Document:

EXHIBIT 10.7
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                          SECURITIES PURCHASE AGREEMENT

                                  BY AND AMONG

                               PALWEB CORPORATION

                                    AS SELLER

                                       AND

                           THE PURCHASERS NAMED HEREIN

                                 JANUARY 4, 2002

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                                TABLE OF CONTENTS

                                                                           PAGE

ARTICLE I  DEFINITIONS.......................................................5

ARTICLE II  PURCHASE AND SALE OF THE SECURITIES...............................7

            Section 2.01  Purchase and Sale...................................7

            Section 2.02  Closing.............................................7

            Section 2.03  Issuance and Delivery of Securities.................7

            Section 2.04  Purchase Price; Closing Payment.....................7

            Section 2.05  Other Closing Actions and Deliveries................8

            Section 2.06  Further Assurances..................................8

ARTICLE III  REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................8

            Section 3.01  Organization and Authority..........................8

            Section 3.02  Authority; Binding Effect...........................8

            Section 3.03  Absence of Conflicts................................8

            Section 3.04  Capitalization; Ownership of Shares.................9

            Section 3.05  Issuance of Securities.............................10

            Section 3.06  Financial Statements...............................10

            Section 3.07  Absence of Undisclosed Liabilities.................10

            Section 3.08  Litigation.........................................10

            Section 3.09  Books and Records..................................10

            Section 3.10  Solvency...........................................11

            Section 3.11  Disclosure.........................................11

            Section 3.12  Brokers, Finders, etc..............................11

            Section 3.13  Registration Rights................................11

            Section 3.14  Use of Proceeds....................................11

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ARTICLE IV  REPRESENTATIONS AND WARRANTIES OF EACH OF THE PURCHASERS.........12

            Section 4.01  Organization.......................................12

            Section 4.02  Authority; Binding Effect..........................12

            Section 4.03  Investment Intent; Status of Investor..............12

            Section 4.04  Disclosure of Information..........................12

            Section 4.05  Investment Experience..............................13

            Section 4.06  Restricted Securities..............................13

            Section 4.07  Brokers, Finders, etc..............................13

ARTICLE V  CONDITIONS TO THE CLOSING.........................................13

            Section 5.01  Conditions to the Obligations of Each Party........13

            Section 5.02  Conditions to the Purchasers' Obligations..........14

            Section 5.03  Conditions to the Company's Obligations............15

ARTICLE VI  CERTAIN COVENANTS AND AGREEMENTS.................................15

            Section 6.01  Covenants and Agreements to the Closing............15

            Section 6.02  Covenants and Agreements that Survive the Closing..16

            Section 6.03  Corporate Authorizations...........................18

ARTICLE VII  SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS, INDEMNIFICATION..................................................18

            Section 7.01  Survival of Representations and Agreements.........18

            Section 7.02  Indemnification by the Company.....................19

            Section 7.03  Indemnification by the Purchaser...................19

            Section 7.04  Defense of Third-Party Claims......................19

            Section 7.05  Direct Claims......................................20

ARTICLE VIII  MISCELLANEOUS..................................................20

            Section 8.01  Publicity..........................................20

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            Section 8.02  Termination........................................21

            Section 8.03  Fees and Expenses..................................21

            Section 8.04  Legends............................................22

            Section 8.05  Notices............................................22

            Section 8.06  Amendment; Waivers.................................23

            Section 8.07  Parties in Interest; Assignment....................23

            Section 8.08  No Third-Party Beneficiaries.......................23

            Section 8.09  Exhibits and Schedules.............................24

            Section 8.10  Severability.......................................24

            Section 8.11  Headings...........................................24

            Section 8.12  Rules of Construction..............................24

            Section 8.13  Entire Agreement...................................24

            Section 8.14  Governing Law......................................24

            Section 8.15  Specific Performance...............................24

            Section 8.16  Counterparts.......................................25

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                                    EXHIBITS

            Exhibit A...............Purchase and Sale of Securities

            Exhibit B...............Certificate of Designation

            Exhibit C...............Form of Stockholders Agreement

            Exhibit D...............Form of Warrant

                                    SCHEDULES

            See Disclosure Schedule

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                          SECURITIES PURCHASE AGREEMENT

            This SECURITIES PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of January 4, 2002 by and between PalWeb Corporation, a Delaware
corporation (the "Company") and the persons named as Purchasers on Exhibit "A"
(collectively "Purchaser") (collectively, the "Parties" and each, a "Party").

                                   WITNESSETH:

            WHEREAS, the Company desires to issue and sell to the Purchaser, and
the Purchaser is willing to acquire from the Company, (i) an aggregate of up to
700,000 shares of Convertible Preferred Shares (as hereinafter defined) and (ii)
warrants for up to an additional two hundred ten million (210,000,000) shares of
Common Stock; and subject to the conditions hereinafter set forth;

             WHEREAS, in connection with the purchase and sale of the Securities
(the "Securities Purchase"), the Company intends to submit to its shareholders a
proposal to alter its capital structure to result in the capitalization
sufficient to have authorized shares of Common Stock to issue upon conversion or
exercise of the Securities being issued (the "Recapitalization"); and

            NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements, covenants, representations and warranties set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and accepted, the Parties hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

            For purposes of this Agreement, the terms set forth below shall have
the following respective meanings:

            "Affiliate" means, with respect to any Person, any other Person
directly or indirectly Controlling or Controlled by, or under direct or indirect
common Control with, such Person.

            "Building" means the land and building located in Dallas, Texas
currently occupied by the Company and leased from Onward, L.L.C. ("Onward")
which is to be conveyed to the Company in partial consideration for the issuance
of Securities as indicated on Exhibit A.

             "Capital Stock" means all shares, interests, participations or
other equivalents of capital stock of a corporation, however designated, and any
warrants, options or other rights to purchase or acquire any such capital stock
and any securities convertible into or exchangeable or exercisable for any such
capital stock.

            "Common Stock" means the Common Stock, par value $.10 per share, of
the Company.

            "Contract" means any contract, agreement, arrangement, understanding
or other instrument or obligation (whether oral or written, pending or
executory).

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            "Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, seats on the board of
directors, by contract or otherwise.

            "Convertible Preferred Shares" means the shares of Series 2001
Convertible Preferred Stock having the terms as set forth in the Certificate of
Designation attached as Exhibit "B", par value $.0001 per share to be issued and
sold by the Company pursuant to this Agreement.

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

            "Governmental Authority" means any nation or government, any state
or political subdivision thereof, any federal or state court and any other
agency, body, authority or entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.

            "Lien" means, with respect to any properties or assets, (i) any
mortgage, pledge, hypothecation, assignment, security interest, lien or
encumbrance or any preference, priority or other security agreement or
preferential arrangement of any kind or character whatsoever in respect of such
properties or assets, including, but not limited to, (A) any conditional sale or
other title retention agreement, (B) any financing lease having substantially
the same economic effect as any of the foregoing, and (C) the filing of, or
agreement to give, any financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction, and (ii) any net profits interest, royalty
interest or other similar ownership interest in such assets or the revenues
derived therefrom.

            "Person" means any individual, corporation, limited liability
company, partnership, association, trust or any other entity or organization of
any kind or character, including any Governmental Authority.

            "Securities" means the Convertible Preferred Shares and the
Warrants.

            "Securities Act" means the Securities Act of 1933, as amended.

            "Stockholders' Agreement" means the Stockholders Agreement, in the
form of Exhibit C hereto, to be entered into by and among the Company, the
Purchaser and the other shareholders of the Company that are signatories thereto
at the Closing.

            "Subsidiary" means, with respect to any Person, (i) any corporation,
partnership or other entity of which shares of capital stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other similar managing body of such corporation, partnership or
other entity are at the time owned by such Person, or (ii) the management of
which is otherwise Controlled, directly or indirectly, through one or more
intermediaries by such Person.

            "Transaction" means the issuance and sale of the securities and the
other transactions contemplated in the Transaction Documents.

            "Transaction Documents" means this Agreement, the Warrant Agreement
and the Stockholders Agreement.

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            "Uniform Commercial Code" means the Uniform Commercial Code as
enacted in the State of Delaware or other applicable jurisdiction, as amended
from time to time.

            "Warrants" means the warrants issued by PalWeb Corporation to the
Purchaser in the form of Exhibit D hereto regarding the purchase of up to an
aggregate 210,000,000 shares of Common Stock pursuant to the terms thereof.

                                   ARTICLE II
                       PURCHASE AND SALE OF THE SECURITIES

Section 2.01    Purchase and Sale. In accordance with and subject to terms and
                conditions set forth herein, at the Closing, the Company shall
                sell to the Purchaser, and the Purchaser shall purchase from the
                Company, the Securities set on Exhibit A hereto.

Section 2.02    Closing. Closing hereunder shall occur simultaneously with the
                exception of this Agreement. The Closing shall take place at the
                offices of Hall, Estill, Hardwick, Gable, Golden and Nelson,
                P.C., 320 South Boston Avenue, Suite 400, Tulsa, Oklahoma
                74103-3708, or at such other place and time or on such other
                date as the Parties shall mutually agree (the "Closing Date").

Section 2.03    Issuance and Delivery of Securities. At the Closing, the Company
                shall issue and deliver to each Purchaser, against payment by
                such Purchaser of the purchase price therefor specified in
                Section 2.04 one or more certificates evidencing the number of
                Convertible Preferred Shares and Warrants set forth opposite the
                name of such Purchaser on Exhibit A, being purchased duly issued
                and registered in the name of such Purchaser and in a form
                sufficient to vest title thereto fully in such Purchaser.

Section 2.04    Purchase Price; Closing Payment. The purchase price to be paid
                by each Purchaser in exchange for the Securities to be issued to
                them pursuant to this Agreement shall be in the form of the
                consideration in the amount specified in Exhibit A. At the
                Closing, each Purchaser shall deliver to the Company such
                documents as the Company may reasonably request to evidence
                payment of the consideration in the amounts set forth opposite
                the name of the Purchaser on Exhibit A, including in the case of
                the Building, a special warranty deed from Onward to the
                Company's subsidiary Plastic Pallet Production, Inc. subject to
                the existing first mortgage in favor of Texas Capital Bank which
                the Company will assume. If Texas Capital Bank fails to consent
                to such transfer, Onward will take such action as may be
                necessary to repay or refinance the indebtedness owed to Texas
                Capital Bank and the Company will execute a note and mortgage to
                Onward to repay Onward in accordance with the terms of the
                existing indebtedness to Texas Capital Bank. Onward and the
                Company will use their best efforts to obtain the consent of
                Texas Capital Bank and to negotiate a more favorable repayment
                schedule for the existing debt being assumed. If the appraised
                value of the Building is less than $1,350,000, the amount of
                Securities issuable to Onward in exchange therefor will be
                appropriately adjusted.

