Document:

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                                  Exhibit 10.6

                             Citibank Currency Swap

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(Multicurrency--Cross Border)

                                     ISDA(R)

                  International Swap Dealers Association, Inc.

                                MASTER AGREEMENT

               dated as of 12 March 2002
                           --------------------------------------

                                           Westpac Securities Admininstration
                                           Limited ABN 77 000 049 472 as
Citibank, N.A.                             trustee of the Series 2002-1G WST
("Party A")                           and  Trust ("Party B")
-------------------------------------      -------------------------------------

have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.

Accordingly, the parties agree as follows:--

1. Interpretation

(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.

(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.

(c) Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.

2. Obligations

(a)   General Conditions.

      (i) Each party will make each payment or delivery specified in each
      Confirmation to be made by it, subject to the other provisions of this
      Agreement.

      (ii) Payments under this Agreement will be made on the due date for value
      on that date in the place of the account specified in the relevant
      Confirmation or otherwise pursuant to this Agreement, in freely
      transferable funds and in the manner customary for payments in the
      required currency. Where settlement is by delivery (that is, other than by
      payment), such delivery will be made for receipt on the due date in the
      manner customary for the relevant obligation unless otherwise specified in
      the relevant Confirmation or elsewhere in this Agreement.

      (iii) Each obligation of each party under Section 2(a)(i) is subject to
      (1) the condition precedent that no Event of Default or Potential Event of
      Default with respect to the other party has occurred and is continuing,
      (2) the condition precedent that no Early Termination Date in respect of
      the relevant Transaction has occurred or been effectively designated and
      (3) each other applicable condition precedent specified in this Agreement.

       Copyright (C) 1992 by International Swap Dealers Association, Inc.

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(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.

(c) Netting. If on any date amounts would otherwise be payable:--

      (i) in the same currency; and

      (ii) in respect of the same Transaction,

by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.

(d) Deduction or Withholding for Tax.

      (i) Gross-Up. All payments under this Agreement will be made without any
      deduction or withholding for or on account of any Tax unless such
      deduction or withholding is required by any applicable law, as modified by
      the practice of any relevant governmental revenue authority, then in
      effect. If a party is so required to deduct or withhold, then that party
      ("X") will:--

            (1) promptly notify the other party ("Y") of such requirement;

            (2) pay to the relevant authorities the full amount required to be
            deducted or withheld (including the full amount required to be
            deducted or withheld from any additional amount paid by X to Y under
            this Section 2(d)) promptly upon the earlier of determining that
            such deduction or withholding is required or receiving notice that
            such amount has been assessed against Y;

            (3) promptly forward to Y an official receipt (or a certified copy),
            or other documentation reasonably acceptable to Y, evidencing such
            payment to such authorities; and

            (4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
            the payment to which Y is otherwise entitled under this Agreement,
            such additional amount as is necessary to ensure that the net amount
            actually received by Y (free and clear of Indemnifiable Taxes,
            whether assessed against X or Y) will equal the full amount Y would
            have received had no such deduction or withholding been required.
            However, X will not be required to pay any additional amount to Y to
            the extent that it would not be required to be paid but for:--

                  (A) the failure by Y to comply with or perform any agreement
                  contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

                  (B) the failure of a representation made by Y pursuant to
                  Section 3(f) to be accurate and true unless such failure would
                  not have occurred but for (I) any action taken by a taxing
                  authority, or brought in a court of competent jurisdiction, on
                  or after the date on which a Transaction is entered into
                  (regardless of whether such action is taken or brought with
                  respect to a party to this Agreement) or (II) a Change in Tax
                  Law.

                                        2                           ISDA(R) 1992

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      (ii) Liability. If:--

            (1) X is required by any applicable law, as modified by the practice
            of any relevant governmental revenue authority, to make any
            deduction or withholding in respect of which X would not be required
            to pay an additional amount to Y under Section 2(d)(i)(4);

            (2) X does not so deduct or withhold; and

            (3) a liability resulting from such Tax is assessed directly against
            X,

      then, except to the extent Y has satisfied or then satisfies the liability
      resulting from such Tax, Y will promptly pay to X the amount of such
      liability (including any related liability for interest, but including any
      related liability for penalties only if Y has failed to comply with or
      perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.

3. Representations

Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--

(a) Basic Representations.

      (i) Status. It is duly organised and validly existing under the laws of
      the jurisdiction of its organisation or incorporation and, if relevant
      under such laws, in good standing;

      (ii) Powers. It has the power to execute this Agreement and any other
      documentation relating to this Agreement to which it is a party, to
      deliver this Agreement and any other documentation relating to this
      Agreement that it is required by this Agreement to deliver and to perform
      its obligations under this Agreement and any obligations it has under any
      Credit Support Document to which it is a party and has taken all necessary
      action to authorise such execution, delivery and performance;

      (iii) No Violation or Conflict. Such execution, delivery and performance
      do not violate or conflict with any law applicable to it, any provision of
      its constitutional documents, any order or judgment of any court or other
      agency of government applicable to it or any of its assets or any
      contractual restriction binding on or affecting it or any of its assets;

      (iv) Consents. All governmental and other consents that are required to
      have been obtained by it with respect to this Agreement or any Credit
      Support Document to which it is a party have been obtained and are in full
      force and effect and all conditions of any such consents have been
      complied with; and

      (v) Obligations Binding. Its obligations under this Agreement and any
      Credit Support Document to which it is a party constitute its legal, valid
      and binding obligations, enforceable in accordance with their respective
      terms (subject to applicable bankruptcy, reorganisation, insolvency,
      moratorium or similar laws affecting creditors' rights generally and
      subject, as to enforceability, to equitable principles of general
      application (regardless of whether enforcement is sought in a proceeding
      in equity or at law)).

                                       3                            ISDA(R) 1992

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(b) Absence of Certain Events. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.

(c) Absence of Litigation. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.

(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.

(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.

(f) Payee Tax Representations. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.

4. Agreements

Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--

(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--

      (i) any forms, documents or certificates relating to taxation specified in
      the Schedule or any Confirmation;

      (ii) any other documents specified in the Schedule or any Confirmation;
      and

      (iii) upon reasonable demand by such other party, any form or document
      that may be required or reasonably requested in writing in order to allow
      such other party or its Credit Support Provider to make a payment under
      this Agreement or any applicable Credit Support Document without any
      deduction or withholding for or on account of any Tax or with such
      deduction or withholding at a reduced rate (so long as the completion,
      execution or submission of such form or document would not materially
      prejudice the legal or commercial position of the party in receipt of such
      demand), with any such form or document to be accurate and completed in a
      manner reasonably satisfactory to such other party and to be executed and
      to be delivered with any reasonably required certification,

in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.

(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.

(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.

(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.

(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,

                                       4                            ISDA(R) 1992

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organised, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.

5. Events of Default and Termination Events

(a) Events of Default. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:--

      (i) Failure to Pay or Deliver. Failure by the party to make, when due, any
      payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
      required to be made by it if such failure is not remedied on or before the
      third Local Business Day after notice of such failure is given to the
      party;

      (ii) Breach of Agreement. Failure by the party to comply with or perform
      any agreement or obligation (other than an obligation to make any payment
      under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
      notice of a Termination Event or any agreement or obligation under Section
      4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
      in accordance with this Agreement if such failure is not remedied on or
      before the thirtieth day after notice of such failure is given to the
      party;

      (iii) Credit Support Default.

            (1) Failure by the party or any Credit Support Provider of such
            party to comply with or perform any agreement or obligation to be
            complied with or performed by it in accordance with any Credit
            Support Document if such failure is continuing after any applicable
            grace period has elapsed;

            (2) the expiration or termination of such Credit Support Document or
            the failing or ceasing of such Credit Support Document to be in full
            force and effect for the purpose of this Agreement (in either case
            other than in accordance with its terms) prior to the satisfaction
            of all obligations of such party under each Transaction to which
            such Credit Support Document relates without the written consent of
            the other party; or

            (3) the party or such Credit Support Provider disaffirms, disclaims,
            repudiates or rejects, in whole or in part, or challenges the
            validity of, such Credit Support Document;

      (iv) Misrepresentation. A representation (other than a representation
      under Section 3(e) or (f)) made or repeated or deemed to have been made or
      repeated by the party or any Credit Support Provider of such party in this
      Agreement or any Credit Support Document proves to have been incorrect or
      misleading in any material respect when made or repeated or deemed to have
      been made or repeated;

      (v) Default under Specified Transaction. The party, any Credit Support
      Provider of such party or any applicable Specified Entity of such party
      (1) defaults under a Specified Transaction and, after giving effect to any
      applicable notice requirement or grace period, there occurs a liquidation
      of, an acceleration of obligations under, or an early termination of, that
      Specified Transaction, (2) defaults, after giving effect to any applicable
      notice requirement or grace period, in making any payment or delivery due
      on the last payment, delivery or exchange date of, or any payment on early
      termination of, a Specified Transaction (or such default continues for at
      least three Local Business Days if there is no applicable notice
      requirement or grace period) or (3) disaffirms, disclaims, repudiates or
      rejects, in whole or in part, a Specified Transaction (or such action is
      taken by any person or entity appointed or empowered to operate it or act
      on its behalf);

