Document:

EXHIBIT 10.5
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                             STOCK PLEDGE AGREEMENT
                             ----------------------

         This Agreement dated effective January 10, 2003, and granted by PALWEB
CORPORATION, an Oklahoma corporation (the "Pledgor"), to PAUL A. KRUGER, an
individual (the "Lender").

         Concurrently herewith, the Pledgor and Plastic Pallet Production, Inc.,
a Texas corporation ("PPP") (the Pledgor and PPP collectively, the "Borrowers"),
as borrowers, and the Lender, as lender, have entered into a Loan Agreement
dated as of even date herewith (the "Loan Agreement") whereby the Lender will
make a term loan in favor of the Borrowers, to be evidenced by a promissory note
payable to the Lender in the original principal amount of SEVEN MILLION DOLLARS
($7,000,000.00) (the "Note").

         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 Borrowers to the Lender arising under the
Note, 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 to the Lender (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 Lender 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 Lender 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 except as allowed by the Loan Agreement (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 Lender, its successors and assigns,
forever as security for the Secured Obligations subject, however, to the terms,
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 Lender
                  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.

         3. Appointment of the Lender; Registration in Nominee Name. The Lender
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 Lender. In addition to all other
rights possessed by the Lender, the Lender 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 Lender'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 Lender 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 the Lender expressly consents in writing, and except as
                  allowed by the Loan Agreement, 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. Except as allowed
                  by the Loan Agreement, any and all cash dividends and
                  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),

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                  shall become part of the Pledged Securities and delivered to
                  the Lender or, if received by the Pledgor, shall be held in
                  trust for the benefit of the Lender and shall forthwith be
                  delivered to the Lender or its designated agent (accompanied
                  by proper instruments of assignment and/or stock powers
                  executed by the Pledgor in accordance with the Lender'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 Lender, 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 Lender, 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
                  Lender 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 Lender pursuant to
                  the provisions of subsection (b) above shall be retained by
                  the Lender 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 Lender 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 Lender 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 the Pledgor commences the cure of an event of default which requires
more than fifteen (15) days and the 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, the Pledgor
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 the
Pledgor 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 Lender
                  shall deem appropriate in a commercially reasonable manner.
                  The Lender shall be authorized at any such sale (to the extent
                  it, in its sole discretion, deems advisable) to restrict the
                  prospective bidders or purchasers

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                  to 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 Lender 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. The Lender shall give the
                  Pledgor at least fifteen (15) days' written notice of the
                  Lender'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 Lender 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 Lender may, in its
                  sole discretion, determine, and the Lender 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 Lender 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 Lender may, after
                  notice or publication as required by law, 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 Lender until the sale price is paid by the
                  purchaser or purchasers thereof, but the Lender 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 Lender's right to sell hereunder or under
                  the Uniform Commercial Code, the Lender 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
                  securities laws may strictly limit the course of conduct of
                  the Lender if the Lender 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 Lender 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 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

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<PAGE>

                  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 Lender 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.

         7. Application of Proceeds of the Pledged Securities Sale. The Lender
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 Lender 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 Lender for
         the account of the Pledgor hereunder and the payment of all costs and
         expenses incurred by the Lender 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 its assigns,  or as a court of competent jurisdiction may
         direct.

         8. The Lender Appointed Attorney-in-Fact. The Pledgor hereby appoints
the Lender 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 Lender may deem necessary or advisable to accomplish the purposes
hereof, which appointment is irrevocable and coupled with an interest. Without
limiting the generality of the foregoing, the Lender shall, to the extent
permitted herein and except as provided in the Loan Agreement, 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 Lender 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 Lender 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 Lender 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

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                  therefor, to any obligor hereunder or thereunder, and no such
                  action shall impair the Lender's rights hereunder.

