LOAN AND SECURITY AGREEMENT
                                 BY AND BETWEEN
                           SAMIR FINANCIAL II, L.L.C.,
                                       AND
                              HARTVILLE GROUP, INC.
                                       AND
                    PETSMARKETING INSURANCE.COM AGENCY, INC.
                         DATED AS OF  FEBRUARY 19, 2003

<PAGE>

                           LOAN AND SECURITY AGREEMENT

     THIS LOAN AND SECURITY AGREEMENT (as amended, modified or supplemented from
time  to  time,  this  "AGREEMENT")  made this 19th day of February, 2003 by and
between  SAMIR  FINANCIAL  II,  L.L.C.,  an  Illinois  limited liability company
("LENDER"),  20682 North Plumwood Drive, Kildeer, Illinois  60047, and HARTVILLE
GROUP,  INC., a Nevada corporation, with its principal place of business at 7551
N.  Main  Street,  North  Canton,  Ohio  44720  ("HARTVILLE"), and PETSMARKETING
INSURANCE.COM  AGENCY,  INC.,  an  Ohio  corporation with its principal place of
business  at  7551  N.  Main  Street,  North  Canton,  Ohio  44720
("PETSMARKETING")(each  of  Hartville  and  Petsmarketing is sometimes hereafter
referred  to  as  a "BORROWER" and are collectively referred to as "BORROWERS").

                              W I T N E S S E T H:
                              -------------------

     WHEREAS,  Borrowers  have  requested a $3,000,000 Loan from Lender, and the
parties  wish  to  provide  for the terms and conditions upon which such Loan or
other  financial  accommodations,  if  made  by  Lender,  shall  be  made;

     NOW, THEREFORE, in consideration of any Loan (including any Loan by renewal
or  extension)  hereafter  made  to  Borrowers by Lender, and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged  by  each  Borrower,  the  parties  agree  as  follows:

     1.     DEFINITIONS.
            -----------

     "ACCOUNT",  "ACCOUNT  DEBTOR",  "CHATTEL  PAPER", "COMMERCIAL TORT CLAIMS",
"DEPOSIT  ACCOUNTS",  "DOCUMENTS",  "ELECTRONIC  CHATTEL  PAPER",  "EQUIPMENT",
"FIXTURES",  "GENERAL  INTANGIBLES",  "GOODS",  "INSTRUMENTS",  "INVENTORY",
"INVESTMENT  PROPERTY",  "LETTER-OF-CREDIT  RIGHT",  "PROCEEDS"  and  "TANGIBLE
CHATTEL  PAPER" shall have the respective meanings assigned to such terms in the
Illinois  Uniform  Commercial  Code,  as  the same may be in effect from time to
time.

     "AFFILIATE"  shall mean any Person (i) which directly or indirectly through
one  or  more  intermediaries  controls,  is  controlled  by, or is under common
control  with,  any Borrower, (ii) which beneficially owns or holds five percent
(5%) or more of the voting control or equity interests of any Borrower, or (iii)
five  percent (5%) or more of the voting control or equity interests of which is
beneficially  owned  or  held  by  any  Borrower.

     "BUSINESS  DAY"  shall  mean any day other than a Saturday, a Sunday or any
day  that  banks  in  Chicago,  Illinois  are  required  or  permitted to close.

     "CAPITAL EXPENDITURES" shall mean with respect to any period, the aggregate
of  all  expenditures  (whether  paid  in  cash  or  accrued  as liabilities and
including  expenditures  for capitalized lease obligations) by Borrowers and its
Subsidiaries  during  such  period  that  are  required  by  generally  accepted
accounting  principles,  consistently applied, to be included in or reflected by
the property, plant and equipment or similar fixed asset accounts (or intangible
accounts  subject  to  amortization)  on  the  balance  sheet  of  Borrowers.

<PAGE>

     "COLLATERAL"  shall  mean  all  of  the  property of Borrowers described in
Section  5  hereof,  together  with  all  other real or personal property of any
----------
Obligor or any other Person now or hereafter pledged to Lender to secure, either
directly  or  indirectly,  repayment  of  any  of  the  Liabilities.

     "ENVIRONMENTAL  LAWS"  shall  mean  all federal, state, district, local and
foreign  laws,  rules,  regulations, ordinances, and consent decrees relating to
health,  safety,  hazardous  substances, pollution and environmental matters, as
now or at any time hereafter in effect, applicable to any Borrower's business or
facilities  owned  or  operated  by  any  Borrower,  including  laws relating to
emissions,  discharges,  releases  or  threatened  releases  of  pollutants,
contamination, chemicals, or hazardous, toxic or dangerous substances, materials
or  wastes  into  the  environment  (including, without limitation, ambient air,
surface  water,  ground  water,  land surface or subsurface strata) or otherwise
relating  to  the  generation,  manufacture,  processing,  distribution,  use,
treatment,  storage,  disposal,  transport  or  handling  of Hazardous Materials

     "ERISA"  shall mean the Employee Retirement Income Security Act of 1974, as
amended,  modified  or  restated  from  time  to  time.

     "EVENT  OF  DEFAULT" shall have the meaning specified in Section 15 hereof.
                                                              ----------

     "FISCAL  YEAR"  shall  mean  each  twelve  (12)  month accounting period of
Borrower,  which  ends  on  December  31st  of  each  year.

     "HARTVILLE/LASALLE  COMMERCIAL  PAPER"  shall mean $1,500,000 of Commercial
Paper  or  a  Certificate  of  Deposit issued by ABN AMRO North America, Inc. or
LaSalle  Bank  National Association to Hartville, whether in certificate or book
entry  form  and  any  renewals  and  substitutions  therefor  and all interest,
dividends,  substitutions,  products  and  proceeds  thereof.

     "HAZARDOUS  MATERIALS"  shall  mean  any  hazardous,  toxic  or  dangerous
substance,  materials  and  wastes,  including, without limitation, hydrocarbons
(including  naturally  occurring  or  man-made  petroleum  and  hydrocarbons),
flammable  explosives,  asbestos,  urea  formaldehyde  insulation,  radioactive
materials,  biological  substances,  polychlorinated  biphenyls,  pesticides,
herbicides  and  any  other  kind  and/or  type  of  pollutants  or contaminants
(including, without limitation, materials which include hazardous constituents),
sewage,  sludge,  industrial slag, solvents and/or any other similar substances,
materials,  or  wastes  and  including any other substances, materials or wastes
that  are  or  become  regulated under any Environmental Law (including, without
limitation  any  that  are  or become classified as hazardous or toxic under any
Environmental  Law).

     "INDEMNIFIED  PARTY" shall have the meaning specified in Section 18 hereof.
                                                              ----------

     "LASALLE BANK LETTER OF CREDIT" shall mean that certain Letter of Credit in
the amount of $1,500,000 issued by LaSalle Bank National Association ("LASALLE")
on  behalf  of  Hartville  for  the benefit of Hartville's Subsidiary, Hartville
Insurance  Company,  and  any  renewals  or  substitutions  therefor.

     "LIABILITIES"  shall  mean  any  and  all  obligations,  liabilities  and
indebtedness of Borrowers to Lender or to any parent, affiliate or subsidiary of
Lender of any and every kind and nature, howsoever created, arising or evidenced
and  howsoever  owned,  held  or  acquired,  whether  now or hereafter existing,
whether  now due or to become due, whether primary, secondary, direct, indirect,
absolute, contingent or otherwise (including, without limitation, obligations of
performance),  whether  several, joint or joint and several, and whether arising
or  existing  under  written  or  oral  agreement  or  by  operation  of  law.

<PAGE>

     "LOAN" or "LOANS" shall mean all loans and advances made by Lender to or on
behalf  of  Borrowers  hereunder.

     "LOCK  BOX"  and  "LOCK  BOX  ACCOUNT" shall have the meanings specified in
subsection  8(a)  hereof.
---------------

     "MATERIAL  ADVERSE  EFFECT"  shall  mean  a  material adverse effect on the
business,  property,  assets,  prospects,  operations or condition, financial or
otherwise,  of  a  Person.

     "OBLIGOR"  shall  mean  each Borrower and each other Person who is or shall
become  primarily  or  secondarily  liable  for  any  of  the  Liabilities.

     "ORIGINAL  TERM"  shall  have  the  meaning specified in Section 10 hereof.
                                                             -----------

     "OTHER  AGREEMENTS"  shall  mean all agreements, instruments and documents,
other than this Agreement, including, without limitation, guaranties, mortgages,
trust  deeds,  pledges,  powers  of  attorney, consents, assignments, contracts,
notices,  security  agreements,  leases,  financing  statements  and  all  other
writings heretofore, now or from time to time hereafter executed by or on behalf
of  any  Borrower  or any other Person and delivered to Lender or to any parent,
affiliate  or  subsidiary  of  Lender  in connection with the Liabilities or the
transactions  contemplated  hereby, as each of the same may be amended, modified
or  supplemented  from  time  to  time.

     "PARENT" shall mean any Person now or at any time or times hereafter owning
or  controlling  (alone  or  with  any  other Person) at least a majority of the
issued and outstanding equity of Borrower and, if Borrower is a partnership, the
general  partner  of  a  Borrower.

     "PBGC"  shall  have  the  meaning  specified in subsection 12(b)(v) hereof.
                                                     --------------------

     "PERMITTED  LIENS"  shall  mean (i) statutory liens of landlords, carriers,
warehousemen,  processors,  mechanics,  materialmen or suppliers incurred in the
ordinary  course  of business and securing amounts not yet due or declared to be
due  by  the  claimant  thereunder  or amounts which are being contested in good
faith  and  by appropriate proceedings and for which the applicable Borrower has
maintained  adequate  reserves;  (ii)  liens  or  security interests in favor of
Lender;  (iii)  zoning restrictions and easements, licenses, covenants and other
restrictions  affecting  the use of real property that do not individually or in
the  aggregate  have  a material adverse effect on any Borrower's ability to use
such  real  property  for its intended purpose in connection with any Borrower's
business;  (iv)  liens  in  connection  with  purchase  money  indebtedness  and
capitalized  leases  otherwise  permitted  pursuant to this Agreement, provided,
that  such liens attach only to the assets the purchase of which was financed by
such  purchase  money  indebtedness  or which is the subject of such capitalized
leases;  (v)  existing,  specific  liens  on  equipment;  (vi) involuntary liens
securing  amounts  less  than $50,000 and which are released or for which a bond
acceptable  to  Lender in its sole discretion has been posted within ten days of
its  creation,  (vii)  liens  specifically  permitted  by  Lender  in writing in
accordance  with  an  intercreditor  or  subordination agreement satisfactory to
Lender;  and  (viii)  other  liens  permitted  under  the  Hartville/LaSalle CD.

<PAGE>

     "PERSON" shall mean any individual, sole proprietorship, partnership, joint
venture,  trust,  unincorporated organization, association, corporation, limited
liability  company,  institution,  entity,  party  or  foreign  or United States
government  (whether  federal,  state,  county,  city,  municipal or otherwise),
including,  without  limitation,  any instrumentality, division, agency, body or
department  thereof.

     "PLAN"  shall  have  the  meaning  specified in subsection 12(b)(v) hereof.
                                                    --------------------

     "SUBSIDIARY"  shall  mean  any corporation of which more than fifty percent
(50%)  of  the outstanding capital stock having ordinary voting power to elect a
majority  of the board of directors of such corporation (irrespective of whether
at  the  time  stock  of any other class of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at the time,
directly  or indirectly, owned by Borrower, or any partnership, joint venture or
limited  liability  company  of  which  more  than  fifty  percent  (50%) of the
outstanding  equity  interests are at the time, directly or indirectly, owned by
any  Borrower  or  any  partnership  of which any Borrower is a general partner.

     2.     LOANS.
            -----

     (a)     LOAN.
             ----

     Subject  to  the  terms  and  conditions  of  this  Agreement and the Other
Agreements,  Lender  shall  make  a Loan to Borrowers in the aggregate amount of
Three  Million  Dollars  ($3,000,000).