      (vi) Cross Default. If "Cross Default" is specified in the Schedule as
      applying to the party, the occurrence or existence of (1) a default, event
      of default or other similar condition or event (however

                                       5                            ISDA(R) 1992

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      described) in respect of such party, any Credit Support Provider of such
      party or any applicable Specified Entity of such party under one or more
      agreements or instruments relating to Specified Indebtedness of any of
      them (individually or collectively) in an aggregate amount of not less
      than the applicable Threshold Amount (as specified in the Schedule) which
      has resulted in such Specified Indebtedness becoming, or becoming capable
      at such time of being declared, due and payable under such agreements or
      instruments, before it would otherwise have been due and payable or (2) a
      default by such party, such Credit Support Provider or such Specified
      Entity (individually or collectively) in making one or more payments on
      the due date thereof in an aggregate amount of not less than the
      applicable Threshold Amount under such agreements or instruments (after
      giving effect to any applicable notice requirement or grace period);

      (vii) Bankruptcy. The party, any Credit Support Provider of such party or
      any applicable Specified Entity of such party:--

            (1) is dissolved (other than pursuant to a consolidation,
            amalgamation or merger); (2) becomes insolvent or is unable to pay
            its debts or fails or admits in writing its inability generally to
            pay its debts as they become due; (3) makes a general assignment,
            arrangement or composition with or for the benefit of its creditors;
            (4) institutes or has instituted against it a proceeding seeking a
            judgment of insolvency or bankruptcy or any other relief under any
            bankruptcy or insolvency law or other similar law affecting
            creditors' rights, or a petition is presented for its winding-up or
            liquidation, and, in the case of any such proceeding or petition
            instituted or presented against it, such proceeding or petition (A)
            results in a judgment of insolvency or bankruptcy or the entry of an
            order for relief or the making of an order for its winding-up or
            liquidation or (B) is not dismissed, discharged, stayed or
            restrained in each case within 30 days of the institution or
            presentation thereof; (5) has a resolution passed for its
            winding-up, official management or liquidation (other than pursuant
            to a consolidation, amalgamation or merger); (6) seeks or becomes
            subject to the appointment of an administrator, provisional
            liquidator, conservator, receiver, trustee, custodian or other
            similar official for it or for all or substantially all its assets;
            (7) has a secured party take possession of all or substantially all
            its assets or has a distress, execution, attachment, sequestration
            or other legal process levied, enforced or sued on or against all or
            substantially all its assets and such secured party maintains
            possession, or any such process is not dismissed, discharged, stayed
            or restrained, in each case within 30 days thereafter; (8) causes or
            is subject to any event with respect to it which, under the
            applicable laws of any jurisdiction, has an analogous effect to any
            of the events specified in clauses (1) to (7) (inclusive); or (9)
            takes any action in furtherance of, or indicating its consent to,
            approval of, or acquiescence in, any of the foregoing acts; or

      (viii) Merger Without Assumption. The party or any Credit Support Provider
      of such party consolidates or amalgamates with, or merges with or into, or
      transfers all or substantially all its assets to, another entity and, at
      the time of such consolidation, amalgamation, merger or transfer:--

            (1) the resulting, surviving or transferee entity fails to assume
            all the obligations of such party or such Credit Support Provider
            under this Agreement or any Credit Support Document to which it or
            its predecessor was a party by operation of law or pursuant to an
            agreement reasonably satisfactory to the other party to this
            Agreement; or

            (2) the benefits of any Credit Support Document fail to extend
            (without the consent of the other party) to the performance by such
            resulting, surviving or transferee entity of its obligations under
            this Agreement.

(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event

                                       6                            ISDA(R) 1992

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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--

        (i) Illegality. Due to the adoption of, or any change in, any applicable
        law after the date on which a Transaction is entered into, or due to the
        promulgation of, or any change in, the interpretation by any court,
        tribunal or regulatory authority with competent jurisdiction of any
        applicable law after such date, it becomes unlawful (other than as a
        result of a breach by the party of Section 4(b)) for such party (which
        will be the Affected Party):--

            (1) to perform any absolute or contingent obligation to make a
            payment or delivery or to receive a payment or delivery in respect
            of such Transaction or to comply with any other material provision
            of this Agreement relating to such Transaction; or

            (2) to perform, or for any Credit Support Provider of such party to
            perform, any contingent or other obligation which the party (or such
            Credit Support Provider) has under any Credit Support Document
            relating to such Transaction;

      (ii) Tax Event. Due to (x) any action taken by a taxing authority, or
      brought in a court of competent jurisdiction, on or after the date on
      which a Transaction is entered into (regardless of whether such action is
      taken or brought with respect to a party to this Agreement) or (y) a
      Change in Tax Law, the party (which will be the Affected Party) will, or
      there is a substantial likelihood that it will, on the next succeeding
      Scheduled Payment Date (1) be required to pay to the other party an
      additional amount in respect of an Indemnifiable Tax under Section
      2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
      6(e)) or (2) receive a payment from which an amount is required to be
      deducted or withheld for or on account of a Tax (except in respect of
      interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is
      required to be paid in respect of such Tax under Section 2(d)(i)(4) (other
      than by reason of Section 2(d)(i)(4)(A) or (B));

      (iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
      succeeding Scheduled Payment Date will either (1) be required to pay an
      additional amount in respect of an Indemnifiable Tax under Section
      2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
      6(e)) or (2) receive a payment from which an amount has been deducted or
      withheld for or on account of any Indemnifiable Tax in respect of which
      the other party is not required to pay an additional amount (other than by
      reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
      party consolidating or amalgamating with, or merging with or into, or
      transferring all or substantially all its assets to, another entity (which
      will be the Affected Party) where such action does not constitute an event
      described in Section 5(a)(viii);

      (iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
      in the Schedule as applying to the party, such party ("X"), any Credit
      Support Provider of X or any applicable Specified Entity of X consolidates
      or amalgamates with, or merges with or into, or transfers all or
      substantially all its assets to, another entity and such action does not
      constitute an event described in Section 5(a)(viii) but the
      creditworthiness of the resulting, surviving or transferee entity is
      materially weaker than that of X, such Credit Support Provider or such
      Specified Entity, as the case may be, immediately prior to such action
      (and, in such event, X or its successor or transferee, as appropriate,
      will be the Affected Party); or

      (v) Additional Termination Event. If any "Additional Termination Event" is
      specified in the Schedule or any Confirmation as applying, the occurrence
      of such event (and, in such event, the Affected Party or Affected Parties
      shall be as specified for such Additional Termination Event in the
      Schedule or such Confirmation).

(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.

                                       7                            ISDA(R) 1992

<PAGE>

6. Early Termination

(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

(b) Right to Terminate Following Termination Event.

      (i) Notice. If a Termination Event occurs, an Affected Party will,
      promptly upon becoming aware of it, notify the other party, specifying the
      nature of that Termination Event and each Affected Transaction and will
      also give such other information about that Termination Event as the other
      party may reasonably require.

      (ii) Transfer to Avoid Termination Event. If either an Illegality under
      Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
      Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
      Affected Party, the Affected Party will, as a condition to its right to
      designate an Early Termination Date under Section 6(b)(iv), use all
      reasonable efforts (which will not require such party to incur a loss,
      excluding immaterial, incidental expenses) to transfer within 20 days
      after it gives notice under Section 6(b)(i) all its rights and obligations
      under this Agreement in respect of the Affected Transactions to another of
      its Offices or Affiliates so that such Termination Event ceases to exist.

      If the Affected Party is not able to make such a transfer it will give
      notice to the other party to that effect within such 20 day period,
      whereupon the other party may effect such a transfer within 30 days after
      the notice is given under Section 6(b)(i).

      Any such transfer by a party under this Section 6(b)(ii) will be subject
      to and conditional upon the prior written consent of the other party,
      which consent will not be withheld if such other party's policies in
      effect at such time would permit it to enter into transactions with the
      transferee on the terms proposed.

      (iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a
      Tax Event occurs and there are two Affected Parties, each party will use
      all reasonable efforts to reach agreement within 30 days after notice
      thereof is given under Section 6(b)(i) on action to avoid that Termination
      Event.

      (iv) Right to Terminate. If:--

            (1) a transfer under Section 6(b)(ii) or an agreement under Section
            6(b)(iii), as the case may be, has not been effected with respect to
            all Affected Transactions within 30 days after an Affected Party
            gives notice under Section 6(b)(i); or

            (2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
            Merger or an Additional Termination Event occurs, or a Tax Event
            Upon Merger occurs and the Burdened Party is not the Affected Party,

      either party in the case of an Illegality, the Burdened Party in the case
      of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
      or an Additional Termination Event if there is more than one Affected
      Party, or the party which is not the Affected Party in the case of a
      Credit Event Upon Merger or an Additional Termination Event if there is
      only one Affected Party may, by not more than 20 days notice to the other
      party and provided that the relevant Termination Event is then

                                       8                            ISDA(R) 1992

<PAGE>

      continuing, designate a day not earlier than the day such notice is
      effective as an Early Termination Date in respect of all Affected
      Transactions.

(c) Effect of Designation.

