EXHIBIT 10.3

SECURITY AGREEMENT
(Equipment, Inventory, Accounts Receivable and General Intangibles)

US
Rubber Reclaiming, Inc. (Company), grants to Fair Holdings, Inc.
(FHI), an Ohio corporation, a security interest in the Companys
Equipment, Inventory, Accounts Receivable and General Intangibles, whether now owned and
hereafter acquired, and/or in the proceeds thereof to secure the payment and performance
of all of the Obligations. Such security interest is granted on the terms stated in this
Security Agreement.

|1. | DEFINITIONS. As used in this Security Agreement, the following terms have the
          meanings indicated when used with the initial letter capitalized:
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| | (a) | Account Debtor means a party who is obligated to the Company with
               respect to any Account Receivable, or General Intangible.
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| | (b) | Accounts Receivable or Account means any right of the
               Company to payment for goods sold or leased or for services rendered, whether or
               not earned by performance.
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| | (c) | Collateral means all property or rights in which a security
               interest is granted under this Security Agreement.
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| | (d) | Collateral Account is used as defined In Paragraph 10(a).
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| | (e) | Credit Agreement means the Credit Agreement between the Company and
               FHI dated the date of this Security Agreement, as it may be amended from time to
               time.
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| | (f) | Default means an Event of Default as defined in the
               Credit Agreement.
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| | (g) | Equipment means all of the furniture, fixtures, machinery, and
               equipment of the Company together with all tools, accessories, parts and
               accessions now in, attached to or hereafter placed in or added to such property,
               and any replacements of any such property.
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| | (h) | General Intangibles means any personal property (including things
               in action) other than goods, Accounts, chattel paper, documents, instruments and
               money.
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| | (i) | Inventory means all goods which are held for sale or lease to
               customers or which are furnished, have been furnished or are to be furnished
               under contracts of service, or which are raw materials, work in process or
               materials used or consumed in the Companys business.
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| | (j) | Obligations is used as defined in the Credit Agreement.
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|2. | FINANCING STATEMENTS. The Company authorizes FHI at the expense of the Company
          to execute on its behalf and file a financing statement or statements in those
          public offices deemed necessary by FHI to perfect its security interest. Such
          financing statements may be signed by FHI alone. In addition, the Company shall
          execute and deliver any financing statement or other document that FHI may
          request to perfect or to further evidence the security interest created by this
          Security Agreement including, without limitation, any certificate or
          certificates of title to the Collateral with the security interest of FHI noted
          thereon or executed applications for such certificates of title.
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|3. | LOCATION, INSPECTION AND PROTECTION OF COLLATERAL. Unless the Company gives FHI
          not less than ten (10) days prior written notice of additional locations at
          which Inventory and Equipment shall be kept, all Inventory and Equipment is kept
          and shall be kept at the following address: 2000 Rubberway Road, Vicksburg,
          Mississippi, 39180. Unless the Company gives FHI written notice of the location
          of additional offices where records of the Company relative to Accounts
          Receivable and General Intangibles are kept, all such records of the Company
          shall be kept at the following address: 2000 Rubberway Road,Vicksburg,
          Mississippi, 39180 which the Company represents is also the address of its
          principal office. The Company shall not keep duplicate Accounts Receivable
          records at any other address or change the location of its principal office
          unless the Company gives FHI not less than 10 days prior written notice of such
          event. The Company shall, at all reasonable times and in a reasonable manner,
          allow the officers, attorneys and accountants of FHI to examine, inspect,
          photocopy and make abstracts from the Companys books and records and to
          verify Equipment and Inventory, the latter both as to quantity and quality, and
          to arrange for verification of Accounts Receivable, under reasonable procedures,
          directly with the Account Debtors or by other methods. The Company shall also
          deliver to FHI upon request any promissory notes or other papers evidencing any
          Account and any guaranty or collateral together with appropriate endorsements
          and assignments and any information relating thereto and shall do anything else
          FHI may reasonably require to further protect FHIs interest in the
          Collateral. If any of the Collateral consists of Equipment normally used in more
          than one state and the Company intends to use any of such Collateral in any
          jurisdiction other than a state in which the Company shall have previously
          advised FHI such Collateral is to be used, the Company shall not commence use in
          such other jurisdiction except upon ten (10) days prior written notice to FHI.
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|4. | FIXTURES. Some of the Collateral may be attached to real estate so as to
          constitute a fixture. If any Collateral is hereafter so attached to any real
          estate, notice of the common address, legal description, and name of the owner