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Section 2.05    Other Closing Actions and Deliveries. To effect the Transaction,
                at or prior to the Closing, the Parties shall enter into the
                agreements and take the necessary actions set forth in this
                Section 2.05.

        (a)        Stockholders Agreement. The Company and the Purchaser shall
                   execute and deliver, and the Company shall cause all other
                   persons that are named as parties therein to execute and
                   deliver, the Stockholders Agreement, stock certificates,
                   requisite board resolutions, certificates of good standing
                   and related agreements as set forth in the Exhibits.

Section 2.06    Further Assurances. Each of the Parties hereby agrees that from
                time to time after Closing each of them shall execute, deliver,
                acknowledge, file and record, or cause to be executed,
                delivered, acknowledged, filed and recorded, such further
                agreements, instruments, certificates and other documents as may
                be reasonably required in order to consummate and make effective
                the Transactions.

                                  ARTICLE III
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

            The Company represents and warrants to the Purchaser as of the date
hereof, and as of the Closing Date, except as set forth in the disclosure
schedule attached hereto ("Disclosure Schedule") as follows:

Section 3.01    Organization and Authority. The Company is a corporation duly
                organized, validly existing and in good standing under the laws
                of the state of Delaware, and has all requisite corporate power
                and authority to own and operate its assets and properties and
                conduct its business and operations as presently being
                conducted.

Section 3.02    Authority; Binding Effect. The Company has all requisite
                corporate power and authority to enter into this Agreement and
                the other Transaction Documents (collectively, the "Company
                Agreements"), to perform its obligations hereunder and
                thereunder and to consummate the Transaction contemplated hereby
                and thereby. The execution and delivery by the Company of this
                Agreement and each of the other Company Agreements, the
                performance by the Company of its obligations hereunder and
                thereunder and the consummation by the Company of the
                Transaction contemplated hereby and thereby have been duly and
                validly authorized by all necessary corporate action on the part
                of the Company. This Agreement and the other Company Agreements
                have been, or will be, duly executed and delivered by the
                Company and constitute, or will constitute upon execution and
                delivery, legal, valid and binding agreements of the Company,
                enforceable against the Company in accordance with each of their
                respective terms, except as such enforceability may be limited
                by bankruptcy, insolvency, reorganization, fraudulent
                conveyance, moratorium or other similar laws affecting
                creditors' rights generally or by general principles of equity.

Section 3.03    Absence of Conflicts. Except as set forth on Schedule 3.3
                attached hereto, the execution and delivery by the Company of
                this Agreement and the other Company Agreements, the performance
                by the Company of its obligations hereunder and thereunder and
                the consummation of the Transaction will not

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                (i) conflict with, or result in any violation or breach of, any
                provision of the certificate of incorporation or bylaws of the
                Company, (ii) conflict with, or result in any violation or
                breach of, constitute a default under, give rise to any right of
                termination or acceleration (with or without notice or the lapse
                of time or both) pursuant to, or result in being declared void,
                voidable or without further effect, any term or provision of any
                material note, bond, mortgage, indenture, lease, franchise,
                permit, license, Contract or other agreement, instrument or
                document to which the Company is a party or by which the
                property or assets of the Company may be bound, (iii) require
                the Company to obtain any consent, approval, permit, notice,
                action, authorization or waiver (each a "Consent") of or file
                with or give notice to any Governmental Authority or any other
                Person not a party to this Agreement, (iv) conflict with, or
                result in any violation of, any material law, ordinance,
                statute, rule or regulation of any Governmental Authority known
                to be applicable to the business, assets or operations of the
                Company, or (v) result in the creation of, or impose on the
                Company the obligation to create, any Lien upon the property or
                assets of the Company.

Section 3.04    Capitalization; Ownership of Shares. The authorized Capital
                Stock of the Company consists of (i) 250,000,000 shares of
                Common Stock, par value $0.10 per share, of which prior to
                giving effect to the Transaction 232,473,244 shares are issued
                and outstanding of which 34,650,000 shares are held by a trustee
                for the benefit of creditors of a subsidiary of the Company and
                are classified as treasury stock and (ii) 20,000,000 shares of
                Preferred Stock, par value $0.0001 per share, of which prior to
                giving effect to the Transaction 1,980,000 shares are issued and
                outstanding and no shares are held in the treasury. All of the
                issued and outstanding shares of Capital Stock of the Company
                have been duly authorized, validly issued, fully paid and
                nonassessable. None of the issued and outstanding shares of
                Capital Stock of the Company has been issued in violation of, or
                subject to, any preemptive rights or similar rights of
                subscription. All offers, issuances and sales by the Company of
                any shares of its Capital Stock or other equity securities have
                been and will be made in compliance with the requirements of the
                Securities Act and all other applicable federal and state
                securities laws. Except as set forth on Schedule 3.4 or as
                contemplated by this Agreement, there are, and, as of the
                Closing Date there will be, no other outstanding options,
                warrants, calls, rights, convertible securities or other
                agreements or commitments of any character pursuant to which the
                Company is or may be obligated to issue or sell any issued or
                unissued shares of its Capital Stock or other equity securities
                or to purchase or redeem any shares of its Capital Stock or
                other equity securities or make any other payments in respect
                thereof, and there are not shares of its Capital Stock or other
                equity securities reserved for issuance for any purpose.

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Section 3.05    Issuance of Securities.

        (a)        The Convertible Preferred Shares have been duly and validly
                   authorized for issuance by the Company. Upon the issuance of
                   the Convertible Preferred Shares pursuant to this Agreement,
                   the Convertible Preferred Shares will be validly issued and
                   fully paid and nonassessable. The shares of Common Stock
                   issuable upon exercise of the Warrant when duly authorized
                   and validly reserved, will be upon issuance in accordance
                   with the terms of the Warrant and the terms hereof, validly
                   issued, fully paid and non-assessable.

        (b)        The issuance and sale by the Company of the Securities will
                   not violate, or be subject to, any preemptive rights or
                   similar rights of subscription.

        (c)        Assuming the accuracy of the representations and warranties
                   of the Purchaser in Article IV hereof, all offers by the
                   Company with respect to, and the issuance and sale by the
                   Company of, the Securities have been and will be made in
                   compliance with the requirements of the Securities Act and
                   all other applicable federal and state securities laws, and
                   the offer, issuance and sale by the Company of the Securities
                   is not required to be registered under the Securities Act.

Section 3.06    Financial Statements. The balance sheet of the Company as of
                August 31, 2001 (the "Latest Balance Sheet") and the audited
                statement of income and statement of cash flows of the Company
                for the period ending May 31, 2001 as filed with the SEC, fairly
                present the financial position, results of operations and cash
                flows of the Company for such period and contain no material
                inaccuracies. Such statements were prepared in conformity with
                United States generally accepted accounting principles, except
                as noted therein.

Section 3.07    Absence of Undisclosed Liabilities. As of the Closing Date, the
                Company will not have any debts, liabilities or obligations of
                any kind or character (whether fixed or contingent, existing or
                inchoate), except for (i) debts, liabilities and obligations
                reflected on the Latest Balance Sheet and (ii) other debts,
                liabilities and obligations that are specifically identified in
                Schedule 3.7.

Section 3.08    Litigation. There is no action, suit, inquiry, investigation or
                other proceeding pending against or, to the knowledge of the
                Company, threatened against or affecting the Company or any of
                its properties or assets, at law or in equity, or in any court
                or before any arbitrator or any foreign or United States
                federal, state or local Governmental Authority (i) in which an
                adverse decision could, either in any single case or in the
                aggregate, have a material adverse effect on the business,
                operations or financial condition of the Company or (ii) which
                in any manner draws into question the validity of or otherwise
                affects the Transaction or the Company Agreements.

Section 3.09    Books and Records. The books and records of the Company fairly
                reflect in all material respects the transactions referred to
                therein, and such books and records are and have been properly
                kept and maintained, with the revenues, expenses, assets and
                liabilities of the Company accurately recorded in all material
                respects therein on the accrual basis of accounting prepared in
                accordance with United

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                States generally accepted accounting principles. True, complete
                and correct copies of such books and records have been made
                available by the Company for review by the Purchaser.

Section 3.10    Solvency. The Company will not be rendered insolvent by the
                consummation of the Transaction, and following the consummation
                of such Transaction, the Company will be able to pay its
                respective debts as they become due, will have capital
                sufficient to carry on its business as then conducted and
                proposed to be conducted, and will own property which has a fair
                value and a fair saleable value in excess of the amount required
                to pay its respective debts as they become due.

Section 3.11    Disclosure. Neither this Agreement nor any certificate,
                instrument or written statement furnished to any of the other
                Parties hereto by or on behalf of the Company contains an untrue
                statement of material fact or omits to state a material fact
                necessary in order to make the statements contained herein or
                therein not misleading. To the Company's knowledge, there is no
                fact which the Company has not disclosed to each of the other
                Parties hereto which materially and adversely affects or which
                could reasonably be expected to materially and adversely affect
                the business, financial condition, prospects, operations,
                property or affairs of the Company or the ability of the Company
                to perform its obligations hereunder or under the other Company
                Agreements.

Section 3.12    Brokers, Finders, etc. All negotiations relating to the
                Transaction Documents and the Transaction contemplated hereby
                and thereby, have been carried on without the intervention of
                any Person acting on behalf of the Company in such manner as to
                give rise to a valid claim against any of the Parties hereto for
                any broker's or finder's commission. The Company shall indemnify
                the Purchaser from and against any and all liabilities and
                obligations arising as a result of anyone claiming a commission,
                finder's fee or other payment for services rendered as a broker
                or finder on behalf of the Company in connection with the
                Transaction contemplated hereby.

Section 3.13    Registration Rights. Until such time as the Securities are fully
                transferable without registration, the Company will give the
                Purchaser unlimited piggyback rights to include the Securities
                or underlying securities related thereto in any public offering
                of the Company of shares of common securities for cash other
                than pursuant to employee benefit plans. All expenses incurred
                in connection with the registration under this Section
                (including all registration, filing, qualification, legal
                printing and accounting fees, but excluding underwriting
                commissions and discounts, if any), shall be borne by the
                Company in connection with registration under this Section. In
                connection with any such piggyback registration, the Company
                will use its best efforts to register or qualify the Securities
                and do any and all other acts and things which may be reasonably
                necessary to assist the Purchaser to consummate the disposition
                of the Securities.

Section 3.14    Use of Proceeds. The Company has used the proceeds from the
                indebtedness being converted into the Securities for the
                following: For the manufacturing of new pallet production
                equipment, working capital and related operating expenses.

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                                   ARTICLE IV
            REPRESENTATIONS AND WARRANTIES OF EACH OF THE PURCHASERS

            Each Purchaser represents and warrants to the Company as of the date
hereof, and as of the Closing Date, as follows:

Section 4.01    Organization. The Purchaser has all requisite power and
                authority to own and operate its assets and properties and
                conduct its business and operations as presently being
                conducted.

