Document:

EXHIBIT 10.5
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                    PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT
                    -----------------------------------------

            This Agreement dated effective December 11, 2001, and granted by
Paul A. Kruger ("Pledgor"), to THE F&M BANK & TRUST COMPANY, an Oklahoma banking
corporation, having its principal office at 1330 South Harvard, Tulsa, Oklahoma
74112 ("Bank").

            Concurrently herewith, Bank and PLASTIC PALLET PRODUCTION, INC., a
Texas corporation ("Borrower") have entered into a Loan Agreement ("Loan
Agreement") whereby Bank has or will advance sums on a promissory note payable
to the Bank in an amount not to exceed THREE MILLION DOLLARS ($3,000,000.00)
(hereinafter the obligations under the Note will be referred to as the "Note").

            Pledgor is a guarantor of part of the sums owed by Borrower to Bank
under the Note ("Guaranty") and desires Bank to advance sums to Borrower under
the Note and Loan Agreement. The advances by Bank to Borrower will benefit
Pledgor as an owner of Borrower.

            As used herein, "UCC" shall mean the Uniform Commercial Code of
Oklahoma, as amended and in effect as of the date hereof, as the context may
require. All other capitalized terms, unless defined herein, shall have the
meanings set forth in the Loan Agreement.

            1. Pledge and Security Interest. As security for the due and
punctual payment of all indebtedness of the Borrower and Pledgor to the Bank
arising under the Note and Guaranty, including all extensions, renewals and
changes in the form thereof, whether for principal, interest, premiums, fees,
expenses or otherwise as well as all future advances or obligations owed Bank
(including without limitation) direct, indirect, contingent, joint, several,
joint and several or howsoever created (all such indebtedness and obligations
being herein sometimes referred to as the "Obligations"), together with any and
all expenses which may be incurred by the Bank in collecting any or all of the
Obligations or in enforcing any rights hereunder (all such expenses being
hereinafter referred to as the "Expenses") (the "Obligations" and the "Expenses"
shall also be part of the "Secured Obligations"), the Pledgor hereby pledges,
assigns, transfers, sets over and delivers unto and for the benefit of the Bank
the certificates for the Pledged Securities listed on Exhibit " A," with stock
powers covering such certificates executed in blank, together with shares
represented thereby and all cash securities, dividends or other property at any
time and from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares (all collectively
referred to herein as the "Pledged Securities").

            TO HAVE AND TO HOLD the Pledged Securities, together with all
rights, titles, interests, powers, privileges and preferences appertaining or
incidental thereto, including all cash proceeds received in respect to the
Pledged Securities and all securities delivered in substitution or addition to
the foregoing Pledged Securities, unto the Bank, its successors and assigns,
forever as security for the Secured Obligations subject, however, to the tenI1s,
covenants and conditions hereinafter set forth.
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            2. Representations and Warranties. The Pledgor represents and
warrants as follows:

            (a)         The Pledged Securities have been validly authorized and
                        issued, are fully paid and non-accessible and the
                        Pledgor owns the same beneficially free and clear of any
                        liens, charges or encumbrances thereon or affecting the
                        title thereto.

            (b)         The Pledgor has good right and lawful authority to
                        pledge and deposit the Pledged Securities as provided
                        herein and warrants and will preserve and defend all
                        right, title and interest in and to the Pledged
                        Securities delivered to the Bank hereunder against the
                        claims of all persons, and will maintain and preserve
                        the lien hereof as long as this Agreement shall remain
                        in full force and effect.

            (c)         The Pledged Securities are shares of Precis Smart Card
                        Systems, Inc., currently constitute 285,000 and
                        ________________ shares which are certificates number
                        0288, CUSIP #740184106 and _______________ and are part
                        of the issued and outstanding shares.

            3. Appointment of the Bank; Registration in Nominee Name. The Bank
shall have the right and absolute discretion to appoint one or more agents for
the purpose of retaining physical possession of the certificates representing or
evidencing the Pledged Securities, which may be held in the name of the Pledgor,
endorsed or assigned in blank in favor of the Bank. In addition to all other
rights possessed by the Bank, the Bank may, from time to time after the
occurrence of an uncured Event of Default (hereinafter defined) or an event
which with the giving of notice or the lapse of time, or both, would be an Event
of Default, at the Bank's sole discretion and without notice to the Pledgor,
take any or all of the following actions: (a) execute the blank stock power to
authorize transfer of the Pledged Securities; (b) transfer all or any part of
the Pledged Securities into the name of the Bank or its nominee for public or
private sale; (c) take control of any proceeds of any of the Pledged Securities;
and (d) exchange certificates or instruments representing or evidencing the
Pledged Securities for certificates or instruments of smaller or larger
denominations for any purpose consistent with its performance of this Agreement.

            4. Voting Rights, Dividends, Replacement of Pledged Securities.

            (a)         So long as there has not occurred an uncured Event of
                        Default, the Pledgor shall be entitled to exercise any
                        and all voting rights and powers relating or pertaining
                        to the Pledged Securities or any part thereof for any
                        purpose not inconsistent with the terms of this
                        Agreement.

