Document:

EXHIBIT 10.2
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                          PALLET MOLDS LEASE AGREEMENT

            This Lease Agreement is made this 7th day of February 2007
(Effective Date), by and between Yorktown Management & Financial Services, LLC,
having its principal place of business at 1613 E. 15th Street, Tulsa, OK 74120
("Lessor"), and Greystone Manufacturing, LLC, 2601 Shoreline Drive Bettendorf,
IA 52722 ("Lessee"). In consideration of the mutual agreements herein made and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

            1. LEASE. Lessor agrees to lease to Lessee, and Lessee agrees to
lease from Lessor, the equipment set forth in Schedule 1 (the Equipment) hereto
at the lease rates and under the terms and conditions hereinafter provided.

            2. LEASE PAYMENT. The Lease Payments will be paid monthly as
follows:

                        PALLET MOLDS @ $1.00 per pallet manufactured from any
one of the five (5) PALLET MOLDS (48x40-three molds, 44x48-one mold,
37x37-one mold)
                        RESIN EQUIPMENT will be leased by Lessee on the basis of
Lessor receiving a payment equal to $0.03 per pound of resin provided from
the resin regrinding facility.

            3. PAYMENT DUE DATE. All Lease Payments shall be due monthly on the
1st day of each month (Payment Date) following the month of production on mold.
Lessee shall pay Lessor at Lessor's address or to the followings bank account
F&M Bank #304603. If a Payment Date falls on a weekend or holiday, then payment
is due on the immediately preceding business day. Lease Payments not received
within five (5) days of the Payment Date shall be delinquent and are subject to
a late charge equal to 18% per annum.

            4. OWNERSHIP OF THE EQUIPMENT. Lessor shall at all times hereunder
be the sole owner of the Equipment and this Lease Agreement is for leasing
purposes only, and it shall not be construed as a sale or a contract for the
sale of the Equipment, and Lessee shall not have or acquire any right, title or
interest in or to the Equipment except the right to use it on a day to day week
to week basis, as provided for herein. Lessee has an option to purchase the
Equipment at the pricing set forth in Schedule 2.

            5. CONDITION OF THE EQUIPMENT. The Equipment is being accepted by
Lessee for use under this Lease Agreement on an "as is where is" basis and shall
be conclusively presumed to be in good repair and working order when mobilized
by the Lessee. Upon acceptance, Lessee's obligations to pay all lease amounts
when due for the Equipment, and otherwise to perform as required under this
Lease Agreement, are unconditional and irrevocable.

            6. LIMIT OF LESSOR'S LIABILITY. Lessor shall not be liable for any
failure of the Equipment when operated by Lessee, or in performing any provision
hereof, for any other cause beyond Lessor's control. Lessee will maintain a
worker compensation policy and name Lessor under it's general liability
insurance in the amount of not less than $1,000,000.00 per occurrence. In
addition Lessee shall indemnify and hold Lessor harmless from any and all claims
or losses asserted by Lessee or third parties arising or resulting from Lessee's
use of the Equipment. Lessee shall be responsible for keeping molds in working
condition and exercise prudent judgment in the servicing, maintenance, and
upkeep of molds and is responsible for damage caused by accident or misuse. IN
NO EVENT SHALL LESSOR BE LIABLE FOR ANY LOSS OF PROFITS, OTHER CONSEQUENTIAL OR
INCIDENTAL DAMAGES OR INCONVENIENCE DUE TO ANY THEFT, CONVERSION, DAMAGE, LOSS,
DEFECT OR FAILURE OF THE EQUIPMENT OR THE TIME CONSUMED IN RECOVERING,
REPAIRING, SERVICING OR REPLACING THE SAME, AND THERE SHALL BE NO ABATEMENT OR
APPORTIONMENT OF LEASE PAYMENTS TO LESSOR DURING SUCH TIME.

            7. TERMINATION. This Lease Agreement shall have a term of 7 years
and may be terminated only as follows:

                        A. TERMINATION BY LESSOR. Lessor may terminate this
            Lease Agreement forthwith and without notice if Lessee fails to
            perform any of the covenants, conditions, provisions or terms
            hereof. This

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            Lease Agreement shall terminate, at the option of Lessor, upon
            the occurrence of any of the following events: (i) the
            appointment of a receiver for any part of the property of Lessee,
            (ii) assignment for the benefit of creditors by Lessee, (iii) the
            dissolution or insolvency of Lessee or the entry of an order of
            relief under any bankruptcy law against Lessee, (iv) Lessee's
            failure to pay any sums due hereunder within ten (10) days of the
            due date, (v) Lessee makes a general admission of its inability
            to pay its debts or obligations as they become due, or (vi) any
            other default by Lessee hereunder which remains uncured for five
            (5) days.