Section 4.02    Authority; Binding Effect. The Purchaser has all requisite power
                and authority to enter into the Transaction Documents, to
                perform its obligations hereunder and thereunder and to
                consummate the Transaction contemplated hereby and thereby. The
                execution and delivery by the Purchaser of each of the
                Transaction Documents, the performance by the Purchaser of its
                obligations hereunder and thereunder and the consummation by the
                Purchaser of the Transaction contemplated hereby and thereby
                have been duly and validly authorized by the Purchaser. This
                Agreement has been, and at the Closing the other Transaction
                Documents will be, duly executed and delivered by the Purchaser
                and constitute legal, valid and binding agreements of the
                Purchaser, enforceable against the Purchaser in accordance with
                the respective terms, except as such enforceability may be
                limited by bankruptcy, insolvency, reorganization, fraudulent
                conveyance, moratorium or other similar laws affecting
                creditors' rights generally or by general principles of equity.

Section 4.03    Investment Intent; Status of Investor.

        (a)        The Purchaser is acquiring the Securities for its own account
                   for investment, and not with a view to any distribution
                   thereof in violation of the Securities Act or any applicable
                   state securities laws.

        (b)        The Purchaser qualifies as an "accredited investor" within
                   the meaning of Rule 501 of Regulation D under the Securities
                   Act.

        (c)        If the Purchaser was organized for the specific purpose of
                   making this investment, each investor in the Purchaser is an
                   "accredited investor" within the meaning of Section 501 of
                   Regulation D.

Section 4.04    Disclosure of Information. The Purchaser has received or has had
                full access to all the information it considers necessary or
                appropriate to make an informed investment decision with respect
                to the Securities to be purchased by the Purchaser under this
                Agreement. The Purchaser further has had an opportunity to ask
                questions and receive answers from the Company regarding the
                terms and conditions of the offering of the Securities and to
                obtain additional information (to the extent the Company
                possessed such information or could acquire it without
                unreasonable effort or expense) necessary to verify any
                information furnished to such Purchaser or to which such
                Purchaser had access.

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Section 4.05    Investment Experience. The Purchaser understands that the
                purchase of the Securities involves substantial risk. The
                Purchaser has experience as an investor in securities of
                companies in the development stage and acknowledges that the
                Purchaser is able to fend for itself, can bear the economic risk
                of its investment in the Securities and has such knowledge and
                experience in financial or business matters that the Purchaser
                is capable of evaluating the merits and risks of this investment
                in the Securities and protecting its own interests in connection
                with this investment.

Section 4.06    Restricted Securities. The Purchaser understands that the
                Securities are characterized as "restricted securities" under
                the Securities Act inasmuch as they are being acquired from the
                Company in a transaction not involving a public offering or
                registration, and that under the Securities Act and applicable
                regulations thereunder such securities may be resold without
                registration under the Securities Act only in certain limited
                circumstances. Further, the Purchaser represents that it is
                familiar with Rule 144 of the U.S. Securities and Exchange
                Commission, as presently in effect, and understands the resale
                limitations imposed thereby and by the Securities Act. The
                Purchaser understands that the Company's obligation to register
                the underlying Common Stock or the Securities sold hereunder is
                limited as set forth in Section 3.14.

Section 4.07    Brokers, Finders, etc. All negotiations relating to the
                Transaction Documents, and the Transaction contemplated hereby
                and thereby, have been carried on without the intervention of
                any Person acting on behalf of the Purchaser in such manner as
                to give rise to a valid claim against any of the Parties hereto
                for any broker's or finder's commission. The Purchaser shall
                indemnify the Company from and against any and all liabilities
                and obligations arising as a result of anyone claiming a
                commission, finder's fee or other payment for services rendered
                as a broker or finder on behalf of the Purchaser in connection
                with the Transaction contemplated hereby.

Section 4.08    Securities Laws. Purchaser has complied with all applicable
                federal and state securities laws in connection with raising the
                funds for making the investment contemplated by this Agreement.

                                   ARTICLE V
                            CONDITIONS TO THE CLOSING

Section 5.01    Conditions to the Obligations of Each Party. The obligations of
                each of the Parties hereto at the Closing are subject to the
                satisfaction on or prior to the Closing Date of the conditions
                set forth below:

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        (a)        Other than suits to enforce any of the Transaction Documents,
                   no action or proceeding shall have been instituted, and no
                   injunction, writ, temporary restraining order or any other
                   order of any nature issued by a court or other Governmental
                   Authority of competent jurisdiction shall have been issued,
                   for the purpose or with the possible effect of enjoining or
                   preventing the consummation of the Transaction or the
                   performance by each of the Parties hereto of its respective
                   obligations under the other Transaction Documents.

Section 5.02    Conditions to the Purchaser's Obligations. The obligations of
                the Purchaser at the Closing are subject to the satisfaction on
                or prior to the Closing Date of the conditions set forth below:

        (a)        The Company shall have performed and complied in all material
                   respects with all agreements required by this Agreement to be
                   performed and complied with by the Company at or prior to the
                   Closing Date, and the Purchaser shall have received a
                   certificate from an appropriate duly authorized officer of
                   the Company dated as of the Closing Date, certifying to the
                   foregoing effect.

        (b)        The representations and warranties of the Company set forth
                   in Article III hereof shall be true and correct in all
                   material respects as of the Closing Date, with the same
                   effect as though such representations and warranties had been
                   made by the Company on and as of the Closing Date, and the
                   Purchaser shall have received a certificate from an
                   appropriate duly authorized officer of the Company, dated as
                   of the Closing Date, certifying to the foregoing effect.

        (c)        The Company and all other parties shall have executed and
                   entered into the Stockholders Agreement.

        (d)        All required notices shall have been given and filings made,
                   and, as the case may be, applicable waiting periods shall
                   have expired without adverse action by, or favorable orders,
                   consents, and approvals in the form required to consummate
                   the Transaction contemplated hereby shall have been received
                   from, all necessary Governmental Authorities and third
                   parties.

        (e)        The due diligence conducted by the Purchaser and its
                   advisors, accountants and legal counsel in connection with
                   the Transaction shall not have caused the Purchaser to become
                   aware of any facts relating to the business, liabilities,
                   financial condition, results of operations, or affairs of the
                   Company which in the good faith judgment of the Purchaser
                   makes it inadvisable for the Purchaser to proceed with the
                   Transaction contemplated hereby.

        (f)        The due diligence conducted by the Purchaser and its advisors
                   and legal counsel in connection with the Transaction
                   contemplated hereby shall not have caused the Purchaser to
                   become aware of any violation or alleged violation by the
                   Company, or any act, omission, event, or circumstance which,
                   in the good faith judgment of the Purchaser, may constitute
                   or serve as a basis for a material violation by the Company,
                   of any applicable federal or state law, rule, or regulation
                   pertaining to health or the environment which, in the good
                   faith judgment of the Purchaser,

                                       14
<PAGE>

                   could cause a material adverse effect on the business,
                   operations or performance of the Company.

        (g)        The Transaction shall have been effectuated in compliance
                   with all applicable federal and state securities laws and the
                   issuance of the Securities to the Purchaser shall have been
                   exempt from registration under the Securities Act, and shall
                   have been exempt from registration or qualification under
                   state securities or Blue Sky laws where applicable.

Section 5.03    Conditions to the Company's Obligations. The obligations of the
                Company at the Closing are subject to the satisfaction on or
                prior to the Closing Date of the conditions set forth below:

        (a)        The Purchaser shall have performed and complied in all
                   material respects with all agreements required by this
                   Agreement to be performed and complied with by the Purchaser
                   at or prior to the Closing Date, and the Company shall have
                   received a certificate from the General Partner of the
                   Purchaser dated as of the Closing Date, certifying to the
                   foregoing effect.

        (b)        The representations and warranties of the Purchaser set forth
                   in Article IV hereof shall be true and correct in all
                   material respects as of the Closing Date, with the same
                   effect as though such representations and warranties had been
                   made by the Purchaser on and as of the Closing Date, and the
                   Company shall have received a certificate from an appropriate
                   duly authorized officer of the or appropriate representative
                   of each Purchase of the Purchaser, dated as of the Closing
                   Date, certifying to the foregoing effect.

        (c)        The Purchaser shall have executed and entered into the
                   Stockholders Agreement.

                                   ARTICLE VI
                        CERTAIN COVENANTS AND AGREEMENTS

Section 6.01    Covenants and Agreements prior to the Closing. From the date
                hereof to the Closing:

        (a)        PURCHASER INSPECTION. The Company shall give the Purchaser
                   and its attorneys, accountants, and representatives free,
                   full, and complete access during reasonable business hours to
                   the Company as Purchaser may deem necessary or appropriate;
                   provided, however, that such due diligence review shall not
                   unreasonably interfere with the operations by the Company.
                   The Company shall provide the Purchaser and its officers,
                   attorneys, accountants and representatives with any
                   information reasonably requested by them pertaining to the
                   financial position and operations of, the income derived from
                   and the expenses associated with the Company. Purchaser will
                   treat all information in accordance with any confidentiality
                   agreements which are binding as of the date hereof between
                   Seller and Purchaser.

        (b)        COMPLIANCE. Each of the Parties hereto shall not take or fail
                   to take any action which action or failure to take such
                   action shall cause the representations and

                                       15
<PAGE>

                   warranties made by each such Party herein to be untrue or
                   incorrect as of the Closing Date.

        (c)        SATISFACTION OF ALL CLOSING CONDITIONS. Each of the Parties
                   hereto shall use its reasonable best efforts to cause all
                   closing conditions set forth in Article V hereof to be
                   satisfied by the Closing.

        (d)        MATERIAL DEVELOPMENTS. The Company shall notify the Purchaser
                   of any material problems or developments with respect to the
                   business of the Company of which the Company shall have or
                   obtain knowledge.

        (e)        NOTICE OF BREACH. Each of the Parties hereto, immediately
                   upon becoming aware thereof, shall give detailed written
                   notice to each of the other Parties hereto of the occurrence
                   of, or the impending or threatened occurrence of, any event
                   which would cause or constitute a breach, or would have
                   caused or constituted a breach had such event occurred or
                   been known to any such Party prior to the date of this
                   Agreement, of any of its respective covenants, agreements,
                   representations, or warranties contained or referred to
                   herein or in any document delivered in accordance with the
                   terms hereof.