          of record of such real estate shall be furnished to FHI at least ten (10) days
          prior to such attachment. If any Collateral is hereafter attached to real estate
          prior to the perfection of the security interest created by this Security
          Agreement in such Collateral, the Company shall, on demand, furnish FHI with a
          disclaimer of interest in the Collateral executed by each person having an
          interest in such real estate.
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|5. | THE COMPANYS TITLE. Other than security interests granted to Senior
          Lenders from time to time for primary credit facilities, including those
          identified on Schedule A attached hereto and any replacements or successors
          thereto, each of which shall be senior and superior to the liens granted herein,
          whether granted prior to or after the security interests granted herein, the
          Company has full and clear title to all of the Collateral presently owned and
          shall have such title to all Collateral hereafter acquired except for the
          security interest granted by this Security Agreement and any other lien or
          security interest permitted under the terms of the Credit Agreement, and except
          for jointly owned collateral, which shall be identified and the Company shall
          keep the Collateral free at all times from any lien or encumbrance except those
          permitted by the Credit Agreement. No financing statements covering all or any
          portion of the Collateral is on file at any public office except as may be
          required or permitted by this Security Agreement and Credit Agreement. FHI
          agrees to execute at any time and from time to time, any documents necessary to
          reflect that the liens granted herein are now, and will be later, subordinate to
          any security interest granted in the Companys assets, from time to time,
          to providers of primary credit facilities to the Company.
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|6. | THE COMPANYS DUTY TO MAINTAIN THE COLLATERAL. The Company shall keep all
          tangible Collateral in good order and repair and shall not waste or destroy any
          of the Collateral. The Company shall not use the Collateral in violation of any
          statute or ordinance or contrary to the provisions of any policy of insurance
          thereon.
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|7. | INSURANCE. In addition to maintaining such insurance on the Collateral as is
          required by the Credit Agreement, the Company shall, upon the reasonable request
          of FHI, keep the Collateral insured against such additional risks, in such
          amounts and under such policies as FHI may reasonably require and with such
          companies as shall be reasonably acceptable to FHI. All policies providing
          insurance on the Collateral shall provide that any loss thereunder shall be
          payable to FHI under a standard form of secured lenders loss payable
          endorsement. The Company authorizes FHI to endorse on the Companys behalf
          and to negotiate drafts reflecting proceeds of insurance on the Collateral,
          provided that FHI shall remit to the Company such surplus, if any, as remains
          after the proceeds have been applied at FHIs option, (a) to the
          satisfaction of all of the Obligations or to the establishment of a cash
          collateral account for the Obligations, or (b) to the replacement or repair of
          the Collateral; provided, however, that so long as no Default exists, and
          provided further that the Company can demonstrate to FHIs satisfaction
          that any proposed replacement or repair of Collateral is economically and
          physically feasible, such proceeds shall be applied, at the Companys
          option and to the extent necessary, as provided in the foregoing clause (b).
          Certificates evidencing the existence of all of the insurance required under the
          Credit Agreement or this Security Agreement shall be furnished to FHI by the
          Company and the original policies providing such insurance shall be delivered to
          FHI at its request.
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|8. | ADVANCES TO PROTECT COLLATERAL. Upon failure of the Company to procure any
          required insurance or to remove any prohibited encumbrance upon the Collateral
          or if any policy providing any required insurance is canceled, FHI may procure
          such insurance or remove any encumbrance on the Collateral and any amount
          expended by FHI for such purposes shall be immediately due and payable by the
          Company to FHI and shall be added to and become a part of the Obligations
          secured hereby and shall bear interest at the Interest Rate, as defined in the
          Credit Agreement.
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|9. | DEALING WITH COLLATERAL PRIOR TO DEFAULT. Prior to Default and thereafter until
          FHI shall notify the Company of the revocation of such authority:
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| | (a) | the Company may, in the ordinary course of business, at its own expense, sell,
               lease or furnish under contracts of service, any of the Inventory normally held
               by the Company for such purposes, provided that a sale in the ordinary course of
               business shall not include a transfer in total or partial satisfaction of a
               debt, and the Company may use and consume, in the ordinary course of its
               business, any raw materials, work in process or materials normally held by it
               for such purposes;
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| | (b) | the Company shall, at its own expense, endeavor to collect, when due, all
               amounts due with respect to any Accounts or General Intangibles, and shall take
               such action with respect to collection as FHI may reasonably request or, in the
               absence of such request, as the Company may deem advisable in accordance with
               sound business practice, and
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| | (c) | the Company may grant, in the ordinary course of business, to any Account