            8. ACCELERATION. Upon termination of this Lease Agreement, all
amounts due or to become due hereunder shall, at the option of Lessor, be
immediately due and payable.

            9. NO WARRANTY. LESSEE ACCEPTS THE DELIVERY OF THE MOLDS IN AN AS IS
WHERE IS CONDITION.

            10. VENUE. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the state of Oklahoma. The parties
agree that jurisdiction and venue for any matter arising out of or pertaining to
this Agreement shall be proper only in the state and federal courts located in
Tulsa County, OK and the parties hereby consent to such venue and jurisdiction.

            11. ENTIRE AGREEMENT. This Lease Agreement, together with any
Schedules and amendments executed herewith constitutes the full, complete,
absolute and entire agreement between Lessor and Lessee with respect to the
subject matter hereof. There are neither oral agreements nor understandings
affecting this instrument, and any further agreement, understanding or waiver to
be binding upon the parties hereto, must be in writing, signed by the party
against whom such agreement is sought to be enforced.

            12. WAIVER. The failure of either party hereto in one or more
instances to insist upon the performance of any of the terms or conditions of
this Lease Agreement or the failure of either party hereto to exercise any right
or privilege by this Lease Agreement, shall not be construed as thereafter
waiving any such terms or conditions, rights or privileges, but the same shall
continue to remain in full force and effect the same as if no forbearance or
waiver had occurred.

            13. PARAGRAPH HEADINGS. Paragraph headings are for convenience only,
and have no independent meaning.

            14. COUNTERPARTS. The parties on separate counterparts, all of which
together shall constitute a single lease, may execute this Lease Agreement in
any number of counterparts and.

            15. MISCELLANEOUS. This Lease Agreement shall not become effective
and binding upon the parties hereto until accepted and executed by a duly
authorized Officer and/or Director of Lessor and Lessee. Lessor can assign this
Lease Agreement to any third party at any time without the consent or approval
of Lessee.

            ACCORDINGLY, the parties hereto have caused this instrument to be
duly executed the day and year first above written.

LESSOR:                                        LESSEE:

YORKTOWN MANAGEMENT AND FINANCIAL              GREYSTONE MANUFACTURING, LLC
   SERVICES, LLC

By: /s/ Warren F. Kruger                       By: /s/ Robert Nelson
    -------------------------------                ---------------------------

                                        2EXHIBIT 10.3
                                                                    ------------

                        SETTLEMENT AGREEMENT AND RELEASE
                        --------------------------------

            This Agreement ("Agreement"), effective as of the 8th of February
2007, is entered by and among 1607 COMMERCE LIMITED PARTNERSHIP, a Texas Limited
Partnership (sometimes "Plaintiff" and sometimes "1607"), PLASTIC PALLET
PRODUCTION, INC., a Texas Corporation (sometimes "Plastic Pallet"); GREYSTONE
LGOISTICS, INC., an Oklahoma Corporation, f/k/a PALWEB CORPORATION (sometimes
"Greystone Logistics"), and GREYSTONE MANUFACTURING, L.L.C., an Oklahoma Limited
Liability Company (sometimes "Greystone Manufacturing"). Hereinafter, Plastic
Pallet, Greystone Logistics and Greystone Manufacturing are sometimes referred
to collectively as "Defendants." The purpose of the Agreement is to memorialize
an agreement that settles all disputes, claims and lawsuits now existing between
the parties.

                                    RECITALS
                                    --------

            The parties have entered into this Agreement under the following
circumstances and to affect the following aims and purposes:

            A. 1607 has filed a lawsuit in the District Court of Cleveland
County, State of Oklahoma, Case No. CJ-2006-489W, styled 1607 COMMERCE LIMITED
PARTNERSHIP, A TEXAS LIMITED PARTNERSHIP, PLAINTIFF V. PLASTIC PALLET PRODUCTION
INC., A TEXAS CORPORATION; GREYSTONE LOGISTICS, INC., AN OKLAHOMA CORPORATION,
F/K/A PALWEB CORPORATION, AND GREYSTONE MANUFACTURING, L.L.C., AN OKLAHOMA
LIMITED LIABILITY COMPANY, DEFENDANTS (the "Lawsuit").