      (i) If notice designating an Early Termination Date is given under Section
      6(a) or (b), the Early Termination Date will occur on the date so
      designated, whether or not the relevant Event of Default or Termination
      Event is then continuing.

      (ii) Upon the occurrence or effective designation of an Early Termination
      Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
      respect of the Terminated Transactions will be required to be made, but
      without prejudice to the other provisions of this Agreement. The amount,
      if any, payable in respect of an Early Termination Date shall be
      determined pursuant to Section 6(e).

(d) Calculations.

      (i) Statement. On or as soon as reasonably practicable following the
      occurrence of an Early Termination Date, each party will make the
      calculations on its part, if any, contemplated by Section 6(e) and will
      provide to the other party a statement (1) showing, in reasonable detail,
      such calculations (including all relevant quotations and specifying any
      amount payable under Section 6(e)) and (2) giving details of the relevant
      account to which any amount payable to it is to be paid. In the absence of
      written confirmation from the source of a quotation obtained in
      determining a Market Quotation, the records of the party obtaining such
      quotation will be conclusive evidence of the existence and accuracy of
      such quotation.

      (ii) Payment Date. An amount calculated as being due in respect of any
      Early Termination Date under Section 6(e) will be payable on the day that
      notice of the amount payable is effective (in the case of an Early
      Termination Date which is designated or occurs as a result of an Event of
      Default) and on the day which is two Local Business Days after the day on
      which notice of the amount payable is effective (in the case of an Early
      Termination Date which is designated as a result of a Termination Event).
      Such amount will be paid together with (to the extent permitted under
      applicable law) interest thereon (before as well as after judgment) in the
      Termination Currency, from (and including) the relevant Early Termination
      Date to (but excluding) the date such amount is paid, at the Applicable
      Rate. Such interest will be calculated on the basis of daily compounding
      and the actual number of days elapsed.

(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.

      (i) Events of Default. If the Early Termination Date results from an Event
      of Default:--

            (1) First Method and Market Quotation. If the First Method and
            Market Quotation apply, the Defaulting Party will pay to the
            Non-defaulting Party the excess, if a positive number, of (A) the
            sum of the Settlement Amount (determined by the Non-defaulting
            Party) in respect of the Terminated Transactions and the Termination
            Currency Equivalent of the Unpaid Amounts owing to the
            Non-defaulting Party over (B) the Termination Currency Equivalent of
            the Unpaid Amounts owing to the Defaulting Party.

            (2) First Method and Loss. If the First Method and Loss apply, the
            Defaulting Party will pay to the Non-defaulting Party, if a positive
            number, the Non-defaulting Party's Loss in respect of this
            Agreement.

            (3) Second Method and Market Quotation. If the Second Method and
            Market Quotation apply, an amount will be payable equal to (A) the
            sum of the Settlement Amount (determined by the

                                       9                            ISDA(R) 1992

<PAGE>

            Non-defaulting Party) in respect of the Terminated Transactions and
            the Termination Currency Equivalent of the Unpaid Amounts owing to
            the Non-defaulting Party less (B) the Termination Currency
            Equivalent of the Unpaid Amounts owing to the Defaulting Party. If
            that amount is a positive number, the Defaulting Party will pay it
            to the Non-defaulting Party; if it is a negative number, the
            Non-defaulting Party will pay the absolute value of that amount to
            the Defaulting Party.

            (4) Second Method and Loss. If the Second Method and Loss apply, an
            amount will be payable equal to the Non-defaulting Party's Loss in
            respect of this Agreement. If that amount is a positive number, the
            Defaulting Party will pay it to the Non-defaulting Party; if it is a
            negative number, the Non-defaulting Party will pay the absolute
            value of that amount to the Defaulting Party.

      (ii) Termination Events. If the Early Termination Date results from a
      Termination Event:--

            (1) One Affected Party. If there is one Affected Party, the amount
            payable will be determined in accordance with Section 6(e)(i)(3), if
            Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
            except that, in either case, references to the Defaulting Party and
            to the Non-defaulting Party will be deemed to be references to the
            Affected Party and the party which is not the Affected Party,
            respectively, and, if Loss applies and fewer than all the
            Transactions are being terminated, Loss shall be calculated in
            respect of all Terminated Transactions.

            (2) Two Affected Parties. If there are two Affected Parties:--

                  (A) if Market Quotation applies, each party will determine a
                  Settlement Amount in respect of the Terminated Transactions,
                  and an amount will be payable equal to (I) the sum of (a)
                  one-half of the difference between the Settlement Amount of
                  the party with the higher Settlement Amount ("X") and the
                  Settlement Amount of the party with the lower Settlement
                  Amount ("Y") and (b) the Termination Currency Equivalent of
                  the Unpaid Amounts owing to X less (II) the Termination
                  Currency Equivalent of the Unpaid Amounts owing to Y; and

                  (B) if Loss applies, each party will determine its Loss in
                  respect of this Agreement (or, if fewer than all the
                  Transactions are being terminated, in respect of all
                  Terminated Transactions) and an amount will be payable equal
                  to one-half of the difference between the Loss of the party
                  with the higher Loss ("X") and the Loss of the party with the
                  lower Loss ("Y").

            If the amount payable is a positive number, Y will pay it to X; if
            it is a negative number, X will pay the absolute value of that
            amount to Y.

      (iii) Adjustment for Bankruptcy. In circumstances where an Early
      Termination Date occurs because "Automatic Early Termination" applies in
      respect of a party, the amount determined under this Section 6(e) will be
      subject to such adjustments as are appropriate and permitted by law to
      reflect any payments or deliveries made by one party to the other under
      this Agreement (and retained by such other party) during the period from
      the relevant Early Termination Date to the date for payment determined
      under Section 6(d)(ii).

      (iv) Pre-Estimate. The parties agree that if Market Quotation applies an
      amount recoverable under this Section 6(e) is a reasonable pre-estimate of
      loss and not a penalty. Such amount is payable for the loss of bargain and
      the loss of protection against future risks and except as otherwise
      provided in this Agreement neither party will be entitled to recover any
      additional damages as a consequence of such losses.

                                       10                           ISDA(R) 1992

<PAGE>

7. Transfer

Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:--

(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and

(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

8. Contractual Currency

(a) Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.

(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.

(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.

(d) Evidence of Loss. For tbe purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.

                                       11                           ISDA(R) 1992

<PAGE>

9. Miscellaneous

(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.

(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.

(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.

(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.

(e) Counterparts and Confirmations.

      (i) This Agreement (and each amendment, modification and waiver in respect
      of it) may be executed and delivered in counterparts (including by
      facsimile transmission), each of which will be deemed an original.

      (ii) The parties intend that they are legally bound by the terms of each
      Transaction from the moment they agree to those terms (whether orally or
      otherwise). A Confirmation shall be entered into as soon as practicable
      and may be executed and delivered in counterparts (including by facsimile
      transmission) or be created by an exchange of telexes or by an exchange of
      electronic messages on an electronic messaging system, which in each case
      will be sufficient for all purposes to evidence a binding supplement to
      this Agreement. The parties will specify therein or through another
      effective means that any such counterpart, telex or electronic message
      constitutes a Confirmation.

(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.

(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.

10. Offices; Multibranch Parties

(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.

(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.

(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.

11. Expenses

A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document

                                       12                           ISDA(R) 1992

<PAGE>

to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.

12. Notices

(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--

      (i) if in writing and delivered in person or by courier, on the date it is
      delivered;

      (ii) if sent by telex, on the date the recipient's answerback is received;

      (iii) if sent by facsimile transmission, on the date that transmission is
      received by a responsible employee of the recipient in legible form (it
      being agreed that the burden of proving receipt will be on the sender and
      will not be met by a transmission report generated by the sender's
      facsimile machine);

      (iv) if sent by certified or registered mail (airmail, if overseas) or the
      equivalent (return receipt requested), on the date that mail is delivered
      or its delivery is attempted; or

      (v) if sent by electronic messaging system, on the date that electronic
      message is received,

unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.

(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.

13. Governing Law and Jurisdiction

(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.

(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--

      (i) submits to the jurisdiction of the English courts, if this Agreement
      is expressed to be governed by English law, or to the non-exclusive
      jurisdiction of the courts of the State of New York and the United States
      District Court located in the Borough of Manhattan in New York City, if
      this Agreement is expressed to be governed by the laws of the State of New
      York; and

      (ii) waives any objection which it may have at any time to the laying of
      venue of any Proceedings brought in any such court, waives any claim that
      such Proceedings have been brought in an inconvenient forum and further
      waives the right to object, with respect to such Proceedings, that such
      court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.

(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any

                                       13                           ISDA(R) 1992

<PAGE>

reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.

(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.

14. Definitions

As used in this Agreement:--

"Additional Termination Event" has the meaning specified in Section 5(b).

"Affected Party" has the meaning specified in Section 5(b).

"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.

"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.

"Applicable Rate" means:--

(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;

(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and

(d) in all other cases, the Termination Rate.

"Burdened Party" has the meaning specified in Section 5(b).

"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.

"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.

"Credit Event Upon Merger" has the meaning specified in Section 5(b).

"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.

"Credit Support Provider" has the meaning specified in the Schedule.

"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.

                                       14                           ISDA(R) 1992

<PAGE>

"Defaulting Party" has the meaning specified in Section 6(a).