            (b)         Unless Bank expressly consents in writing, the Pledgor
                        shall not receive and not be entitled to retain any and
                        all stock and/or stock dividends in respect of the
                        Pledged Securities, whether resulting from a
                        subdivision, combination or reclassification of the
                        outstanding capital stock of the issuer thereof or
                        received in exchange for the Pledged Securities, or any
                        part thereof, or as a result of any merger,
                        consolidation, acquisition or other exchange of assets
                        to which such issuer or the Pledgor may be a party or
                        otherwise. Any and all cash dividends and

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                        distributions and other property received in respect of
                        the Pledged Securities or in payment of the principal of
                        or in redemption of or in exchange for any Pledged
                        Securities (either at maturity, upon call for redemption
                        or otherwise), shall become part of the Pledged
                        Securities and delivered to Bank or, if received by the
                        Pledgor, shall be held in trust for the benefit of the
                        Bank and shall forthwith be delivered to the Bank or its
                        designated agent (accompanied by proper instruments of
                        assignment and/or stock powers executed by the Pledgor
                        in accordance with the Bank's instructions) to be held
                        subject to the terms of this Agreement.

            (c)         Upon the occurrence of an uncured Event of Default, at
                        the option of the Bank, all rights of the Pledgor to
                        exercise the voting rights and powers which it is
                        entitled to exercise shall cease and all such rights
                        shall thereupon become vested in the Bank, which shall
                        have the sole and exclusive right and authority to
                        exercise such voting and/or consensual rights and
                        powers. After the occurrence of an Event of Default, the
                        Bank shall receive and be entitled to retain as
                        collateral any and all cash dividends and distributions,
                        if any, paid in respect of the Pledged Securities. Any
                        and all money and other property paid over to or
                        received by the Bank pursuant to the provisions of
                        subsection (b) above shall be retained by the Bank as
                        part of the Pledged Securities and be applied in
                        accordance with the provisions hereof.

            5. Remedies Upon Default. Upon the occurrence of an uncured Event of
Default in the payment of the Secured Obligations when due (whether by
acceleration or otherwise), then, in addition to having the right to exercise
any rights and remedies of a secured party upon default under the Uniform
Commercial Code in effect in the State of Oklahoma, the Bank may, without being
required to give any notice to the Pledgor, apply the cash (if any) then held by
it hereunder to the payment in full of the Secured Obligations and all other
indebtedness referred to in the order and manner specified therein. If there
shall be no such cash or the cash so applied shall be insufficient to pay all
Obligations in full, the Bank may thereupon sell the Pledged Securities, or any
part thereof, and shall apply the proceeds of such sale to the payment in full
of the Secured Obligations and all other indebtedness referred herein in the
order and manner specified therein.

            If Pledgor commences the cure of an event of default which requires
more than fifteen (15) days and Pledgor has immediately initiated steps which
are reasonably sufficient to cure such event of default and continues to take
reasonable and necessary steps to cure the event of default, Borrower may
continue to cure the event of default beyond any cure period so long as the
event of default is capable of being cured within a reasonable time and Borrower
continues in good faith to effect a cure.

            6. Sale of the Pledged Securities.

            (a)         Notwithstanding anything to the contrary herein, sale of
                        the Pledged Securities may be made at any public or
                        private sale, for cash, upon credit or for future
                        delivery, as the Bank shall deem appropriate in a
                        commercially reasonable manner. The Bank shall be
                        authorized at any such sale (to the extent it, in its
                        sole discretion, deems advisable) to restrict the
                        prospective bidders or purchasers to

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                        persons who will represent and agree that they are
                        purchasing the Pledged Securities then being sold for
                        their own account for investment and not with a view to
                        the distribution or resale thereof, and upon
                        consummation of any such sale the Bank shall have the
                        right to assign, transfer and deliver to the purchaser
                        or purchasers thereof the Pledged Securities sold. Each
                        such purchaser at any such sale shall hold the property
                        purchased absolutely free from any claim or right on the
                        part of the Pledgor, and the Pledgor hereby waives (to
                        the extent permitted by law) all rights of redemption,
                        stay and/or appraisal which the Pledgor may now have or
                        may at any time in the future have under any rule or
                        statute now existing or hereafter enacted. To the extent
                        that notice of sale shall be required to be given by
                        law, the Bank shall give the Pledgor at least fifteen
                        (15) days' written notice of the Bank's intention to
                        make any such public or private sale. Such notice, in
                        case of public sale, shall state the time and place
                        fixed for such sale. Any such public sale shall be held
                        at such time or times within ordinary business hours and
                        at such place or places as the Bank may fix in the
                        notice of such sale. At any such sale, the Pledged
                        Securities, or portion thereof, to be sold may be sold
                        in one lot as an entirety or in separate parcels, as the
                        Bank may, in its sole discretion, determine, and the
                        Bank may bid (which bid may be, in whole or in part, in
                        the form of cancellation of indebtedness) for and
                        purchase the whole or any part of the Pledged
                        Securities. The Bank shall not be obligated to make any
                        sale of the Pledged Securities if it shall determine not
                        to do so, regardless of the fact that notice of sale of
                        the Pledged Securities may have been given. The Bank
                        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 the time and place fixed
                        for sale; and such sale may, without further notice, be
                        made at the time and place to which the same was so
                        adjourned. In case sale of all or any part of the
                        Pledged Securities is made on credit or for future
                        delivery, the Pledged Securities so sold may be retained
                        by the Bank until the sale price is paid by the
                        purchaser or purchasers thereof, but the Bank shall not
                        incur any liability in case any such purchaser or
                        purchasers shall fail to take up and pay for the Pledged
                        Securities so sold and, in the case of any such failure,
                        such Pledged Securities may be sold again upon like
                        notice. As an alternative to the Bank's right to sell
                        hereunder or under the Uniform Commercial Code, the Bank
                        may proceed by suit or suits at law or in equity to
                        foreclose this Agreement and to sell the Pledged
                        Securities, or any portion thereof, pursuant to a
                        judgment or decree of a court or courts of competent
                        jurisdiction.