     (b)     REPAYMENTS.
             ----------

     REPAYMENT  OF LOAN.  The Loan and all other Liabilities shall be repaid, if
     ------------------
not  sooner due or declared due, on the last day of the Original Term.  The Loan
may  be  prepaid  in whole or part without penalty at any time, and in the event
that the Loan is so prepaid, the Lender will promptly refund to the Borrower the
unallocated  portion  of  any  "Prepaid  Interest"  (as  defined  in  the Note).

     (c)     NOTE.
             ----

     The  Loan  shall, in Lender's sole discretion, be evidenced by a promissory
note  in form and substance satisfactory to Lender.  However, if the Loan is not
so  evidenced,  such  Loan may be evidenced solely by entries upon the books and
records  maintained  by  Lender.

     3.     RESERVED.
            --------

<PAGE>

     4.     INTEREST,  FEES  AND  CHARGES.
            -----------------------------

     (a)     INTEREST  RATE.
             --------------

     The Loan shall bear interest at the rate of two and one half percent (2.5%)
per  month  or  thirty percent (30%) per annum, payable in advance commencing on
the  date  of  this Agreement and continuing on the same day of each month.  The
first  nine  (9)  months  of interest due and payable hereunder in the aggregate
amount  of  Six  Hundred  Seventy-Five  Thousand  ($675,000.00) shall be paid to
Lender in advance from the initial proceeds of the Loan.  Upon the occurrence of
an  Event  of  Default  and  during the continuance thereof, the Loan shall bear
interest  at  the  rate  of three percent (3.0%) per month or thirty-six percent
(36%)  per annum, which interest shall be payable on demand.  All interest shall
be  calculated  on  the  basis  of  a  360-day  year.

     (b)     FEES  AND  CHARGES.
             ------------------

     (i)  CLOSING  FEE AND BALANCE OF GOOD FAITH DEPOSIT: Borrowers shall pay to
          ----------------------------------------------
Lender  a  closing  fee  (the  "CLOSING FEE") equal to Three Hundred Twenty-Five
Thousand  and  00/100  Dollars  ($325,000.00),  which Closing Fee shall be fully
earned  and  payable  on  the  date  of  disbursement  of the Loan. In addition,
Borrowers  shall  pay  to Lender on the date of the disbursement of the Loan the
balance  of  the  good  faith  deposit  in  the  amount  of  $20,000.

     (ii) COSTS AND EXPENSES: Borrowers shall reimburse Lender for all costs and
          ------------------
expenses,  including,  without  limitation,  legal expenses and attorneys' fees,
incurred  by Lender in connection with the (i) documentation and consummation of
this  transaction  and  any  other  transactions  between  Borrowers and Lender,
including,  without  limitation, Uniform Commercial Code and other public record
searches  and filings, overnight courier or other express or messenger delivery,
appraisal  costs,  surveys,  title  insurance  and environmental audit or review
costs;  (ii)  collection,  protection  or enforcement of any rights in or to the
Collateral;  (iii)  collection  of  any Liabilities; and (iv) administration and
enforcement of any of Lender's rights under this Agreement. Borrowers shall also
pay  all  normal  service  charges  with  respect  to all accounts maintained by
Borrowers  with  Lender  and any additional services requested by Borrowers from
Lender.  All  such  costs,  expenses  and  charges  shall constitute Liabilities
hereunder,  shall  be  payable by Borrowers to Lender on demand, and until paid,
shall  bear  interest  at  the  highest rate then applicable to Loans hereunder.

     (iii)  MONITORING  AND  COLLATERAL  MANAGEMENT  FEE:  Borrowers will pay to
            --------------------------------------------
Lender  a  monitoring  and collateral management fee (the "COLLATERAL MANAGEMENT
FEE")  of  $3,000 each month, payable in advance, commencing on the date of this
Agreement,  (with  the first fee payable from the initial proceeds of the Loan),
and  continuing  on  the  fifteenth  day  of  each  month  thereafter  until the
Liabilities  are  paid  in  full.

     (c)     MAXIMUM  INTEREST.
             -----------------

     It is the intent of the parties that the rate of interest and other charges
to  Borrowers under this Agreement shall be lawful; therefore, if for any reason
the  interest or other charges payable under this Agreement are found by a court
of  competent  jurisdiction, in a final determination, to exceed the limit which
Lender may lawfully charge to Borrowers, then the obligation to pay interest and
other charges shall automatically be reduced to such limit and, if any amount in
excess of such limit shall have been paid, then such amount shall be refunded to
Borrowers.

<PAGE>

     5.     COLLATERAL.
            ----------

     (a)     GRANT  OF  SECURITY  INTEREST  TO  LENDER.
             -----------------------------------------

     As  security  for  the  payment  of  all Loans now or in the future made by
Lender  to  Borrowers hereunder and for the payment or other satisfaction of all
other Liabilities, each Borrower hereby assigns to Lender and grants to Lender a
continuing security interest in the following property of such Borrower, whether
now  or  hereafter  owned,  existing,  acquired  or  arising and wherever now or
hereafter  located:  (a)  all  Accounts and all Goods whose sale, lease or other
disposition  by  such Borrower has given rise to Accounts and have been returned
to,  or  repossessed  or  stopped  in transit by, such Borrower; (b) all Chattel
Paper,  Instruments,  Documents  and  General  Intangibles  (including,  without
limitation,  all  patents,  patent  applications,  trademarks,  trademark
applications,  trade  names,  trade  secrets,  goodwill,  copyrights,  copyright
applications, registrations, licenses, software, franchises, customer lists, tax
refund claims, claims against carriers and shippers, guarantee claims, contracts
rights, payment intangibles, security interests, security deposits and rights to
indemnification); (c) all Inventory (whether or not Eligible Inventory); (d) all
Goods  (other  than  Inventory),  including,  without  limitation, Equipment and
Fixtures;  (e) all Investment Property; (f) all Deposit Accounts, bank accounts,
deposits  and  cash; (g) all Letter-of-Credit Rights; (h) Commercial Tort Claims
listed  on  Exhibit  C  hereto  (i)  any  other property of such Borrower now or
hereafter  in  the  possession, custody or control of Lender or any agent or any
parent,  affiliate or subsidiary of Lender or any participant with Lender in the
Loans,  for  any purpose (whether for safekeeping, deposit, collection, custody,
pledge,  transmission  or  otherwise)  and  (j) all additions and accessions to,
substitutions  for,  and  replacements,  products  and Proceeds of the foregoing
property,  including,  without  limitation,  proceeds  of all insurance policies
insuring  the  foregoing  property, and all of such Borrower's books and records
relating  to  any  of  the  foregoing  and  to  such  Borrower's  business.

     (b)     OTHER  SECURITY.
             ---------------

     Lender,  in  its  sole  discretion,  without  waiving  or  releasing  any
obligation,  liability  or  duty  of Borrowers under this Agreement or the Other
Agreements  or  any  Event  of  Default, may at any time or times hereafter, but
shall  not be obligated to, pay, acquire or accept an assignment of any security
interest,  lien, encumbrance or claim asserted by any Person in, upon or against
the  Collateral.  All sums paid by Lender in respect thereof and all costs, fees
and  expenses including, without limitation, reasonable attorney fees, all court
costs and all other charges relating thereto incurred by Lender shall constitute
Liabilities,  payable  by  Borrowers  to Lender on demand and, until paid, shall
bear  interest  at  the  highest  rate  then  applicable  to  Loans  hereunder.

<PAGE>

     (c)     POSSESSORY  COLLATERAL.
             ----------------------

     Upon  a Borrower's receipt of any portion of the Collateral evidenced by an
agreement,  Instrument  or Document, including, without limitation, any Tangible
Chattel Paper and any Investment Property consisting of certificated securities,
Borrower  shall  deliver  the  original  thereof  to  Lender  together  with  an
appropriate  endorsement  or  other  specific  evidence of assignment thereof to
Lender  (in  form  and  substance  acceptable  to Lender).  If an endorsement or
assignment  of any such items shall not be made for any reason, Lender is hereby
irrevocably  authorized,  as  such  Borrower's  attorney  and  agent-in-fact, to
endorse  or  assign  the  same  on  such  Borrower's  behalf.

     (d)     ELECTRONIC  CHATTEL  PAPER.
             --------------------------

     To  the  extent that a Borrower obtains or maintains any Electronic Chattel
Paper,  such  Borrower  shall  create,  store  and  assign the record or records
comprising  the  Electronic  Chattel  Paper  in  such a manner that (i) a single
authoritative copy of the record or records exists which is unique, identifiable
and  except  as  otherwise  provided  in  clauses  (iv),  (v)  and  (vi)  below,
unalterable,  (ii)  the  authoritative copy identifies Lender as the assignee of
the  record  or  records,  (iii)  the  authoritative copy is communicated to and
maintained  by  the Lender or its designated custodian, (iv) copies or revisions
that  add or change an identified assignee of the authoritative copy can only be
made  with  the participation of Lender, (v) each copy of the authoritative copy
and  any  copy  of  a  copy  is  readily  identifiable as a copy that is not the
authoritative  copy  and  (vi) any revision of the authoritative copy is readily
identifiable  as  an  authorized  or  unauthorized  revision.

     6.     PRESERVATION  OF  COLLATERAL  AND  PERFECTION  OF SECURITY INTERESTS
            --------------------------------------------------------------------
THEREIN.
--------

     Borrowers  shall,  at  Lender's request, at any time and from time to time,
authenticate, execute and deliver to Lender such financing statements, documents
and  other  agreements  and instruments (and pay the cost of filing or recording
the  same  in all public offices deemed necessary or desirable by Lender) and do
such  other  acts  and  things  or cause third parties to do such other acts and
things as Lender may deem necessary or desirable in its sole discretion in order
to  establish  and maintain a valid, attached and perfected security interest in
the  Collateral  in  favor of Lender (free and clear of all other liens, claims,
encumbrances  and  rights  of  third  parties whatsoever, whether voluntarily or
involuntarily  created,  except  Permitted  Liens)  to  secure  payment  of  the
Liabilities,  and in order to facilitate the collection of the Collateral.  Each
Borrower  irrevocably  hereby  makes,  constitutes  and appoints Lender (and all
Persons  designated  by  Lender  for  that  purpose) as such Borrower's true and
lawful attorney and agent-in-fact to execute and file such financing statements,
documents and other agreements and instruments and do such other acts and things
as  may  be  necessary to preserve and perfect Lender's security interest in the
Collateral.  Each  Borrower  further  agrees  that  a  carbon,  photographic,
photostatic  or other reproduction of this Agreement or of a financing statement
shall  be  sufficient  as a financing statement.  Each Borrower further ratifies
and  confirms  the  prior  filing  by Lender of any and all financing statements
which  identify  such Borrower as debtor, Lender as secured party and any or all
Collateral  as  collateral.

<PAGE>

     7.     POSSESSION  OF  COLLATERAL  AND  RELATED  MATTERS.
            -------------------------------------------------

     Until an Event of Default has occurred, each Borrower shall have the right,
except  as  otherwise provided in this Agreement, in the ordinary course of such
Borrower's  business,  to  (a) sell, lease or furnish under contracts of service
any  of  such  Borrower's  Inventory normally held by such Borrower for any such
purpose;  and  (b)  use  and consume any raw materials, work in process or other
materials  normally  held  by such Borrower for such purpose; provided, however,
that a sale in the ordinary course of business shall not include any transfer or
sale  in  satisfaction,  partial  or  complete, of a debt owed by such Borrower.

