts, and cooperate with them in the carrying on or defense of any such
proceedings.

            (n) Debtor shall furnish to Secured Party from time to time such
information relating to the Collateral or Debtor's financial condition and
affairs as Secured Party may from time to time request or as may be required
from time to time by any Credit Document.

            (o) In the event any goods, the sale or other disposition of which
creates any of the Collateral described in Article 1 under the caption
"Accounts" (herein also sometimes collectively called "Accounts") which is
included in the Collateral, are returned to Debtor for credit, unless such
return would not cause the amounts outstanding under Note B to exceed the
Borrowing Base (as defined in the Loan Agreement), Debtor will promptly pay to
Secured Party the full amount of any advance made with respect to such Account,
and until such payment has been made, will hold such goods separate and apart
from Debtor's own property in trust for Secured Party and will immediately
notify Secured Party of such return.

            (p) Debtor shall, within ten (10) days after Debtor has knowledge of
the applicable circumstances and in any event before any further advance of
funds by Secured Party secured hereby, notify Secured Party in writing in the
event any Account fails to constitute an "Eligible Account" (as defined in the
Loan Agreement) (and repay to Secured Party the amount of any advance made with
respect to such Account if the failure of such Account to constitute an Eligible
Account would cause the amounts outstanding under Note B to exceed the Borrowing
Base). Nothing in this paragraph shall be construed to limit or release any
right of Secured Party to any Collateral arising pursuant to Article 1 of this
Agreement.

            (q) Debtor will not agree to a material modification of any of the
terms of any Account without the prior written consent of Secured Party.

            (r) Until the occurrence of an Event of Default (as hereinafter
defined), Debtor may use the Collateral described in Article 1 under the caption
"Inventory" in any lawful manner not inconsistent with this Agreement or with
the terms or conditions of any policy of insurance thereon and may also sell or
lease such Collateral in the ordinary course of business. A sale in the ordinary
course of business does not include a transfer in partial or total satisfaction
of a debt. Until the occurrence of an Event of Default, Debtor may also use and
consume any raw materials or supplies, the use and consumption of which are
necessary to carry on Debtor's business.

<PAGE>


            (s) Except as disclosed to Secured Party in writing, none of the
Collateral described in Article 1 under the caption "Equipment" is or shall be
wholly or partly affixed to real estate or other goods so as to become fixtures
on such real estate or accessions to such other goods. To the extent any of such
Collateral is or shall be wholly or partly affixed to real estate or other goods
so as to become fixtures on such real estate or accessions to such other goods,
Debtor has supplied to Secured Party a description of the real estate or other
goods to which such Collateral is or shall be wholly or partly affixed. Said
real estate is not subject to any lien or mortgage except as disclosed to
Secured Party in writing. Debtor will, on demand by Secured Party, furnish or
cause to be furnished to Secured Party a disclaimer or disclaimers, signed by
all persons having an interest in the applicable real estate or other goods to
which such Collateral is or shall be wholly or partly affixed, of any interest
in such Collateral which is before Secured Party's interest.

            (t) The Collateral described in Article 1 under the caption
"Equipment" will be used in the business of Debtor.

            (u) If Secured Party is a state or national bank and if any natural
person executing this Agreement is a "consumer" as defined in Regulation AA of
the Board of Governors of the Federal Reserve System, no security interest
created or evidenced by this Agreement shall extend to, cover or affect
"household goods" as also defined therein and no waiver of the rights of Debtor
contained in this or any other instrument shall extend to, or be effective as
to, any right the waiver of which is prohibited by Regulation AA. If Secured
Party is not a state or national bank and if any natural person executing this
Agreement is a "consumer" as defined in 16 C.F.R. ss. 444.1(d), as amended, no
lien or security interest created or evidenced by this Agreement shall extend
to, cover or affect "household goods" as defined in 16 C.F.R. ss. 444.1(a), as
amended and no waiver of the rights of Debtor contained in this or any other
instrument shall extend to, or be effective as to, any right the waiver of which
is prohibited by 16 C.F.R ss. 444.