            (b)         The Pledgor understands that compliance with federal or
                        state banking and/or securities laws may strictly limit
                        the course of conduct of the Bank if the Bank were to
                        attempt to dispose of all or any part of the Pledged
                        Securities and may also limit the extent to which or the
                        manner in which any subsequent transferee of the Pledged
                        Securities may dispose of the same. The Pledgor agrees
                        that in any sale of any of the Pledged Securities, the
                        Bank is hereby authorized to comply with any such
                        limitation or restriction in connection with such sale
                        as it may be advised by counsel is necessary to avoid
                        violation of applicable law (including, without
                        limitation, compliance with such procedures as may
                        restrict the number of

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                        prospective bidders and purchasers and/or further
                        restrict such prospective bidders or purchasers to
                        persons who will represent and agree that they are
                        purchasing for their own account for investment and not
                        with a view to the distribution or resale of such
                        Pledged Securities), or in order to obtain any required
                        approval of the sale or of the purchaser by any
                        governmental regulatory authority or official, and the
                        Pledgor further agrees that such compliance shall not
                        result in such sale being considered or deemed not to
                        have been made in a commercially reasonable manner, nor
                        shall the Bank be liable or accountable to the Pledgor
                        for any discount allowed by reason of the fact that such
                        Pledged Securities are sold in compliance with any such
                        limitation or restriction.

            (c)         The Pledgor agrees that to register the Pledged
                        Securities if, in connection with any sale, exchange or
                        other disposition of the Pledged Securities,
                        registration with, or notice to, any governmental
                        commission or regulatory authority shall, in the opinion
                        of the Bank, be required.

            (d)         Under the Reorganization Plan, Pledgor is the
                        beneficiary of a Registration Rights Agreement, and
                        Pledgor shall take all actions to allow Bank, in the
                        event Bank deems it necessary, to exercise Pledgor's
                        rights as the holder of the right to request
                        registration of the Pledged Securities under the
                        Registration Rights Agreement. Pledgor further grants
                        Bank the power, coupled with an interest in Pledgor's
                        name or in Bank's name, or both, to exercise all rights,
                        benefits or options under the Registration Rights
                        Agreement to require the registration of the Pledged
                        Securities and sale thereunder. Pledgor further waives
                        all right to object to Bank's request pursuant to this
                        paragraph to require registration of the Pledged
                        Securities received under the Reorganization Plan.

            7. Application of Proceeds of the Pledged Securities Sale. The Bank
shall apply all cash held by it pursuant to Section 4 hereof and the proceeds of
sale of the Pledged Securities as follows:

            First: to the payment of the Expenses, including but not limited to
            the costs and expenses of such sale or the collection of such cash,
            including the out-of-pocket expenses of the Bank and the reasonable
            fees and out-of-pocket expenses of counsel employed in connection
            therewith, and to the payment of all advances made by the Bank for
            the account of the Pledgor hereunder and the payment of all costs
            and expenses incurred by the Bank in connection with the
            administration and enforcement of this Agreement;

            Second: to the payment of the Obligations; and

            Third: the balance, if any, of such proceeds shall be paid to the
            Pledgor or his assigns, or as a court of competent jurisdiction may
            direct.

            8. The Bank Appointed Attorney-in-Fact. The Pledgor hereby appoints
the Bank the Pledgor's attorney-in-fact for the purpose of carrying out the
provisions of this Agreement and taking any action and executing any instrument
which the Bank may deem necessary or

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advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Bank shall, to the extent permitted herein, have the right and power to
receive, endorse and collect all checks and other orders for the payment of
money made payable to the Pledgor representing any dividend, interest payment or
other distribution payable or distributable in respect of the Pledged Securities
or any part thereof and to give full discharge for the same.