8.     COLLECTIONS.
       -----------

     (a)  Lender  may,  at  any  time  and from time to, whether before or after
notification  to  any Account Debtor and whether before or after the maturity of
any  of the Liabilities, (i) enforce collection of any of Borrowers' Accounts or
other  amounts  owed  to  Borrowers  by  suit or otherwise; (ii) exercise all of
Borrowers'  rights  and  remedies with respect to proceedings brought to collect
any  Accounts  or  other  amounts owed to Borrowers; (iii) surrender, release or
exchange  all or any part of any Accounts or other amounts owed to Borrowers, or
compromise  or  extend  or  renew for any period (whether or not longer than the
original period) any indebtedness thereunder; (iv) sell or assign any Account of
Borrowers or other amount owed to Borrowers upon such terms, for such amount and
at  such  time  or  times  as Lender deems advisable; (v) prepare, file and sign
Borrowers'  name  on  any proof of claim in bankruptcy or other similar document
against  any  Account Debtor or other Person obligated to Borrowers; and (vi) do
all  other  acts and things which are necessary, in Lender's sole discretion, to
fulfill  Borrowers'  obligations  under  this  Agreement  and to allow Lender to
collect  the  Accounts  or  other  amounts owed to Borrowers. In addition to any
other  provision  hereof,  Lender  may  at any time, whether before or after the
occurrence  and  during  the  continuance  of an Event of Default, at Borrowers'
expense,  notify  any  parties  obligated on any of the Accounts to make payment
directly  to  Lender  of  any  amounts due or to become due thereunder. Lender's
rights and remedies with respect to Borrowers' Accounts pursuant to this Section
8(b)  and  as otherwise provided in this Agreement is subject to Petsmarketing's
insurance  trust  obligations  to  Clarendon  National Insurance Company and its
successors.

     (b)  For  purposes  of  calculating interest and fees, Lender shall, within
three  (3)  Business  Days  after  receipt  by  Lender at its office in Chicago,
Illinois  of  (i) checks and (ii) cash or other immediately available funds from
collections  of items of payment and Proceeds of any Collateral, apply the whole
or  any  part  of  such  collections or Proceeds against the Liabilities in such
order  as  Lender  shall  determine  in  its  sole  discretion.  For purposes of
determining  the  amount  of  Loans available for borrowing purposes, checks and
cash  or  other immediately available funds from collections of items of payment
and  Proceeds of any Collateral shall be applied in whole or in part against the
Liabilities,  in such order as Lender shall determine in its sole discretion, on
the  day  of  receipt,  subject  to  actual  collection.

<PAGE>

     (c)  On  a  monthly  basis,  Lender  shall  deliver to Borrowers an account
statement  showing all Loans, charges and payments, which shall be deemed final,
binding and conclusive upon Borrowers unless Borrowers notify Lender in writing,
specifying  any  error therein, within thirty (30) days of the date such account
statement  is  sent  to  Borrowers  and any such notice shall only constitute an
objection  to  the  items  specifically  identified.

     9.     COLLATERAL,  AVAILABILITY  AND  FINANCIAL  REPORTS  AND  SCHEDULES.

     (a)     MONTHLY  REPORTS.
             ----------------

     Petsmarketing shall deliver to Lender, in addition to any other reports, as
soon  as practicable and in any event: within fifteen (15) days after the end of
each  month,  (A)  a detailed trial balance of such Borrower's Accounts aged per
invoice date, in form and substance reasonably satisfactory to Lender including,
without  limitation,  the  names  and  addresses  of all Account Debtors of such
Borrower,  and  (B)  a summary and detail of accounts payable (such Accounts and
accounts  payable  divided into such time intervals as Lender may require in its
sole  discretion),  including  a  listing  of  any  held  checks.

     (b)     FINANCIAL  STATEMENTS.
             ---------------------

     Each  Borrower shall deliver to Lender the following financial information,
all  of which shall be prepared in accordance with generally accepted accounting
principles  consistently  applied,  and  shall  be  accompanied  by a compliance
certificate  in the form of Exhibit B hereto, which compliance certificate shall
                            ---------
include  a  calculation  of all financial covenants contained in this Agreement:
(i)  no  later  than  thirty  (30)  days  after  each  calendar month, copies of
internally prepared financial statements, including, without limitation, balance
sheets  and  statements  of income, retained earnings and cash flow of Borrower,
certified  by  the  Chief  Financial Officer of such Borrower; and (ii) no later
than  ninety (90) days after the end of each of Borrowers' Fiscal Years, audited
consolidated  annual  financial  statements  with  an  unqualified  opinion  by
independent  certified  public  accountants selected by Borrowers and reasonably
satisfactory  to  Lender;

     (c)     OTHER  INFORMATION.
             ------------------

     Promptly  following  request  therefore  by  Lender, such other business or
financial  data,  reports,  appraisals  and projections as Lender may reasonably
request.

     10.     TERMINATION.
             -----------

     THIS  AGREEMENT  SHALL BE IN EFFECT FROM THE DATE HEREOF UNTIL FEBRUARY 19,
2004  (THE "ORIGINAL TERM").  Provided that no Event of Default has occurred and
is  then  existing,  Lender  will extend the Original Term for an additional one
year  ending  on  the anniversary date of the Original Term (the "RENEWAL TERM")
upon  payment  by  Borrowers  to  Lender of a $250,000 renewal fee (the "RENEWAL
FEE").  Borrowers  must advise Lender at least forty (40) days (the date of such
notice  by  Borrowers  to  Lender is referred to as the "Extension Notice Date")
prior to the end of the Original Term if Borrowers intend to extend the Original
Term for an additional one year, and if so advised, the Renewal Fee must be paid
by  Borrowers  to Lender within three (3) days of the Extension Notice Date.  At
such time as Borrowers have repaid all of the Liabilities and this Agreement has
terminated,  each  Borrower  shall  deliver  to  Lender  a  release, in form and
substance  satisfactory  to Lender, of all obligations and liabilities of Lender
and  its  officers,  directors,  employees,  agents,  parents,  subsidiaries and
affiliates  to  Borrower,  and  if  Borrowers  are  obtaining new financing from
another lender, Borrowers shall deliver such lender's indemnification of Lender,
in  form  and  substance  satisfactory  to  Lender,  for checks which Lender has
credited to either Borrower's account, but which subsequently are dishonored for
any  reason  or  for automatic clearinghouse or wire transfers not yet posted to
such  Borrower's  account.

<PAGE>

     Upon  the occurrence of an Event of Default or if the Original Term of this
Agreement  is not renewed, Borrowers shall immediately cease to permit, allow or
cause  Hartville  Insurance  Company,  Ltd.  ("HIC")  to  acquire  a quota share
participation  in  any  pet  health insurance originated by Petsmarketing or any
other  Person.  In  the  event  of such non-renewal or upon the occurrence of an
Event  of Default, Borrowers authorize Lender to take whatever action or actions
that  Lender  may  deem  appropriate,  whether in the name of either Borrower or
Lender,  to  ensure  that HIC ceases to incur any additional reinsurance risk in
connection  with  health care insurance plans originated by Petsmarketing or any
other  Person. In addition, Borrowers will cause the LaSalle Letter of Credit to
be  canceled  as soon as possible upon the demand of Lender after the occurrence
of  an  Event  of  Default  and/or  after the end of the Original Term or if the
Original  Term  is  extended  at  the  option of Lender, after the Renewal Term.
Borrowers  hereby  irrevocably  constitute  and  appoint  Lender  as  their
attorney-in-fact  for  the  purposes  set  forth  above,  such appointment being
coupled with an interest for as long as the Liabilities remain outstanding. Upon
payment  and  performance  in  full  of  all  of  the  monetary  Liabilities and
termination  of this Agreement as provided herein, Lender shall promptly deliver
to  Borrowers termination statements, requests for re-conveyances and such other
documents  as may be reasonably required to terminate Lender's security interest
in  the  Collateral.

          11.     REPRESENTATIONS  AND  WARRANTIES.
                  --------------------------------

     Each  Borrower  hereby  represents  and  warrants  to  Lender,  which
representations  and  warranties  (whether  appearing  in  this  Section  11  or
                                                                 -----------
elsewhere) shall be true at the time of such Borrower's execution hereof and the
closing  of  the  transactions  described herein or related hereto, shall remain
true  until  the  repayment  in full and satisfaction of all the Liabilities and
termination  of this Agreement, and shall be remade by each Borrower at the time
each  Loan  is  made  pursuant  to  this  Agreement.

          (a)     FINANCIAL  STATEMENTS  AND  OTHER  INFORMATION.
                  ----------------------------------------------

     The financial statements and other information delivered or to be delivered
by  each Borrower to Lender at or prior to the date of this Agreement accurately
reflect  the  financial condition of such Borrower as of the respective dates of
such  statements  and other information, and there has been no adverse change in
the  financial  condition,  the  operations or any other status of such Borrower
since  the  date  of  the financial statements delivered to Lender most recently
prior  to the date of this Agreement.  All written information now or heretofore
furnished  by  such  Borrower  to Lender is true and correct as of the date with
respect  to  which  such  information  was  furnished.

<PAGE>

     (b)     LOCATIONS.
             ---------

     The  office  where  each Borrower keeps its books, records and accounts (or
copies  thereof)  concerning  the Collateral, such Borrower's principal place of
business  and  all  of  each  Borrower's  other places of business, locations of
Collateral and post office boxes and locations of bank accounts are as set forth
in  Exhibit  A  and  at  other locations within the continental United States of
    ----------
which  Lender  has  been  advised  by  a  Borrower in accordance with subsection
   -                                                                  ----------
12(b)(i).  The  Collateral, including, without limitation, the Equipment (except
--------
any  part thereof which a Borrower shall have advised Lender in writing consists
of  Collateral normally used in more than one state) is kept, or, in the case of
vehicles,  based,  only  at  the  addresses set forth on Exhibit A, and at other
                                                         ---------
locations  within the continental United States of which Lender has been advised
by  a  Borrower  in  writing  in  accordance  with  subsection  12(b)(i) hereof.
                                                    --------------------
     (c)     LOANS  BY  BORROWERS.
             --------------------

     Borrowers  have  not  made  any loans or advances to any Affiliate or other
Person  except  for  advances  authorized  hereunder  to employees, officers and
directors  of  Borrowers  for  travel and other expenses arising in the ordinary
course  of  Borrowers'  business  and  loans,  if  any,  permitted  pursuant  to
subsection  13(f)  hereof.

     (d)     LIENS.
             -----

     Each  Borrower  is the lawful owner of all Collateral now purportedly owned
or hereafter purportedly acquired by such Borrower, free from all liens, claims,
security  interests  and  encumbrances  whatsoever,  whether  voluntarily  or
involuntarily  created  and  whether  or not perfected, other than the Permitted
Liens.

     (e)     ORGANIZATION,  AUTHORITY  AND  NO  CONFLICT.
             -------------------------------------------

     Hartville  is  a  corporation  duly organized, validly existing and in good
standing  in the State of Nevada, its state organizational identification number
is  C10954-3000  and  is duly qualified and in good standing in all states where
the  nature  and extent of the business transacted by it or the ownership of its
assets  makes such qualification necessary.  Petsmarketing is a corporation duly
organized, validly existing and in good standing in the State of Ohio, its state
organizational  identification  number  is  1147049 and is duly qualified and in
good  standing  in  all  states  where  the  nature  and  extent of the business
transacted  by  it  or  the  ownership  of  its  assets makes such qualification
necessary.  Each  Borrower  has  the  right and power and is duly authorized and
empowered  to  enter  into,  execute  and  deliver  this Agreement and the Other
Agreements and perform its obligations hereunder and thereunder. Each Borrower's
execution,  delivery  and performance of this Agreement and the Other Agreements
does  not  conflict  with the provisions of the organizational documents of such
Borrower,  any  statute, regulation, ordinance or rule of law, or any agreement,
contract  or  other  document  which  may  now  or  hereafter be binding on such
Borrower,  and  such  Borrower's  execution,  delivery  and  performance of this
Agreement  and  the  Other  Agreements shall not result in the imposition of any
lien  or  other  encumbrance  upon  any  of  such  Borrower's property under any
existing  indenture,  mortgage, deed of trust, loan or credit agreement or other
agreement  or  instrument  by  which such Borrower or any of its property may be
bound  or  affected.

<PAGE>

     (f)     LITIGATION.
             ----------

     Except  as  set  forth  on  Schedule  11(f) hereto, there are no actions or
proceedings which are pending or threatened against Borrowers which might have a
Material  Adverse  Effect  on a Borrower, and such Borrower shall, promptly upon
becoming  aware  of  any  such  pending or threatened action or proceeding, give
written  notice  thereof  to  Lender.  Borrowers  have no Commercial Tort Claims
pending  other  than  those  set  forth  on Exhibit C hereto as Exhibit C may be
amended  from  time  to  time.