            4.2 If Debtor should fail to comply with any of its agreements,
covenants or obligations under this Agreement, the Note or any other Credit
Document, then Secured Party (in Debtor's name or in Secured Party's own name)
may perform them or cause them to be performed for Debtor's account and at
Debtor's expense, but shall have no obligation to perform any of them or cause
them to be performed. Any and all expenses thus incurred or paid by Secured
Party shall be Debtor's obligations to Secured Party due and payable on demand,
or if no demand is sooner made, then they shall be due on or before four (4)
years after the respective dates on which they were incurred, and each shall
bear interest from the date Secured Party pays it until the date Debtor repays
it to Secured Party, at the maximum nonusurious rate of interest from time to
time permitted by whichever of applicable Texas or federal law from time to time
permits the higher nonusurious interest rate (the "Ceiling Rate"), or, only if
applicable law imposes no maximum nonusurious rate, then at the same rate as is
provided for in Note A for interest on past due principal (the "Past Due Rate").
At all times, if any, that applicable Texas law establishes the Ceiling Rate,
the Ceiling Rate shall be the "weekly ceiling" as defined in Chapter 1D of Title
79, Revised Civil Statutes, 1925 - "Chapter 1D" - and ss.303 of the Texas
Finance Code - "Texas Finance Code" - as amended for that day. Upon making any
such payment or incurring any such expense, Secured Party shall be fully and
automatically subrogated to all of the rights of the person, corporation or body
politic receiving such

<PAGE>


payment. Any amounts owing by Debtor to Secured Party pursuant to this or any
other provision of this Agreement shall automatically and without notice be and
become a part of the Debt and shall be secured by this and all other instruments
securing the Debt. The amount and nature of any such expense and the time when
it was paid shall be fully established by the affidavit of Secured Party or any
of Secured Party's officers or agents. Without notice to Debtor or any other
person or entity, the Ceiling Rate and the Past Due Rate shall automatically
fluctuate upward and downward as and in any amount by which the maximum
nonusurious rate of interest permitted by such applicable law and the rate of
interest as provided for in Note A for interest on past due principal fluctuate,
respectively. The exercise of the privileges granted to Secured Party in this
Section shall in no event be considered or constitute a cure of the default or a
waiver of Secured Party's right at any time after an Event of Default to declare
the Debt to be at once due and payable, but is cumulative of such right and of
all other rights given by this Agreement, the Note and the Credit Documents and
of all rights given Secured Party by law.

                                    ARTICLE 5
             ASSIGNMENT OF PAYMENTS; CERTAIN POWERS OF SECURED PARTY

            Debtor hereby authorizes and directs each account debtor and each
other person or entity obligated to make payment in respect of any of the
Collateral (each a "Collateral Obligor") to pay over to Secured Party, its
officers, agents or assigns, upon demand by Secured Party, all or any part of
the Collateral without making any inquiries as to the status or balance of the
Debt and without any notice to or further consent of Debtor. Debtor hereby
agrees to indemnify each Collateral Obligor and hold each Collateral Obligor
harmless from all expenses and losses which it may incur or suffer as a result
of any payment it makes to Secured Party pursuant to this paragraph. To
facilitate the rights of Secured Party hereunder, Debtor hereby authorizes
Secured Party, its officers, employees, agents or assigns, at any time while an
Event of Default exists:

            (a) to notify Collateral Obligors of Secured Party's security
interest in the Collateral and to collect all or any part of the Collateral
without further notice to or further consent by Debtor, and Debtor hereby
constitutes and appoints Secured Party the true and lawful attorney of Debtor
(such agency being coupled with an interest), irrevocably, with power of
substitution, in the name of Debtor or in its own name or otherwise, to take any
of the actions described in the following clauses (b), (c), (d), (e), (f) and
(g);

            (b) to ask, demand, collect, receive, receipt for, sue for, compound
and give acquittance for any and all amounts which may be or become due or
payable under the Collateral and to settle and/or adjust all disputes and/or
claims directly with any Collateral Obligor and to compromise, extend the time
for payment, arrange for payment in installments, otherwise modify the terms of,
or release, any of the Collateral, on such terms and conditions as Secured Party
may determine (without thereby incurring responsibility to or discharging or
otherwise affecting the liability of Debtor to Secured Party under this
Agreement or otherwise);

            (c) to direct delivery of, receive, open and dispose of all mail
addressed to Debtor and to execute, sign, endorse, transfer and deliver (in the
name of Debtor or in its own name or other-

<PAGE>


wise) any and all receipts or other orders for the payment of money drawn on the
Collateral and all notes, acceptances, commercial paper, drafts, checks, money
orders and other instruments given in payment or in part payment thereof and all
invoices, freight and express bills and bills of lading, storage receipts,
warehouse receipts and other instruments and documents in respect of any of the
Collateral and any other documents necessary to evidence, perfect and realize
upon the security interests and obligations of this Agreement;