            9. Miscellaneous.

            (a)         No Waiver. No failure on the part of the Bank to
                        exercise, and no delay in exercising, any right, power
                        or remedy hereunder shall operate as a waiver thereof;
                        nor shall any single or partial exercise of any such
                        right, power or remedy by the Bank preclude any other or
                        further exercise thereof or the exercise of any other
                        right, power or remedy. All remedies hereunder are
                        cumulative and not exclusive of any other remedies
                        provided by law. The Bank may extend or renew the
                        Obligations and grant releases, compromises or
                        indulgences with respect to the Secured Obligations, any
                        extension or renewal thereof, any security therefor, to
                        any obligor hereunder or thereunder, and no such action
                        shall impair the Bank's rights hereunder.

            (b)         Termination. This Agreement shall terminate when the
                        Secured Obligations have been fully performed and paid,
                        at which time the Bank shall reassign and redeliver (or
                        cause to be so reassigned and redelivered) to the
                        Pledgor, without recourse or warranty and at the expense
                        of the Pledgor against receipt, such of the Pledged
                        Securities (if any) as shall not have been sold or
                        otherwise applied by the Bank pursuant to the terms
                        hereof and which is still held by the Bank hereunder,
                        together with appropriate instruments of reassignment
                        and release.

            (c)         Addresses for Notices, Etc. All notices, requests,
                        demands, directions and other communications provided
                        for hereunder shall be in writing (including telegraphic
                        communication) and mailed, telegraphed or delivered as
                        set out in the Loan Agreement, or, as to any party, to
                        such other address as such party shall specify by a
                        notice in writing to the other parties.

            (d)         Further Assurances. The Pledgor agrees to do such
                        further reasonable acts and things, and to execute and
                        deliver such additional conveyances, assignments,
                        agreements and instruments as the Bank may at any time
                        request in connection with the administration or
                        enforcement of this Agreement (including, without
                        limitation, to aid the Bank in the sale of all or any
                        part of the Pledged Securities) or related to the
                        Pledged Securities or any part thereof or in order
                        better to assure and confirm unto the Bank its rights,
                        powers and remedies hereunder. The Pledgor hereby
                        consents and agrees that the issuer of the Pledged
                        Securities, or any registrar or transfer agent for any
                        of the Pledged Securities, shall be entitled to accept
                        the provisions hereof as conclusive evidence of the
                        right of the Bank to affect any transfer pursuant to
                        Section 2, notwithstanding any other notice or

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                        direction to the contrary heretofore or hereafter given
                        by the Pledgor or any other person to such issuer or to
                        any such registrar or transfer agent.

            (e)         Binding Agreement; Assignment. This Agreement shall be
                        binding upon and inure to the benefit of the parties
                        hereto, their respective successors and assigns, except
                        that the Pledgor shall not be permitted to assign this
                        Agreement or any interest herein or in the Pledged
                        Securities, or any part thereof, or otherwise pledge,
                        encumber or grant any option with respect to the Pledged
                        Securities, or any part thereof, or any cash or property
                        held by the Bank as Pledged Securities under this
                        Agreement.

            (f)         Governing Law; Amendments. This Agreement shall be
                        governed by the laws of the State of Oklahoma. No
                        provision of this Agreement may be amended, waived or
                        modified, nor may any of the Pledged Securities be
                        released, unless specifically provided for herein,
                        except in writing signed by the Bank.

            (g)         Headings. Paragraph headings used herein are for
                        convenience only and shall not affect the construction
                        of this Agreement.

            (h)         Jurisdiction; Venue. Pledgor agrees that the courts
                        sitting in Tulsa County, Oklahoma (both state and
                        federal) shall have exclusive jurisdiction to resolve
                        any disputes in law or in equity arising out of this
                        Agreement, and Pledgor submits to the jurisdiction of
                        the District Court, State of Oklahoma, 14th Judicial
                        District or the United States District Court, Northern
                        District of Oklahoma, waiving all obligations to venue.

            (i)         Counterparts. This Agreement may be executed in
                        counterpart (or by facsimile signature with the original
                        signature page to be delivered thereafter) and each
                        counterpart shall constitute an original as if each
                        signature is contained on a single document.

            10. Definitions. "Event of Default" shall include but not be limited
to any event or failure of the Borrower or Pledgor to comply with any of the
terms, covenants, agreements or obligations contained in this Agreement, the
Loan Agreement or the Note or any other writing between the Bank and the Pledgor
arising in connection with the Bank's financing of the Borrower.

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

                                         /s/ Paul A. Kruger
                                         ------------------------------
                                         Paul A. Kruger

                                         THE F&M BANK & TRUST COMPANY

                                         /s/ Louis Medina
                                         ------------------------------
                                         Louis Medina, Senior Vice President

                                       8EXHIBIT 10.6
                                                                    ------------

                                WARREN F. KRUGER
                                LIMITED GUARANTY
                                ----------------

The Borrower, PLASTIC PALLET PRODUCTION, INC., a Texas corporation ("Borrower"),
has borrowed or desires to borrow the principal sum of $3,000,000.00 from THE
F&M BANK & TRUST COMPANY, an Oklahoma banking corporation ("Bank"), pursuant to
a Note ("Note") and Loan Agreement of even date, (the "Loan Agreement") with
Borrower and Bank and Warren F. Kruger, Paul A. Kruger and PalWeb Corporation
(individually or collectively "Guarantor" or "Guarantors ") (hereinafter the
Note identified above will be collectively referred to as the "Note" and the
sums due under the Note shall be referred to and defined hereafter as
"Indebtedness").