     (g)     COMPLIANCE  WITH  LAWS  AND  MAINTENANCE  OF  PERMITS.
             -----------------------------------------------------

     Each  Borrower  has  obtained  all  governmental  consents,  franchises,
certificates, licenses, authorizations, approvals and permits, the lack of which
would  have  a  Material  Adverse  Effect on such Borrower.  Each Borrower is in
compliance  in  all  material respects with all applicable federal, state, local
and  foreign  statutes,  orders,  regulations,  rules and ordinances (including,
without  limitation, Environmental Laws and statutes, orders, regulations, rules
and  ordinances  relating  to  taxes,  employer  and  employee contributions and
similar  items,  securities, ERISA or employee health and safety) the failure to
comply  with  which  would  have  a  Material  Adverse  Effect on such Borrower.

     (h)     AFFILIATE  TRANSACTIONS.
             -----------------------

     Except  as  set  forth on Schedule 11(h) hereto or as permitted pursuant to
                               --------------
subsection 11(c) hereof, neither Borrower is conducting, permitting or suffering
  --------------
to  be  conducted,  transaction  with any Affiliate other than transactions with
Affiliates  for  the  purchase  or sale of Inventory or services in the ordinary
course of business pursuant to terms that are no less favorable to such Borrower
than  the  terms  upon which such transfers or transactions would have been made
had  they  been  made  to  or  with  a  Person  that  is  not  an  Affiliate.

     (i)     NAMES  AND  TRADE  NAMES.
             ------------------------


     Each Borrower's name has always been as set forth on the first page of this
Agreement  and  Borrowers use no trade names, assumed names, fictitious names or
division names in the operation of its business, except as set forth on Schedule
                                                                      ----------
11(i)  hereto.
----

     (j)     EQUIPMENT.
             ---------

     Each  Borrower  has  good  and  indefeasible  and merchantable title to and
ownership  of  all  Equipment purportedly owned by such Borrower, subject to the
Permitted  Liens. No Equipment is an accession to other personal property unless
such  personal property is subject to a second priority lien in favor of Lender,
subject  to  Permitted  Liens.

     (k)     ENFORCEABILITY.
             --------------

     This  Agreement and the Other Agreements to which Borrowers are a party are
the  legal,  valid  and  binding  obligations  of  Borrowers and are enforceable
against  Borrowers  in  accordance  with  their  respective  terms.

<PAGE>

     (l)     RESERVED.
             ---------

     (m)     INDEBTEDNESS.
             ------------

     Except as set forth on Schedule 11(m) hereto, neither Borrower is obligated
                            -------------
(directly or indirectly), for any loans or other indebtedness for borrowed money
other  than  the  Loans.

     (n)     MARGIN  SECURITY  AND  USE  OF  PROCEEDS.
             ----------------------------------------

     Borrowers do not own any margin securities, and none of the proceeds of the
Loans  hereunder  shall  be  used  for the purpose of purchasing or carrying any
margin  securities  or  for the purpose of reducing or retiring any indebtedness
which was originally incurred to purchase any margin securities or for any other
purpose  not  permitted by Regulation U of the Board of Governors of the Federal
Reserve  System  as  in  effect  from  time  to  time.

     (o)     PARENT,  SUBSIDIARIES  AND  AFFILIATES.
             --------------------------------------

     Except  as  set  forth  on  Schedule 11(o) hereto, neither Borrower has any
                                 -------------
Parents,  Subsidiaries  or other Affiliates or divisions, nor is either Borrower
engaged  in  any  joint  venture  or  partnership  with  any  other  Person.

     (p)     NO  DEFAULTS.
             ------------

     Neither  Borrower  is  in  default  under  any  material contract, lease or
commitment  to  which  it  is  a  party or by which it is bound, nor does either
Borrower  know  of any dispute regarding any contract, lease or commitment which
would  have  a  Material  Adverse  Effect  on  such  Borrower.

     (q)     EMPLOYEE  MATTERS.
             -----------------

     Except  as  set forth on Schedule 11(q), there are no controversies pending
or  threatened  between  either  Borrower  and  any  of its employees, agents or
independent  contractors  other than employee grievances arising in the ordinary
course  of  business  which would not, in the aggregate, have a Material Adverse
Effect on such Borrower, and each Borrower is in compliance with all federal and
state  laws respecting employment and employment terms, conditions and practices
except for such non-compliance which would not have a Material Adverse Effect on
such  Borrower.

     (s)     INTELLECTUAL  PROPERTY.
             ----------------------

     Each  Borrower  possesses  adequate licenses, patents, patent applications,
copyrights,  service  marks, trademarks, trademark applications, tradestyles and
trade  names  to continue to conduct its business as heretofore conducted by it.

<PAGE>

     (t)     ENVIRONMENTAL  MATTERS.
             ----------------------

     Except  as  set  forth  in  Schedule  11(s)  hereto,  neither  Borrower has
generated,  used,  stored, treated, transported, manufactured, handled, produced
or  disposed  of any Hazardous Materials, on or off its premises (whether or not
owned  by  it) in any manner which at any time violates any Environmental Law or
any  license,  permit, certificate, approval or similar authorization thereunder
and the operations of the such Borrower comply in all material respects with all
Environmental  Laws  and  all  licenses,  permits,  certificates,  approvals and
similar  authorizations thereunder. There has been no investigation, proceeding,
complaint,  order,  directive,  claim,  citation  or  notice by any governmental
authority  or  any  other  Person, nor is any pending or to the best of the such
Borrower's  knowledge  threatened  with  respect  to  any non-compliance with or
violation  of  the requirements of any Environmental Law by such Borrower or the
release, spill or discharge, threatened or actual, of any Hazardous Materials or
the  generation, use, storage, treatment, transportation, manufacture, handling,
production  or  disposal  of any Hazardous Materials or any other environmental,
health or safety matter, which affects such Borrower or its business, operations
or  assets  or  any properties at which such Borrower has transported, stored or
disposed of any Hazardous Materials. Neither Borrower has any material liability
(contingent  or  otherwise)  in  connection  with a release, spill or discharge,
threatened  or  actual,  of  any  Hazardous  Materials  or  the generation, use,
storage,  treatment,  transportation,  manufacture,  handling,  production  or
disposal  of  any  Hazardous  Materials.

     (u)     ERISA  MATTERS.
             --------------

     Except  as  set  forth  on  Schedule  11(t),  each  Borrower  has  paid and
discharged  all  obligations  and liabilities arising under ERISA of a character
which,  if  unpaid  or  unperformed,  might  result  in the imposition of a lien
against  any  of  its  properties  or  assets.

          12.     AFFIRMATIVE  COVENANTS.
                  ----------------------

     Until  payment  and satisfaction in full of all Liabilities and termination
of  this  Agreement,  unless  Borrowers  obtain  Lender's  prior written consent
waiving  or  modifying  any  of  Borrowers'  covenants hereunder in any specific
instance,  each  Borrower  covenants  and  agrees  as  follows:

          (a)     MAINTENANCE  OF  RECORDS.
                  ------------------------

     Borrowers  shall at all times keep accurate and complete books, records and
accounts  with  respect  to  all  of  such  Borrower's  business  activities, in
accordance  with  sound  accounting  practices and generally accepted accounting
principles  consistently applied and insurance industry custom and practice, and
shall keep such books, records and accounts, and any copies thereof, only at the
addresses  indicated  for  such  purpose  on  Exhibit  A;
                                              ----------

          (b)     NOTICES.
                  -------

     Each  Borrower  shall:

<PAGE>

     (i)  LOCATIONS.  Promptly (but in no event less than ten (10) days prior to
          ---------
the occurrence thereof) notify Lender of the proposed opening of an new place of
business  or  new  location  of Collateral, the closing of any existing place of
business  or  location  of  Collateral,  any  change  of in the location of such
Borrower's  books,  records  and  accounts  (or  copies thereof), the opening or
closing  of  any post office box, the opening or closing of any bank account or,
if  any of the Collateral consists of Goods of a type normally used in more than
one  state,  the  use of any such Goods in any state other than a state in which
such  Borrower  has  previously  advised  Lender  that  such Goods will be used.

     (ii)  INTENTIONALLY  DELETED.
           ----------------------

     (iii)  LITIGATION  AND  PROCEEDINGS.  Promptly upon becoming aware thereof,
            ---------------------------
notify  Lender  of  any  actions  or proceedings which are pending or threatened
against  a  Borrower which might have a Material Adverse Effect on such Borrower
and of any Commercial Tort Claims of such Borrower which may arise, which notice
shall  constitute  such  Borrower's authorization to amend Exhibit C to add such
Commercial  Tort  Claim.

     (iv)  NAMES  AND  TRADE  NAMES.  Notify  Lender within ten (10) days of the
           -----------------------
change  of  its name or the use of any trade name, assumed name, fictitious name
or  division  name  not  previously  disclosed  to  Lender  in  writing.

     (v)  ERISA  MATTERS.  Promptly  notify  Lender of (x) the occurrence of any
          --------------
"reportable  event"  (as defined in ERISA) which might result in the termination
by the Pension Benefit Guaranty Corporation (the "PBGC") of any employee benefit
plan  ("Plan")  covering any officers or employees of the Borrower, any benefits
of  which are, or are required to be, guaranteed by the PBGC, (y) receipt of any
notice  from  the  PBGC  of  its  intention  to  seek termination of any Plan or
appointment of a trustee therefore or (z) its intention to terminate or withdraw
from  any  Plan.

     (vi)  ENVIRONMENTAL  MATTERS. Immediately notify Lender upon becoming aware
           ----------------------
of  any  investigation, proceeding, complaint, order, directive, claim, citation
or  notice  with  respect  to  any  non-compliance  with  or  violation  of  the
requirements  of  any Environmental Law by such Borrower or the generation, use,
storage, treatment, transportation, manufacture handling, production or disposal
of  any  Hazardous Materials or any other environmental, health or safety matter
which  affects  such  Borrower  or  its  business  operations  or  assets or any
properties  at  which  such  Borrower has transported, stored or disposed of any
Hazardous  Materials.

     (vii)  DEFAULT;  MATERIAL  ADVERSE  CHANGE.  Promptly  advise Lender of any
            -----------------------------------
material adverse change in the business, property, assets, prospects, operations
or  condition,  financial  or otherwise, of each Borrower, the occurrence of any
Event  of  Default  hereunder  or the occurrence of any event which, if uncured,
will  become an Event of Default after notice or lapse of time (or both). All of
the  foregoing  notices  shall  be  provided  by Borrowers to Lender in writing.

<PAGE>

     (c)     COMPLIANCE  WITH  LAWS  AND  MAINTENANCE  OF  PERMITS.
             -----------------------------------------------------

     Each  Borrower  shall  maintain  all  governmental  consents,  franchises,
certificates, licenses, authorizations, approvals and permits, the lack of which
would have a Material Adverse Effect on Borrowers and each Borrower shall remain
in  compliance  with  all applicable federal, state, local and foreign statutes,
orders,  regulations,  rules  and  ordinances  (including,  without  limitation,
Environmental  Laws  and  statutes,  orders,  regulations,  rules and ordinances
relating  to  taxes,  employer  and  employee  contributions  and similar items,
securities,  ERISA  or  employee  health  and  safety) the failure with which to
comply  would  have  a  Material Adverse Effect on Borrowers, or either of them.
Following  any  determination  by  Lender  that  there is non-compliance, or any
condition  which  requires  any  action  by or on behalf of Borrower in order to
avoid non-compliance, with any Environmental Law, at Borrowers' expense cause an
independent environmental engineer acceptable to Lender to conduct such tests of
the relevant site(s) as are appropriate and prepare and deliver a report setting
forth the results of such tests, a proposed plan for remediation and an estimate
of  the  costs  thereof.