            (d) in its discretion to file any claim or take any other action or
proceeding which Secured Party may deem necessary or appropriate to protect and
preserve the rights, titles and interests of Secured Party hereunder;

            (e) to sign the name of Debtor to financing statements, drafts
against Collateral Obligors, assignments or verifications of any of the
Collateral and notices to Collateral Obligors;

            (f) to station one or more representatives of Secured Party on
Debtor's premises for the purpose of exercising any rights, benefits or
privileges available to Secured Party hereunder or under any of the Credit
Documents or at law or in equity, including receiving collections and taking
possession of books and records relating to the Collateral; and

            (g) to cause title to any or all of the Collateral to be transferred
into the name of Secured Party or any nominee or nominees of Secured Party.

The powers conferred on Secured Party pursuant to this Article 5 are conferred
solely to protect Secured Party's interest in the Collateral and shall not
impose any duty or obligation on Secured Party to perform any of the powers
herein conferred. No exercise of any of the rights provided for in this Article
5 shall constitute a retention of collateral in satisfaction of the indebtedness
as provided for in Section 9.505 of the Uniform Commercial Code of Texas.

                                    ARTICLE 6
                                EVENTS OF DEFAULT

            If any Event of Default occurs under the Loan Agreement, then that
shall constitute an Event of Default (herein so called) under this Agreement.

                                    ARTICLE 7
                          REMEDIES IN EVENT OF DEFAULT

            7.1 Upon the occurrence of an Event of Default, and at any time
thereafter:

            (a) Secured Party shall have the option of declaring, without notice
to any person, all Debt to be immediately due and payable.

            (b) Secured Party is authorized, in any legal manner and without
breach of the peace, to take possession of the Collateral (Debtor hereby WAIVING
all claims for damages arising from or 

<PAGE>


connected with any such taking) and of all books, records and accounts relating
thereto and to exercise without interference from Debtor any and all rights
which Debtor has with respect to the management, possession, operation,
protection or preservation of the Collateral, including the right to sell or
rent the same for the account of Debtor and to deduct from such sale proceeds or
such rents all costs, expenses and liabilities of every character incurred by
Secured Party in collecting such sale proceeds or such rents and in managing,
operating, maintaining, protecting or preserving the Collateral and to apply the
remainder of such sales proceeds or such rents on the Debt in such manner as
Secured Party may elect. Before any sale, Secured Party may, at its option,
complete the processing of any of the Collateral and/or repair or recondition
the same to such extent as Secured Party may deem advisable and any sums
expended therefor by Secured Party shall be reimbursed by Debtor. Secured Party
may take possession of Debtor's premises to complete such processing, repairing
and/or reconditioning, using the facilities and other property of Debtor to do
so, to store any Collateral and to conduct any sale as provided for herein, all
without compensation to Debtor. All costs, expenses, and liabilities incurred by
Secured Party in collecting such sales proceeds or such rents, or in managing,
operating, maintaining, protecting or preserving such properties, or in
processing, repairing and/or reconditioning the Collateral if not paid out of
such sales proceeds or such rents as hereinabove provided, shall constitute a
demand obligation owing by Debtor and shall bear interest from the date of
expenditure until paid at the Past Due Rate, all of which shall constitute a
portion of the Debt. If necessary to obtain the possession provided for above,
Secured Party may invoke any and all legal remedies to dispossess Debtor,
including specifically one or more actions for forcible entry and detainer. In
connection with any action taken by Secured Party pursuant to this paragraph,
Secured Party shall not be liable for any loss sustained by Debtor resulting
from any failure to sell or let the Collateral, or any part thereof, or from
other act or omission of Secured Party with respect to the Collateral unless
such loss is caused by the willful misconduct and bad faith of Secured Party,
nor shall Secured Party be obligated to perform or discharge any obligation,
duty, or liability under any sale or lease agreement covering the Collateral or
any part thereof or under or by reason of this instrument or the exercise of
rights or remedies hereunder.