            As a condition of the loans by the Bank, the Bank has required that
the payment and performance by Borrower of the Note and Indebtedness be
unconditionally guaranteed by the undersigned to the limited extent and only to
the extent outlined below in this Guaranty. The loan of monies to Borrower will
benefit the Guarantor as owner of an interest in Borrower.

            1. As an inducement for and in consideration of Bank agreeing to
make available or lend to Borrower and Guarantor certain funds pursuant to that
certain Loan Agreement dated of even date herewith between Borrower and Bank,
and evidenced by the certain Note executed by Borrower and payable to the order
of Bank, Guarantor, Guarantor absolutely and unconditionally guarantees and
promises to pay to Bank or its order, in legal tender of the United States of
America, the Note and Indebtedness (as defined below) of Borrower, to Bank on
the terms and conditions set forth in this Guaranty; provided, however,
Guarantor's payment obligation shall be limited to, and not exceed, the sum of
(1) ONE MILLION DOLLARS ($1,000,000.00) of the principal sums outstanding on the
Notes, plus accrued interest on that sum, and (2) all costs and expenses
(including a reasonable attorney's fee) incurred in enforcing this Guaranty
(hereinafter collectively "Limited Guaranteed Amount"). Under this Guaranty, the
liability of Guarantor is limited as set forth above, and the obligations of
Guarantor are absolute and continuing. The amount of this Guaranty is limited to
the Limited Guaranteed Amount.

            2. Guarantor's liability under this Guaranty shall be open and
continuous for so long as this Guaranty remains in force. Guarantor intends to
guarantee at all times the performance and prompt payment when due, whether at
maturity or earlier by reason of acceleration or otherwise, of all Indebtedness.
Accordingly, no payments made upon the Indebtedness will discharge or diminish
the continuing liability of Guarantor in connection with any remaining portions
of the Indebtedness or any of the Indebtedness which subsequently arises or is
thereafter incurred or contracted. Notwithstanding anything contained in this
Guaranty to the contrary, Guarantor shall be entitled to any notices and
opportunities to cure a default pursuant to the Indebtedness which may be
afforded the Borrower.

            3. This Guaranty will take effect when received by Bank without the
necessity of any acceptance by Bank, or any notice to Guarantor or to Borrower,
and will continue in full
<PAGE>

force until all Indebtedness incurred or contracted before receipt by Bank of
any notice of revocation shall have been fully and finally paid and satisfied
and all other obligations of Guarantor under this Guaranty shall have been
performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may
only do so in writing. Guarantor's written notice of revocation must be
delivered to Bank at the address of Bank listed above or such other place as
Bank may designate in writing. This Guaranty may be revoked only with respect to
Indebtedness incurred or contracted by Borrower, or acquired by Bank thirty (30)
days or more after the date on which written notice of revocation is actually
received by Bank. No notice of revocation hereof shall be effective as to any
Indebtedness: (a) existing at the date of receipt of such notice; (b) incurred
or contracted by Borrower, or acquired by Bank, within thirty (30) days after
receipt of such notice; (c) now existing or hereafter created pursuant to or
evidenced by a loan agreement or commitment under which Borrower is or may
become obligated to Bank; or (d) renewals, extensions, consolidations,
substitutions, and refinancings of the foregoing. Any payment by Guarantor with
respect to the Indebtedness guaranteed shall not reduce the maximum obligation
hereunder, unless written notice to that effect be actually received by Bank at
or prior to the time of such payment. It is anticipated that fluctuations may
occur in the aggregate amount of Indebtedness covered by this Guaranty, and it
is specifically acknowledged and agreed by Guarantor that reductions in the
amount of Indebtedness, even to zero dollars ($0.00), prior to written
revocation of this Guaranty by Guarantor shall not constitute a termination of
this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs,
successors and assigns so long as any of the guaranteed Indebtedness remains,
but sums are available for advance.