         (b)      Termination. This Agreement shall terminate when the Secured
                  Obligations have been fully performed and paid, at which time
                  the Lender 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 Lender pursuant to the terms
                  hereof and which is still held by the Lender 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 Lender may at any time request in
                  connection with the administration or enforcement of this
                  Agreement (including, without limitation, to aid the Lender 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 Lender 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 Lender to affect any
                  transfer pursuant to Section 2, notwithstanding any other
                  notice or 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 Lender 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 Lender.

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<PAGE>

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

         (h)      Jurisdiction; Venue. The Pledgor agrees that the exclusive
                  jurisdiction to resolve any disputes in law or in equity
                  arising out of this Agreement shall be in the state courts
                  sitting in Tulsa County, Oklahoma or federal courts sitting in
                  the Northern District of Oklahoma, and the Pledgor submits to
                  the jurisdiction of the such courts, 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 Borrowers to comply with any of the terms,
covenants, agreements or obligations contained in this Agreement, the Loan
Agreement or the Note or any other Loan Document (as defined in the Loan
Agreement).

         IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.

                                          PALWEB CORPORATION, an Oklahoma
                                          corporation

                                          By:    /s/ Warren F. Kruger
                                                 ------------------------------
                                          Name:  Warren F. Kruger
                                                 ------------------------------
                                          Title: President
                                                 ------------------------------
                                                         "Pledgor"

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<PAGE>

                                    EXHIBIT A
                                    ---------

                              (Pledged Securities)

          2,000,000 shares of common stock of Plastic Pallet Production, Inc.,
          represented by Certificate No. 2 issued to PalWeb Corporation.

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

                               SECURITY AGREEMENT
                               ------------------

         THIS SECURITY AGREEMENT is made and entered into effective as of the
10th day of January, 2003, between PALWEB CORPORATION, an Oklahoma corporation
("PalWeb"), PLASTIC PALLET PRODUCTION, INC., a Texas corporation ("PPP") (PalWeb
and PPP collectively, the "Debtors"), and PAUL A. KRUGER, an individual (the
"Secured Party").

                                    RECITALS:
                                    ---------

         A. The Debtors have requested that the Secured Party make in favor of
the Debtors a $7,000,000 term loan (the "Loan"), to be evidenced by that certain
$7,000,000 Promissory Note (the "Note") dated as of even date herewith.

         B. Pursuant to that certain Loan Agreement dated as of even date
herewith (the "Loan Agreement") between the Debtors and the Secured Party, the
Secured Party has agreed to make the Loan in favor of the Debtors.

         C. The Loan Agreement provides that the Secured Party's obligations
thereunder are subject to the execution and delivery of this Security Agreement.

         NOW, THEREFORE, to induce the Secured Party to enter into the Loan
Agreement, to consummate the transactions provided for therein, and for other
valuable considerations, the receipt of which is hereby acknowledged, the
Secured Party and the Debtors agree as follows:

         1. Definitions.

         1.1. Terms Defined in Loan Agreement. All capitalized terms used herein
and not otherwise defined shall have the meanings assigned to such terms in the
Loan Agreement.

         1.2. Terms Defined in the UCC. Each term used herein which is defined
in the UCC and not otherwise defined herein, shall have the respective meaning
given such term in the UCC.

         1.3. Definitions of Certain Terms Used Herein. As used in this Security
Agreement, the following terms shall have the following meanings:

         "Account" shall have the meaning given such term in Article 9 of the
UCC.

         "Collateral" is defined in Section 2 of this Security Agreement.

         "Chattel Paper" shall have the meaning given such term in Article 9 of
the UCC.

         "Equipment" shall have the meaning given such term in Article 9 of the
UCC.

         "General Intangible" shall have the meaning given such term in Article
9 of the UCC.
<PAGE>

         "Instruments" shall have the meaning given such term in Article 9 of
the UCC.

         "Inventory" shall have the meaning given such term in Article 9 of the
UCC.