          (d)     INSPECTION  AND  AUDITS.
                  -----------------------

     Borrowers  shall permit Lender, or any Persons designated by it, to call at
Borrowers'  places  of business two times each year and after the occurrence and
during  the  continuance  of  an  Event of Default at any reasonable times, and,
without  hindrance  or  delay,  to inspect the Collateral and to inspect, audit,
check  and  make extracts from each Borrower's books, records, journals, orders,
receipts  and  any  correspondence  and  other  data relating to each Borrower's
business,  the  Collateral  or  any transactions between the parties hereto, and
shall  have  the  right  to  make  such  verification concerning each Borrower's
business  as  Lender  may  consider  reasonable  under  the circumstances.  Each
Borrower  shall  furnish  to Lender such information relevant to Lender's rights
under  this Agreement as Lender shall at any time and from time to time request.
Lender,  through  its officers, employees or agents shall have the right, at any
time  and from time to time, in Lender's name, to verify the validity, amount or
any  other  matter relating to any of a Borrower's Accounts, by mail, telephone,
telegraph  or  otherwise.  Borrowers  authorize  Lender  to discuss the affairs,
finances  and business of Borrowers with any officers, employees or directors of
Borrowers  or  with  a  Parent  or  any  Affiliate or the officers, employees or
directors  of  a Parent or any Affiliate, and to discuss the financial condition
of  Borrowers  with  Borrowers'  independent  public  accountants.  Any  such
discussions  shall  be  without liability to Lender or to Borrowers' independent
public  accountants.  Borrowers  shall  pay to Lender all customary fees and all
costs  and  out-of-pocket  expenses  incurred  by  Lender in the exercise of its
rights  hereunder,  and  all  of  such fees, costs and expenses shall constitute
Liabilities  hereunder,  including  normal audit fees and out-of-pocket expenses
related  to  such  audit,  including  but  not limited to, airfare, lodging, and
meals,  to  cover  Lender's  periodic  examinations  of  Collateral,  as well as
Borrowers' books and records.  Audit fees will be charged at the rate of $10,000
for  each  audit, payable in advance. All of such fees, costs and expenses shall
be  constituted  Liabilities  hereunder,  shall  be payable on demand and, until
paid,  shall  bear  interest  at  the  highest  rate  then  applicable  to Loans
hereunder.

<PAGE>

     (e)     INSURANCE.
             ---------

     Each  Borrower  shall:

          (i)     Keep  the  Collateral properly housed and insured for the full
insurable  value  thereof  against  loss  or  damage  by fire, theft, explosion,
sprinklers,  collision  (in  the case of motor vehicles) and such other risks as
are customarily insured against by Persons engaged in businesses similar to that
of  such  Borrower, with such companies, in such amounts, with such deductibles,
and  under policies in such form, as shall be reasonably satisfactory to Lender.
Original  (or certified) copies of such policies of insurance have been or shall
be,  within  thirty  (30) days of the date hereof, delivered to Lender, together
with  evidence  of  payment  of  all  premiums  therefore,  and shall contain an
endorsement, in form and substance acceptable to Lender, showing loss under such
insurance  policies  payable  to  Lender.  Such  endorsement,  or an independent
instrument  furnished  to Lender, shall provide that the insurance company shall
give  Lender  at least thirty (30) days written notice before any such policy of
insurance  is altered or canceled and that no act, whether willful or negligent,
or default of a Borrower or any other Person shall affect the right of Lender to
recover  under such policy of insurance in case of loss or damage.  In addition,
each  Borrower  shall cause to be executed and delivered to Lender an assignment
of  proceeds  of  its  business  interruption insurance policies.  Each Borrower
hereby  directs all insurers under all policies of insurance to pay all proceeds
payable  thereunder  directly  to  Lender.  Each  Borrower  irrevocably  makes,
constitutes  and  appoints  Lender  (and  all  officers,  employees  or  agents
designated  by  Lender)  as  such  Borrower's  true  and  lawful  attorney  (and
agent-in-fact)  for  the  purpose of making, settling and adjusting claims under
such  policies  of  insurance, endorsing the name of such Borrower on any check,
draft,  instrument or other item of payment for the proceeds of such policies of
insurance  and  making  all  determinations  and  decisions with respect to such
policies  of  insurance.

          (ii)     Maintain,  at  its  expense,  such public liability and third
party  property  damage  insurance  as  is  customary  for  Persons  engaged  in
businesses similar to that of Borrowers with such companies and in such amounts,
with  such  deductibles  and  under policies in such form as shall be reasonably
satisfactory  to Lender and original (or certified) copies of such policies have
been  or  shall  be, within ninety (90) days after the date hereof, delivered to
Lender,  together  with evidence of payment of all premiums therefore; each such
policy  shall  contain  an  endorsement  showing  Lender  as  additional insured
thereunder  and  providing that the insurance company shall give Lender at least
thirty  (30)  days  written  notice  before  any such policy shall be altered or
canceled.

If Borrowers at any time or times hereafter shall fail to obtain or maintain any
of  the  policies  of  insurance  required  above or to pay any premium relating
thereto,  then Lender, without waiving or releasing any obligation or default by
Borrowers  hereunder,  may  (but  shall  be  under  no obligation to) obtain and
maintain  such  policies  of insurance and pay such premiums and take such other
actions  with  respect  thereto  as  Lender deems advisable.  Such insurance, if
obtained  by  Lender, may, but need not, protect Borrowers' interests or pay any
claim  made  by  or  against  Borrowers  with  respect  to the Collateral.  Such
insurance may be more expensive than the cost of insurance Borrowers may be able
to obtain on its own and may be cancelled only upon Borrowers providing evidence
that  it  has  obtained  the insurance as required above.  All sums disbursed by
Lender in connection with any such actions, including, without limitation, court
costs,  expenses, other charges relating thereto and reasonable attorneys' fees,
shall  constitute  Loans  hereunder,  shall be payable on demand by Borrowers to
Lender  and, until paid, shall bear interest at the highest rate then applicable
to  Loans  hereunder.

<PAGE>

     (f)     COLLATERAL.
             ----------

     Each Borrower shall keep the Collateral in good condition, repair and order
and  shall  make all necessary repairs to the Equipment and replacements thereof
so  that  the  operating  efficiency and the value thereof shall at all times be
preserved  and  maintained.  Borrower  shall permit Lender to examine any of the
Collateral  at  any  time  and  wherever the Collateral may be located and, each
Borrower shall, immediately upon written request therefore by Lender, deliver to
Lender  any  and  all  evidence  of ownership of any of the Equipment including,
without  limitation,  certificates  of  title  and  applications of title.  Each
Borrower  shall,  at  the  written  request  of  Lender, indicate on its records
concerning  the  Collateral  a  notation, in form satisfactory to Lender, of the
security  interest  of  Lender  hereunder.

     (g)     USE  OF  PROCEEDS.
             -----------------

     All monies and other property obtained by Borrowers from Lender pursuant to
this  Agreement  shall  be  used  solely  for  business  purposes  of Borrowers.

     (h)     TAXES.
             -----

     Each  Borrower shall file all required tax returns and pay all of its taxes
when  due,  including,  without  limitation,  taxes imposed by federal, state or
municipal agencies, and shall cause any liens for taxes to be promptly released;
provided,  that  Borrower  shall  have  the right to contest the payment of such
taxes  in  good  faith  by  appropriate proceedings so long as (i) the amount so
contested  is  shown  on  such  Borrower's  financial  statements;  and (ii) the
contesting  of any such payment does not give rise to a lien for taxes.  If such
Borrower  fails  to pay any such taxes and in the absence of any such contest by
such  Borrower, Lender may (but shall be under no obligation to) advance and pay
any sums required to pay any such taxes and/or to secure the release of any lien
therefore,  and any sums so advanced by Lender shall constitute Loans hereunder,
shall  be  payable  by such Borrower to Lender on demand, and, until paid, shall
bear  interest  at  the  highest  rate  then  applicable  to  Loans  hereunder.


     (i)     INTELLECTUAL  PROPERTY.
             ----------------------

     Each  Borrower  shall  maintain  adequate  licenses,  patents,  patent
applications,  copyrights,  service  marks,  trademarks, trademark applications,
tradestyles  and trade names to continue its business as heretofore conducted by
it  or  as  hereafter  conducted  by  it.

     13.     NEGATIVE  COVENANTS.
             -------------------

     Until  payment  and satisfaction in full of all Liabilities and termination
of  this  Agreement,  unless  Borrowers  obtain  Lender's  prior written consent
waiving  or modifying any of such Borrower's covenants hereunder in any specific
instance,  each  Borrower  agrees  as  follows:

<PAGE>

     (a)     GUARANTIES.
             ----------

     Except  in  connection  with  the  LaSalle Bank Letter of Credit, Borrowers
shall not assume, guarantee or endorse, or otherwise become liable in connection
with,  the  obligations  of any Person, except by endorsement of instruments for
deposit  or  collection  or  similar  transactions  in  the  ordinary  course of
business.

     (b)     INDEBTEDNESS.
             ------------

     Borrowers  shall not create, incur, assume or become obligated (directly or
indirectly),  for  any  loans or other indebtedness of borrowed money other than
the  loans,  except  that  Borrowers may (i) incur a reimbursement obligation to
LaSalle  in  accordance  with the LaSalle Bank Letter of Credit agreements; (ii)
borrow  money  from  a person other than Lender on an unsecured and subordinated
basis  if a subordination agreement in favor of Lender and in form and substance
satisfactory  to  Lender  is  executed and delivered to Lender relative thereto;
(iii)  maintain  its present indebtedness listed on Schedule 11(n) hereto; (iii)
                                                    --------------
incur  unsecured  indebtedness  to  trade  creditors  in  the ordinary course of
business;  (iv)  incur  purchase  money  indebtedness  or  capitalized  lease
obligations  in  connection  with  Capital;  and  (v)  incur  operating  lease
obligations.

     (c)     LIENS.
             -----

     Borrowers shall not grant or permit to exist (voluntarily or involuntarily)
any lien, claim, security interest or other encumbrance whatsoever on any of its
assets,  other  than  Permitted  Liens.

     (d)     MERGERS,  SALES,  ACQUISITIONS, SUBSIDIARIES AND OTHER TRANSACTIONS
             -------------------------------------------------------------------
OUTSIDE  THE  ORDINARY  COURSE  OF  BUSINESS.
 -------------------------------------------

     Neither  Borrower  shall  (i)  enter into any merger or consolidation; (ii)
change  the  state of such Borrower's organization or enter into any transaction
which  has  the  effect  of changing such Borrower's state of organization (iii)
sell, lease or otherwise dispose of any of its assets other than in the ordinary
course  of business; (iv) purchase the stock, other equity interests or all or a
material  portion of the assets of any Person or division of such Person; or (v)
enter  into any other transaction outside the ordinary course of such Borrower's
business,  including, without limitation, any purchase, redemption or retirement
of  any  shares of any class of its stock or any other equity interest.  Neither
Borrower  shall  form  any  Subsidiaries  or  enter  into  any joint ventures or
partnerships  with  any  other  Person.

     (e)     DIVIDENDS  AND  DISTRIBUTIONS.
             -----------------------------

     Borrowers  shall  not  declare  or  pay  any dividend or other distribution
(whether  in  cash  or  in  kind)  on  any  class of its stock (if Borrower is a
corporation)  or on account of any equity interest in Borrower (if Borrower is a
partnership,  limited  liability  company  or  other  type  of  entity).

<PAGE>

     (f)     INVESTMENTS;  LOANS.
             -------------------

     Neither  Borrower  shall  purchase  or  otherwise  acquire,  or contract to
purchase  or  otherwise  acquire,  the obligations or stock of any Person, other
than  direct obligations of the United States; nor shall either Borrower lend or
otherwise  advance  funds  to  any Person except for advances made to employees,
officers  and  directors  for  travel and other expenses arising in the ordinary
course  of  business.

     (g)     FUNDAMENTAL  CHANGES,  LINE  OF  BUSINESS.
             -----------------------------------------

     Neither  Borrower  shall  amend  its organizational documents or change its
Fiscal  Year or enter into a new line of business materially different from such
Borrower's  current  business.