        (f)        NOTICE OF LITIGATION. Immediately upon becoming aware
                   thereof, each of the Parties hereto shall notify each of the
                   other Parties hereto of (i) any suit, action, or proceeding
                   to which any such Party is named as a party or which is
                   threatened against any such Party in writing to the extent
                   such suit, action or proceeding relates to any of the Company
                   Agreements or affects the consummation of the Transaction,
                   (ii) any order or decree or any complaint praying for an
                   order or decree restraining or enjoining the consummation of
                   any of the Company Agreements or consummation of the
                   Transaction, or (iii) any notice from any tribunal of its
                   intention to institute an investigation into, or to institute
                   a suit or proceeding to restrain or enjoin the consummation
                   of, any of the Company Agreements or the Transaction, or to
                   nullify or render ineffective any of the Company Agreements
                   or Transaction Documents.

Section 6.02    Covenants and Agreements that Survive the Closing. The following
                covenants and agreements shall survive according to or until the
                satisfaction of their terms:

        (a)        FINANCIAL STATEMENTS. From the date hereof so long as the
                   Purchaser owns, in the aggregate, of record or beneficially
                   at least 5% (directly or indirectly) of the Common Stock (on
                   a fully diluted basis):

                (i)    QUARTERLY OPERATING STATEMENTS. The Company shall
                       maintain a standard system of accounting and shall
                       furnish to the Purchaser as soon as practicable after the
                       end of each quarter, commencing with the fiscal quarter
                       ending after the date of the closing, and in any event
                       within 45 days after the end of each said quarter,
                       consolidated operating statements for the Company which
                       shall be certified on behalf of the Company by the
                       President or the chief financial officer of the Company
                       to have been prepared in accordance with United States
                       generally accepted accounting principles, except as noted
                       therein, to fairly present the financial condition

                                       16
<PAGE>

                       of the Company for such period on a consolidated basis,
                       and shall include at least a balance sheet as at the end
                       of such period, a statement of income and statements of
                       cash flows and key operating statistics, all in
                       reasonable detail.

                (ii)   ANNUAL FINANCIAL STATEMENTS. As soon as practicable after
                       the end of each fiscal year of the Company ending after
                       the date of the Closing and in any event within 120 days
                       thereafter, the Company shall furnish to the Purchaser
                       the following financial statements on a consolidated
                       basis, prepared in accordance with United States
                       generally accepted accounting principles, except as noted
                       therein, together with a report thereon on, unqualified
                       as to scope, of reputable independent certified public
                       accountants selected by the Company and reasonably
                       acceptable to the Purchaser:

                       A.  A consolidated balance sheet of the Company at the
                           end of such year;

                       B.  A consolidated statement of income of the Company for
                           such year;

                       C.  A consolidated statement of cash flows of the Company
                           for such year; and

                       D.  A statement of changes in stockholders' equity for
                           such year;

                       setting forth in each case in comparative form the
                       figures for the previous fiscal year, if applicable, all
                       in reasonable detail.

                   Each of the financial statements referred to in this Section
                   6.02 shall fairly and accurately reflect the financial
                   condition and operating results of the Company as of the
                   dates and for the periods stated therein, subject in the case
                   of the unaudited financial statements to changes resulting
                   from normal year-end adjustments.

        (b)        MATERIAL BREACH NOTICE. The Company shall deliver promptly
                   (but in any event within five business days) after the
                   discovery or receipt of notice of any default under any
                   material agreement to which the Company and/or any of its
                   Subsidiaries is a party, which default could have a material
                   adverse effect on the Company or any Subsidiary, an officer's
                   certificate specifying the nature and period of existence
                   thereof and what actions the Company has taken and proposes
                   to take with respect thereto.

        (c)        FURTHER ASSURANCES/ACQUISITION OF COMMON SHARES. At any time
                   or from time to time after the Closing, the Company agrees to
                   cooperate with the Purchaser and, at the request of the
                   Purchaser, to execute and deliver any instruments, documents
                   or consents, and to take all action as the Purchaser may
                   reasonably request in order to evidence or effectuate the
                   consummation of: (i) the Transaction and to otherwise carry
                   out the intent of the Parties hereunder.

                                       17
<PAGE>

        (d)        ADDITIONAL INFORMATION. The Company shall deliver with
                   reasonable promptness, such other information and financial
                   data concerning the Company as the Purchaser may reasonably
                   request.

Section 6.03    Corporate Authorizations. The Purchaser acknowledges that the
                Company does not currently have sufficient authorized shares of
                Common Stock with a par value low enough to permit shares of
                Common Stock to be issued upon conversion of the Preferred Stock
                or exercise of the Warrants. As promptly as practical after the
                Closing, the Company shall take all necessary corporate actions
                to submit to the shareholders appropriate amendments to its
                Certificate of Incorporation to authorize additional shares of
                Common Stock and reduce the par value so that the Preferred
                Stock and Warrants can be converted or exercised in accordance
                with their respective terms.

                                  ARTICLE VII
                     SURVIVAL OF REPRESENTATIONS, WARRANTIES
                         AND AGREEMENTS; INDEMNIFICATION

Section 7.01    Survival of Representations and Agreements.

        (a)        Those representations and warranties contained in any of the
                   Transaction Documents or in any agreement, instrument,
                   certificate or other document delivered pursuant to this
                   Agreement and referred to below shall survive the Closing and
                   the consummation of the Transaction contemplated hereby and
                   thereby and shall continue in full force and effect:

                (i)    until the expiration of the latest statute of limitations
                       applicable to claims, damages or liabilities that may be
                       asserted against or incurred by the Company in connection
                       with the subject matter thereof, in the case of the
                       representations and warranties set forth in Sections 3.05
                       and 3.11;

                (ii)   for a period of two (2) years in the case of all other
                       representations and warranties set forth in Article III
                       hereof;

                (iii)  for a period of two (2) years in the case of all
                       representations and warranties set forth in Article IV
                       hereof; and

                (iv)   for the comparable periods of time set forth above in
                       this Section 7.01 in the case of each representation and
                       warranty (but not covenants) set forth in any of the
                       Transaction Documents or any other agreement, instrument,
                       certificate or other document delivered pursuant to this
                       Agreement, based upon the nature of such representation
                       and warranty when compared to the most analogous
                       representation and warranty set forth herein.

        (b)        Each covenant and agreement set forth in any of the
                   Transaction Documents to be performed after the Closing shall
                   survive the Closing in accordance with its terms.

                                       18
<PAGE>

        (c)        All representations, warranties, covenants and agreements
                   made or contained in any of the Transaction Documents or any
                   other agreement, instrument, certificate or other document
                   delivered in accordance with this Agreement shall be deemed
                   to be material and to have been relied upon by the Parties
                   hereto.

Section 7.02    Indemnification by the Company. From and after the Closing, the
                Company shall indemnify and hold the Purchaser and its
                respective general and limited partners, officers, employees,
                agents and affiliates, harmless against any and all damages,
                losses, deficiencies, liabilities, obligations, commitments,
                costs or expenses, including legal and other expenses reasonably
                incurred in investigating and defending against the same
                (collectively, "Liabilities" and each a "Liability") incurred by
                the Purchaser resulting from (i) the material breach of any
                representation or warranty of the Company contained in Article
                III hereof or in any Transaction Document, (ii) any material
                breach of any agreement or covenant of the Company to be
                performed prior to Closing contained in this Agreement or in any
                Transaction Document and of which the Purchaser was not aware
                and (iii) Third-Party Claims against Purchaser arising with
                respect to periods prior to the Closing, whether as a result of
                actions or omissions of the Company.

Section 7.03    Indemnification by the Purchaser. From and after the Closing,
                the Purchaser shall indemnify and hold the Company and its
                directors, officers, employees, agents and affiliates harmless
                against any and all Liabilities incurred by the Company, its
                directors, officers, employees, agents and affiliates resulting
                from (i) the breach of any representation or warranty of the
                Purchaser contained in Article IV hereof or in any Transaction
                Documents and (ii) any breach of any agreement or covenant of
                the Purchaser to be performed prior to Closing contained in this
                Agreement or in any Transaction Document.

Section 7.04    Defense of Third-Party Claims. An indemnified Party shall give
                prompt written notice to an indemnifying Party of the
                commencement or assertion of any action, proceeding, demand or
                claim by a third party (collectively, a "Third-Party Claim") in
                respect of which such indemnified Party shall seek
                indemnification hereunder. Any failure so to notify an
                indemnifying Party shall not relieve such indemnifying Party
                from any liability that it, he or she may have to such
                indemnified Party under this Section 7.04 unless the failure to
                give such notice materially and adversely prejudices such
                indemnifying Party. The indemnifying Party shall have the right
                to assume control of the defense or, settle or otherwise dispose
                of such Third-Party Claim on such terms as they deem
                appropriate; provided, however, that:

        (a)        The indemnified Party shall be entitled, at his, her or its
                   own expense, to participate in the defense of such
                   Third-Party Claim (provided, however, that the indemnifying
                   Parties shall pay the attorneys' fees of the indemnified
                   Party if (A) the employment of separate counsel shall have
                   been authorized in writing by any such indemnifying Party in
                   connection with the defense of such Third-Party Claim, (B)
                   the indemnifying Parties shall not have employed counsel
                   reasonably satisfactory to the indemnified Party to have
                   charge of such Third-Party Claim, or (C) the indemnified
                   Party's counsel shall have advised the indemnified Party in

                                       19
<PAGE>

                   writing, with a copy to the indemnifying Party, that there is
                   a conflict of interest that could make it inappropriate under
                   applicable standards of professional conduct to have common
                   counsel);

        (b)        The indemnifying Party shall obtain the prior written
                   approval of the indemnified Party before entering into or
                   making any settlement, compromise, admission or
                   acknowledgment of the validity of such Third-Party Claim or
                   any liability in respect thereof if, pursuant to or as a
                   result of such settlement, compromise, admission or
                   acknowledgment, injunctive or other equitable relief would be
                   imposed against the indemnified Party;

        (c)        No indemnifying Party shall consent to the entry of any
                   judgment or enter into any settlement that does not include
                   as an unconditional term thereof the giving by each claimant
                   or plaintiff to each indemnified Party of a release from all
                   liability in respect of such Third-Party Claim; and

        (d)        The indemnifying Party shall not be entitled to control (but
                   shall be entitled to participate at their own expense in the
                   defense of), and the indemnified Party shall be entitled to
                   have sole control over, the defense or settlement,
                   compromise, admission, or acknowledgment of any Third-Party
                   Claim (A) as to which the indemnifying Party fails to assume
                   the defense within a reasonable length of time or (B) to the
                   extent the Third-Party Claim seeks an order, injunction, or
                   other equitable relief against the indemnified Party which,
                   if successful, would materially adversely affect the
                   business, operations, assets, or financial condition of the
                   indemnified Party; provided, however, that the indemnified
                   Party shall make no settlement, compromise, admission, or
                   acknowledgment that would give rise to liability on the part
                   of any indemnifying Party without the prior written consent
                   of such indemnifying Party.