               Debtor, any rebate, refund or adjustment to which such Account Debtor may be
               entitled, and may accept, in connection therewith, the return of the goods, the
               sale or lease of which shall have given rise to the obligation of the Account
               Debtor.
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|10. | DEALING WITH COLLATERAL AFTER DEFAULT. After Default and upon the request of
          FHI:
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| | (a) | the Company shall upon receipt of any checks, drafts, cash or other remittances
               in payment of Inventory sold or in payment of Accounts Receivable of the
               Company, deposit the same in a special collateral account (the Collateral
               Account) maintained with FHI; such proceeds shall be deposited in the form
               received except for the endorsement of the Company when required, which
               endorsement FHI is authorized to make on the Companys behalf, and shall be
               held by FHI as security for all Obligations;
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| | (b) | the Company shall deliver to FHI all other instruments and chattel paper which
               constitute proceeds from the sale of Collateral, whether then held or thereafter
               acquired, and
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| | (c) | the Company shall keep segregated any such checks, drafts, cash, other
               instruments, chattel paper or other remittances from any of the Companys
               other funds or property and shall hold such items for the benefit of FHI until
               delivery to FHI or deposit in the Collateral Account and FHI may apply all or
               any portion of the funds on deposit in the Collateral Account against any
               Obligations in the order of application provided for in the Credit Agreement or,
               absent such provision, at the discretion of FHI.
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| | After
Default, FHI may notify any Account Debtor to make payment directly to FHI of any amounts
due or to become due under any Account Receivable, General Intangible, instrument or
chattel paper and FHI may enforce the collection of any Account Receivable, General
Intangible, instrument or chattel paper in its name or in the name of the Company, by suit
or otherwise, and may surrender, release or exchange all or any part thereof or compromise
or extend or renew for any period, whether or not longer than the original period, any
indebtedness thereunder or evidenced thereby, and any Account Debtor will be fully
protected in relying upon the representation of FHI that it has authority under the terms
of this Security Agreement to deal with any Account Receivable, General Intangible,
instrument or chattel paper and need not look beyond this Security Agreement and such
representation of FHI to establish FHIs authority in that regard.
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|11. | SUBSTITUTION AND SALE OF EQUIPMENT. The Company may from time to time so long
          as no Default has occurred and is continuing, substitute items of Equipment so
          long as any new Equipment becomes subject to the security interest created by
          this Security Agreement and is subject to no prior liens or security interest
          other than those permitted by the Credit Agreement. So long as no Default has
          occurred and is continuing, the Company may, in the ordinary course of its
          business, sell or otherwise dispose of any items of Equipment for which
          substitutes have been obtained or which are no longer useful to the Company in
          its operations, provided that at least ten (10) days prior written notice of any
          proposed disposition of any material amount of Equipment in a single or a
          planned series of transactions is given to FHI. Upon the request of the Company,
          FHI will deliver an appropriate release of its security interest in any item of
          Equipment disposed of by the Company pursuant to the provisions of this
          paragraph.
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|12. | REMEDIES UPON DEFAULT. Upon the occurrence of any Default FHI shall have with
          respect to the Collateral, in addition to all rights and remedies specified in
          the Credit Agreement, this Security Agreement or any other agreement between the
          Company and FHI the remedies of a secured party under the Uniform Commercial
          Code (the Code) as in effect from time to time in Indiana,
          regardless of whether the Code in such form has been enacted in the jurisdiction
          in which any such right or remedy is asserted. Any notice required by law,
          including but not limited to notice of the intended disposition of all or any
          portion of the Collateral, shall be deemed reasonably and properly given if
          given at least 10 days prior to such disposition in the manner prescribed for
          the giving of notices in the Credit Agreement. Any proceeds of the disposition
          of any of the Collateral shall be applied first to the payment of the expenses
          of the retaking, holding, repairing, preparing for sale and sale of the
          Collateral, including reasonable attorneys fees and legal expenses in
          connection therewith and any balance of such proceeds shall be applied by FHI to
          the Obligations in such order as FHI shall determine.
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|13. | RELATION TO CREDIT AGREEMENT. This Security Agreement is given pursuant to the
          terms of the Credit Agreement and shall be deemed a part thereof and subject to
          the terms and conditions of the Credit Agreement.
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|14. | NOTICES. Any notice required or otherwise given concerning this Security
          Agreement by either party to the other shall be given as notices are required to
          be given under the terms of the Credit Agreement.
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Dated:  April 15, 2005

| | US Rubber Reclaiming, Inc.

By:  /s/  John D. LaGrone
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