     (h)     EQUIPMENT.
             ---------

     Borrowers  shall  not  permit  any  Equipment to become an accession to any
other  personal  property  unless  such personal property is subject to a second
priority  lien  in  favor  of  Lender,  subject  to  the  Permitted  Liens.

     (i)     AFFILIATE  TRANSACTIONS.
             -----------------------

     Except  as  set  forth on Schedule 11(i) hereto or as permitted pursuant to
                               --------------
subsection  11(c)  hereof,  Borrowers  shall not conduct, permit or suffer to be
  ---------------
conducted, transactions with Affiliates for the purchase or sale of Inventory or
services  in  the  ordinary  course  of business pursuant to terms that are less
favorable  to Borrowers than the terms upon which such transfers or transactions
would  have  been  made  had  they  been made to or with a Person that is not an
Affiliate.

     (j)     REINSURANCE  RISK.
             -----------------

     Borrower  shall  cause Hartville Insurance Company, LTD. to stop writing or
incurring  insurance  and/or  reinsurance  risk  based  in  whole or in part, or
directly  or  indirectly, on the LaSalle Bank Letter of Credit at any time after
the  occurrence  of  an  Event of Default and/or after the Original Term of this
Agreement  or,  if the Original Term has been extended as provided in Section 10
hereof,  the  Renewal  Term  of  this  Agreement.

     14.     JOINT  AND  SEVERAL  LIABILITY.
             ------------------------------

     (a)  Notwithstanding  anything  to  the  contrary  contained  herein,  all
Liabilities of each Borrower hereunder shall be joint and several obligations of
Borrowers;

     (b) Notwithstanding any provisions of this Agreement to the contrary, it is
intended  that  the joint and several nature of the Liabilities of Borrowers and
the liens and security interests granted by borrowers to secure the Liabilities,
not  constitute  a  "Fraudulent  Conveyance"  (as  defined below). Consequently,
Lender  and  Borrowers agree that if the Liabilities of a Borrower, or any liens
or  security  interests granted by such Borrower securing the Liabilities would,
but  for  the  application of this sentence, constitute a Fraudulent Conveyance,
the  Liabilities  of such Borrower and the liens and security interests securing
such  Liabilities shall be valid and enforceable only to the maximum extent that
would not cause such Liabilities or such lien or security interest to constitute
a Fraudulent Conveyance, and the Liabilities of such Borrower and this Agreement
shall  automatically  be  deemed  to have been amended accordingly. For purposes
hereof,  "Fraudulent conveyance" means a fraudulent conveyance under Section 548
of  Chapter  11  of  Title  II of the United States Code (11 U.S.C. Sec. 101, et
seq.),  as  amended  (the  "Bankruptcy  Code")  or  a  fraudulent  conveyance or
fraudulent  transfer under the applicable provision of any fraudulent conveyance
or  fraudulent  transfer  law  or  similar  law  of  any  state, nation or other
governmental  unit,  as  in  effect  from  time  to  time;

<PAGE>

     (c) Each Borrower assumes responsibility for keeping itself informed of the
financial  condition  of  the  other Borrowers, and any and all endorsers and/or
guarantors  of  any  instrument  or  document evidencing all or any part of such
other  Borrower's  Liabilities  and  of all other circumstances bearing upon the
risk  of  nonpayment  by  such  other  Borrowers  of  their Liabilities and each
Borrower  agrees  that Lender shall not have any duty to advise such Borrower of
information  known  to Lender regarding such condition or any such circumstances
or to undertake any investigation not a part of its regular business routine. If
Lender,  in  its sole discretion, undertakes at any time or from time to time to
provide  any  such  information  to  a  Borrower,  Lender shall not be under any
obligation  to update any such information or to provide any such information to
such  Borrower  on  any  subsequent  occasion;

     (d)  Lender  is  hereby  authorized,  without  notice or demand and without
affecting  the  liability of any Borrower hereunder, to, at a time and from time
to  time  (i) renew, extend, accelerate or otherwise change the time for payment
of,  or  other  terms  relating to a Borrower's Liabilities or otherwise modify,
amend or change the terms of any promissory note or other agreement, document or
instrument now or hereafter executed by a Borrower and delivered to Lender; (ii)
accept  partial  payments  on  a  Borrower's  Liabilities;  (iii)  take and hold
security  or  collateral for the payment of a Borrower's Liabilities; (iii) take
and  hold  security  or  collateral  for the payment of a Borrower's Liabilities
hereunder  or  for  the payment of any guaranties of a Borrower's Liabilities or
other  liabilities  of  a  Borrower and exchange, enforce, waive and release any
such  security  or collateral; (iv) apply such security or collateral and direct
the  order  or  manner  of  sale  thereof  as Lender, in its sole discretion may
determine; and (v) settle, release, compromise, collect or otherwise liquidate a
Borrower's  Liabilities  and any security or collateral therefore in any manner,
without  affecting  or  impairing the obligations of the other Borrowers. Lender
shall  have  the exclusive right to determine the time and manner of application
of  any  payments  or  credits,  whether  received  from a Borrower or any other
source,  and  such  determination  shall  be  binding on such Borrower. All such
payments  and  credits  may  be  applied, reversed and reapplied, in whole or in
part,  to  any of a Borrower's Liabilities as Lender shall determine in its sole
discretion  without  affecting the validity or enforceability of the Liabilities
of  the  other  Borrowers;

     (e)  Each  Borrower hereby agrees that, except as hereinafter provided, its
obligations hereunder shall be unconditional, irrespective of (i) the absence of
any  attempt  to  collect  a  Borrower's  Liabilities  from  and Borrower or any
guarantor  or  other  action  to enforce the same; (ii) the waiver or consent by
Lender  with  respect  to  any provision of any instrument evidencing Borrowers'
Liabilities,  or  any  part  thereof,  or any other agreement heretofore, now or
hereafter  executed  by  a  Borrower  and  delivered to Lender; (iii) failure by
Lender to take any steps to perfect and maintain its security interest in, or to
preserve  its  rights to, any security or collateral for Borrower's Liabilities;
(iv) the institution of any proceeding under the Bankruptcy Code, or any similar
proceeding, by or against a Borrower or Lender's election in any such proceeding
of  the  application  of  Section  1111(b)(2)  of  the  Bankruptcy Code; (v) any
borrowing  or  grant  of  a  security  interest  by  any  Borrower  as
debtor-in-possession,  under  Section  364  of  the  Bankruptcy  Code;  (vi) the
disallowance, under Section 502 of the Bankruptcy Code, of all or any portion of
Lender's  claim(s)  for repayment of any of Borrowers' Liabilities; or (vii) any
other  circumstance  which  might  otherwise  constitute  a  legal  or equitable
discharge  or  defense  of  a  guarantor;  and

<PAGE>

     (f)  No payment made by or for the account of a Borrower including, without
limitations, (i) a payment made by such Borrower on behalf of another Borrower's
Liabilities or (ii) a payment made by any other person under any guaranty, shall
entitle  such  Borrower,  by  subrogation or otherwise, to any payment from such
other  Borrower  or  from  or  out  of  such  other Borrower's property and such
Borrower  shall  not exercise any right or remedy against such other Borrower or
any  property  of  such  other  Borrower  by  reason  of any performance of such
Borrower  of  its  joint  and  several  obligations  hereunder.

     15.     DEFAULT.
             -------

     The  occurrence of any one or more of the following events shall constitute
an  "Event  of  Default"  by  Borrowers  hereunder:

     (a)     PAYMENT.
             -------

     The  failure  of  any Obligor to pay when due, declared due, or demanded by
Lender, any of the Liabilities and such failure shall continue for ten (10) days
thereafter.

     (b)     BREACH  OF  THIS  AGREEMENT  AND  THE  OTHER  AGREEMENTS.
             --------------------------------------------------------

     The  failure  of  any  Obligor  to  perform,  keep  or  observe  any of the
covenants, conditions, promises, agreements or obligations of such Obligor under
this Agreement or any of the Other Agreements; provided that any such failure by
an  Obligor  under  subparagraphs  12(b)(ii),  11(d)  (but  only with respect to
involuntarily  created  liens,  claims,  security  interests  and encumbrances),
12(c),  (11(q), 11(r), 11(s) and 11(t) of this Agreement shall not constitute an
Event  of  Default  hereunder  until  the  fifteenth  (15th)  day  following the
occurrence  thereof.

     (c)     BREACHES  OF  OTHER  OBLIGATIONS.
             --------------------------------

     The  failure  of  any  Obligor  to  perform,  keep  or  observe  any of the
covenants, conditions, promises, agreements or obligations of such Obligor under
any other agreement with any Person if such failure could reasonably be expected
to  have  a  Material  Adverse  Effect  on  such  Obligor.

     (d)     BREACH  OF  REPRESENTATIONS  AND  WARRANTIES.
             --------------------------------------------

     The  making  or  furnishing by any Obligor to Lender of any representation,
warranty,  certificate,  schedule,  report  or  other communication within or in
connection with this Agreement or the Other Agreements or in connection with any
other  agreement  between such Obligor and Lender, which is untrue or misleading
in  any  respect.

<PAGE>

     (e)     LOSS  OF  COLLATERAL.
             --------------------

     The  loss, theft, damage or destruction of, or (except as permitted hereby)
sale,  lease or furnishing under a contract of service of, any of the Collateral
in  excess  of  $100,000  that  is  not  covered  by  insurance.

     (f)     LEVY,  SEIZURE  OR  ATTACHMENT.
             ------------------------------

     The  making  or  any  attempt  by  any  Person to make any levy, seizure or
attachment  upon  any  of  the  Collateral.

     (g)     BANKRUPTCY  OR  SIMILAR  PROCEEDINGS.
             ------------------------------------

     The commencement of any proceedings in bankruptcy by or against any Obligor
or  for  the liquidation or reorganization of any Obligor, or alleging that such
Obligor  is  insolvent  or  unable  to  pay its debts as they mature, or for the
readjustment  or  arrangement  of  any Obligor's debts, whether under the United
States  Bankruptcy Code or under any other law, whether state or federal, now or
hereafter  existing,  for  the  relief  of  debtors,  or the commencement of any
analogous  statutory  or  non-statutory  proceedings  involving  any  Obligor;
provided, however, that if such commencement of proceedings against such Obligor
is involuntary, such action shall not constitute an Event of Default unless such
proceedings  are not dismissed within thirty (30) days after the commencement of
such  proceedings.

     (h)     APPOINTMENT  OF  RECEIVER.
             -------------------------

     The  appointment  of  a receiver or trustee for any Obligor, for any of the
Collateral  or  for  any  substantial  part  of  any  Obligor's  assets  or  the
institution  of  any  proceedings  for  the  dissolution, or the full or partial
liquidation,  or  the  merger  or  consolidation,  of  any  Obligor  which  is a
corporation, limited liability company or a partnership; provided, however, that
if  such  appointment  or  commencement  of  proceedings against such Obligor is
involuntary,  such  action  shall not constitute an Event of Default unless such
appointment  is  not  revoked  or  such  proceedings  are  not  dismissed within
forty-five  (45)  days  after  the  commencement  of  such  proceedings.

     (i)     JUDGMENT.
             --------

     The  entry  of  any  judgment  or  order  against  any Obligor in excess of
$25,000, which remains unsatisfied or undischarged and in effect for thirty (30)
days  after  such  entry  without  a  stay  of  enforcement  or  execution.

<PAGE>

     (j)     DEATH  OR  DISSOLUTION  OF  OBLIGOR.
             -----------------------------------

     The  death  of  W.  Russell  Smith  III, or of any general partner who is a
natural  Person  of  any  Obligor which is a partnership, or any member who is a
natural  Person  of  any  Obligor  which  is  a limited liability company or the
dissolution  of  any  Obligor which is a partnership, limited liability company,
corporation  or  other  entity.

     (k)     DEFAULT  OR  REVOCATION  OF  GUARANTY.
             -------------------------------------

     The  occurrence  of  an  event  of  default  under,  or  the  revocation or
termination  of, any agreement, instrument or document executed and delivered by
any  Person to Lender pursuant to which such Person has guaranteed to Lender the
payment  of  all  or  any  of  the  Liabilities or has granted Lender a security
interest  in  or  lien  upon  some  or all of such Person's real and/or personal
property  to  secure  the  payment  of  all  or  any  of  the  Liabilities.