                   The parties hereto shall extend reasonable cooperation in
                   connection with the defense of any Third-Party Claim pursuant
                   to this Section 7.04 and, in connection therewith, shall
                   furnish such records, information, and testimony and attend
                   such conferences, discovery proceedings, hearings, trials and
                   appeals as may be reasonably requested.

Section 7.05    Direct Claims. In any case in which an indemnified Party seeks
                indemnification hereunder which is not subject to Section 7.04
                because no Third-Party Claim is involved, the indemnified Party
                shall notify the indemnifying Party in writing of any
                Liabilities which such indemnified Party claims are subject to
                indemnification under the terms hereof. The failure of the
                indemnified Party to exercise promptness in such notification
                shall not amount to a waiver of such claim unless the resulting
                delay materially prejudices the position of the indemnifying
                Party with respect to such claim.

                                  ARTICLE VIII
                                  MISCELLANEOUS

Section 8.01    Publicity. The Company and the Purchaser shall promptly advise
                and cooperate with each other prior to issuing, or permitting
                any of its general or limited

                                       20
<PAGE>

                partners, officers, directors, partners, stockholders, employees
                or agents to issue, any press release or other form of public
                announcement with respect to the Transaction Documents or the
                Transaction. The Company and the Purchaser agree that all such
                press releases or other forms of public announcement with
                respect to the Transaction Documents or the Transaction are
                subject to the approval of each other, which approval shall not
                be unreasonably withheld; provided, however, that the Company or
                the Purchaser shall be entitled to issue a press release or make
                a public announcement with respect to the Transaction Documents
                or the Transaction, after consulting with each other, if the
                Company or the Purchaser, as the issuer of such press release or
                other form of public announcement, has received advice from its
                counsel to the effect that such press release is required by
                law. The Parties acknowledge that any press release concerning
                the Company, its business and operations issued after the
                Closing shall be subject to the confidentiality provisions set
                forth in the Stockholders Agreement.

Section 8.02    Termination. This Agreement may be terminated at any time prior
                to the Closing by:

        (a)        the mutual consent of the Company and the Purchaser;

        (b)        the Purchaser (i) upon the failure of the Company to perform
                   or comply in all material respects with any of its respective
                   covenants or agreements contained herein prior to or (ii) at
                   the Closing or if any representation or warranty of the
                   Company shall not have been true and correct in all material
                   respects as of the time at which such was made or any future
                   time in each if the Company failed to cure such breach within
                   ten (10) days after written notice thereof by the Purchaser.

        (c)        the Company (i) upon the failure of the Purchaser to perform
                   or comply in all material respects with any of its respective
                   covenants or agreements contained herein prior to or (ii) at
                   the Closing or if any representation or warranty of the
                   Purchaser shall not have been true and correct in all
                   material respects as of the time at which such was made or
                   any future time in each if the Purchaser failed to cure such
                   breach within ten (10) days after written notice thereof by
                   the Company.

        (d)        either the Company or the Purchaser if the Closing does not
                   occur one hundred and twenty (120) days after execution;

                   provided, however, that no Party may terminate this Agreement
                   pursuant to subsection (d) above if such party is, at the
                   time of any such attempted termination, in breach of any term
                   or provision hereof.

Section 8.03    Fees and Expenses. All fees and expenses incurred by each Party
                in connection with the pursuit of the Transaction contemplated
                hereunder, including the preparation, negotiation and execution
                of the Transaction Documents and all documents ancillary thereto
                ("Transaction Fees") shall be borne solely and entirely by the
                Company. Transaction Fees shall include all fees and expenses of

                                       21
<PAGE>

                each such Party's legal counsel, accountants and all other
                third-party consultants and advisors engaged by each such Party
                to assist with the Transaction Documents and the Transaction
                contemplated hereunder and thereunder and all direct out of
                pocket expenses for travel and similar matters.

Section 8.04    Legends.

        (a)        In addition to any other legend that may be required by this
                   Agreement or applicable law, each certificate representing
                   the Securities, unless such Securities have been registered
                   under the Securities Act or may be sold in accordance with
                   the provisions of Rule 144(k) thereunder, shall be stamped or
                   otherwise imprinted with a legend in substantially the
                   following form:

                       "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
                       REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
                       (THE "ACT"). THE SECURITIES HAVE BEEN ACQUIRED FOR
                       INVESTMENT AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR
                       OTHERWISE DISPOSED OF UNLESS (A) REGISTERED UNDER THE ACT
                       OR (B) AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS
                       AVAILABLE (AND, IN SUCH CASE, AN OPINION OF COUNSEL IN
                       FORM AND SUBSTANCE REASONABLY SATISFACTORY TO PalWeb
                       CORPORATION (THE "COMPANY"), SHALL HAVE BEEN DELIVERED TO
                       THE COMPANY TO THE EFFECT THAT THE OFFER, SALE, TRANSFER
                       OR OTHER DISPOSITION THEREOF IS EXEMPT FROM REGISTRATION
                       UNDER THE ACT).

Section 8.05    Notices. Any notice or other communication required or permitted
                hereunder shall be in writing and shall be delivered by hand, by
                telex or telecopier, or by certified or registered mail, postage
                prepaid and return receipt requested. Notices shall be deemed to
                have been given upon delivery, if delivered by hand, three days
                after mailing, if mailed, one business day after delivery to the
                courier, if delivered by overnight courier service, and upon
                receipt of an appropriate electronic confirmation, if by telex
                or telecopier. Notices shall be delivered to the Company and the
                Purchaser at the addresses set forth below:

                        If to the Company:

                                    PalWeb Corporation
                                    1607 West Commercial Street
                                    Dallas, Texas  75208
                                    Attention:  Paul A. Kruger
                                    (214) 698-9330
                                    (214) 745-4578 (Fax)

                                       22
<PAGE>

                        CC:

                                    Michael M. Stewart
                                    Crowe & Dunlevy
                                    1800 Mid-America Tower
                                    Oklahoma City, Oklahoma  73102
                                    (405) 235-7747
                                    (405) 272-5238 (Fax)

                        If to the Purchaser:

                                    Westgate Investments, L.P.
                                    c/o: Hall, Estill, Hardwick, Gable, Golden
                                         & Nelson, P.C.
                                    320 South Boston, Suite 400
                                    Tulsa, Oklahoma  74103
                                    Attention:  William W. Pritchard
                                    (918) 594-0468
                                    (918) 594-0496 (Fax)

                Any Party may from time to time change its address or designee
                for notification purposes by giving the other Parties prior
                notice in the manner specified above of the new address or the
                new designee and the subsequent date upon which the change shall
                be effective.

Section 8.06    Amendment; Waivers. This Agreement may be amended only by a
                written instrument duly executed and delivered on behalf of each
                of the Company and the Purchasers holding a majority of the
                outstanding Convertible Preferred Stock. Compliance with any
                term or provision hereof may be waived only by a written
                instrument executed by each of the Company and the Purchaser. No
                failure to exercise any right, power or privilege granted
                hereunder shall operate as a waiver thereof, nor shall any
                single or partial exercise thereof preclude any other or further
                exercise thereof or the exercise of any other right, power or
                privilege granted hereunder.

Section 8.07    Parties in Interest; Assignment. This Agreement shall be binding
                upon and inure to the benefit of the Parties and their
                respective successors, assigns and legal representatives.
                Neither this Agreement nor any rights or obligations hereunder
                may be assigned by any Party without the prior written consent
                of the other Parties. Such consent shall be not unreasonably
                withheld.

Section 8.08    No Third-Party Beneficiaries. Nothing in this Agreement is
                intended or shall be construed to give any person, other than
                the Parties hereto, any legal or equitable right, remedy or
                claim under or in respect of this Agreement or any provision
                contained herein.

                                       23
<PAGE>

Section 8.09    Exhibits and Schedules. The Exhibits and Schedules to this
                Agreement are a part of this Agreement as if fully set forth
                herein. All references herein to Articles, Sections, Exhibits
                and Schedules shall be deemed references to such parts of this
                Agreement, unless the context shall otherwise require.

Section 8.10    Severability. In the event that any one or more of the terms or
                provisions contained in the Transaction Documents or in any
                other agreement, instrument or document referred to herein shall
                be held to be invalid, illegal or unenforceable for any reason,
                the validity, legality or enforceability of all other terms and
                provisions of the Transaction Documents or any other such
                agreement, instrument or other documents referred to herein
                shall not be affected.

Section 8.11    Headings. The Article and Section headings in this Agreement are
                for convenience of reference only, do not constitute a part of
                this Agreement and shall not limit, extend or otherwise affect
                the meaning or interpretation of the terms and provisions of
                this Agreement.

Section 8.12    Rules of Construction.

        (a)        In this Agreement, unless the context otherwise requires,
                   words in the singular number or in the plural number shall
                   each include the singular number and the plural number.

        (b)        All references herein to dollar amounts are in United States
                   dollars.

        (c)        The terms "herein," "hereunder," "hereto" and similar terms
                   refer to this Agreement generally and not to any one Article
                   or Section of this Agreement.

Section 8.13    Entire Agreement. This Agreement, including the Exhibits and
                Schedules hereto which are incorporated by reference herein, and
                the other Transaction Documents and other documents referred to
                therein, constitute the entire agreement and understanding
                between the Parties with respect to the Transaction contemplated
                hereby and thereby and cancel, merge and supersede all prior
                oral or written agreements, representations and warranties,
                arrangements and understandings relating to the subject matter
                hereof and thereof.

Section 8.14    Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
                CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
                OF OKLAHOMA, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF
                LAWS OF ANOTHER JURISDICTION. The venue of any legal action or
                claim arising herefrom shall be Tulsa, Oklahoma.

Section 8.15    Specific Performance. The Parties hereto agree that irreparable
                damage would occur in the event that any of the Transaction
                Documents were not performed in accordance with the terms
                thereof. Accordingly, the Parties agree that each of them shall
                be entitled to injunctive relief to prevent breaches of the
                terms and provisions of the Transaction Documents and to obtain
                specific performance of such terms, in addition to any other
                remedy now or hereafter available at law or in equity or
                otherwise.

                                       24
<PAGE>

Section 8.16    Counterparts. This Agreement may be executed by the Parties in
                separate counterparts, each of which when so executed and
                delivered shall be deemed an original, but all such counterparts
                shall together constitute one and the same instrument.

                          [SIGNATURE PAGE - NEXT PAGE]

                                       25
<PAGE>

            IN WITNESS WHEREOF, the parties set forth below have caused this
Securities Purchase Agreement to be duly executed as of the date first above
written.

                                        THE COMPANY:

                                        PALWEB CORPORATION

                                        By:  /s/ Paul A. Kruger
                                             -----------------------------------
                                             Paul A. Kruger
                                             Chief Executive Officer

                                        THE PURCHASER:

                                        WESTGATE INVESTMENTS, L.P.