         "Indebtedness" means and includes all liabilities, obligations and
indebtedness of the Debtors to the Secured Party, of every kind and description,
now existing or hereafter incurred, direct or indirect, absolute or contingent,
due or to become due, matured or unmatured, and whether or not of the same or a
similar class or character as the Loan and whether or not currently contemplated
by the Secured Party or the Debtors, including (i) the Loan; (ii) all other
liabilities, obligations and indebtedness of the Debtors to the Secured Party
arising out of or related to the Loan Agreement, the Loan or any of the Loan
Documents, including costs and expenses of collection and other amounts
reimbursable under the Loan Agreement; and (iii) any and all extensions of any
of the foregoing; PROVIDED, HOWEVER, that the term "Indebtedness" shall exclude
all Claims (as defined in that certain Mutual Release Agreement dated as of even
date herewith between the Lender, the Borrowers, Westgate Investments, L.P. and
each of the existing directors of PalWeb).

         "Letter of Credit Rights" shall have the meaning given such term in
Article 9 of the UCC.

         "Lien" shall mean any lien (statutory or other), security interest,
mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, the interest of a
vendor or lessor under any conditional sale, capitalized lease or other title
retention agreement).

         "Payment Intangible" shall have the meaning given such term in Article
9 of the UCC.

         "Proceeds" shall have the broadest and most extensive meaning now or
hereafter given or assigned to such term in Article 9 of the UCC and, in any
event, shall include, but not be limited to, (i) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to the Debtors from time to
time with respect to the Collateral, and (ii) any and all payments (in any form
whatsoever) made or due and payable to the Debtors from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental authority.

         "UCC" means the Uniform Commercial Code as in effect on the date hereof
in the State of Oklahoma as hereinafter amended, modified or re-enacted from
time to time.

         2. Grant of Security Interest. As security for the payment of all
Indebtedness, the Debtors hereby assign and grant to the Secured Party, a first
and prior, continuous and continuing security interest in, and assignment of,
all of the following, whether now or hereafter existing or acquired (the
"Collateral"):

                  (a) All Accounts of the Debtors;

                  (b) All Equipment of the Debtors;

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<PAGE>

                  (c) All Inventory of the Debtors;

                  (d) All General Intangibles of the Debtors;

                  (e) All Payment Intangibles of the Debtors;

                  (f) All Instruments (including promissory notes), Letter of
         Credit Rights, Supporting Obligations, Documents, Chattel Paper of the
         Debtors;

                  (g) All books, records, ledger cards, electronic data
         processing materials and other general intangibles relating to the
         foregoing subsections (a) through (f), inclusive; and

                  (h) all proceeds of and all replacements, additions,
         substitutions, accessories, appurtenances, and parts for, the items or
         types of collateral described above in subsections (a) through (g),
         inclusive, whether now owned or hereafter acquired including, without
         limitation insurance proceeds.

         3. Warranties. The Debtors warrant that: (i) no financing statement
(other than any which may have been filed on behalf of the Secured Party or for
Permitted Liens, as defined and described in the Loan Agreement) covering any of
the Collateral is on file in any public office; (ii) except for Permitted Liens,
the Debtors are and will be the lawful owners of all of the Collateral, free of
all Liens and claims whatsoever, with full power and authority to execute this
Security Agreement and to perform the Debtors' obligations hereunder, and to
subject the Collateral to the security interest hereunder; (iii) all information
with respect to the Collateral and the Account Debtors set forth on any
schedule, certificate or other writing at any time heretofore or hereafter
furnished by the Debtors to the Secured Party, is and will be true and correct
in all material respects as of the date furnished, and (iv) the Debtors are duly
authorized to execute, deliver and perform this Security Agreement.

         4. Use and Possession. As long as there exists no Event of Default, the
Debtors may have possession of the Collateral and use the same in any lawful
manner not inconsistent with this Security Agreement, with any applicable law or
regulation or with any policy of insurance on any of such Collateral.