            (c) Secured Party may, without notice except as hereinafter
provided, sell the Collateral or any part thereof at public or private sale
(with or without appraisal or having the Collateral at the place of sale) for
cash, upon credit, or for future delivery, and at such price or prices as
Secured Party may deem best, and Secured Party may be the purchaser of any and
all of the Collateral so sold and may apply upon the purchase price therefor any
of the Debt and thereafter hold the same absolutely free from any right or claim
of whatsoever kind. Upon any such sale Secured Party shall have the right to
deliver, assign and transfer to the purchaser thereof the Collateral so sold.
Each purchaser at any such sale shall hold the property sold absolutely free
from any claim or right of whatsoever kind, including any equity or right of
redemption, stay or appraisal which Debtor has or may have under any rule of law
or statute now existing or hereafter adopted. To the extent notice is required
by applicable law, Secured Party shall give Debtor written notice at the address
set forth herein (which shall satisfy any requirement of notice or reasonable
notice in any applicable statute) of Secured Party's intention to make any such
public or private sale. Such notice (if any is required by applicable law) shall
be personally delivered or mailed, postage prepaid, at least ten (10) calendar
days before the date fixed for a public sale, or at least (10) calendar days
before the date after which the private sale or other disposition is to be made,
unless the Collateral is of a type customarily sold

<PAGE>


on a recognized market, is perishable or threatens to decline speedily in value.
Such notice (if any is required by applicable law), in case of public sale,
shall state the time and place fixed for such sale or, in case of private sale
or other disposition other than a public sale, the time after which the private
sale or other such disposition is to be made. Any public sale shall be held at
such time or times, within the ordinary business hours and at such place or
places, as Secured Party may fix in the notice of such sale. At any sale the
Collateral may be sold in one lot as an entirety or in separate parcels as
Secured Party may determine. Secured Party shall not be obligated to make any
sale pursuant to any such notice. Secured Party may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at any time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the Collateral on credit or
for future delivery, the Collateral so sold may be retained by Secured Party
until the selling price is paid by the purchaser thereof, but Secured Party
shall incur no liability in case of the failure of such purchaser to take up and
pay for the Collateral so sold, and in case of any such failure, such Collateral
may again be sold upon like notice. Each and every method of disposition
described in this Section shall constitute disposition in a commercially
reasonable manner. Each Obligor, to the extent applicable, shall remain liable
for any deficiency.

            (d) Secured Party shall have all the rights of a secured party after
default under the Uniform Commercial Code of Texas and in conjunction with, in
addition to or in substitution for those rights and remedies:

            (i) Secured Party may require Debtor to assemble the Collateral and
make it available at a place Secured Party designates which is mutually
convenient to allow Secured Party to take possession or dispose of the
Collateral; and

            (ii) it shall not be necessary that Secured Party take possession of
the Collateral or any part thereof before the time that any sale pursuant to the
provisions of this Article is conducted and it shall not be necessary that the
Collateral or any part thereof be present at the location of such sale; and

            (iii) before application of proceeds of disposition of the
Collateral to the Debt, such proceeds shall be applied to the reasonable
expenses of retaking, holding, preparing for sale or lease, selling, leasing and
the like and the reasonable attorneys' fees and legal expenses incurred by
Secured Party, each Obligor, to the extent applicable, to remain liable for any
deficiency; and

            (iv) the sale by Secured Party of less than the whole of the
Collateral shall not exhaust the rights of Secured Party hereunder, and Secured
Party is specifically empowered to make successive sale or sales hereunder until
the whole of the Collateral shall be sold; and, if the proceeds of such sale of
less than the whole of the Collateral shall be less than the aggregate of the
Debt, this Agreement and the security interest created hereby shall remain in
full force and effect as to the unsold portion of the Collateral just as though
no sale had been made; and

<PAGE>


            (v) in the event any sale hereunder is not completed or is defective
in the opinion of Secured Party, such sale shall not exhaust the rights of
Secured Party hereunder and Secured Party shall have the right to cause a
subsequent sale or sales to be made hereunder; and

            (vi) any and all statements of fact or other recitals made in any
bill of sale or assignment or other instrument evidencing any foreclosure sale
hereunder as to nonpayment of any indebtedness or as to the occurrence of any
default, or as to Secured Party having declared all of such indebtedness to be
due and payable, or as to notice of time, place and terms of sale and the
Collateral to be sold having been duly given, as to any other act or thing
having been duly done by Secured Party, shall be taken as prima facie evidence
of the truth of the facts so stated and recited; and

            (vii) Secured Party may appoint or delegate any one or more persons
as agent to perform any act or acts necessary or incident to any sale held by
Secured Party, including the sending of notices and the conduct of sale, but in
the name and on behalf of Secured Party; and