            4. Guarantor authorizes Bank, either before or after any revocation
hereof, without notice or demand and without lessening Guarantor's liability
under this Guaranty, from time to time: (a) prior to revocation as set forth
above, to make one or more additional secured or unsecured loans to Borrower, to
lease equipment or other goods to Borrower, or otherwise to extend additional
credit to Borrower; (b) to alter, compromise, renew, extend, accelerate, or
otherwise change one or more times the time for payment or other terms of the
Indebtedness or any part of the Indebtedness, including increases and decreases
of the rate of interest on the Indebtedness; extensions may be repeated and may
be for longer than the original loan term; (c) to take and hold security for the
payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, fail
or decide not to perfect, and release any such security, with or without the
substitution of new collateral; (d) to release, substitute, agree not to sue, or
deal with anyone or more of Borrower's sureties, endorsers, or other guarantors
on any terms or in any manner Bank may choose; (e) to determine how, when and
what application of payments and credits shall be made on the Indebtedness; (f)
to apply such security and direct the order or manner of sale thereof, including
without limitation, any nonjudicial sale permitted by the terms of the
controlling security agreement, as Bank in its discretion may determine; (g) to
sell, transfer, assign, or grant participations in all or any part of the
Indebtedness; (h) to assign or transfer this Guaranty in whole or in part; (i)
to exercise or refrain from exercising any rights against Borrower or others, or
otherwise act or refrain from acting; (j) to settle or compromise any
Indebtedness; and (k) to subordinate the payment of all or any part of
Indebtedness of Borrower to Bank to the payment of any liabilities which may be
due Bank or others.

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<PAGE>

            5. Guarantor represents and warrants to Bank that (a) no
representations or agreements of any kind have been made to Guarantor which
would limit or qualify in any way the terms of this Guaranty; (b) this Guaranty
is executed at Borrower's request and at the request of Bank; (c) Guarantor has
not and will not, without the prior written consent of Bank, sell, lease,
assign, encumber, hypothecate, transfer, or otherwise dispose of all or
substantially all of Guarantor's assets, or any interest therein; (d) Bank has
made no representation to Guarantor as to the credit worthiness of Borrower; (e)
upon Bank's request, Guarantor will provide to Bank financial and credit
information in form acceptable to Bank, and all such financial information
provided to Bank is true and correct in all material respects and fairly
presents the financial condition of Guarantor as of the dates thereof, and no
material adverse change has occurred in the financial condition of Guarantor
since the date of the financial statements; and (f) Guarantor has established
adequate means of obtaining from Borrower on a continuing basis information
regarding Borrower's financial condition. Guarantor agrees to keep adequately
informed from such means of any facts, events, or circumstances which might in
any way affect Guarantor's risks under this Guaranty, and Guarantor further
agrees that, absent a request for information, Bank shall have no obligation to
disclose to Guarantor any information or documents acquired by Bank in the
course of its relationship with Borrower.

            6. Except as prohibited by applicable law, Guarantor waives any
right to require Bank (a) to continue lending money or to extend other credit to
Borrower; (b) to make any presentment, protest, demand, or notice of any kind
including notice of any nonpayment of the Indebtedness or of any nonpayment
related to any collateral, or notice of any action or nonaction on the part of
Borrower or Bank in connection with the Indebtedness or in connection with the
creation of new or additional loans or obligations; (c) to resort for payment or
to proceed directly or at once against any person, including Borrower or any
other guarantor; (d) to proceed directly against or exhaust any collateral held
by Bank from Borrower, any other guarantor, or any other person; (e) to give
notice of the terms, time, and place of any public or private sale of personal
property security held by Bank from Borrower or to comply with any other
applicable provisions of the Uniform Commercial Code; (f) to pursue any other
remedy within Bank's power; or (g) to commit any act or omission of any kind, or
at any time, with respect to any matter whatsoever.

If now or hereafter (a) Borrower shall be or become insolvent, and (b) the
Indebtedness shall not at all times until paid be fully secured by collateral
pledged by Borrower, Guarantor hereby forever waives and relinquishes in favor
of Bank and Borrower, and their respective successors, any claim or right to
payment Guarantor may now have or hereafter have or acquire against Borrower, by
subrogation or otherwise, so that at no time shall Guarantor be or become a
"creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any
successor provision of the Federal bankruptcy laws.

Guarantor also waives any and all rights or defenses arising by reason of (a)
any "one action" or "anti-deficiency" law or any other law which may prevent
Bank from bringing any action, including a claim for deficiency, against
Guarantor, before or after Bank's commencement or completion of any foreclosure
action, either judicially or by exercise of a power of sale; (b) any election of
remedies by Bank which destroys or otherwise adversely affects Guarantor's
subrogation rights or Guarantor's rights to proceed against Borrower for
reimbursement,

                                       3
<PAGE>

including without limitation, any loss of rights Guarantor may suffer by reason
of any law limiting, qualifying, or discharging the Indebtedness; (c) any
disability or other defense of Borrower or of any other person, or by reason of
the cessation of Borrower's liability from any cause whatsoever, other than
payment in full in legal tender, of the Indebtedness; (d) any right to claim
discharge of the Indebtedness on the basis of impairment of any collateral for
the Indebtedness; (e) any statute of limitations, if at any time any action or
suit brought by Bank against Guarantor is commenced there is outstanding
Indebtedness of Borrower to Bank which is not barred by any applicable statute
of limitations; (f) any defenses given to guarantors at law or in equity other
than actual payment and performance of the Indebtedness; or (g) by any failure,
neglect, or omission by Bank to perfect in any manner the collection of the
Indebtedness or the security given therefor, including the failure or omission
to seek a deficiency judgement against Borrower. If payment is made by Borrower,
whether voluntarily or otherwise, or by any third party, on the Indebtedness and
thereafter Bank is forced to remit the amount of that payment to Borrower's
trustee in bankruptcy or to any similar person under any federal or state
bankruptcy law or law for the relief of debtors, the Indebtedness shall be
considered unpaid for the purpose of enforcement of this Guaranty.