            B. The lawsuit alleges that Plastic Pallet has defaulted in the
payment of rent pursuant to the terms of an Equipment Lease dated September 8,
2003 (the "Lease"), and that there is allegedly due and owing Plaintiff the sum
of $576,000.00. the Lawsuit also seeks to

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enforce a certain Guaranty against Greystone Logistics' predecessor, PalWeb
Corporation, and Greystone Manufacturing that was executed in conjunction with
the transaction and to foreclose a security interest in certain accounts,
inventory, equipment and other personal property of the Defendants.

            C. The Defendants have answered and denied the allegations contained
in the Lawsuit.

            D. In order to resolve the litigation, forego the risks and expenses
associated with litigation and buy their peace, the parties have agreed to
settle their disputes according to the terms of this Settlement Agreement.

                             IT IS THEREFORE AGREED

            1. CONSIDERATION. The parties acknowledge the adequacy of
consideration as expressed by the recitations and mutual covenants in this
Agreement.

            2. GENERAL WARRANTIES.

                        (i) In addition to the specific warranties contained
hereinafter, if any, each party warrants

                                    (a)         that it has been fully informed
                                                and has full knowledge of the
                                                terms, conditions and effects of
                                                this Agreement;
                                    (b)         that it, either personally or
                                                through its independently
                                                retained attorneys, has fully
                                                investigated to its satisfaction
                                                all facts surrounding the
                                                various claims, controversies
                                                and disputes and is fully
                                                satisfied with the terms and
                                                effects of this Agreement;
                                    (c)         that no promise or inducement
                                                has been offered or made to it
                                                except as expressly stated in
                                                this Agreement, and

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                                    (d)         that this Agreement is executed
                                                without reliance on any
                                                statement or representation by
                                                any other party or any other
                                                party's agent except as set
                                                forth herein.

            3. 1607 COMMERCE LIMITED PARTNERSHIP SETTLEMENT AND RELEASE.

            As a full, final and complete settlement of any and all claims that
it has asserted, or could have asserted in the Lawsuit, 1607 agrees to accept
the following:
                        (i)         a payment of $1,048,000.00 at Closing (as
                                    hereinafter defined);

                        (ii)        payment of the sum of $24,000.00 per month
                                    for a term of twenty-four (24) months
                                    commencing March 1, 2007, and on the first
                                    day of each month thereafter (the "Monthly
                                    Payment");

                        (iii)       the transfer at Closing of two (2) million
                                    unregistered common shares of Greystone
                                    Logistics Inc. free and clear of all
                                    encumbrances and/or restrictions;

                        (iv)        a Pallet Supply Agreement ("PSA") under the
                                    terms of which Defendants agree to provide
                                    floor space, utilities and the regrind resin
                                    in their facility in Iowa for the production
                                    by 1607 of the Granada pallet and the
                                    nestable pallet shall be executed by the
                                    parties within thirty (30) days after the
                                    execution of this Agreement. The PSA shall
                                    further provide:

                                    (a)         The Defendants will purchase all
                                                Granada pallets produced by 1607
                                                during the two (2) year term
                                                commencing on the first day of
                                                the month following the
                                                expiration of sixty (60) days
                                                after the complete execution of
                                                this Agreement and the PSA;
                                                provided, however, the Defendant
                                                shall not be required to
                                                purchase in excess

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                                                of 200,000 Granada pallets
                                                during the two (2) year term.
                                                The purchase price shall be
                                                $8.00 per pallet. The Defendants
                                                shall be given credit toward the
                                                purchase price for all Monthly
                                                Payments made; provided,
                                                however, this does not obligate
                                                1607 to produce any pallets, it
                                                only agrees to use its best
                                                efforts to do so.

                                    (b)         The Defendants will purchase all
                                                of the nestable pallets produced
                                                by 1607 during the two (2) year
                                                term commencing on the date the
                                                mold for the nestable pallets is
                                                completed, but no earlier than
                                                the first day of the month
                                                following the expiration of
                                                sixty (60) days after the
                                                complete execution of this
                                                Agreement and the PSA; provided,
                                                however, the Defendants shall
                                                not be required to purchase in
                                                excess of 200,000 nestable
                                                pallets during the two 92) year
                                                term. The purchase price shall
                                                be $3.00 per pallet.

                        (iv) its receipt of a complete and effective release
executed in its favor by the Defendants.