"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).

"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.

"Illegality" has the meaning specified in Section 5(b).

"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).

"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.

"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.

"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.

"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have

                                       15                           ISDA(R) 1992

<PAGE>

been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.

"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.

"Non-defaulting Party" has the meaning specified in Section 6(a).

"Office" means a branch or office of a party, which may be such party's head or
home office.

"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.

"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.

"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.

"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.

"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of:--

(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and

(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.

"Specified Entity" has the meanings specified in the Schedule.

                                       16                           ISDA(R) 1992

<PAGE>

"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.

"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.

"Stamp Tax" means any stamp, registration, documentation or similar tax.

"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.

"Tax Event" has the meaning specified in Section 5(b).

"Tax Event Upon Merger" has the meaning specified in Section 5(b).

"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).

"Termination Currency" has the meaning specified in the Schedule.

"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.

"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.

"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.

"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market

                                       17                           ISDA(R) 1992

<PAGE>

value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.

IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.

Westpac Securities Administration         Westpac Securitisation Management
Limited (ABN 77 000 049 472)              Pty Limited (ABN 73 081 709 211)
--------------------------------------    --------------------------------------
           (Name of Party)                           (Name of Party)

By: /s/ Robert George Hamilton            By: /s/ G. P. D. Rennie
    ----------------------------------        ----------------------------------
    Name: Robert George Hamilton              Name: G. P. D. Rennie
    Title: Manager, Trustee                   Title: Attorney
             Securitisation                   Date: 12 March 2002
    Date: 12 March 2002

Westpac Banking Corporation               Citibank, N.A.
(ABN 33 007 457 141)

By: /s/ John Lowrey                       By: /s/ Thomas E. O'Callaghan
    ----------------------------------        ----------------------------------
    Name: John Lowrey                         Name: Thomas E. O'Callaghan
    Title: Tier 3 Attorney                    Title: General Counsel
    Date: 12 March 2002                       Date: 12 March 2002

                                       18                           ISDA(R) 1992

<PAGE>

Citibank Cross Currency Swap

                                    SCHEDULE
                                     to the
                                Master Agreement
                               dated 12 March 2002

between Citibank, N.A. ("Citibank" and "Party A")

and Westpac Securities Administration Limited (ABN 77 000 049 472) in its
capacity as trustee of the Series 2002-1G WST Trust ("Party B")

and Westpac Securitisation Management Pty Limited (ABN 73 081 709 211) (the
"Trust Manager")

and Westpac Banking Corporation (ABN 33 007 457 141) ("Westpac" and the "Standby
Swap Provider")

Part 1:  Termination Provision

         (a)   "Specified Entity" in relation to:

                (i)    Party A, is not applicable; and

                (ii)   Party B, is not applicable.

         (b)    (i)    The following provisions of Section 5 will not apply
                       to Party A:

                         Section 5(a)(ii)   Section 5(a)(v)    Section 5(b)(iv)
                         Section 5(a)(iii)  Section 5(a)(vi)
                         Section 5(a)(iv)   Section 5(b)(iii)

                (ii)   The following provisions of Section 5 will not apply to
                       Party B:

                         Section 5(a)(ii)   Section 5(a)(v)    Section 5(b)(iii)
                         Section 5(a)(iii)  Section 5(a)(vi)   Section 5(b)(iv)
                         Section 5(a)(iv)   Section 5(a)(viii)

                (iii)  Replace Section 5(a)(i) and insert:

                          "(i)  Failure to Pay or Deliver. Failure by the party
                                to make, when due, any payment under this
                                Agreement or delivery under Section 2(a)(i) or
                                2(e) required to be made by it if such failure
                                is not remedied at or before 10.00am on the
                                tenth Local Business Day after notice of such
                                failure is given to the party";

                (iv)   Section 5(b)(ii) will not apply to Party A as the
                       Affected Party (subject to Part 5(4)(ii) of this
                       Schedule).

                (v)    The "Bankruptcy" provisions of Section 5(a)(vii) are
                       replaced by "An Insolvency Event (as defined in the
                       Master Trust Deed) has occurred in respect of the party.
                       In relation to Party A, the events described in the
                       definition of Insolvency Event shall apply to it as if
                       Party A were a relevant corporation referred to in that
                       definition. The occurrence of an Insolvency

                                                                          Page 1

<PAGE>

                       Event in respect of Party B in its personal capacity
                       will not constitute an Event of Default provided that
                       within thirty Business Days of that occurrence, Party B
                       procures the novation of this Agreement and all
                       Transactions to a third party in respect of which the
                       Designated Rating Agencies confirm that the novation
                       will not cause a reduction or withdrawal of the rating
                       of the Notes and Party A agrees that it will execute
                       such a novation agreement in standard ISDA form
                       applicable in the A$ markets".

                 (vi)  The application of Section 5(b)(i) will be restricted as
                       set out in Part 5(4) of this Schedule.

            (c)  The "Automatic Early Termination" provisions in Section 6(a)
                 will not apply to Party A nor Party B.

            (d)  "Payment on Early Termination". For the purposes of
                 Section 6(e) of this Agreement:

                 (i)   Market Quotation will apply; and

                 (ii)  the Second Method will apply.

            (e)  "Termination Currency" means US Dollars.

            (f)  "Additional Termination Event" means the occurrence of any of
                 the following:

                 (i)   Party B is entitled to issue a notice to redeem all of
                       the Class A Notes (in accordance with the Conditions of
                       the Class A Notes) for reasons of taxation, in which
                       case Party A shall be the Affected Party for the
                       purposes of Section 6(b)(iv) of this Agreement and Party
                       B shall be the Affected Party for the purposes of
                       Section 6(e)(ii)(1) of this Agreement; or

                 (ii)  an Event of Default (as defined in the Security Trust
                       Deed) occurs and an Extraordinary Resolution of the
                       Voting Mortgagees (as defined in the Security Trust
                       Deed) is passed directing the Security Trustee to
                       exercise rights under clause 9 of the Security Trust
                       Deed, in which case Party B shall be the Affected Party.

                                                                          Page 2

<PAGE>

Part 2:  Tax Representations

         (a)      Payer Tax Representations. For the purpose of Section 3(e) of
                  this Agreement, Party A and Party B each make the following
                  representation:

                  It is not required by any applicable law, as modified by the
                  practice of any relevant government revenue authority, of any
                  Relevant Jurisdiction to make any deduction or withholding for
                  or on account of any Tax from any payment (other than interest
                  under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be
                  made by it to the other party under this Agreement. In making
                  this representation, it may rely on:

                  (i)   the accuracy of any representation made by the other
                        party pursuant to Section 3(f) of this Agreement;

                  (ii)  the satisfaction of the agreement contained in Section
                        4(a)(i) or 4(a)(iii) of this Agreement and the accuracy
                        and effectiveness of any document provided by the other
                        party pursuant to Section 4(a)(i) or 4(a)(iii) of this
                        Agreement; and

                  (iii) the satisfaction of the agreement of the other party
                        contained in Section 4(d) of this Agreement,

                  provided that it shall not be a breach of this representation
                  where reliance is placed on clause (ii) and the other party
                  does not deliver a form or document under Section 4(a)(iii) by
                  reason of material prejudice to its legal or commercial
                  position.

         (b)      Payee Tax Representations.  For the purpose of Section 3(f)
                  of this Agreement:

                  (i)   Party B and Westpac as Standby Swap Provider and (on and
                        from the Novation Date) as Party A, each makes the
                        following representation:

                                   It is an Australian resident and does not
                                   derive the payments under this Agreement in
                                   part or whole in carrying on business in a
                                   country outside Australia at or through a
                                   permanent establishment of itself in that
                                   country.

                  (ii)  Citibank as Party A represents that it is an "eligible
                        contract participant" under the U.S. Commodity Exchange
                        Act.

                                                                          Page 3

<PAGE>

Citibank Cross Currency Swap

Part 3.  Documents To Be Delivered

For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees
to deliver the following documents as applicable:

(a)   Tax Forms, documents or certificates to be delivered are:

<TABLE>
<CAPTION>
-------------------------------------- ------------------------------------ -----------------------------------

Party required to deliver document     Form/Document/Certificate            Date by which document to be
                                                                            delivered
-------------------------------------- ------------------------------------ -----------------------------------
<S>                                  <C>                                  <C>
Party A and Party B                    Any document or certificate          As soon as reasonably practicable
                                       reasonably required or reasonably    following the earlier of (a) the
                                       requested by a party in connection   relevant party learning that such
                                       with its obligations to make a       document or certificate is
                                       payment under this Agreement which   required and (b) a request by
                                       would enable that party to make      other party.
                                       the payment free from any
                                       deduction or withholding for or on
                                       account of Tax or as would reduce
                                       the rate at which deduction or
                                       withholding for or on account of
                                       Tax is applied to that payment as
                                       requested by Party A with respect
                                       to any payments received by
                                       Party B.
-------------------------------------- ------------------------------------ -----------------------------------

(b)      Other documents to be delivered are:

-------------------------------------- ------------------------------------ -----------------------------------

Party required to deliver document     Form/Document/Certificate            Date by which document to be
                                                                            delivered
-------------------------------------- ------------------------------------ -----------------------------------