         5. Sales in the Ordinary Course of Business; Collections by Debtors.
Until such time as the Secured Party shall notify the Debtors of the revocation
of such power and authority because of the occurrence of an Event of Default
(whether or not the Secured Party takes any other action or accelerates the
Indebtedness), the Debtors (i) may, in the ordinary course of their business, at
their own expense, sell, lease or furnish under contracts of service any of the
Collateral held by the Debtors for such purpose, and use and consume, in the
ordinary course of its business, any raw materials, work in process or materials
normally held by the Debtors for such purpose, and (ii) will, at their own
expense, endeavor to collect, as and when due, all amounts due with respect to
Accounts, lease and/or notes receivable, leases, lease agreements, chattel
paper, contracts, General Intangibles and Payment Intangibles pertaining to any
of the

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<PAGE>

Collateral, including the taking of such action with respect to such collection
as the Secured Party may reasonably request or, in the absence of such request,
as the Debtors may deem advisable.

         6. Collections by the Secured Party. Upon the occurrence of an Event of
Default (whether or not the Secured Party takes any other action or accelerates
the Indebtedness), the Secured Party may at any time, whether before or after
any revocation of such power and authority or the maturity of any of the
Indebtedness, notify any parties obligated on any of the Accounts, leases and/or
notes receivable, leases, lease agreements, Chattel Paper, contracts, General
Intangibles or Payment Intangibles to make payment to the Secured Party of any
amounts due or to become due thereunder and enforce collection of any such
Accounts, leases and/or notes receivable, leases, lease agreements, Chattel
Paper, contracts, General Intangibles or Payment Intangibles by suit or
otherwise and 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 obligations thereunder or evidenced thereby. The Debtors
will, at their own expense, notify any parties obligated on any of the Accounts,
leases and/or notes receivable, leases, lease agreements, Chattel Paper,
contracts, General Intangibles or Payment Intangibles pertaining to the
Collateral to make payment to the Secured Party of any amounts due or to become
due thereunder. The Secured Party is authorized to endorse, in the name of the
Debtors, any item howsoever received by the Secured Party, representing any
payment on or other proceeds of any of the Collateral. In each instance in which
the Secured Party may elect hereunder to effect direct collection of any one or
more Accounts, leases and/or notes receivable, leases, lease agreements, Chattel
Paper, contracts, General Intangibles or Payment Intangibles pertaining to the
Collateral, the Secured Party is also entitled to take possession of all books
and records of the Debtors relating to the Debtors' Accounts, leases and/or
notes receivable, leases, lease agreements, Chattel Paper, contracts, General
Intangibles or Payment Intangibles, and the Debtors will not in any manner take
or suffer any action to be taken to hinder, delay or interfere with the Secured
Party's attempts to effect collection.

         7. Inventory Location. The Debtors hereby represent and warrant to the
Secured Party that the Inventory is located only in or near the locations set
forth on Exhibit A hereto. The Debtors will not open or establish any warehouse
not owned or established as of the date of this Security Agreement or locate any
Inventory at any location except as set forth above without obtaining the
Secured Party's prior written consent and executing such financing statements as
the Secured Party and its counsel deem necessary to perfect its security
interest therein. The Debtors shall immediately notify the Secured Party of the
occurrence of any event causing loss or depreciation in value (except for
ordinary wear and tear and loss or depreciation in value) of Collateral and the
amount of such loss or depreciation.