            (viii) to the extent allowed by applicable law, demand of
performance, advertisement and presence of property at sale are hereby WAIVED
and Secured Party is hereby authorized to sell hereunder any evidence of debt it
may hold as security for the Debt. To the extent allowed by applicable law, all
demands and presentments of any kind or nature are expressly WAIVED by Debtor.
Debtor WAIVES, to the extent allowed by applicable law, the right to require
Secured Party to pursue any other remedy for the benefit of Debtor and agrees
that Secured Party may proceed against any Obligor for the amount of the Debt
owed to Secured Party without taking any action against any other Obligor or any
other person or entity and without selling or otherwise proceeding against or
applying any of the Collateral in Secured Party's possession.

            7.2 All remedies herein expressly provided for are cumulative of any
and all other remedies existing at law or in equity and are cumulative of any
and all other remedies provided for in any other instrument securing the payment
of the Debt, or any part thereof, or otherwise benefiting Secured Party, and the
resort to any remedy provided for hereunder or under any such other instrument
or provided for by law shall not prevent the concurrent or subsequent employment
of any other appropriate remedy or remedies.

            7.3 Secured Party may resort to any security given by this Agreement
or to any other security now existing or hereafter given to secure the payment
of the Debt, in whole or in part, and in such portions and in such order as may
seem best to Secured Party in its sole and uncontrolled discretion, and any such
action shall not in anywise be considered as a waiver of any of the rights,
benefits or security interests evidenced by this Agreement.

            7.4 To the full extent Debtor may do so, Debtor agrees that Debtor
will not at any time insist upon, plead, claim or take the benefit or advantage
of any law now or hereafter in force providing for any appraisement, valuation,
stay, extension or redemption, and Debtor, for Debtor, Debtor's heirs, devisees,
executors, administrators, personal representatives, successors, receivers,
trustees and assigns, and for any and all persons ever claiming any interest in
the Collateral, to the extent permitted by law, hereby WAIVES and releases all
rights of redemption, valuation, appraisement, 

<PAGE>


stay of execution, notice of intention to mature or to declare due the whole of
the Debt, notice of election to mature or to declare due the whole of the Debt
and all rights to a marshaling of the assets of Debtor, including the
Collateral, or to a sale in inverse order of alienation in the event of
foreclosure of the security interest hereby created.

                                    ARTICLE 8
                              ADDITIONAL AGREEMENTS

            8.1 Subject to the automatic reinstatement provisions of Section
8.24 below, upon full payment of the Debt, complete performance of all of the
obligations of the Obligors under the Credit Documents and final termination of
Secured Party's obligations--if any--to make any further advances under the Note
or to provide any other financial accommodations to any Obligor, all rights
under this Agreement shall terminate and the Collateral shall become wholly
clear of the security interest evidenced hereby, and upon written request by
Debtor such security interest shall be released by Secured Party in due form and
at Debtor's cost.

            8.2 Secured Party may waive any default without waiving any other
prior or subsequent default. Secured Party may remedy any default without
waiving the default remedied. The failure by Secured Party to exercise any
right, power or remedy upon any default shall not be construed as a waiver of
such default or as a waiver of the right to exercise any such right, power or
remedy at a later date. No single or partial exercise by Secured Party of any
right, power or remedy hereunder shall exhaust the same or shall preclude any
other or further exercise thereof, and every such right, power or remedy
hereunder may be exercised at any time and from time to time. No modification or
waiver of any provision hereof nor consent to any departure by Debtor therefrom
shall in any event be effective unless the same shall be in writing and signed
by Secured Party and then such waiver or consent shall be effective only in the
specific instances, for the purpose for which given and to the extent therein
specified. No notice to nor demand on Debtor in any case shall of itself entitle
Debtor to any other or further notice or demand in similar or other
circumstances. Acceptance by Secured Party of any payment in an amount less than
the amount then due on the Debt shall be deemed an acceptance on account only
and shall not in any way affect the existence of a default hereunder.

            8.3 Secured Party may at any time and from time to time in writing
(a) waive compliance by Debtor with any covenant herein made by Debtor to the
extent and in the manner specified in such writing; (b) consent to Debtor's
doing any act which hereunder Debtor is prohibited from doing, or consent to
Debtor's failing to do any act which hereunder Debtor is required to do, to the
extent and in the manner specified in such writing; (c) release any part of the
Collateral, or any interest therein, from the security interest of this
Agreement; or (d) release any party liable, either directly or indirectly, for
the Debt or for any covenant herein or in any other instrument now or hereafter
securing the payment of the Debt, without impairing or releasing the liability
of any other party. No such act shall in any way impair the rights of Secured
Party hereunder except to the extent specifically agreed to by Secured Party in
such writing.