            In consideration of the terms of the above terms of settlement,
1607, on behalf of itself and its assigns does hereby release, discharge and
acquit Plastic Pallet, Greystone Logistics (and its predecessor PalWeb
Corporation) and Greystone Manufacturing, and each of them, and their agents,
representatives and assigns, officers, directors, employees, successors,
corporate parents, subsidiaries, affiliated entities, divisions, insurers,
members, and their attorneys from any and all causes of actions, claims, or
demands that existed prior to the date hereof; notwithstanding the foregoing,
this release does not release Plastic Pallet, Greystone Logistics, and Greystone

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Manufacturing from the obligations and duties of this Agreement, or from their
obligations and duties under the PSA.

            4. PLASTIC PALLET SETTLEMENT AND RELEASE.

            As a full, final and complete settlement of any and all claims
against Plaintiff that that it has asserted or may have asserted in the Lawsuit,
Plastic Pallet agrees to accept the following:

                        (i) its receipt of a complete and effective release
executed in its favor by 1607.

            In consideration of the terms of the above terms of settlement,
Plastic Pallet Production, Inc., on behalf of itself and its assigns does hereby
release, discharge and acquit 1607 and its agents, representatives and assigns,
officers, directors,employees, successors, corporate parents, subsidiaries,
affiliated entities, divisions, insurers, members, predecessors and attorneys
from any and all causes of actions, claims, or demands that existed prior to the
date hereof; notwithstanding the foregoing, this release does not release 1607
from the obligations and duties of this Agreement.

            5. GREYSTONE LOGISTICS SETTLEMENT AND RELEASE.

            As a full, final and complete settlement of any and all claims
against Plaintiff that that it has asserted or may have asserted in the Lawsuit,
Greystone Logistics agrees to accept the following:

                        (i) its receipt of a complete and effective release
executed in its favor by 1607.

            In consideration of the terms of the above terms of settlement,
Greystone Logistics, Inc., on behalf of itself and its predecessor PalWeb
Corporation and their assigns does hereby release, discharge and acquit 1607 and
its agents, representatives and assigns, officers, directors,

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employees, successors, corporate parents, subsidiaries, affiliated entities,
divisions, insurers, members, predecessors and attorneys from any and all causes
of actions, claims, or demands that existed prior to the date hereof;
notwithstanding the foregoing, this release does not release 1607 from the
obligations and duties of this Agreement.

            6. GREYSTONE MANUFACTURING SETTLEMENT AND RELEASE

            As a full, final and complete settlement of any and all claims
against Plaintiff that that it has asserted or may have asserted in the Lawsuit,
Greystone Manufacturing agrees to accept the following:

                        (i) its receipt of a complete and effective release
executed in its favor by 1607.

            In consideration of the terms of the above terms of settlement,
Greystone Manufacturing L.L.C., on behalf of itself and its assigns does hereby
release, discharge and acquit 1607 and its agents, representatives and assigns,
officers, directors, employees, successors, corporate parents, subsidiaries,
affiliated entities, divisions, insurers, members, predecessors and attorneys
from any and all causes of actions, claims, or demands that existed prior to the
date hereof; notwithstanding the foregoing, this release does not release 1607
from the obligations and duties of this Agreement.

            7. CLOSING. This transaction shall be closed in the offices of F&M
Bank on February ____, 2007 (the "Closing").

            8. LEASE AND EQUIPMENT. The Lease is hereby terminated and all
equipment included in the Lease (as itemized on Exhibit A hereto and referenced
herein as the "Equipment") is hereby tendered to 1607 in its location in Iowa,
where 1607 is authorized to use

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same pursuant to PSA. Defendants warrant that no one claims any interest in the
Equipment by or through the Defendants.

            9. CONDITION. Prior to the effectiveness of this Agreement, F&M Bank
must have consented thereto and agreed to release all security interests in the
Equipment and subordination agreement related to loans by F&M Bank to the
Defendants. 1607 acknowledges that the Equipment will be secured by its loan
from F&M Bank.

            10. OTHER RELEASE DOCUMENTS. Upon the execution hereof, each party
agrees that it will execute such additional documents necessary to effectuate
the dismissal, without prejudice, of the Lawsuit, the release of any and all
security interests in the pledged collateral.

            11. PSA NEGOTIATION; ARBIGRATION. The parties agree to negotiate the
provisions of the PSA in good faith. In the event the parties are unable to
agree to the terms of a PSA within thirty (30) days 1607 shall have the option
to remove the Equipment from the Defendants' facility in Iowa or submit the
issues related to the PSA to three (3) attorneys practicing commercial law in
Oklahoma City, Oklahoma, for them to determine a reasonable, commercial
resolution to the open issues in the negotiation. Each party shall select one
arbitrator and the two (2) arbitrators so selected shall select a third. Costs
of the arbitration shall be borne equally. The conclusions reached by the
arbitrators shall be final and binding on all parties.