Guarantor further waives and agrees not to assert or claim at any time any
deductions to the amount guaranteed under this Guaranty for any claim of setoff,
counterclaim, counter demand, recoupment or similar right, whether such claim,
demand or right may be asserted by the Borrower, the Guarantor, or both.

            7. In the event of (i) an Event of Default as that tem1 is defined
in the Loan Agreement of even date herewith between Borrower and Bank, or (ii) a
breach of any of the covenants or agreements of Guarantor contained herein, or
(iii) a default or events of default under any loan agreement, credit agreement,
pledge agreement, guaranty, mortgage or security agreement between or among the
Borrower and/or the Bank, or a material default or events of default under any
loan agreement, credit agreement, pledge agreement, guaranty, mortgage or
security agreement between or among the Guarantor and/or the Bank, or (iv)
failure of Guarantor to pay debts as they mature, or (v) the business failure of
Borrower or Guarantor or (vi) the appointment of a receiver, trustee, custodian
or liquidator of any substantial portion of the property or assets of Borrower
or Guarantor or (vii) the commencement of any proceedings under any bankruptcy
or insolvency laws by or against Borrower or Guarantor and as to involuntary
proceedings, a failure to obtain a dismissal thereof within 90 days, or (viii)
the death of Guarantor and even if such event shall occur at a time when any of
the Indebtedness may not be due and payable, all Indebtedness shall, for the
purposes of this Guaranty Agreement, be deemed, at Bank's election and after
written notice, to be immediately due and payable.

            8. Guarantor warrants and agrees that each of the waivers set forth
above is made with Guarantor's full knowledge of its significance and
consequences and that, under the circumstances, the waivers are reasonable and
not contrary to public policy or law. If any such wavier is determined to be
contrary to any applicable law or public policy, such waiver shall be effective
only to the extent permitted by law or public policy.

                                       4
<PAGE>

            9. In addition to all liens upon and rights of setoff against the
moneys, securities or other property of Guarantor given to Bank by law, Bank
shall have, with respect to Guarantor's obligations to Bank under this Guaranty
and to the extent permitted by law, a contractual possessory security interest
in and a right of setoff against, and Guarantor hereby assigns, conveys,
delivers, pledges, and transfers to Bank all of Guarantor's right, title and
interest in and to, all deposits, moneys, securities and other property of
Guarantor now or hereafter in the possession of or on deposit with Bank, whether
held in a general or special account or deposit, whether held jointly with
someone else, or whether held for safekeeping or otherwise, excluding however
all IRA, Keogh, and trust accounts. Every such security interest and right of
setoff may be exercised without demand upon or notice to Guarantor. No security
interest or right of setoff shall be deemed to have been waived by any act or
conduct on the part of Bank or by any neglect to exercise such right of setoff
or to enforce such security interest or by any delay in so doing. Every right of
setoff and security interest shall continue in full force and effect until such
right of setoff or security interest is specifically waived or released by an
instrument in writing executed by Bank.

            10. Guarantor agrees that the Indebtedness of Borrower to Bank,
whether now existing or hereafter created, shall be prior to any claim that
Guarantor may now have or hereafter acquire against Borrower, whether or not
Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim
Guarantor may have against Borrower, upon any account whatsoever, to any claim
that Bank may now or hereafter have against Borrower. In the event of insolvency
and consequent liquidation of the assets of Borrower, through bankruptcy, by an
assignment for the benefit of creditors, by voluntary liquidation, or otherwise,
the assets of Borrower applicable to the payment of the claims of both Bank and
Guarantor shall be paid to Bank and shall be first applied by Bank to the
Indebtedness of Borrower to Bank. Guarantor does hereby assign to Bank all
claims which it may have or acquire against Borrower or against any assignee or
trustee in bankruptcy of Borrower; provided however, that such assignment shall
be effective only for the purpose of assuring to Bank full payment in legal
tender of the Indebtedness. If Bank so requests, any notes or credit agreements
now or hereafter evidencing any debts or obligations of Borrower to Guarantor
shall be marked with a legend that the same are subject to this Guaranty and
shall be delivered to Bank. Guarantor agrees, and Bank hereby is authorized, in
the name of Guarantor, from time to time to execute and file financing
statements and continuation statements and to execute such other documents and
to take such other actions as Bank deems necessary or appropriate to perfect,
preserve and enforce its rights under this Guaranty.