     (l)     CRIMINAL  PROCEEDINGS.
             ---------------------

     The  institution in any court of a criminal proceeding against any Obligor,
or  the  indictment  of  any  Obligor  for  any  crime.

     (m)     CHANGE  OF  MANAGEMENT.
             ----------------------

     If  W.  Russell  Smith  III  shall  cease  to be President of Hartville and
Petsmarketing  at  any  time.

     16.     REMEDIES  UPON  AN  EVENT  OF  DEFAULT.
             --------------------------------------

     (a)     Upon  the occurrence of an Event of Default described in subsection
                                                                      ----------
15(g)  hereof, all of the Liabilities shall immediately and automatically become
-----
due  and  payable, without notice of any kind.  Upon the occurrence of any other
Event  of  Default,  all  Liabilities  may, at the option of Lender, and without
demand,  notice or legal process of any kind, be declared, and immediately shall
become,  due  and  payable.

     (b)     Upon  the  occurrence  of  an Event of Default, Lender may exercise
from  time  to  time  any  rights and remedies available to it under the Uniform
Commercial Code and any other applicable law in addition to, and not in lieu of,
any  rights  and  remedies  expressly granted in this Agreement or in any of the
Other Agreements and all of Lender's rights and remedies shall be cumulative and
non-exclusive  to the extent permitted by law.  In particular, but not by way of
limitation of the foregoing, Lender may, without notice, demand or legal process
of  any  kind,  take  possession of any or all of the Collateral (in addition to
Collateral  of  which  it already has possession), wherever it may be found, and
for  that  purpose  may  pursue the same wherever it may be found, and may enter
onto  any  of Borrowers' premises where any of the Collateral may be, and search
for,  take possession of, remove, keep and store any of the Collateral until the
same  shall be sold or otherwise disposed of, and Lender shall have the right to
store  the  same  at  any  of  Borrowers'  premises  without cost to Lender.  At
Lender's  request,  Borrowers  shall,  at  Borrowers'  expense,  assemble  the
Collateral  and  make  it  available  to  Lender  at  one  or  more places to be
designated  by  Lender  and  reasonably  convenient  to  Lender  and  Borrowers.
Borrowers  recognize that if Borrowers fail to perform, observe or discharge any
of  their Liabilities under this Agreement or the Other Agreements, no remedy at
law  will  provide  adequate  relief  to Lender, and agrees that Lender shall be
entitled  to  temporary and permanent injunctive relief in any such case without
the  necessity  of  proving  actual  damages.  Any  notification  of  intended
disposition  of  any  of  the  Collateral required by law will be deemed to be a
reasonable  authenticated notification of disposition if given at least ten (10)
days  prior  to  such  disposition and such notice shall (i) describe Lender and
Borrowers,  (ii)  describe  the  Collateral  that is the subject of the intended
disposition, (iii) state the method of the intended disposition, (iv) state that
Borrowers are entitled to an accounting of the Liabilities and state the charge,
if  any,  for  an  accounting  and  (v)  state  the time and place of any public
disposition  or the time after which any private sale is to be made.  Lender may
disclaim  any  warranties that might arise in connection with the sale, lease or
other  disposition  of  the  Collateral  and  has  no  obligation to provide any
warranties  at  such  time.  Any Proceeds of any disposition by Lender of any of
the Collateral may be applied by Lender to the payment of expenses in connection
with  the  Collateral,  including,  without  limitation,  legal  expenses  and
reasonable  attorneys'  fees, and any balance of such Proceeds may be applied by
Lender  toward  the  payment  of  such  of the Liabilities, and in such order of
application,  as  Lender  may  from  time  to  time  elect.

<PAGE>

     17.     CONDITIONS PRECEDENT.  The obligation of Lender to fund the Loan is
             --------------------
subject  to  the  satisfaction  or  waiver on or before February 19, 2003 of the
following  conditions  precedent:  Lender  shall  have  received  each  of  the
following  agreements,  opinions,  certificates  and other documents as follows:

(i)     This  Agreement;
(ii)    $3,000,000  Promissory  Note  (Secured);
(iii)   Secretary's  Certificate  of  each  Borrower;
(iv)    Good Standing Certificate for each Borrower dated within twenty days of
        this  date;
(v)     Unanimous  Written Consent of the Directors of each Borrower authorizing
        the  Loans  and  the  execution  and  delivery  of  this  Agreement;
(vi)    Acknowledgment  of the filing of a UCC-1 Financing Statement naming (a)
        Hartville  as  Debtor in favor of Lender with the Office of the Nevada
        Secretary of State and (b) Petsmarketing as Debtor in favor of Lender in
        the Office of the Ohio  Secretary  of  State;
(vii)   Guaranty  of  W.  Russell  Smith  III  and  Whiskers,  Inc.;
(viii)  Stock  Pledge  Agreement from each of Hartville, W. Russell Smith III
        and  Whiskers,  Inc.  together with the stock certificates evidencing
        each stock pledge  and  related  stock  powers  executed  in  blank;
(ix)    Warrant  Agreement  whereby Hartville agrees to issue to Lender 300,000
        restricted  warrants  to  purchase  the  stock  of Hartville as provided
        in such Agreement.
(x)     Letter  Agreement of Hartville Insurance Company regarding incurring new
        reinsurance risk after the Original Term or, if applicable, Renewal Term
        and the termination  of  the  LaSalle  Letter  of  Credit;  and
(xi)    Opinion  of  Borrower's  counsel  in  form  satisfactory  to  Lender.

<PAGE>

     18.     INDEMNIFICATION.
             ---------------

     Borrowers  agree  to defend (with counsel satisfactory to Lender), protect,
indemnify  and hold harmless Lender, each affiliate or subsidiary of Lender, and
each  of  their  respective officers, directors, employees, attorneys and agents
(each  an  "Indemnified  Party")  from  and  against  any  and  all liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments, suits, claims,
costs,  expenses  and  disbursements  of  any kind or nature (including, without
limitation,  the  disbursements  and  the  reasonable  fees  of counsel for each
Indemnified  Party  in  connection  with  any  investigative,  administrative or
judicial  proceeding, whether or not the Indemnified Party shall be designated a
party  thereto),  which may be imposed on, incurred by, or asserted against, any
Indemnified  Party  (whether direct, indirect or consequential and whether based
on  any  federal,  state  or  local  laws  or  regulations,  including,  without
limitation,  securities  laws and regulations, Environmental Laws and commercial
laws  and  regulations,  under  common law or in equity, or based on contract or
otherwise)  in  any  manner  relating to or arising out of this Agreement or any
Other  Agreement, or any act, event or transaction related or attendant thereto,
the  making or issuance and the management of the Loans or any Letters of Credit
or  the  use  or  intended  use  of  the proceeds of the Loans or any Letters of
Credit;  provided,  however,  that  Borrowers  shall  not  have  any  obligation
hereunder  to  any  Indemnified  Party  with  respect  to  matters  caused by or
resulting  from  the  willful misconduct or gross negligence of such Indemnified
Party.  To  the  extent  that  the  undertaking  to  indemnify  set forth in the
preceding  sentence  may  be unenforceable because it is violative of any law or
public  policy,  Borrowers  shall satisfy such undertaking to the maximum extent
permitted  by applicable law.  Any liability, obligation, loss, damage, penalty,
cost  or  expense  covered  by  this indemnity shall be paid to each Indemnified
Party  on  demand,  and,  failing  prompt payment, shall, together with interest
thereon  at  the  highest  rate then applicable to Loans hereunder from the date
incurred  by  each  Indemnified  Party  until paid by Borrowers, be added to the
Liabilities  of  Borrowers  and be secured by the Collateral.  The provisions of
this  Section  18  shall  survive  the  satisfaction  and  payment  of the other
      -----------
Liabilities  and  the  termination  of  this  Agreement.

     19.     NOTICE.
             ------

     All  written  notices and other written communications with respect to this
Agreement shall be sent by ordinary, certified or overnight mail, by telecopy or
delivered  in  person,  and  in  the case of Lender shall be sent to it at 20682
North  Plumwood,  Kildeer,  Illinois  60047, Attention:  Mohammed H. Mirza (847)
726-2217,  and  in  the  case  of Borrowers shall be sent to it at its principal
place  of  business  set  forth  on Exhibit A hereto or as otherwise directed by
                                    ---------
Borrowers  in writing.  All notices shall be deemed received upon actual receipt
thereof  or  refusal  of  delivery.

<PAGE>

     20.     CHOICE  OF  GOVERNING  LAW;  CONSTRUCTION;  FORUM  SELECTION.
             ------------------------------------------------------------

     This  Agreement  and  the  Other  Agreements  are submitted by Borrowers to
Lender  for  Lender's  acceptance  or  rejection  at Lender's principal place of
business as an offer by Borrowers to borrow monies from Lender now and from time
to  time  hereafter,  and  shall  not be binding upon Lender or become effective
until accepted by Lender, in writing, at said place of business.  If so accepted
by  Lender, this Agreement and the Other Agreements shall be deemed to have been
made  at  said place of business.  THIS AGREEMENT AND THE OTHER AGREEMENTS SHALL
BE  GOVERNED  AND CONTROLLED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS AS TO
INTERPRETATION,  ENFORCEMENT,  VALIDITY,  CONSTRUCTION, EFFECT, AND IN ALL OTHER
RESPECTS,  INCLUDING,  WITHOUT LIMITATION, THE LEGALITY OF THE INTEREST RATE AND
OTHER  CHARGES, BUT EXCLUDING PERFECTION OF THE SECURITY INTERESTS IN COLLATERAL
LOCATED OUTSIDE OF THE STATE OF ILLINOIS, WHICH SHALL BE GOVERNED AND CONTROLLED
BY  THE  LAWS  OF THE RELEVANT JURISDICTION IN WHICH SUCH COLLATERAL IS LOCATED.
If  any provision of this Agreement shall be held to be prohibited by or invalid
under  applicable law, such provision shall be ineffective only to the extent of
such  prohibition  or  invalidity,  without  invalidating  the remainder of such
provision  or  remaining  provisions  of  this  Agreement.

     To induce Lender to accept this Agreement, each Borrower irrevocably agrees
that, subject to Lender's sole and absolute election, ALL ACTIONS OR PROCEEDINGS
IN  ANY  WAY,  MANNER  OR  RESPECT,  ARISING  OUT  OF OR FROM OR RELATED TO THIS
AGREEMENT,  THE  OTHER AGREEMENTS OR THE COLLATERAL SHALL BE LITIGATED IN COURTS
HAVING SITUS WITHIN THE CITY OF CHICAGO, STATE OF ILLINOIS. EACH BORROWER HEREBY
CONSENTS  AND  SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURTS
LOCATED  WITHIN SAID CITY AND STATE. Borrowers irrevocably consent to service of
process  by  mail. EACH BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER
OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT AGAINST SUCH BORROWER BY LENDER IN
ACCORDANCE  WITH  THIS  SECTION.

     21.     MODIFICATION  AND  BENEFIT  OF  AGREEMENT.
             -----------------------------------------

     This  Agreement  and  the  Other Agreements may not be modified, altered or
amended  except  by  an  agreement  in writing signed by Borrowers or such other
person  who  is  a  party to such Other Agreement and Lender.  Borrowers may not
sell,  assign or transfer this Agreement, or the Other Agreements or any portion
thereof,  including,  without  limitation,  Borrowers' rights, titles, interest,
remedies,  powers  or duties hereunder and thereunder.  Borrowers hereby consent
to  Lender's  sale,  assignment,  transfer or other disposition, at any time and
from  time  to time hereafter, of this Agreement, or the Other Agreements, or of
any  portion  thereof, or participations therein, including, without limitation,
Lender's  rights,  titles,  interest,  remedies, powers and/or duties and agrees
that  it  shall  execute  and  deliver  such  documents as Lender may request in
connection  with  any  such  sale,  assignment,  transfer  or other disposition.