                                        By:  /s/ William W. Pritchard
                                             -----------------------------------
                                             General Partner: Westgate Capital
                                             Company, L.L.C.
                                             William W. Pritchard, Manager

                                        HIDALGO TRADING COMPANY, LC

                                        By:  /s/ Paul A. Kruger
                                             -----------------------------------
                                             Paul A. Kruger
                                             Manager

                                        ONWARD, LLC

                                        By:  /s/ Paul A. Kruger
                                             -----------------------------------
                                             Paul A. Kruger
                                             Manager

                                       26
<PAGE>

                                    EXHIBIT A

                         PURCHASE AND SALE OF SECURITIES

<TABLE><CAPTION>
       PURCHASER                     PURCHASE PRICE                       SECURITIES TO BE PURCHASED
       ---------                     --------------                       --------------------------
                                                                              FROM THE COMPANY
                                                                              ----------------

<S>                              <C>                                     <C>
 Westgate Investments, L.P.      $5,214,297                              521,430 Shares of Convertible
 320 South Boston, Suite 400     of debt conversion,                     Preferred Stock Warrants for
 Tulsa, Oklahoma  74103-3708     principal only                          156,429,000 Shares of Common Stock

 Hidalgo Trading Company, LC     $950,200 of debt conversion,            95,020 Shares of Convertible
                                 principal only                          Preferred Stock Warrants for
                                                                         28,506,000 Shares of Common Stock

 Onward, LLC                     $276,082 of debt                        27,608 Shares of Convertible
                                 conversion, principal only              Preferred Stock Warrants for
                                                                         8,282,460 shares of Common Stock

 Onward, LLC                     $536,745 equity in Building based on    53,674 Shares of Convertible
                                 $1,350,000 agreed value less            Preferred Stock Warrants for
                                 $813,255.18 in indebtedness             16,102,200 shares of Common Stock
                                 ($808,393.18 in principal and $4,862    for each $10 in Purchase Price
                                 in accrued interest) owed to Texas
                                 Capital Bank
 ------------------------------------------------------------------------------------------------------------

                      TOTALS     $6,977,324 consisting of                697,732 Shares of Convertible
                                 $6,440,579 of debt                      Preferred  Stock Warrants for
                                 conversion and $536,745                 209,319,660 Shares of Common Stock
                                 of Building equity
</TABLE>

                                        iEXHIBIT 10.8
                                                                    ------------

================================================================================

                        SHAREHOLDERS AND VOTING AGREEMENT

                                  BY AND AMONG

                               PALWEB CORPORATION

                                       AND

                                THE SHAREHOLDERS

                     IDENTIFIED ON THE SIGNATURE PAGE HEREOF

                                 JANUARY 4, 2002

================================================================================
<PAGE>

                        SHAREHOLDERS AND VOTING AGREEMENT
                               PALWEB CORPORATION

            This SHAREHOLDERS AND VOTING AGREEMENT (this "Agreement") is made as
of January 4, 2002, by and among PalWeb Corporation, a Delaware corporation (the
"Company"), and each of the parties identified on the signature page hereof
("Shareholders").

                                   WITNESSETH:

            WHEREAS, as of January 4, 2002, the Company and the Shareholders
entered into that certain Securities Purchase Agreement (the "Securities
Purchase Agreement"), upon the terms and conditions of which Shareholders are
purchasing from the Company, and the Company is issuing and selling to
Shareholders, certain Preferred Shares and Warrants (as hereinafter defined);
and

            WHEREAS, the Company and the Shareholders desire to enter into this
Agreement in order, among other things, to set forth certain agreements among
the Parties with respect to (i) the designation of persons to serve as members
of the Board of Directors of the Company (the "Company Board"), (ii) the
issuance of Preferred Stock (as hereinafter defined) and (iii) certain other
matters;

            NOW, THEREFORE, in consideration of the premises, the terms and
conditions set forth herein and the mutual benefits to be gained by the
performance thereof, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:

                                    ARTICLE I
                                   DEFINITIONS

            SECTION l. l. DEFINITIONS.

            (a) For purposes of this Agreement, the terms set forth below shall
have the following respective meanings:

            "Affiliate" means (i) with respect to any Person other than
Shareholders, any other Person directly or indirectly Controlling or Controlled
by, or under direct or indirect common Control with, such Person and (ii) with
respect to Shareholders, any Person directly or indirectly Controlling or
Controlled by, or under direct or indirect common Control with, Shareholders and
any limited or general partner of Shareholders.

            "Annual Budget" means, with respect to any fiscal year of the
Company, a budget prepared by the management of the Company and approved by 60%
of the members of the Company Board which reflects, among other things,
projected capital expenditures; general, administrative and marketing
expenditures; and other costs and expenses expected to be incurred by the
Company for such fiscal year, as the same may be subsequently revised by the
<PAGE>

management of the Company and reapproved by 60% of the members of the Company
Board from time to time for such fiscal year.

            "Board Designees" means the Westgate Board Designees and the Company
Shareholders Board Designees and any Replacement Board Designee.

            "Book Value" of a share of Stock means the book value per share of
such Stock, as determined by dividing the Total Equity attributable to such
class of Stock as of the date of the most recent quarterly or year-end financial
statements of the Company available on the date of determination by the total
number of shares of such class of Stock outstanding as of the date of such
financial statements. The term "Total Equity" attributable to a class of Stock
means the sum of the par value, additional paid in capital and retained earnings
attributable to such class of Stock, other than any shares of such class of
Stock held in treasury of the Company, as determined in accordance with United
States generally accepted accounting principles, in effect from time to time.

            "Bylaws" means, with respect to any corporation, the bylaws of such
corporation (if any), as in effect from time to time on or after the date
hereof.

            "Capital Stock" means, with respect to any corporation, all shares,
interests, participations or other equivalents of capital stock of such
corporation, however designated (including any debt instruments convertible into
any shares of Capital Stock).

            "Charter" means, with respect to any corporation, the certificate or
articles of incorporation (or similar governing document) of such corporation,
as in effect from time to time on or after the date hereof.

            "Common Shares" means shares of common stock of PalWeb Corporation.

            "Common Share Equivalents" means securities convertible into, or
exchangeable or exercisable for, Common Shares or other Capital Stock of such
corporation, including, (subject to Section 1.2), all rights, warrants and
options granted by such corporation to third parties or Shareholders or
employees of such corporation.

            "Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, seats on the board of
directors, by contract or otherwise.

            "Hold" means, with respect to any Stock (i) to be the record holder
of such Stock as shown on the books and records of the Company or (ii) to be the
beneficial owner of such Stock; provided, that unless either (a) the officers of
the Company responsible for maintaining the stock records of the Company, after
due inquiry in the event of any transfer of record ownership of any Stock by a
Shareholder, have actual knowledge that the Shareholder is the beneficial owner
of any Stock or (b) the Shareholder has furnished to the Company a certificate
certifying that such Shareholder is the beneficial owner of such Stock, the
Company shall be

                                       2
<PAGE>

entitled to assume that the record holder of any Stock is also the beneficial
holder thereof, and the terms "held" and "holder" have correlative meanings.

            "HSR Act" means the Hart-Scott-Rodino Antitrust Improvement Act of
1976, as amended, and as the same may be amended from time to time, and any
successor statute thereto.

            "PalWeb Shareholders" means the Persons who are shareholders of the
Company.

            "Party" means any Person who is a signatory to this Agreement.

            "Person" means any individual, partnership, corporation, limited
liability company, association, joint stock company, trust, joint venture,
unincorporated organization or any other entity or organization of any kind or
character, including any government or any agency or political subdivisions
thereof.

            "Preferred Stock" means Series 2001 12% Cumulative Convertible
Senior Preferred Stock issued pursuant to the Securities Purchase Agreement.

            "Shareholders" means the parties to this Agreement as of the date
hereof (other than the Company) and any other subsequent holder of Preferred
Stock who becomes a party to this Agreement.

            "Stock" means any Common Shares and any Common Share Equivalents of
the Company, in each case, whether issued prior to, on or after the date hereof.

            "Total Stock" means the total number of Common Shares which are
issued and outstanding plus the total number of Common Shares that would be
issued and outstanding assuming the exercise, exchange or conversion of all
outstanding Common Share Equivalents.

            "Transfer" as to any Stock, means to sell, or in any other way
directly or indirectly transfer, assign, distribute, pledge, encumber or
otherwise dispose of, either voluntarily or involuntarily.

            "Transferee" means a Person that acquires any Stock, or any interest
therein, as a result of a Transfer.

            "Transferor" means a Person that Transfers Stock, or any interest
therein.

            "Voting Stock" means, with respect to any corporation, any Capital
Stock or other securities of such corporation the holders of which are generally
entitled to vote for members of the board of directors of such corporation.

            "Warrants" means, means the warrants issued by PalWeb Corporation to
the Shareholder in the form attached as an Exhibit to the Securities Purchase
Agreement.

                                       3
<PAGE>

            "Westgate" means Westgate Investments, L.P., an Oklahoma limited
partnership and one of the Shareholders.

            (b) Each of the terms below has the meaning set forth in the
provision of this Agreement identified opposite such term in the following
table:

               Term                                   Provision
               ----                                   ---------

        Agreement                                     Preamble
        Company                                       Preamble
        Company Board                                 Recitals
        Company Board Committee                       Section 2.2(a)(i)
        Replacement Board Designee                    Section 2.1(a)(iii)
        Shareholders                                  Recitals
        Securities Purchase Agreement                 Recitals
        Westgate Board Designees                      Section 2.1 (a)(i)
        Westgate Committee Designee                   Section 2.2(a)(i)
        Westgate Shareholder Board Designees          Section 2.1(a)(ii)

            SECTION 1.2. METHODOLOGY FOR CALCULATIONS. Except as otherwise
expressly provided in this Agreement, for purposes of calculating (i) the number
of Common Shares outstanding at any time, (ii) the number of Common Shares owned
or held by a Party or any other Person at any time and (iii) related
percentages, all Common Share Equivalents of the Company shall be treated as
having been converted, exchanged or exercised for Common Shares at the then
applicable conversion price, exchange price or exercise price if the then
applicable conversion price, exchange price or exercise price is equal to or
less than the then current fair market value of a Common Share as determined in
good faith by the Company Board. Notwithstanding the foregoing, in no event
shall the term Common Share Equivalents be deemed to include any options to
purchase Common Shares granted to employees pursuant to a stock option plan,
stock incentive plan or similar Company plan or program, in any calculation
referred to above.

                                   ARTICLE II
                              CORPORATE GOVERNANCE

            SECTION 2.1. BOARD OF DIRECTORS.

            The Company shall at all times be managed by or under the direction
of the Company Board, which shall consist of such number members as may be
established by the Board and approved by Westgate so long as Westgate is
entitled to designate members of the Board.