<PAGE>


            8.4 Secured Party shall not be required to take any steps necessary
to preserve any rights against prior parties to any of the Collateral.

            8.5 The security interest and other rights of Secured Party
hereunder shall not be impaired by any indulgence, moratorium or release granted
by Secured Party, including but not limited to (a) any renewal, extension or
modification which Secured Party may grant with respect to the Debt, (b) any
surrender, compromise, release, renewal, extension, exchange or substitution
which Secured Party may grant in respect of any item of the Collateral, or any
part thereof or any interest therein, or (c) any release or indulgence granted
to any endorser, guarantor or surety of the Debt.

            8.6 Secured Party may call at Debtor's place or places of business
during reasonable business hours at intervals to be determined by Secured Party
and, without hindrance or delay, inspect, audit, check and make extracts from
and copies of the books, records, journals, orders, receipts, correspondence and
other data relating to the Collateral or to any transaction between Debtor and
Secured Party, and Debtor shall assist Secured Party in such actions.

            8.7 Secured Party may render and send to Debtor a statement of
account showing loans made, all other charges, expenses and items charged to
Debtor, payment by Debtor against the loans, proceeds collected and applied to
the loans, other appropriate debts and credits, and a total of Debtor's
indebtedness on the loans as of the date of the statement of account, and the
statement of account shall be considered correct in all respects and accepted by
and conclusively binding upon Debtor, except for specified objections which
Debtor makes in writing within ten (10) days from the date upon which the
statement of account is sent.

            8.8 A carbon, photographic or other reproduction of this Agreement
or of any financing statement relating to this Agreement shall be sufficient as
a financing statement.

            8.9 Debtor will cause all financing statements and continuation
statements relating hereto to be recorded, filed, re-recorded and refiled in
such manner and in such places as Secured Party shall reasonably request and
will pay all such recording, filing, re-recording, and refiling taxes, fees and
other charges.

            8.10 In the event the ownership of the Collateral or any part
thereof becomes vested in a person other than Debtor, Secured Party may, without
notice to Debtor, deal with such successor or successors in interest with
reference to this Agreement and to the Debt in the same manner as with Debtor,
without in any way vitiating or discharging Debtor's liability hereunder or upon
the Debt. No sale of the Collateral, and no forbearance on the part of Secured
Party and no extension of the time for the payment of the Debt given by Secured
Party shall operate to release, discharge, modify, change or affect, in whole or
in part, the liability of Debtor hereunder for the payment of the Debt or the
liability of any other person hereunder for the payment of the Debt, except as
agreed to in writing by Secured Party.

            8.11 Any other or additional security taken for the payment of any
of the Debt shall not in any manner affect the security given by this Agreement.

<PAGE>


            8.12 To the extent that proceeds of the Debt are used to pay
indebtedness secured by any outstanding lien, security interest, charge or prior
encumbrance against the Collateral, such proceeds have been advanced by Secured
Party at Debtor's request and Secured Party shall be subrogated to any and all
rights, security interests and liens owned by any owner or holder of such
outstanding liens, security interests, charges or encumbrances, irrespective of
whether said liens, security interests, charges or encumbrances are released.

            8.13 If any part of the Debt cannot be lawfully secured by this
Agreement, or if the lien, assignments and security interests of this Agreement
cannot be lawfully enforced to pay any part of the Debt, then and in either such
event, at the option of Secured Party, all payments on the Debt shall be deemed
to have been first applied against that part of the Debt.

            8.14 Secured Party may assign this Agreement so that the assignee
shall be entitled to the rights and remedies of Secured Party hereunder and in
the event of such assignment, Debtor will assert no claims or defenses it may
have against the assignee except those granted in this Agreement.

            8.15 This Agreement shall not be changed orally but shall be changed
only by agreement in writing signed by Debtor and Secured Party. No course of
dealing between the parties, no usage of trade and no parole or extrinsic
evidence of any nature shall be used to supplement or modify any of the terms or
provisions of this Agreement.

            8.16 Any notice, request or other communication required or
permitted to be given hereunder shall be given as provided in the Loan
Agreement. Actual notice, however and from whomever given or received, shall
always be effective when received.