Party A, Party B and the Standby       A legal opinion as to the validity   The date of this Agreement.
Swap Provider                          and enforceability of that party's
                                       obligations under this Agreement
                                       in form and substance reasonably
                                       acceptable to the other party.
-------------------------------------- ------------------------------------ -----------------------------------

Party A, Party B and the Standby       A list of the authorised             On the execution of this
Swap provider                          signatories for a party and          Agreement, and if requested by
                                       evidence satisfactory in form and    the other party, on the execution
                                       substance to the other party of      of any Confirmation but only if
                                       the authority of the authorised      the evidence of the authority,
                                       signatories of the party to          incumbency and specimen signature
                                       execute this Agreement and any       of any person executing the
</TABLE>

                                                                          Page 4

<PAGE>

<TABLE>

-------------------------------------- ------------------------------------ -----------------------------------
<S>                                   <C>                                  <C>
                                       Confirmation on behalf of the        Confirmation has changed from
                                       party.                               that previously delivered.
-------------------------------------- ------------------------------------ -----------------------------------
</TABLE>

                                                                         Page 5

<PAGE>

Citibank Cross Currency Swap

<TABLE>
<CAPTION>
-------------------------------------- ------------------------------------ -----------------------------------
<S>                                  <C>                                  <C>
Party required to deliver document     Form/Document/Certificate            Date by which document to be
                                                                            delivered
-------------------------------------- ------------------------------------ -----------------------------------

Party B                                A certified copy of the Security     The date of this Agreement
                                       Trust Deed, Master Trust Deed,
                                       Series Notice and Note Trust Deed
                                       (including Conditions of Class A
                                       Notes).

                                       For the purposes of this and the
                                       following clause a copy of a
                                       document is taken to be certified
                                       if a director or an Authorised
                                       Signatory of Party B, or a person
                                       authorised to execute this
                                       Agreement or a Confirmation on
                                       behalf of Party B or a solicitor
                                       acting for Party B has certified
                                       it to  be a true and complete copy
                                       of the document of which it
                                       purports to be a copy.
-------------------------------------- ------------------------------------ -----------------------------------

Party B                                (Without limiting any obligation     Promptly after any such document
                                       Party B may have under the terms     is entered into.
                                       of the Security Trust Deed to
                                       notify Party A of amendments) a
                                       certified copy of any document
                                       that amends in any way the terms
                                       of the Security Trust Deed.
-------------------------------------- ------------------------------------ -----------------------------------
</TABLE>

Other than the legal opinions referred to above, all documents delivered under
this Part 3(b) are covered by the representation in Section 3(d) of this
Agreement.

                                                                          Page 6

<PAGE>

Citibank Cross Currency Swap

Part 4:  Miscellaneous

(a)      Addresses for Notices.  For the purpose of Section 12(a) of this
         Agreement:

         Party A:

         Address:       Level 24, Citigroup Centre
                        2 Park Street
                        Sydney  NSW  2000

         Attention:     Treasure Confirmation Unit Head

         Telex No:      AA24164  Answerback:  CITINAT

         Facsimile No:  61 2 8225 5206

         Telephone No:  61 2 8225 2134

         Party B:

         Address:       4th Floor
                        50 Pitt Street
                        Sydney NSW 2000

         Attention:     Robert Hamilton

         Facsimile No:    02 9220 4113

         And a copy to the Trust Manager to the address below.

         Trust Manager:

         Address:       Level 25
                        60 Martin Place
                        Sydney NSW 2000

         Attention:     Cameron Kelly

         Facsimile No:  02 9226 1888

         Standby Swap Provider:

         Address:       Financial Markets Operations
                        Level 3, 255 Elizabeth Street
                        Sydney NSW 2000

         Attention:     Senior Manager, Global Derivative Operations

         Telex No:      AA178147 Answerback:  WBCTRS

         Facsimile No:  61 2 9283 1724

   (b)   Process Agent. For the purpose of Section 13(c) of this Agreement:

         Party A appoints as its Process Agent: Not applicable.

         Party B appoints as its Process Agent: Not applicable.

         The Standby Swap Provider appoints as its Process Agent: Not
         applicable.

   (c)   Offices. The provisions of Section 10(a) will apply to Party A.

                                                                          Page 7

<PAGE>

   (d)   Multibranch Party. For the purpose of Section 10(c) of this Agreement:

         Party A is not a Multibranch Party.

         Party B is not a Multibranch Party.

   (e)   Calculation Agent.  The Calculation Agent is Party A (unless otherwise
         specified in a Confirmation in relation to the relevant Transaction).

   (f)   Credit Support Document.  Details of any Credit Support Document:

         (i)   Party A:  Nil.

         (ii)  Party B:  The Security Trust Deed.

   (g)   Credit Support Provider.

         (i)   In relation to Party A:  Nil.

         (ii)  In relation to Party B:  Nil.

   (h)   Governing Law. This Agreement will be governed by and construed in
         accordance with the laws of the State of New South Wales and section
         13(b)(i) is replaced by "submits to the non-exclusive jurisdiction of
         the courts of New South Wales and courts of appeal from them".

   (i)   Jurisdiction. In the second line of section 13(b), the words ", the
         Standby Swap Provider and the Trust Manager" are inserted after the
         words "each party".

   (j)   Netting of Payments.  Subparagraph (ii) of Section 2(c) of this
         Agreement will apply.

   (k)   "Affiliate" will have the meaning specified in Section 14 of this
         Agreement. The words "or Affiliates" are deleted where they appear in
         the first paragraph of Section 6(b)(ii).

                                                                          Page 8

<PAGE>

Citibank Cross Currency Swap

Part 5:  Other Provisions

(1)      Payments: In Section 2:

         (i)   In Section 2(a)(i) add the following sentence:

               "Each payment will be by way of exchange for the corresponding
               payment or payments payable by the other party";

         (ii)  In Section 2(a)(ii) insert immediately after the words "freely
               transferable funds" the following words:

               ", free of any set-off, counterclaim, deduction or withholding
               (except as expressly provided in this Agreement),"

         (iii) Insert new paragraph (iv) in Section 2(a) immediately after
               Section 2(a)(iii) as follows:

               "(iv)  Where:

                      (1)  payments are due pursuant to Section 2(a)(i) by Party
                           A to Party B (the "Party A Payment") and by Party B
                           to Party A (the "Party B Payment) on the same day

                      then Party A's obligation to make the Party A payment
                      will be subject to the condition precedent (which will be
                      an "applicable condition precedent" for the purpose of
                      Section 2(a)(iii)(3)) that Party A first receives either:

                      (2)  the Party B payment; or

                      (3)  confirmation from Party B's bank that it holds
                           irrevocable instructions to effect payment of the
                           Party B payment and that funds are available to make
                           that payment,

                      except in the case of the Initial Exchanges in respect
                      of the currency swap Transaction applicable to the
                      Class A Notes, in which case Party A will waive this
                      condition;"

               (iv)   add the following new sentence to Section 2(b):

                      "Party B may, for example, reasonably object if the change
                      of account would materially prejudice Class A Noteholders
                      including, without limitation, any prejudice arising from
                      any liability to deduct or withhold any Tax as a result
                      of such a change of account."

               (v)    Delete the word "if" at the beginning of
                      Section 2(d)(i)(4) and insert the following words instead:

                      "if and only if X is Party A and";

               (vi)   In Section 2(d)(ii) insert the words "(if and only if Y is
                      Party A)" after the word "then" at the beginning of the
                      last paragraph.

                                                                          Page 9

<PAGE>

           (vii)  add the following new Section 2(f):

                  (f)     Payment Instructions.

                  (i)     Party B authorises and instructs Party A to make
                          payment of any amount due from Party A to Party B
                          hereunder by paying that amount direct to the
                          Principal Paying Agent to the account specified in
                          writing by the Principal Paying Agent to Party A and
                          to Party B. On payment of any such amount by Party A
                          to the Principal Paying Agent, Party A's obligation
                          shall be fully discharged in respect of that payment.

                  (ii)    Party A authorises and instructs Party B to make
                          payment of any amount denominated in Australian
                          dollars due from Party B to Party A to such account in
                          Sydney as is specified by Party A from time to time.

      (2)  Additional Representations:  In Section 3 add the following
           immediately after paragraph (f):

           "(g)   Non Assignment. It has not assigned (whether absolutely, in
                  equity or otherwise) or declared any trust over (other than,
                  in respect of Party B, the trusts created under the Master
                  Trust Deed and the Series Notice) or given any charge over any
                  of its rights under this Agreement or any Transaction (except
                  in respect of Party B, for the security interest created under
                  the Security Trust Deed).

            (h)   Contracting as Principal. Each existing Transaction has been
                  entered into by Party A as principal and not otherwise and
                  each existing Transaction has been entered into by Party B in
                  its capacity as trustee of the Trust and not otherwise.