            11. The following words shall have the following meaning when used
in this Guaranty:

            Guarantor or Guarantors shall have the meaning set out in the
preamble. GUARANTY. The word "Guaranty" means this Guaranty made by Guarantor
for the benefit of Bank dated of even date herewith. INDEBTEDNESS. The word
"Indebtedness" is used in its most comprehensive sense and means and includes
any and all of Borrower's liabilities, obligations, debts, and indebtedness to
Bank on the Note or otherwise, now existing or hereinafter incurred or created,
including, without limitation, all loans, advances, interest, costs, debts
overdraft indebtedness, credit card indebtedness, lease obligations, other
obligations, and liabilities of Borrower and any present or

                                       5
<PAGE>

future judgements against Borrower; and whether any such Indebtedness is
voluntarily or involuntarily incurred, due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined; whether Borrower may be
liable individually or jointly with others, or primarily or secondarily, or as
guarantor or surety; whether recovery on the Indebtedness may be or may become
barred or unenforceable against Borrower for any reason whatsoever; and whether
the Indebtedness arises from transactions which may be voidable on account of
infancy, insanity, ultra vires, or otherwise. BANK. The word "Bank" means The F
&M Bank & Trust Company of Tulsa, Oklahoma, its successors and assigns. RELATED
DOCUMENTS. The word "Related Documents" mean and include without limitation all
notes, loan agreements, guaranties, security agreements, mortgages, deeds of
trust, and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the Indebtedness.

            12. The following miscellaneous provisions are a part of this
Guaranty

AMENDMENTS. This Guaranty, together with any Related Documents, constitutes the
entire understanding and agreement of the parties as to the matters set forth in
this Guaranty. All prior and contemporaneous representations and discussions
concerning the subject are included in this document and the Related Documents
or do not constitute an aspect of the agreement of the parties. Except as may be
specifically set forth in this Guaranty and the Related Documents, no conditions
precedent or subsequent, of any kind whatsoever, exist with respect to
Guarantor's obligations under this Guaranty. No alteration of or amendment to
this Guaranty shall be effective unless given in writing and signed by the party
or parties sought to be charged or bound by the alteration or amendment.

APPLICABLE LAW. This Guaranty has been delivered to Bank and accepted by Bank in
the State of Oklahoma. If there is a lawsuit, Guarantor agrees upon Bank's
request to submit to the jurisdiction of the courts of Oklahoma County, State of
Oklahoma. This Guaranty shall be governed by and construed in accordance with
the laws of the State of Oklahoma.

ATTORNEYS' FEES; EXPENSES. Guarantor agrees to pay upon demand all of Bank's
reasonable costs and expenses, including reasonable attorneys' fees and Bank's
reasonable legal expenses, incurred in connection with the enforcement of this
Guaranty. Bank may pay someone else to help enforce this Guaranty, and Guarantor
shall pay the reasonable costs and expenses of such enforcement. Costs and
expenses include Bank's reasonable attorneys' fees and legal expenses whether or
not there is a lawsuit, including reasonable attorneys' fees and legal expenses
for bankruptcy proceedings (and including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-judgment
collection services. Guarantor also shall pay all court costs and such
additional fees as may be directed by the court.

NOTICES. Except for revocation notices by Guarantor, all notices required to be
given by either party to the other under this Guaranty shall be in writing and
shall be delivered either personally, by overnight courier, or by United States
mail (postage prepaid), addressed to the intended recipient at the address shown
above or to such other addresses as either party may designate to the other in
writing and shall be effective on the date of actual delivery .All revocation
notices by Guarantor shall be in writing and shall be effective only upon actual
delivery to Bank as

                                       6
<PAGE>

provided above in the section set out above. For notice purposes, Guarantor
agrees to keep Bank informed at all times of Guarantor's current address.

INTERPRETATION. The words "Guarantor," "Borrower," and "Bank" include the heirs,
successors, assigns, and transferees of each of them. Caption headings in this
Guaranty are for convenience purposes only and are not to be used to interpret
or define the provisions of this Guaranty. If a court of competent jurisdiction
finds any provision of this Guaranty to be invalid or unenforceable as to any
person or circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances, and all provisions of
this Guaranty in all other respects shall remain valid and enforceable. It is
not necessary for Bank to inquire into the powers of Borrower or Guarantor or of
the officers, directors, partners, or agents acting or purporting to act on
their behalf, and any Indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed under this Guaranty.

WAIVER. Bank shall not be deemed to have waived any rights under this Guaranty
unless such waiver is given in writing and signed by Bank. No delay or omission
on the part of Bank in exercising any right shall operate as a waiver of such
right or any other right. A waiver by Bank of a provision of this Guaranty shall
not prejudice or constitute a waiver of Bank's right otherwise to demand strict
compliance with that provision or any other provision of this Guaranty. No prior
waiver by Bank, nor any course of dealing between Bank and Guarantor, shall
constitute a waiver of any of Bank's rights or of any of Guarantor's obligations
as to any future transactions. Whenever the consent of Bank is required under
this Guaranty, the granting of such consent by Bank in any instance shall not
constitute continuing consent to subsequent instances where such consent is
required and in all cases such consent may be granted or withheld in the sole
discretion of Bank.

            Dated effective this 12 day of December, 2001

                                   GUARANTOR:

                                   /s/ Warren F. Kruger
                                   ----------------------------
                                   Warren F. Kruger

                                       7

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