            12. POST CLOSING MATTERS. In addition to negotiating the terms of
the PSA, the parties post closing hereunder agree to do the following:

                        (i)         Defendants will execute and deliver to 1607,
                                    or its designee, an assignment of the
                                    patents described on Exhibit B hereto, free
                                    and clear of all encumbrances.

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                        (ii)        The parties will inventory the Equipment at
                                    the Defendants' plant in Iowa and place a
                                    tag or other identifying mark on each item
                                    of Equipment to avoid confusion with
                                    equipment owned by Defendants.

                        (iii)       The Defendants will deliver to 1607 a lien
                                    waiver and/or subordination agreement from
                                    the owner of the real estate where the plant
                                    is located in Iowa, the mortgage lender on
                                    that property and all lenders on the
                                    personal property of the Defendants
                                    acknowledging that they have no interest in
                                    the Equipment.

            The parties agree to satisfy these matters within thirty (30) days
after the date of Closing.

            13. ATTORNEYS' FEES AND COSTS. Each party agrees to be responsible
to pay such party's respective attorneys' fees and costs of Court incurred in
connection with the Lawsuit and the preparation and execution of this Agreement.

            14. APPLICABLE LAW. This Agreement shall be construed under and in
accordance with the laws of the State of Oklahoma.

            15. MERGER AND MODIFICATIONS. Except as specified herein, this
Agreement supersedes and replaces any prior agreements and understandings of the
parties, and contains the entire agreement between the parties, with respect to
matters set forth herein. No variation, modification, or changes hereof shall be
binding upon any party hereto unless set forth in a document executed by all
parties hereto or duly authorized agent or representative thereof.

            16. ATTORNEY FEES FOR BREACH. In the event it is necessary to file
an action or lawsuit to enforce any provision of this Agreement, including the
implied covenant of cooperation, or for damages relating to the Agreement's
breach, the prevailing party in such litigation shall be entitled to be awarded
a reasonable attorneys' fee.

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            17. FURTHER ASSURANCES. Each party agrees to do all things necessary
and to execute such other documents as may be necessary to effectuate the
purposes of this Agreement.

            18. SIGNATURES. This Agreement may be signed and delivered by
facsimile or otherwise, in one or more identical counterparts (or with
counterpart signature pages) each of which shall be deemed an original and all
of which, taken together, shall constitute a fully executed Agreement and shall
be considered a single document.

            19. MISCELLANEOUS. It is expressly understood and agreed that the
terms of this Settlement Agreement are contractual and not merely recitals. In
the event any one or more of the provisions contained herein for any reason
shall be held to be invalid or unenforceable in any respect, such invalidity or
unenforceability shall not affect any other provision, but this Agreement shall
continue as if such invalid or unenforceable provision had never been contained
herein.

            In witness whereof the undersigned have executed this Agreement on
this ___ day of February 2007, effective as of the date set forth above.

            (the remainder of this page is left blank intentionally)

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                                        1607 COMMERCE LIMITED PARTNERSHIP, a
                                        Texas Limited Partnership, by its
                                        General Partner 1607 COMMERCE, LLC, an
                                        Oklahoma Limited Liability Company

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

                                        PLASTIC PALLET PROUDCTION, INC.,
                                        a Texas Corporation

                                        /s/ Warren F. Kruger
                                        ----------------------------------------
                                        BY: Warren F. Kruger, Authorized Officer
                                        of PLASTIC PALLET PRODUCTION
                                        INC., a Texas Corporation

                                        GREYSTONE LOGISTICS, INC., an Oklahoma
                                        Corporation,
                                        f/k/a PALWEB CORPORATION

                                        /s/ Warren F. Kruger
                                        ----------------------------------------
                                        BY: Warren F. Kruger, Authorized
                                        Officer of GREYSTONE LOGISTICS,
                                        INC., an Oklahoma Corporation, f/k/a
                                        PALWEB COPRORATION

                                        GREYSTONE MANUFACTURING, L.L.C., an
                                        Oklahoma Limited Liability Company

                                        /s/ Warren F. Kruger
                                        ----------------------------------------
                                        BY: Warren F. Kruger, Authorized manager
                                        or Member of GREYSTONE MANUFACTURING,
                                        L.L.C., an Oklahoma Limited Liability
                                        Company

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