            (i)   Absent a written agreement between the parties that expressly
                  imposes affirmative obligations to the contrary for that
                  Transaction:

                  (A)     Non-Reliance.  It is acting for its own account, and
                          it has made its own independent decisions to enter
                          into that Transaction and as to whether that
                          Transaction is appropriate or proper for it based upon
                          its own judgment and upon advice from the Trust
                          Manager and such advisors as it has deemed necessary.
                          It is not relying on any communication (written or
                          oral) of the other party as investment advice or as a
                          recommendation to enter into that Transaction; it
                          being understood that information and explanations
                          related to the terms and conditions of a Transaction
                          shall not be considered investment advice or a
                          recommendation to enter into that Transaction. It has
                          not received from the other party any assurance or
                          guarantee as to the expected results of that
                          Transaction;

                  (B)     Evaluation and Understanding. It is capable of
                          evaluating and understanding (on its own behalf or
                          through independent professional advice including
                          advice from the Trust Manager), and understands and
                          accepts the terms, conditions and risks of that
                          Transaction. It is also capable of assuming, and
                          assumes, the financial and other risks of that
                          Transaction;

                  (C)     Status of Parties.  The other party is not acting as
                          a fiduciary or an advisor for it in respect of that
                          Transaction;

                                                                         Page 10

<PAGE>

         (j)      Party B represents and warrants on a continuing basis:

                  (A)     Trust Validly Created.  The Trust has been validly
                          created and is in existence.

                  (B)     Sole Trustee. It has been validly appointed as trustee
                          of the Trust and is presently the sole trustee of the
                          Trust.

                  (C)     No Proceedings to Remove. No notice has been given to
                          it and to its knowledge no resolution has been passed,
                          and no direction or notice has been given, removing it
                          as trustee of the Trust.

                  (D)     Power. It has power to enter into this Agreement and
                          the Credit Support Document in its capacity as trustee
                          of the Trust.

                  (E)     Good Title. It is the owner in equity of the assets of
                          the Trust and has power to mortgage or charge them in
                          the manner provided in the Credit Support Document and
                          subject only to the Credit Support Document and any
                          Security Interest permitted under the Credit Support
                          Document, those assets are free of all other Security
                          Interests."

(3)      Additional Covenant:  In Section 4 add a new paragraph as follows:

         "(f)     Contracting as principal. Party A will enter into all
                  Transactions as principal and not otherwise and Party B will
                  enter into all Transactions in its capacity as trustee of the
                  Trust and not otherwise".

(4)      Amendment to Section 6.  In section 6 make the following amendments:

         (i)      Section 6(a) is amended by deleting the words "all outstanding
                  Transactions" where they appear and inserting instead the
                  words "the Relevant Swap Transaction".

         (ii)     Add a new section 6(aa):

                  "(aa)    Restricted Termination Rights.

                  (I)     Termination by Party B: Party B must not designate an
                          Early Termination Date without the prior written
                          consent of the Note Trustee.

                  (II)    Consultation regarding timing: Each Party may only
                          designate an Early Termination Date following prior
                          consultation with the other Party as to the timing of
                          the Early Termination Date. Subject to its duties
                          under the Master Trust Deed and the Series Notice,
                          Party B may exercise any rights in its capacity as
                          holder of the Purchased Receivables only on the
                          instructions of the Note Trustee and only after
                          consultation between Party A and the Note Trustee.
                          Party B may only designate an Early Termination Date
                          at the direction of the Trust Manager.

                  (III)   Party A's limited rights in relation to Tax Event:
                          Notwithstanding Part 1(b)(iv) of this Schedule, Party
                          A may designate an Early Termination Date if it is an
                          Affected Party following a Tax Event but only if the
                          Note Trustee is satisfied that the Noteholders will be
                          paid in full all principal and interest outstanding on
                          the Class A Notes.

                                                                         Page 11

<PAGE>

                  (IV)    Illegality: The parties agree that the imposition by
                          any Agency of an Australian jurisdiction of any
                          exchange controls, restrictions or prohibitions will
                          not constitute an Illegality for the purposes of
                          Section 5(b)(i) and Party A will not be entitled to
                          designate an Early Termination Date, and in those
                          circumstances, payments by Party B in accordance with
                          section 2(f) will continue to be proper performance of
                          its payment obligation and Party A's obligations will
                          be unaffected, to the extent of Party B's payments
                          under section 2(f).

                  (V)     Transfer where Party B does not gross-up. If any
                          payment by Party B to Party A under this Agreement is,
                          or is likely to be, made subject to any deduction or
                          withholding on account of Tax, Party B will endeavour
                          to procure the substitution as principal obligor under
                          this Agreement, in respect of each Affected
                          Transaction of Party B, a party incorporated in
                          another jurisdiction approved by Party A and the Note
                          Trustee, and in respect of which the Designated Rating
                          Agencies confirm that the substitution will not cause
                          a reduction or withdrawal of the rating of the Class A
                          Notes."

        (iii)     In section 6(b)(ii), add the words "so long as the transfer in
                  respect of that Transaction would not lead to a rating
                  downgrade of any rated debt of Party B that is secured under
                  the Security Trust Deed" after the words "ceases to exist" at
                  the end of the first paragraph.

        (iv)      In section 6(e), delete the sentence "The amount, if any,
                  payable in respect of an Early Termination Date and determined
                  pursuant to this Section will be subject to any Set-off." at
                  the end of the first paragraph.

(5)      In section 9, add the following new paragraphs:

         "(h)     Further Assurances. Each party shall, upon request by the
                  other party (the "requesting party") at the expense of the
                  requesting party, perform all such acts and execute all such
                  agreements, assurances and other documents and instruments as
                  the requesting party reasonably requires and which are within
                  the powers of that party to assure and confirm the rights and
                  powers afforded, created or intended to be afforded or
                  created, under or in relation to this Agreement and each
                  Transaction or other dealing which occurs under or is
                  contemplated by it and in respect of which the Designated
                  Rating Agencies confirm will not cause a reduction or
                  withdrawal of the rating of the Class A Notes.

         (i)      Recorded Conversation.  Each party:

                  (A)     consents to the recording of the telephone
                          conversations of trading and marketing personnel of
                          that party and its Affiliates in connection with this
                          Agreement or any potential Transaction; and

                  (B)     agrees to obtain any necessary consent of, and give
                          notice of such recording to, such personnel of it and
                          its Affiliates.

         (j)      ISDA Definitions:  This Agreement, each Confirmation and each
                  Transaction are subject to the 2000 ISDA Definitions (as
                  published by the International Swaps and

                                                                         Page 12

<PAGE>

                  Derivatives Association, Inc.) (as amended and supplemented
                  from time to time) (the "ISDA Definitions"), and will be
                  governed in all respects by any provisions set forth in the
                  ISDA Definitions, without regard to any amendments to the
                  ISDA Definitions made after the date of this Agreement. The
                  ISDA Definitions are incorporated by reference in, and shall
                  be deemed to be part of, this Agreement and each Confirmation.

         (k)      Inconsistency: In the event of any inconsistency between any
                  two or more of the following documents, they shall take
                  precedence over each other in the following descending order:

                  (i)   any Confirmation;

                  (ii)  this Schedule and "Paragraph 11 - Elections and
                        Variables" to the ISDA Credit Support Annex
                        (as applicable);

                  (iii) the ISDA Definitions;

                  (iv)  the printed form of ISDA Master Agreement and ISDA
                        Credit Support Annex (as applicable)."

  (6)    (i)      Facsimile Transmissions:  Replace Section 12(a)(iii) with:

                  "(iii)  if sent by facsimile, on production of a transmission
                          report by the machine from which the facsimile was
                          sent which indicates that the facsimile was sent in
                          its entirety to the facsimile number of the recipient
                          notified for the purpose of this Section unless the
                          recipient notifies the sender within 24 hours of the
                          facsimile being sent that the facsimile was not
                          received in its entirety in legible form."

                  (ii)    In Section 12(a), insert "and settlement instructions"
                          after "Section 5 or 6" in line 2;

                  (iii)   Insert an additional Section 12(a)(vi):

                          "(vi)   if sent by ordinary mail, on the third
                          (seventh, if posted to or from a place outside
                          Australia) day after posting."

           (7)    Definitions:  In section 14:

                  (i)     add a new paragraph

                          "Unless otherwise defined in this Agreement, terms
                          defined in the Security Trust Deed (either expressly
                          or by incorporation by reference) have the same
                          meaning where used in this Agreement."

                  (ii)    Insert the following definitions in alphabetical order
                          in Section 14.

                          "Initial Exchange" in relation to a currency swap
                          Transaction has the meaning given in the Confirmation
                          for that currency swap Transaction."

                          "Inconvertibility Event" means any event beyond the
                          control of the Standby Swap Provider that makes it
                          impossible for the Standby Swap Provider to convert
                          to U.S. Dollars through customary legal channels an
                          amount of Australian Dollars sufficient to fulfil its
                          obligations under this Agreement and each
                          Transaction.

                          "Joint Rating" means, in relation to a Designated
                          Rating Agency:

                                                                         Page 13

<PAGE>

                  (a)     the highest possible jointly supported short term
                          credit rating or long term credit rating, as
                          applicable, that can be determined in relation to
                          Party A and the Standby Swap Provider by that
                          Designated Rating Agency in accordance with its
                          approach to jointly supported obligations, provided
                          that if either Party A or the Standby Swap Provider
                          has a long term credit rating of less than BBB from
                          S&P the Joint Rating from S&P will be the credit
                          rating (from S&P) of the other party; or

                  (b)     if the Standby Swap Provider has been released from
                          its obligations under this Agreement, the short term
                          credit rating or long term credit rating, as the case
                          may be of Party A.