            (a) DESIGNATION.

            (i) Westgate Board Designees. For so long as Westgate holds either
      (i) at least 5% of the outstanding Preferred Stock, or (ii) at least 5% of
      the Common Shares,

                                       4
<PAGE>

      Westgate shall have the right to designate at least two-thirds of the
      members of the Company Board (collectively, the "Westgate Designees").

            (ii) Company Shareholder Board Designees. From and after the date
      hereof, the PalWeb Shareholders shall have the right to elect the
      remaining members of the Company Board (the "Company Shareholder Board
      Designees").

            (iii) Vacancies. If any Board Designee shall be elected or appointed
      as a member of the Company Board but shall thereafter cease to serve as a
      member of the Company Board (whether as a result of his or her death or
      resignation or for any other reason) prior to the expiration of his or her
      term of office, the Person who designated such Board Designee shall have
      the right to designate another person (a "Replacement Board Designee") to
      fill the resulting vacancy in the Company Board.

            (b) COMPANY ACTION. The Company shall use its best efforts and take
all action within its power to cause each Board Designee to be elected or
appointed to serve as a member of the Company Board as promptly as practicable
after the date upon which he or she has been so designated. Without limiting the
generality of the foregoing, the Company shall take any of the following actions
if required in order to effect the election or appointment of a Board Designee:

            (i) If there exists a vacancy on the Company Board, the Company
      shall take all necessary action within its power to cause such vacancy to
      be filled through the appointment of such Board Designee. If no such
      vacancy exists, the Company shall solicit and use its best efforts to
      obtain the resignation of one or more members of the Company Board so as
      to allow for the appointment of such Board Designee.

            (ii) If the Company Board is authorized by law to increase the
      number of members of the Company Board without approval of the
      shareholders of the Company, the Company shall take all necessary action
      within its power to increase the size of the Company Board and cause each
      newly created directorship to be filled by the appointment of a Board
      Designee.

            (iii) The Company shall nominate such Board Designee for election as
      a member of the Company Board at the next meeting of the shareholders at
      which members of the Company Board are to be elected and, in connection
      therewith, shall (w) name such Board Designee as a nominee of management
      in the form of proxy sent by management to the shareholders of the Company
      prior to such meeting, (x) include all required information regarding such
      Board Designee in the proxy statement sent by management of the Company to
      the shareholders of the Company prior to such meeting (which information
      shall, upon request, be furnished to management by the Person who
      designated such Board Designee), (y) recommend to the shareholders of the
      Company the election of such Board Designee and (z) vote in favor of such
      Board Designee all legally effective proxies received from shareholders of
      the Company that authorize or direct any officer or director of the
      Company, as proxy holder, to vote in the election of directors for

                                       5
<PAGE>

      such Board Designee or which grant to any officer or director of the
      Company the power to exercise his or her discretion in voting in the
      election of directors.

            (c) SHAREHOLDER ACTION. Each Shareholder shall use its best efforts
and shall take all action within its power (including, but not limited to, (i)
attending all meetings of the shareholders of the Company for the purposes of
ensuring that a quorum is obtained, (ii) voting all Voting Stock of the Company
owned or held by such Shareholder at any meeting of the shareholders of the
Company or, if under applicable law shareholders of the Company are permitted to
take action by written resolution or consent in lieu of a meeting, executing any
written resolution or consent with respect to all Voting Stock of the Company
owned by such Shareholder and (iii) causing any person designated by it to serve
as a member of the Company Board to vote on any matter presented for a vote of
Company Board) to cause each Board Designee to be elected or appointed as a
member of the Company Board in accordance with the provisions of this Section
2.1. In addition, each Shareholder shall vote all Voting Stock owned or held by
such Shareholder against any resolution which may be proposed to remove any
Board Designee that is serving as a member of the Company Board, unless the
Party who designated such Board Designee otherwise requests in writing.

            SECTION 2.2. COMPANY BOARD COMMITTEES

            (a) DESIGNATION.

            (i) Westgate. So long as one or more Westgate Board Designees are
      serving as members of the Company Board, Westgate shall have the right to
      designate one of such Westgate Board Designees (an "Westgate Committee
      Designee") for appointment as a member of each committee of the Company
      Board (each, a "Company Board Committee").

            (ii) Vacancies. If any Westgate Committee Designee shall be
      appointed as a member of a Company Board Committee but shall thereafter
      cease to serve as a member of such Company Board Committee (whether as a
      result of his or her death or resignation or for any other reason) prior
      to the expiration of his or her term of office, Westgate shall have the
      right to designate another member of the Company Board for appointment to
      fill the resulting vacancy in such Company Board Committee.

            (b) COMPANY ACTION. The Company shall use its best efforts and take
all action within its power to cause each Westgate Committee Designee to be
appointed to serve on the applicable Company Board Committee as promptly as
practicable after he or she has been designated to so serve. Without limiting
the generality of the foregoing, the Company shall take all necessary action
within its power to increase the size of any Company Board Committee and cause
the newly created position on such Company Board Committee to be filled by the
appointment of the Westgate Committee Designee. In addition, the Company shall
use its best efforts and take all action within its power to ensure that an
Westgate Committee Designee is not removed as a member of a Company Board
Committee to which he or she has been appointed, unless Westgate otherwise
requests in writing.

                                       6
<PAGE>

            SECTION 2.3. CONTRACTUAL MANAGEMENT RIGHTS. In addition to the
foregoing rights set forth in this Article Il, Westgate shall also have the
right to routinely consult with, and advise, the management of the Company
regarding the Company's operations. The management of the Company agrees to take
into consideration any such advice received from Westgate. The Company
acknowledges that the provisions of this Agreement, including those set forth in
this Article II, are intended to provide Westgate with certain contractual
management rights.

            SECTION 2.4. DIRECTORS' AND OFFICERS' INDEMNIFICATION

            (a) From time to time, at the request of any member of the Company
Board or any Party entitled to designate such a member, the Company will
investigate the feasibility and cost of obtaining a policy of directors' and
officers' liability insurance covering each of the members of the applicable
board of directors.

            (b) From time to time, at the request of any member of the Company
Board or any Party entitled to designate a member of the Company Board, the
Company Board will review and cause to be implemented (or in the case of the
Charter of the Company, recommend for approval by the shareholders of the
Company) any amendments to their Charter, Bylaws and other organizational
documents which are proposed by such member of the Company Board or such Party
for the purpose of ensuring that such organizational documents at all times
provide for indemnification of, advancement of expenses to, and limitations on
the personal liability of, the members of the Company Board to the fullest
extent permitted under applicable law. This paragraph (b) may not be amended,
repealed or otherwise modified in any manner adverse to any member of the
Company Board, without the consent of at least 60% of the members of the Company
Board.

            (c) Each of the members of the Company Board is intended to be a
third-party beneficiary of the obligations of the Company pursuant to this
Section 2.4, and the obligations of the Company pursuant to this Section 2.4
shall be enforceable by each such individual.

            SECTION 2.5. EXPENSES. Upon receipt of proper documentation, the
Company shall pay the reasonable out-of-pocket expenses incurred by each of the
members of the Company Board in connection with performing his or her duties,
including without limitation, the reasonable out-of-pocket expenses incurred by
any such person in attending meetings of the applicable board of directors or
any committee thereof.

            SECTION 2.6 CERTAIN RESTRICTIONS. Except as expressly provided
herein or as may be approved in writing by each of the Shareholders, (i) no
Shareholder shall grant any proxy with respect to any Stock owned or held by
such Shareholder that would permit the proxy holder to vote such Stock in any
manner that is inconsistent in any respect with the provisions of this Agreement
and (ii) no Shareholder shall enter into or agree to be bound by any voting
trust agreement, shareholders agreement or other agreement or arrangement of any
kind with respect to any Stock that is inconsistent in any respect with the
provisions of this Agreement.

                                       7
<PAGE>

            SECTION 2.7. CERTAIN ACTIONS. The Company shall not take, and each
Shareholder shall use its best efforts and take all actions within its power to
ensure that none of the following actions is taken by the Company or, if
applicable, any of its subsidiaries, without the affirmative vote of at least
60% of the members of the Company Board:

            (a) any amendment to the Charter or Bylaws of the Company;

            (b) any consolidation with, or merger with or into, any Person,
except for any merger of a wholly owned subsidiary of the Company with or into
the Company in which the Company is the surviving entity and in which none of
the securities held by any Shareholder are converted into or exchanged for any
securities or other property;

            (c) except as contemplated by an Annual Budget, any sale, lease,
transfer or other disposition of any of the properties or assets of the Company
to any Person, other than sales, leases or other dispositions of assets in one
transaction or a series of related transactions to the extent such sales, leases
or other dispositions do not exceed in the aggregate the greater of 10% of the
net book value of all fixed assets of the Company as of the beginning of the
fiscal year in which such sales, leases or other dispositions are effected or
$500,000;

            (d) any change in the general nature of the business of the Company;

            (e) the acquisition or issuance of any shares of Capital Stock of
the Company or entering into any commitments or obligations or the grant of any
options, warrants or rights of any kind to acquire or issue any such shares,
other than as specifically contemplated by this Agreement and the Securities
Purchase Agreement;

            (f) the incurrence of any funded indebtedness by the Company, except
for indebtedness incurred as contemplated by an Annual Budget, incurred under
the Company's primary credit facility or in an aggregate amount not exceeding
$250,000;

            (g) any investment by the Company in any Person other than a
wholly-owned subsidiary in an amount exceeding $100,000;

            (h) the payment of any dividends on Common Shares;

            (i) the filing of any petition seeking to reorganize the Company
pursuant to, or to obtain relief under, any federal or state bankruptcy or
insolvency law;

            (j) any dissolution, liquidation or winding-up of the affairs of the
Company;

            (k) the appointment or dismissal of the chief executive officer, the
president, the chief operating officer, the chief financial officer or any
senior vice president of the Company; or

            (1) the making of any capital expenditures not approved in an Annual
Budget in an aggregate amount exceeding $250,000 in any fiscal year.

                                       8
<PAGE>

                                   ARTICLE III
                    REPRESENTATIONS, WARRANTIES AND COVENANTS

            SECTION 3.1. REPRESENTATIONS AND WARRANTIES. Each Party represents
and warrants to the other Parties as follows:

            (a) It has all requisite power, legal capacity and authority to
execute, deliver and perform its obligations under this Agreement.

            (b) This Agreement has been duly and validly authorized, executed
and delivered by it, and constitutes a valid and binding obligation of it,
enforceable against it in accordance with its terms except to the extent that
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally.

            (c) The execution, delivery and performance of this Agreement by it
does not (i) violate, conflict with, or constitute a breach of or default under
its organizational documents, if any, or any material agreement to which it is a
party or by which it is bound or (ii) violate any law, regulation, order, writ,
judgment, injunction or decree applicable to it.