            8.17 This Agreement shall be binding upon Debtor, and the heirs,
devisees, executors, administrators, personal representatives, trustees,
beneficiaries, conservators, receivers, successors and assigns of Debtor,
including all successors in interest of Debtor in and to all or any part of the
Collateral, and shall benefit Secured Party and its successors and assigns.

            8.18 If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future laws, the legality, validity
and enforceability of the remaining provisions of this Agreement shall not be
affected thereby, and this Agreement shall be liberally construed so as to carry
out the intent of the parties to it. Each waiver in this Agreement is subject to
the overriding and controlling rule that it shall be effective only if and to
the extent that (a) it is not prohibited by applicable law and (b) applicable
law neither provides for nor allows any material sanctions to be imposed against
Secured Party for having bargained for and obtained it.

            8.19 Secured Party shall be deemed to have exercised reasonable care
in the custody and preservation of any of the Collateral in its possession if it
takes such action for that purpose as Debtor requests in writing, but failure of
Secured Party to comply with such request shall not of itself be deemed a
failure to have exercised reasonable care, and no failure of Secured Party to
take any action so requested by Debtor shall be deemed a failure to exercise
reasonable care in the custody

<PAGE>


or preservation of such Collateral. Secured Party shall not be responsible in
any way for any depreciation in the value of the Collateral, nor shall any duty
or responsibility whatsoever rest upon Secured Party to take any steps to
preserve rights against prior parties or to enforce collection of the Collateral
by legal proceedings or otherwise, the sole duty of Secured Party, its
successors and assigns, being to receive collections, remittances and payments
on such Collateral as and when made and received by Secured Party and, at
Secured Party's option, to apply the amount or amounts so received, after
deduction of any collection costs incurred, as payment upon any of the Debt or
to hold the same for the account and order of Debtor.

            8.20 In the event Debtor instructs Secured Party, in writing or
orally, to deliver any or all of the Collateral to a third person, and Secured
Party agrees to do so, the following conditions shall be conclusively deemed to
be a part of Secured Party's agreement, whether or not they are specifically
mentioned to Debtor at the time of such agreement: (i) Secured Party shall
assume no responsibility for checking the genuineness or authenticity of any
person purporting to be a messenger, employee or representative of such third
person to whom Debtor has directed Secured Party to deliver the Collateral, or
the genuineness or authenticity of any document of instructions delivered by
such person; (ii) Debtor will be considered by requesting any such delivery to
have assumed all risk of loss as to the Collateral; (iii) Secured Party's sole
responsibility will be to deliver the Collateral to the person purporting to be
such third person described by Debtor, or a messenger, employee or
representative thereof; and (iv) Secured Party and Debtor hereby expressly agree
that the foregoing actions by Secured Party shall constitute reasonable care.

            8.21 The pronouns used in this Agreement are in the masculine and
neuter genders but shall be construed as feminine, masculine or neuter as
occasion may require. "Secured Party", "Obligor" and "Debtor" as used in this
Agreement include the heirs, devisees, executors, administrators, personal
representatives, trustees, beneficiaries, conservators, receivers, successors
and assigns of those parties. When this Agreement is executed by more than one
person, corporation or other legal entity, it shall be construed as though
"Debtor" were written "Debtors" and as though the pronoun and verbs were changed
to correspond; and in such case (a) each of Debtors shall be bound jointly and
severally with one another to keep, observe and perform the covenants,
agreements, obligations and liabilities imposed by this Agreement upon the
"Debtor", (b) a release of one or more persons, corporations or other legal
entities comprising "Debtor" shall not in any way be deemed a release of any
other person, corporation or other legal entity comprising "Debtor", and (c) a
separate action hereunder may be brought and prosecuted against one or more of
the persons, corporations or other legal entities comprising "Debtor" without
limiting any liability or impairing Secured Party's right to proceed against any
other person, corporation or other legal entity comprising "Debtor".

            8.22 The section headings appearing in this Agreement have been
inserted for convenience only and shall be given no substantive meaning or
significance whatever in construing the terms and provisions of this Agreement.
Terms used in this Agreement which are defined in the Texas Uniform Commercial
Code are used with the meanings as therein defined. Wherever the term
"including" or a similar term is used in this Agreement, it shall be read as if
it were written "including by way of example only and without in any way
limiting the generality of the clause or concept referred to."