<PAGE>

     22.     HEADINGS  OF  SUBDIVISIONS.
             --------------------------

     The  headings  of  subdivisions  in  this  Agreement are for convenience of
reference only, and shall not govern the interpretation of any of the provisions
of  this  Agreement.

     23.     POWER  OF  ATTORNEY.
             -------------------

     Each Borrower acknowledges and agrees that its appointment of Lender as its
attorney  and agent-in-fact for the limited purposes specified in this Agreement
is an appointment coupled with an interest and shall be irrevocable until all of
the Liabilities are satisfied and paid in full and this Agreement is terminated.

     24.     CONFIDENTIALITY.
             ---------------

     Borrowers  and  Lender  hereby  agree  and  acknowledge  that  any  and all
information  relating to Borrowers which is (i) furnished by Borrowers to Lender
(or  to  any  affiliate  of  Lender);  and  (ii)  non-public,  confidential  or
proprietary in nature, shall be kept confidential by Lender or such affiliate in
accordance  with  applicable  law;  provided, however, that such information and
other  credit  information relating to Borrowers may be distributed by Lender or
such  affiliate  to Lender's or such affiliate's directors, officers, employees,
attorneys, affiliates, assignees, participants, auditors, agents and regulators,
and  upon  the order of a court or other governmental agency having jurisdiction
over Lender or such affiliate, to any other party.  Borrowers and Lender further
agree  that  this  provision  shall  survive  the termination of this Agreement.
Notwithstanding  the  foregoing, Borrowers hereby consent to Lender publishing a
tombstone  or similar advertising material relating to the financing transaction
contemplated  by  this  Agreement.

25.     BROKERAGE  COMMISSION;  THIRD  PARTY  FEES:
        ------------------------------------------

     Lender  shall  not  be responsible for any brokerage or other fee to Summit
Financial  Partners  or  any  other  party who assisted Borrowers to arrange the
credit  being  extended  to Borrowers pursuant to this Agreement. Borrower shall
have  the sole responsibility to pay any such fee and will indemnify Lender with
respect  thereto  in  accordance  with  Section  18  above.

     26.     COUNTERPARTS.
             ------------

     This  Agreement and any amendments, waivers, consents or supplements may be
executed  in  any  number  of  counterparts  and  by different parties hereto in
separate  counterparts,  each of which, when so executed and delivered, shall be
deemed  an original, but all of which counterparts together shall constitute but
one  agreement.

     27.     ELECTRONIC  SUBMISSIONS.
             -----------------------

     Upon  not  less  than thirty (30) days' prior written notice (the "APPROVED
ELECTRONIC  FORM  NOTICE"),  Lender  may  permit  or  require  that  any  of the
documents,  certificates, forms, deliveries or other communications, authorized,
required or contemplated by this Agreement or the Other Agreements, be submitted
to  Lender  in "APPROVED ELECTRONIC FORM" (as hereafter defined), subject to any
reasonable  terms,  conditions  and  requirements  in  the

<PAGE>

applicable  Approved  Electronic  Forms Notice.  For purposes hereof "ELECTRONIC
FORM" means e-mail, e-mail attachments, data submitted on web-based forms or any
other communication method that delivers machine readable data or information to
Lender,  and  "APPROVED  ELECTRONIC FORM" means an Electronic Form that has been
approved  in  writing by Lender (which approval has not been revoked or modified
by  Lender) and sent to Borrowers in an Approved Electronic Form Notice.  Except
as  otherwise  specifically  provided in the applicable Approved Electronic Form
Notice,  any  submissions  made  in an applicable Approved Electronic Form shall
have  the same force and effect that the same submissions would have had if they
had  been  submitted  in  any  other  applicable  form  authorized,  required or
contemplated  by  this  Agreement  or  the  Other  Agreements.

     28.     WAIVER  OF  JURY  TRIAL;  OTHER  WAIVERS.
             ----------------------------------------

     (a) EACH BORROWER AND LENDER EACH HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY
IN  ANY  ACTION  OR  PROCEEDING  WHICH  PERTAINS  DIRECTLY OR INDIRECTLY TO THIS
AGREEMENT,  ANY  OF  THE  OTHER AGREEMENTS, THE LIABILITIES, THE COLLATERAL, ANY
ALLEGED  TORTIOUS  CONDUCT  BY  EACH  BORROWER  OR  LENDER OR WHICH, IN ANY WAY,
DIRECTLY  OR  INDIRECTLY,  ARISES  OUT OF OR RELATES TO THE RELATIONSHIP BETWEEN
EACH BORROWER AND LENDER. IN NO EVENT SHALL LENDER BE LIABLE FOR LOST PROFITS OR
OTHER  SPECIAL  OR  CONSEQUENTIAL  DAMAGES.

     (b)  Each Borrower hereby waives demand, presentment, protest and notice of
nonpayment,  and  further  waives  the  benefit  of all valuation, appraisal and
exemption  laws.

     (c) Each Borrower hereby waives the benefit of any law that would otherwise
restrict  or  limit  Lender  or  any  affiliate of Lender in the exercise of its
right,  which  is  hereby  acknowledged  and  agreed  to, to set-off against the
Liabilities,  without notice at any time hereafter, any indebtedness, matured or
unmatured,  owing  by  Lender  or  such  affiliate  of  Lender to each Borrower,
including,  without  limitation any deposit account at Lender or such affiliate.
     (d)  OTHER THAN NOTICE, IF ANY, AS SPECIFICALLY PROVIDED IN THIS AGREEMENT,
EACH  BORROWER  HEREBY WAIVES ALL RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR
TO  THE  EXERCISE  BY  LENDER  OF ITS RIGHTS TO REPOSSESS THE COLLATERAL OF SUCH
BORROWER  WITHOUT  JUDICIAL  PROCESS  OR  TO  REPLEVY,  ATTACH OR LEVY UPON SUCH
COLLATERAL.

     (e)  Lender's  failure,  at  any time or times hereafter, to require strict
performance  by  Borrower of any provision of this Agreement or any of the Other
Agreements shall not waive, affect or diminish any right of Lender thereafter to
demand  strict compliance and performance therewith. Any suspension or waiver by
Lender  of  an Event of Default under this Agreement or any default under any of
the  Other  Agreements  shall  not  suspend,  waive or affect any other Event of
Default  under  this  Agreement  or  any  other  default  under any of the Other
Agreements,  whether  the same is prior or subsequent thereto and whether of the
same  or of a different kind or character. No delay on the part of Lender in the
exercise  of  any  right  or  remedy under this Agreement or any Other Agreement
shall preclude other or further exercise thereof or the exercise of any right or
remedy.  None  of  the  undertakings,  agreements,  warranties,  covenants  and
representations  of  Borrower  contained  in  this Agreement or any of the Other
Agreements  and no Event of Default under this Agreement or default under any of
the  Other Agreements shall be deemed to have been suspended or waived by Lender
unless  such  suspension  or  waiver  is in writing, signed by a duly authorized
officer  of  Lender  and directed to such Borrower specifying such suspension or
waiver.

<PAGE>

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

                                      BORROWERS:
                                      HARTVILLE GROUP, INC.


                                      By:/s/ W. Russell Smith III
                                         ------------------------
                                      Name:  W. Russell Smith III
                                      Title: President


                                      PETSMARKETING INSURANCE.COM AGENCY, INC.


                                      By:/s/ W. Russell Smith III
                                         ------------------------
                                      Name:  W. Russell Smith III
                                      Title: President


                                      LENDER:

                                      SAMIR FINANCIAL II, L.L.C., an Illinois
                                          limited liability company


                                      By: /s/ Mohammed H. Mirza
                                          ---------------------
                                      Name:  Mohammed H. Mirza
                                      Title: Manager

<PAGE>

                 EXHIBIT A -- BUSINESS AND COLLATERAL LOCATIONS

     Attached  to and made a part of that certain Loan and Security Agreement of
even date herewith between HARTVILLE GROUP, INC. and PETSMARKETING INSURANCE.COM
AGENCY,  INC.  ("BORROWERS")  and  SAMIR  FINANCIAL  II,  L.L.C.  ("LENDER").

          Borrowers'  Business  Locations (please indicate which location is the
principal  place  of business and at which locations originals and all copies of
Borrower's  books,  records  and  accounts  are  kept).

                        1.  7551  N.  Main  Street
                            North  Canton,  Ohio  44720

<PAGE>

                       EXHIBIT B - COMPLIANCE CERTIFICATE

     Attached to and made a part of that certain Loan and Security Agreement, as
it  may be amended in accordance with its terms from time to time, including all
exhibits  attached  thereto  (the  "AGREEMENT")  of  even  date herewith between
HARTVILLE GROUP, INC. PETSMARKETING INSURANCE.COM AGENCY, INC. ("BORROWERS") and
SAMIR  FINANCIAL  II,  L.L.C.  ("LENDER").

     This Certificate is submitted pursuant to subsection 9(c) of the Agreement.

     The  undersigned  hereby  certifies  to  Lender that as of the date of this
Certificate:

1.       The  undersigned  is  the  President of [Hartville/Petsmarketing].

2.       There  exists  no event or circumstance which is or which with the
passage  of  time,  the  giving  of notice, or both would constitute an Event of
Default,  as  that  term  is  defined  in the Agreement, or, if such an event of
circumstance exists, a writing attached hereto specifies the nature thereof, the
period  of  existence  thereof  and  the action that Hartville/Petsmarketing has
taken  or  proposes  to  take  with  respect  thereto.

3.     No  material  adverse  change  in  the condition, financial or otherwise,
business,  property,  or  results  of  operations of Hartville/Petsmarketing has
occurred         , or, if such a change has occurred, a writing attached
       ---------
hereto  specifies the nature thereof and the action that Hartville/Petsmarketing
has  taken  or  proposes  to  take  with  respect  thereto.

4.       Borrower  is  in  compliance  with  the representations, warranties and
covenants  in the Agreement, or, if Hartville/Petsmarketing is not in compliance
with  any  representations,  warranties or covenants in the Agreement, a writing
attached  hereto  specifies  the nature thereof, the period of existence thereof
and  the  action that Hartville/Petsmarketing has taken or proposes to take with
respect  thereto.

5.       The  financial statements of Hartville/Petsmarketing being concurrently
delivered  herewith  have  been  prepared  in accordance with generally accepted
accounting  principles  consistently  applied  and  there  have been no material
changes  in  accounting  policies  or  financial  reporting  practices  of
Hartville/Petsmarketing since             or, if any such change has occurred,
                             --------------
such  changes  are  set  forth  in  a  writing  attached  hereto.

6.     Attached  hereto  is  a  true  and  correct  calculation of the financial
covenants  contained  in  the  Agreement.

                             HARTVILLE GROUP, INC. / PETSMARKETING
                             INSURANCE.COM AGENCY, INC.


                             By:
                                ------------------------------------
                             Its:
                                ------------------------------------

<PAGE>

                       EXHIBIT C - COMMERCIAL TORT CLAIMS



     None.


<PAGE>

                           SCHEDULE 11(F) - LITIGATION

     None.


<PAGE>
                     SCHEDULE 11(H) - AFFILIATE TRANSACTIONS


<PAGE>
                      SCHEDULE 11(I) - NAMES & TRADE NAMES



     Petshealth Care Plan


<PAGE>

                          SCHEDULE 11(M) - INDEBTEDNESS


<PAGE>

              SCHEDULE 11(O) - PARENT, SUBSIDIARIES AND AFFILIATES


     Whiskers,  Inc.  owns 90% of the outstanding stock of Hartville Group, Inc.
and  Hartville  Group  owns 100% of Petsmarketing Insurance.com Agency. Inc. and
Hartville  Insurance  Company,  Ltd


<PAGE>
                        SCHEDULE 11(Q) - EMPLOYEE MATTERS


<PAGE>
                     SCHEDULE 11(S) - ENVIRONMENTAL MATTERS


     None.


<PAGE>
                         SCHEDULE 11(T) - ERISA MATTERS.


     None.

<PAGE>