            (d) It is not a party to any proxy, voting trust or other agreement
which is inconsistent with or conflicts with any provision of this Agreement or
the rights of any Party hereunder.

            (e) If the Party is not a natural person, the consummation by the
Party of the transactions contemplated by this Agreement have been duly and
validly authorized by all necessary corporate, partnership or other action on
the part of the Party. If the Party is acting otherwise than in his individual
capacity (whether as an executor or a guardian or in any other fiduciary or
representative capacity), all actions on the part of the Party and all other
Persons (including any court) necessary for the authorization, execution,
delivery and performance by the Party of this Agreement have been duly taken.

            SECTION 3.2. COVENANTS .

            (a) PUBLIC DISCLOSURES. Unless approved by the Company Board, the
Company shall not disclose any material information related to this Agreement in
any press release or other public announcement or in any document filed with any
governmental entity, without the prior written consent of the Shareholders,
unless such disclosure is required by applicable law or governmental regulations
or by order of a court of competent jurisdiction, in which case prior to making
such disclosure the Company shall give written notice to such Shareholder
describing in reasonable detail the proposed content of such disclosure and
shall permit such Shareholder to review and comment upon the form and substance
of such disclosure.

            (b) CONFIDENTIALITY. Each Shareholder who receives any confidential
information or other proprietary information or data from the Company or from
any

                                       9
<PAGE>

representative of the Company concerning the business of the Company (including
without limitation information regarding strategic plans, planned acquisitions
or dispositions, financing sources, operating performance, financial statements
or other information), shall hold such information or data in strictest
confidence and shall not disclose such information or data to any other Person
or use such information or data for such Shareholder's own benefit or for the
benefit of any other Person without the prior written consent of the Company.

            (c) ANNUAL BUDGET. The management of the Company shall prepare a
proposed Annual Budget and submit it for the approval of the Company Board not
later than the end of the fiscal year preceding the year to which the Annual
Budget applies, which Annual Budget shall be approved no later than the end of
the second month of the fiscal year to which such Annual Budget applies. The
Company may periodically update and amend the Annual Budget and present a
revised version to the Company Board. Upon such approval, the revised annual
budget shall be the Annual Budget.

                                   ARTICLE IV
                                  MISCELLANEOUS

            SECTION 4.1. DURATION OF AGREEMENT. The rights and obligations of a
Shareholder under this Agreement shall terminate at such time as Westgate no
longer owns at least 5% of the Total Stock. This Agreement shall terminate and
be of no further force and effect upon the earlier of (i) the date as of which
Shareholders and its successors and assigns are no longer the holders of Stock
or (ii) the tenth anniversary of the date hereof.

            SECTION 4.2. FURTHER ASSURANCES. At any time or from time to time
after the date hereof, the Parties agree to cooperate with each other, and at
the request of any other Party, to execute and deliver any further instruments
or documents and to take all such further action as the other Party may
reasonably request in order to evidence or effectuate the consummation of the
transactions contemplated hereby and to otherwise carry out the intent of the
Parties hereunder.

            SECTION 4.3. AMENDMENT AND WAIVER. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
shall be effective unless (i) in the case of a modification or amendment, it is
approved in writing by the Company and the Shareholders owning at least a
majority of the Total Stock owned by all Shareholders or (ii) in the case of a
waiver, it is approved in writing by each Party entitled to the benefits thereof
(it being understood that the grant of such a waiver shall not be unreasonably
withheld by a Party so long as such Party and its rights under this Agreement
would not be materially affected thereby). In addition, this Agreement may not
be modified or amended in a manner that would deny to Shareholders certain
contractual rights with respect to the Company without the written consent of
the Shareholders. The failure of any Party to enforce any of the provisions of
this Agreement shall in no way be construed as a waiver of such provisions and
shall not affect the right of such Party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.

                                       10
<PAGE>

            SECTION 4.4. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

            SECTION 4.5. ENTIRE AGREEMENT. Except as otherwise expressly set
forth herein, this document embodies the complete agreement and understanding
among the Parties with respect to the subject matter hereof.

            SECTION 4.6. SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by the Company and its successors and assigns and each Shareholder and its
respective successors and assigns, so long as they hold Stock. No Party shall
have the right to assign its rights and obligations under this Agreement (a)
without the prior written consent of each of the other Parties, which consent
shall not be unreasonably withheld, and (b) unless the assignee of such Party
executes a document in form reasonably satisfactory to the Company pursuant to
which such assignee agrees to become a party to, and be bound by, this
Agreement.

            SECTION 4.7. COUNTERPARTS. This Agreement may be executed in
separate counterparts each of which shall be an original and all of which taken
together shall constitute one and the same agreement.

            SECTION 4.8. REMEDIES. Each Shareholder shall be entitled to enforce
its rights under this Agreement specifically, to recover damages by reason of
any breach of any provision of this Agreement and to exercise all other rights
existing in their favor. The Parties agree and acknowledge that money damages
may not be an adequate remedy for any breach of the provisions of this
Agreement, including without limitation any breach of Article 11, and that each
Party may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief
(without posting a bond or other security) in order to enforce or prevent any
violation of the provisions of this Agreement.

            SECTION 4.9. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered by hand, by telex
or telecopier, or by certified or registered mail, postage prepaid and return
receipt requested. Notices shall be deemed to have been given upon delivery, if
delivered by hand, three business days after mailing, if mailed, one business
day after delivery to the courier, if delivered by overnight courier service,
and upon receipt of an appropriate electronic confirmation, if by telex or
telecopier. Notices shall be delivered to the Company at the address set forth
below and to any other recipient at the address indicated on Schedule 4.9 hereto
and to any subsequent holder of Stock subject to this Agreement at such address
as indicated by the records of the Company, or at such address or to the
attention of such other Person as the recipient Party has specified by prior
written notice to the sending Party. The addresses for the Company are as
follows:

                                       11
<PAGE>

                                                 Authorized Agent for Service
                                                 ----------------------------

      PalWebCorporation
      2500 S. McGee                              Crowe & Dunlevy
      Norman, Oklahoma  73072                    1800 Mid-America Tower
      Attention: Paul A. Kruger                  Oklahoma City, OK  73102

          with copies to:

          Michael M. Stewart
          Crowe & Dunlevy
          1800 Mid-America Tower
          20 North Broadway
          Oklahoma City, Oklahoma  73102

      Westgate Investments, L.P.                 William W. Pritchard
      320 South Boston Ave., Ste. 400            Hall, Estill, Hardwick, Gable,
      Tulsa, Oklahoma  74103-3708                Golden & Nelson, P.C.
      Attention: William W. Pritchard, Manager   320 South Boston Ave., Ste. 400
                                                 Tulsa, Oklahoma  74103-3708

            SECTION 4.10. GOVERNING LAW AND JURISDICTION.

            (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OKLAHOMA, WITHOUT REGARD TO ANY
PRINCIPLES OF CONFLICTS OF LAWS WHICH WOULD REQUIRE THE APPLICATION OF THE LAWS
OF ANY OTHER JURISDICTION; PROVIDED, HOWEVER, THAT TO THE EXTENT THAT ANY
MANDATORY, NON-WAIVABLE PROVISIONS OF LAW REQUIRE THAT THE LAWS OF THE
JURISDICTION OF INCORPORATION OF THE COMPANY BE APPLIED WITH RESPECT TO MATTERS
RELATING TO THE INTERNAL AFFAIRS OF THE COMPANY, THE LAWS OF ITS JURISDICTION OF
INCORPORATION SHALL GOVERN SUCH MATTERS.

            (b) Each of the Parties hereby submits to the jurisdiction of the
United States District Court for the Northern District of Oklahoma, Tulsa
Division, in any action, suit or proceeding with respect to (i) any dispute or
controversy arising in connection with this Agreement or the enforcement of the
provisions of this Agreement and (ii) the enforcement of any award hereunder.
The Company irrevocably appoints the agent for service specified opposite its
name in Section 4.9 hereof as its authorized agent upon which process may be
served in any related proceeding, and agrees that service of process upon such
agent, and written notice of said service to the Company, by the person serving
the same to the address provided in Section 4.9 hereof, shall be deemed in every
respect effective service of process upon such Party in any such action, suit or
proceeding. The Company further agrees to take any and all action as may be

                                       12
<PAGE>

necessary to maintain such designation and appointment of such agent in full
force and effect until the expiration all representations and warranties
hereunder.

            (c) To the extent enforceable in accordance with applicable law,
each of the Parties hereby acknowledges and agrees that the submission by such
Party to the jurisdictions referred to in paragraph (b) above shall be exclusive
with respect to all actions, suits and proceedings specified therein, other than
regarding the enforcement of any award thereunder. The Company hereby covenants
not to bring any action, suit or proceeding in any jurisdiction other than those
referred to in paragraph (b) above.

            (d) The provisions of this Section 4.10 shall be valid and
enforceable notwithstanding the illegality, invalidity, or unenforceability of
any other provisions of this Agreement.

            SECTION 4.11. HEADINGS. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.

            SECTION 4.12. CONSTRUCTION. Where specific language is used to
clarify by example a general statement contained herein, such specific language
shall not be deemed to modify, limit or restrict in any manner the construction
of the general statement to which it relates. The language used in this
Agreement shall be deemed to be the language chosen by the Parties to express
their mutual intent, and no rule of strict construction shall be applied against
any Party.

            IN WITNESS WHEREOF, the Parties have executed this Shareholders and
Voting Agreement on the day and year first above written.

                                    THE COMPANY:

                                    PALWEB CORPORATION

                                    By: /s/ Paul A. Kruger
                                       -----------------------------------------
                                       Paul A. Kruger
                                       President

                                    THE SHAREHOLDERS:

                                    WESTGATE INVESTMENTS, L.P.
                                    By:  Westgate Capital Company, LLC,
                                         General Partner

                                    By: /s/ William W. Pritchard
                                       -----------------------------------------
                                       William W. Pritchard, Manager

                                       13
<PAGE>

                                    HIDALGO TRADING COMPANY, LC

                                    By: /s/ Paul A. Kruger
                                       -----------------------------------------
                                       Paul A. Kruger, Manager

                                    ONWARD, LLC.

                                    By: /s/ Paul A. Kruger
                                       -----------------------------------------
                                       Paul A. Kruger, Manager

                                       14
<PAGE>
                                                                    Schedule 5.9

                        Shareholder Addresses for Notice

Westgate Investments, L.P.
Attention:  William W. Pritchard
320 S. Boston, Suite 400
Tulsa, Oklahoma  74103
(918) 594-0496 (Facsimile)

Hidalgo Trading Company, LC and
Onward, LLC
Attention:  Paul A. Kruger
2500 S. McGee
Norman, Oklahoma  73072
(405) 360-5354 (Facsimile)

                                       15

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