         8. Covenants of the Debtors. The Debtors will (i) upon demand, provide
to the Secured Party any information the Secured Party deems necessary in order
to protect, preserve, continue, perfect, extend or maintain a valid security
interest in the Collateral (free of all other Liens, claims and rights of third
parties whatsoever) to secure payment of the Indebtedness, and Debtors hereby
authorize the filing of any financing statement, continuation statement,
inventory list, lien entry forms or other similar documents and will pay any
expenses and fees incurred from time to time by Secured Party in connection
therewith; (ii) keep all Inventory only at the

                                       4
<PAGE>

locations set forth in Section 7 hereof or at such other addresses as shall be
provided to the Secured Party at least fifteen days prior to the location of any
Inventory thereat, and which address shall be acceptable to the Secured Party;
(iii) keep only at the locations set forth in Section 7 hereof all records
concerning Accounts, notes receivable, contracts, General Intangibles and
Payment Intangibles, which records will be of such character as will enable the
Secured Party or its agents or designees to determine at any time the status
thereof; (iv) furnish the Secured Party such information concerning the Debtors,
the Collateral and the Account Debtors as the Secured Party may from time to
time reasonably request; (v) permit the Secured Party and its agents and
designees from time to time to inspect the Inventory and to inspect, audit and
make copies of and extracts from all records and all other papers in the
possession of the Debtors, and will, upon reasonable request of the Secured
Party, deliver to the Secured Party all of such records and papers which pertain
to the Collateral and the Account Debtors; (vi) upon request of the Secured
Party, stamp on the Debtors' records concerning the Collateral, a notation, in
form satisfactory to the Secured Party, of the security interest of the Secured
Party hereunder; (vii) except for the sale or lease of Inventory in the ordinary
course of its business, not sell, lease, transfer or otherwise dispose of,
assign or create or permit to exist any Lien on or security interest in any
Collateral to or in favor of anyone other than the Secured Party, except with
the prior written consent of the Secured Party; (viii) at all times keep all
Collateral insured against loss, damage, theft and other risks, in such amounts,
with such companies, under such policies and in such form, all as shall be
reasonably satisfactory to the Secured Party, which policies shall provide that
loss thereunder shall be payable to the Debtors and the Secured Party as their
interests may appear, and such policies or certificates thereof shall, if the
Secured Party so requests, be deposited with the Secured Party; (ix) if the
Collateral is of a type normally used in more than one state, whether or not
actually so used, the Debtors will immediately give written notice to the
Secured Party of any change in the location of the chief executive office or the
chief place of business of the Debtors, and of any transfer of any such
Collateral in any jurisdiction other than the locations set forth in paragraph 7
hereof; and (x) reimburse the Secured Party for all reasonable expenses,
including attorneys' fees and legal expenses, incurred by the Secured Party in
seeking to collect or enforce any rights in the Collateral and to collect the
Revolving Note and all other Indebtedness and to enforce its rights hereunder.

         9. Remedies. Whenever an Event of Default shall exist, the Indebtedness
shall be immediately due and payable, or not, as provided in the Loan Agreement,
and the Secured Party may from time to time exercise any rights and remedies
available to it hereunder, under the Loan Agreement or applicable law. The
Debtors agree, in case of an Event of Default and upon the request of the
Secured Party, to assemble the Collateral, at the Debtors' expense, at a
convenient place acceptable to the Secured Party. Without limiting the
foregoing, upon the existence of an Event of Default, the Secured Party may, to
the fullest extent permitted by applicable law, without notice (except as
required by the Loan Agreement), advertisement, hearing or process of law of any
kind, (i) enter upon any premises where any of the Collateral may be located and
take possession of and remove all or any such items, (ii) sell any or all of the
Collateral free of all rights and claims of the Debtors therein and thereto at
any public or private sale, and (iii) bid for and purchase any of the Collateral
at any such sale. If any notification of intended disposition of any of the
Collateral is required by law, such notification, if mailed, shall be deemed
reasonably and properly given if mailed at least ten days before disposition,
postage prepaid, addressed to the Debtors, at the address shown on the signature
page or at any other address of the Debtors

                                       5
<PAGE>

appearing on the records of the Secured Party. Any proceeds of any of the
Collateral (including proceeds of collections by the Secured Party described in
Section 6) may be applied by the Secured Party to the payment of expenses
incurred in connection with enforcing its rights or remedies with respect to the
Collateral, including reasonable attorneys' fees and legal expenses, and any
balance of such proceeds may be applied by the Secured Party toward the payment
of such of the Indebtedness, and in such order of application as the Secured
Party may from time to time elect, but only if allowed by applicable law.