                  "Novation Date" means the date upon which the obligations of
                  Citibank as Party A under this Agreement and each Transaction
                  are novated to the Standby Swap Provider pursuant to Part
                  5(11)(c).

                  "Prescribed Rating Period" means in relation to the Joint
                  Ratings determined by the Designated Rating Agencies:

                  (a)     a period of 30 Business Days from the date of
                          determination of the relevant credit rating where any
                          Joint Rating immediately after that determination is
                          less than the relevant Prescribed Rating but greater
                          than or equal to a short term credit rating of A-1 by
                          S&P and long term credit ratings of A by S&P and A3 by
                          Moody's, as the case may be; and

                  (b)     a period of 5 Business Days from the date of
                          determination of the relevant credit rating where any
                          Joint Rating immediately after that determination is
                          less than a short term credit rating of A-1 by S&P and
                          P-1 by Moody's and less than a long term credit rating
                          of A by S&P and A3 by Moody's.

                  "Prescribed Ratings" means a short term credit rating of A-1+
                  by S&P and a short term credit rating of P-1 by Moody's or a
                  long term credit rating of AA- by S&P and a long term credit
                  rating of A2 by Moody's.

                  "Relevant Swap Transaction" means, in relation to Class A
                  Notes, each Transaction which is a Currency Swap for Class A
                  Notes only.

                  "Security Trust Deed" means the Series 2002-1G WST Trust
                  Security Trust Deed dated on or about the date of this
                  Agreement between Party B as chargor, Perpetual Trustee
                  Company Limited as security trustee, the Trust Manager and
                  Citicorp Trustee Company Limited as note trustee.

         (iii)    Swap Transaction.  Any reference to a:

                  (a)     "Swap Transaction" in the 2000 ISDA Definitions is
                          deemed to be a reference to a "Transaction" for the
                          purpose of interpreting this Agreement or any
                          Confirmation; and

                  (b)     "Transaction" in this Agreement or any Confirmation is
                          deemed to be a reference to a "Swap Transaction" for
                          the purpose of interpreting the 2000 ISDA Definitions.

                                                                         Page 14

<PAGE>

         (iv)     In the definition of "Market Quotation", on line 1 on page 16
                  of this Agreement, replace the words "been required after that
                  date." with:

                  "been required after that date and, in respect of each
                  Terminated Transaction which is a Relevant Swap Transaction,
                  on the basis that the Housing Loan Principal as defined in
                  Series Notice referred to in the Terminated Transaction will
                  thereafter have an amortisation schedule based on a constant
                  prepayment rate per annum ("CPR") equal to:

                  (a)     25%, if the Replacement Transaction is calculated
                          within one year of the Effective Date of the
                          Terminated Transaction; or

                  (b)     if the Replacement Transaction is calculated later
                          than one year after the Effective Date of the
                          Terminated Transaction, the arithmetic mean of the
                          following:

                          (I)      the four CPRs most recently published prior
                                   to the relevant quotation on Bloomberg
                                   monitor service in respect of the Class of
                                   Notes applicable to the Terminated
                                   Transaction (based on data provided to
                                   Bloomberg by the Trust Manager);

                          (II)     the forecast CPR provided to the party making
                                   the determination (or its agent) by Party A
                                   for the remaining life of the Class of Notes
                                   applicable to the Terminated Transaction;

                          (III)    the forecast CPR provided to the party making
                                   the determination (or its agent) by the
                                   Standby Swap Provider for the remaining life
                                   of the Class of Notes applicable to the
                                   Terminated Transaction;

                          (IV)     the forecast CPR provided to the party making
                                   the determination (or its agent) by the Trust
                                   Manager for the remaining life of the Class
                                   of Notes applicable to the Terminated
                                   Transaction,

                          without regard to the CPRs having the highest and
                          lowest values (unless fewer than three CPRs are
                          provided under subparagraphs (II), (III) and (IV)
                          collectively, in which case all CPRs will be taken
                          into account in the calculation of the arithmetic
                          mean). For this purpose, if more than one CPR has the
                          same highest value or lowest value, then one of such
                          CPRs shall be disregarded.

(8)      Other Provisions

         Insert the following Sections 15, 16, 17, 18 and 19 after Section 14:

         "15.     Segregation

                  The liability of Party B under this Agreement is several and
                  is separate in respect of each Relevant Swap Transaction. The
                  failure of Party B to perform its obligations in respect of
                  any Relevant Swap Transaction shall not release Party B from
                  its obligations under this Agreement or under any other
                  Relevant Swap Transaction in respect of any other Notes issued
                  by Party B. Nothing in this Agreement affects the respective
                  priority rankings of claims against the Mortgaged Property of
                  Party B under the Security Trust Deed. Without limiting the
                  generality

                                                                         Page 15

<PAGE>

                  of the foregoing, the provisions of this Agreement shall have
                  effect separately and severally in respect of each Relevant
                  Swap Transaction and shall be enforceable by or against Party
                  B as though a separate agreement applied between Party A and
                  Party B for each Relevant Swap Transaction, so that (among
                  other things):

                  (i)     this Agreement together with each Confirmation
                          relating to a Relevant Swap Transaction will form a
                          single separate agreement between Party A and Party B
                          and references to the respective obligations
                          (including references to payment obligations generally
                          and in the context of provisions for the netting of
                          payments and the calculation of amounts due on early
                          termination) of Party A and Party B shall be construed
                          accordingly as a several reference to each mutual set
                          of obligations arising under each such separate
                          agreement between Party A and Party B;

                  (ii)    representations made and agreements entered into by
                          the parties under this Agreement are made and entered
                          separately and severally by Party B in respect of each
                          Relevant Swap Transaction and may be enforced by Party
                          B against Party A separately and severally in respect
                          of each Relevant Swap Transaction;

                  (iii)   rights of termination, and obligations and
                          entitlements consequent upon termination, only accrue
                          to Party A against Party B separately and severally in
                          respect of each Relevant Swap Transaction, and only
                          accrue to Party B against Party A separately and
                          severally in respect of each Relevant Swap
                          Transaction; and

                  (iv)    the occurrence of an Event of Default or Termination
                          Event in respect of a Relevant Swap Transaction does
                          not in itself constitute an Event of Default or
                          Termination Event in respect of any other Relevant
                          Swap Transaction.

         16.      Recourse

                  Party B enters into this Agreement in its capacity as Trustee
                  of the Trust, and Cluse 3.3(b) of the Series Notice applies to
                  this Agreement as if set out in full. Clause 16 of the
                  Security Trust Deed shall apply to govern Party A's priority
                  to moneys received from the sale of Assets or other
                  enforcement of the Charge under the Security Trust Deed.

                  This Section 16:

                  (i)      applies even though any other provision of this
                           Agreement is not made subject to it; and

                  (ii)     overrides any other provision of this Agreement which
                           is inconsistent with it.

         17.      The Trust Manager

                  Party A acknowledges that the Trust Manager will, at the
                  request of Party B, perform the day to day management of the
                  Trust on the terms and conditions of the Master Trust Deed and
                  Series Notice. Unless expressly advised to the contrary in
                  writing by Party B from time to time, any rights or
                  obligations of Party B under this

                                                                         Page 16

<PAGE>

                  Agreement may be exercised or satisfied (as the case may be)
                  by the Trust Manager on behalf of Party B and Party A is not
                  obliged to enquire as to the authority of the Trust Manager to
                  take such action on behalf of Party B. Except where the
                  context otherwise requires, references in this Agreement to a
                  "party" to this Agreement are to Party A or Party B.

         18.      Trust Deed

                  The parties acknowledge and agree that, for the purposes of
                  the Master Trust Deed and Trust Documents, this Agreement is a
                  "Hedge Agreement" and Party A is a "Swap Provider" and
                  "Support Facility Provider".

         19.      Replacement Currency Swap

                  (a)     If this Agreement is terminated, Party B may, at the
                          direction of the Trust Manager, enter into one or more
                          currency swaps which replace the Transactions under
                          this Agreement (collectively a "Replacement Currency
                          Swap") but only on the condition that the Settlement
                          Amount payable (if any) by Party B to Party A upon
                          termination of this Agreement will be paid in full
                          when due in accordance with the Series Notice and this
                          Agreement, and in respect of which the Designated
                          Rating Agencies confirm that the replacement will not
                          cause a reduction or withdrawal of the rating of the
                          Class A Notes.

                  (b)     If the condition in section 19(a) is satisfied, Party
                          B may enter into the Replacement Currency Swap and if
                          it does so it must direct the Replacement Currency
                          Swap provider to pay any upfront premium to enter into
                          the Replacement Currency Swap due to Party B directly
                          to Party A in satisfaction of and to the extent of
                          Party B's obligation to pay the Settlement Amount to
                          Party A as referred to in section 19(a), and to the
                          extent that such premium is not greater than or equal
                          to the Settlement Amount, the balance may be satisfied
                          by Party B as a Trust Expense (as defined in the
                          Series Notice).