<PAGE>


            8.23 This Agreement is performable in Travis County, Texas, which
shall be a proper place of venue for suit on or in respect of this Agreement.
Debtor irrevocably agrees that any legal proceeding in respect of this Agreement
shall be brought in the district courts of Travis County, Texas or the United
States District Court for the Western District of Texas, Austin Division
(collectively, the "Specified Courts"). Debtor hereby irrevocably submits to the
nonexclusive jurisdiction of the state and federal courts of the State of Texas.
Debtor hereby irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to any Credit Document brought
in any Specified Court, and hereby further irrevocably waives any claims that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum. Debtor further irrevocably consents to the service of
process out of any of the Specified Courts in any such suit, action or
proceeding by the mailing of copies thereof by certified mail, return receipt
requested, postage prepaid, to Debtor at its address as provided in this
Agreement or as otherwise provided by Texas law. Nothing herein shall affect the
right of Secured Party to commence legal proceedings or otherwise proceed
against Debtor in any jurisdiction or to serve process in any manner permitted
by applicable law. Debtor agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE APPLICABLE LAWS OF THE
STATE OF TEXAS AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT.

            8.24 Debtor agrees that, if at any time all or any part of any
payment previously applied by Secured Party to the Debt is or must be returned
by Secured Party--or recovered from Secured Party--for any reason (including the
order of any bankruptcy court), this Agreement shall automatically be reinstated
to the same effect, as if the prior application had not been made, and, in
addition, Debtor hereby agrees to indemnify Secured Party against, and to save
and hold Secured Party harmless from any required return by Secured Party--or
recovery from Secured Party--of any such payments because of its being deemed
preferential under applicable bankruptcy, receivership or insolvency laws, or
for any other reason.

            8.25 This Agreement and the other Credit Documents embody the entire
agreement and understanding between Secured Party and Debtor with respect to
their subject matter and supersede all prior conflicting or inconsistent
agreements, consents and understandings relating to such subject matter. Debtor
acknowledges and agrees there is no oral agreement between Debtor and Secured
Party which has not been incorporated in this Agreement and the other Credit
Documents.

            8.26 Secured Party may from time to time and at any time, without
any necessity for any notice to or consent by Debtor or any other person or
entity, release all or any part of the Collateral from the security interests of
this Agreement, with or without cause, including as a result of any
determination by Secured Party that the Collateral or any portion thereof
contains or has been contaminated by or releases or discharges any hazardous or
toxic waste, material or substance.

            8.27 Secured Party is hereby authorized at any time and from time to
time, without notice to any person or entity (and Debtor hereby WAIVES any such
notice) to the fullest extent permitted

<PAGE>


by law, to set-off and apply any and all monies, securities and other properties
of Debtor now or in the future in the possession, custody or control of Secured
Party, or on deposit with or otherwise owed to Debtor by Secured
Party--including all such monies, securities and other properties held in
general, special, time, demand, provisional or final accounts or for safekeeping
or as collateral or otherwise (but excluding those accounts clearly designated
as escrow or trust accounts held by Debtor for others unaffiliated with
Debtor)--against any and all of Debtor's obligations to Secured Party now or
hereafter existing under this Agreement or any of the Credit Documents,
irrespective of whether Secured Party shall have made any demand hereunder or
thereunder. Secured Party agrees to use reasonable efforts to promptly notify
Debtor after any such set-off and application, provided that failure to give--or
delay in giving--any such notice shall not affect the validity of such set-off
and application or impose any liability on Secured Party. Secured Party's rights
under this Section are in addition to other rights and remedies (including other
rights of set-off) which Secured Party may have.

<PAGE>


            EXECUTED as of the 8th day of April, 1998.

               NOTICE PURSUANT TO TEX. BUS. & COMM. CODE SS.26.02

     THIS AGREEMENT, THE NOTE AND THE OTHER CREDIT DOCUMENTS TOGETHER CONSTITUTE
A WRITTEN AGREEMENT AND REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREE MENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.


CHASE BANK OF TEXAS,                        SURREY, INC.
  NATIONAL ASSOCIATION                        a Texas corporation


By: /s/ Cindy M. Matula                     By: /s/ Mark van der Hagen
   ----------------------------------          ---------------------------------
Name: Cindy M. Matula                       Name: Mark van der Hagen
     --------------------------------            -------------------------------
Title: Vice President                       Title: Vice President
      -------------------------------             ------------------------------

                       "Secured Party"                                  "Debtor"