         10. Reimbursement of Secured Party. The Secured Party may from time to
time, at its option, perform any agreement, obligation or covenant of the
Debtors hereunder which the Debtors shall fail to perform, and take any other
action which the Secured Party reasonably deems necessary for the maintenance or
preservation of any of the Collateral or its interest therein, and the Debtors
agree to forthwith reimburse the Secured Party for all reasonable expenses of
the Secured Party in connection with the foregoing, together with interest
thereon at the Default Rate from the date of notice thereof to the Debtors until
reimbursed by the Debtors.

         11. Reasonable Care. The Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in
its possession if it takes such action for that purpose as the Debtors may
request in writing, but failure of the Secured Party to comply with any such
request shall not of itself be deemed a failure to exercise reasonable care.

         12. Notices. Any notice from the Secured Party to the Debtors, if
mailed, shall be deemed given when mailed, postage prepaid, or delivered by
commercial delivery service, addressed to the Debtors, at the Debtors' address
shown on the signature page hereto or at any other address of the Debtors
appearing on the records of the Secured Party. Any notice from the Debtors to
the Secured Party, if mailed, shall be deemed given when mailed, postage
prepaid, or by commercial delivery service, addressed to the Secured Party at
the address shown on the signature page hereto or at such other address as the
Secured Party shall have provided to the Debtors for such purpose.

         13. No Waiver. No delay on the part of the Secured Party in the
exercise of any right or remedy shall operate as a waiver thereof, and no single
or partial exercise by the Secured Party of any right or remedy shall preclude
other or further exercise thereof or the exercise of any other right or remedy.

         14. Amendments and Modifications. No amendment to, modification or
waiver of, or consent with respect to any provision of this Security Agreement,
shall in any event be effective unless the same shall be in writing and signed
and delivered by the Secured Party, and then any such amendment, modification,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

         15. Choice of Law. This Security Agreement has been delivered to the
Secured Party at Tulsa, Oklahoma, and shall be construed in accordance with and
governed by the laws of the State of Oklahoma.

                                       6
<PAGE>

         16. Severability. Whenever possible each provision of this Security
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Security Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of this Security
Agreement.

         17. Binding Effect. This Security Agreement shall be binding upon the
Debtors and their successors and assigns, and shall inure to the benefit of the
Secured Party and its successors and assigns.

         18. Financing Statement. A carbon or photographic copy, or other
reproduction, of this Security Agreement or of any financing statement prepared
or filed with respect hereto is sufficient as a financing statement for all
purposes.

         IN WITNESS WHEREOF, this Security Agreement has been duly executed and
delivered in Tulsa, Oklahoma, effective as of the day and year first above
written.

Address for Debtors:                      PALWEB CORPORATION,
                                          an Oklahoma corporation

1607 West Commerce                        By:    /s/ Warren F. Kruger
Dallas, Texas 75208                              ------------------------------
                                          Name:  Warren F. Kruger
                                                 ------------------------------
                                          Title: President
                                                 ------------------------------

                                          PLASTIC PALLET PRODUCTION, INC., a
                                          Texas corporation

1607 West Commerce                        By:    /s/ Warren F. Kruger
Dallas Texas 75208                               ------------------------------
                                          Name:  Warren F. Kruger
                                                 ------------------------------
                                          Title: President
                                                 ------------------------------
                                                        "Debtors"

Address for Secured Party                        /s/ Paul A. Kruger
                                                 ------------------------------
                                                 Paul A. Kruger, an individual
2500 South McGee, Suite 147
Norman, Oklahoma  73072                                  "Secured Party"

                                       7
<PAGE>

                                    EXHIBIT A
                                    ---------

                            (Locations of Inventory)

                               1607 West Commerce
                               Dallas, Texas 75208

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