                  (c)     The obligations of Party B (and the rights of Party A)
                          under this section 19 constitute separate and
                          independent obligations of Party B (and rights of
                          Party A) and shall survive the termination of this
                          Agreement.

                  (d)     If a Settlement Amount is payable by Party A to Party
                          B upon termination of this Agreement, Party B may
                          direct Party A to pay all or part of that amount (but
                          not any greater amount) to the extent required to the
                          Replacement Currency Swap provider in satisfaction of
                          and to the extent of Party B's obligation to pay any
                          upfront premium to the Replacement Currency Swap
                          provider to enter into the Replacement Currency Swap."

(9)      Ratings Downgrade

         (a)      (Downgrade): If, as a result of the reduction or withdrawal of
                  the credit rating of Party A or the Standby Swap Provider or
                  as a result of a release of the Standby Swap Provider under
                  Part 5(12), a Joint Rating is less than the relevant
                  Prescribed Rating, Party A must by the expiry of the
                  Prescribed Rating Period in relation to the

                                                                         Page 17

<PAGE>

                  credit ratings assigned by the Designated Rating Agencies to
                  Party A and the Standby Swap Provider at that time (or such
                  greater period as is agreed to in writing by each Designated
                  Rating Agency), at its cost alone and at its election:

                  (i)      provided that the short term Joint Rating by each of
                           S&P and Moody's is greater than or equal to A-1 and
                           P-1, respectively, or the long term Joint Rating by
                           each of S&P and Moody's is greater than or equal to A
                           and A2, respectively, transfer Eligible Credit
                           Support in accordance with the Credit Support Annex
                           in an amount equal to the Collateral Amount as
                           defined in Part 5(9)(b); or

                  (ii)     enter into, and procure that the Standby Swap
                           Provider enters into, an agreement novating Party A's
                           and/or the Standby Swap Providers' rights and
                           obligations under this Agreement and each Transaction
                           to a replacement counterparty acceptable to the
                           Manager and the Standby Swap Provider and which each
                           Designated Rating Agency confirms in writing will not
                           result in a reduction, qualification or withdrawal of
                           the credit ratings then assigned by them to the Class
                           A Notes; or

                  (iii)    enter into, or procure that the Standby Swap Provider
                           enters into, such other arrangements in respect of
                           each Transaction which each Designated Rating Agency
                           confirms in writing will not result in a reduction,
                           qualification or withdrawal of the credit ratings
                           then assigned by it to the Class A Notes.

                  Notwithstanding that Party A has elected to satisfy its
                  obligations pursuant to this Part 5(9)(a) in a particular
                  manner, it may subsequently and from time to time vary the
                  manner in which it satisfies its obligations pursuant to this
                  Part 5(9)(a) (but will not be entitled to any additional grace
                  period in relation to such a variation).

         (b)      (Collateral Amount): For the purpose of this Part 5(9) the
                  "Collateral Amount" will be an amount equal to the greater of
                  the following:

                  (i)    zero;

                  (ii)   CCR; and

                  (iii)  an amount acceptable to Moody's and sufficient to
                         maintain the credit rating assigned to the Class A
                         Notes by Moody's immediately prior to the review of
                         the Joint Rating.

                  Where:

                  CCR = CR x 1.030

                  CR = MTM + VB

                  MTM means the aggregate mark-to-market value (whether positive
                  or negative) of each Transaction determined in accordance with
                  Part 5(9)(c) no earlier than 3 Business Days prior to the date
                  that the Collateral Amount is lodged.

                  VB means the volatility buffer, being the value calculated by
                  multiplying the Relevant Calculation Amount as at the most
                  recent Payment Date by the relevant percentage obtained from
                  the following table:

                                                                         Page 18

<PAGE>

<TABLE>
<CAPTION>
                   ------------------------------------------------------------------------------------
                   Party A's and the     Where the period     Where the period     Where the period
                   Standby Swap          between the date of  between the date of  between the date
                   Provider's jointly    recalculation and    recalculation and    of recalculation
                   supported long term   the Final Maturity   the Final Maturity   and the Final
                   credit rating by S&P  Date is less than    Date is greater      Maturity Date is
                                         or equal to 5 years  than 5 years and     greater than 10
                                                              less than or equal   years
                                                              to 10 years
                   ------------------------------------------------------------------------------------
                  <S>                   <C>                  <C>                  <C>
                   A+                    1.05                 1.75                 3.0
                   ------------------------------------------------------------------------------------
                   A                     1.35                 2.45                 4.5
                   ------------------------------------------------------------------------------------
                   A-                    1.5                  3.15                 6
                   ------------------------------------------------------------------------------------
</TABLE>

         (c)      (Mark to Market Value): Party A must calculate the
                  mark-to-market value of each Transaction by obtaining 2 bids
                  from counterparties with the Prescribed Ratings willing to
                  provide each Transaction in the absence of Party A. The
                  mark-to-market value may be a positive or a negative amount. A
                  bid has a negative value if the payment to be made is from the
                  counterparty to Party A and has a positive value if the
                  payment to be made is from Party A to the counterparty. The
                  mark-to-market value is the higher of the bids (on the basis
                  that any bid of a positive value is higher than any bid of a
                  negative value).

         (d)      (Recalculation): Party A must recalculate the Collateral
                  Amount (including the CCR and the mark-to-market value) on
                  each Valuation Date.  If:

                  (i)      the Value on such Valuation Date of all Eligible
                           Credit Support held by the Transferee is less than
                           the recalculated Collateral Amount, the difference is
                           the Delivery Amount in relation to that Valuation
                           Date; or

                  (ii)     the Value on such Valuation Date of all Eligible
                           Credit Support held by the Transferee is greater than
                           the recalculated Collateral Amount, the difference is
                           the Return Amount in relation to that Valuation Date.

         (e)      (Definitions): For the purposes of this Part 5(9) "Delivery
                  Amount", "Eligible Credit Support", "Return Amount",
                  "Transferee", "Value" and "Valuation Date" have the same
                  meaning as in the Credit Support Annex.

(10)     Transfer

         Notwithstanding the provisions of Section 7, Citibank as Party A may
         transfer all its rights powers and privileges and all its unperformed
         and future obligations under this Agreement and each Transaction to any
         of its Affiliates (in this Part 5(10), the "Transferee") by delivering
         to the Standby Swap Provider, Party B and the Trust Manager a notice
         expressed to be given under this provision signed by both Citibank as
         Party A and the Transferee. Upon delivery of those documents to Party
         B:

         (a)      (Party A's rights terminate): Citibank's rights powers
                  privileges and obligations as Party A under this Agreement
                  and each Transaction terminate;

         (b)      (Transfer and Assumption): Citibank will be taken to have
                  transferred its rights powers and privileges under this
                  Agreement and each Transaction to the Transferee and the
                  Transferee will be taken to have assumed obligations
                  equivalent to those Party A had under this Agreement and each
                  Transaction;

                                                                         Page 19

<PAGE>

         (c)      (Release): Party B will be taken to have released Citibank
                  as Party A from all its unperformed and future obligations
                  under this Agreement and each Transaction; and

         (d)      (Documents): this Agreement and the Confirmation relating to
                  each Transaction shall be construed as if the Transferee was
                  a party to it in place of Citibank as Party A.

         A Transferee may utilise this provision as Party A. A transfer under
         this Part 5(10) will be of no force or effect until each Designated
         Rating Agency confirms in writing that such transfer will not result in
         a reduction, qualification or withdrawal of the credit ratings then
         assigned by them to the Class A Notes and until the Standby Swap
         Provider has given its written consent to such a transfer (such consent
         not to be withheld).

(11)     Standby Swap Provider

         (a)      (Commitment): Notwithstanding any other provision in this
                  Agreement to the contrary, if Citibank as Party A fails to:

                  (i)    make, when due, any payment required to be made by it
                         to Party B under a Transaction; or

                  (ii)   comply with any obligation under Part 5(9) within the
                         required period, then:

                  (iii)  as soon as practicable following such failure but, in
                         relation to a failure to pay under a Transaction, in
                         any event no later than 11.00 am (New York time) on
                         the due date for such payment or, in relation to a
                         failure to comply with an obligation under Part 5(9),
                         no later than the Business Day following the due date
                         for compliance with such obligation, Party B must
                         notify Citibank as Party A and the Standby Swap
                         Provider in writing of such failure and:

                         (A)    the amount of the defaulted payment and the
                                basis of calculation of the defaulted
                                payment; or

                         (B)    details of the failure to comply with the
                                obligation under Part 5(9),

                         as the case may be; and

                  (iv)   as soon as reasonably practicable after its receipt of
                         such notice (and in any event, in relation to a
                         failure to pay under a Transaction, no later than 1.30
                         pm (New York time) on the due date for such payment,
                         and, in relation to a failure to comply with an
                         obligation under Part 5(9), no later than 3 Business
                         Days after the failure to comply with such obligation,
                         provided, in each case, that notice has been given by
                         Party B by the required times in accordance with Part
                         5(11)(a)(iii)) the Standby Swap Provider must:

                         (A)    in relation to a failure to pay under a
                                Transaction, pay to Party B the amount then
                                owing by Citibank as Party A to Party B under
                                that Transaction by depositing such amount into
                                the Collections Account in cleared funds; and

                                                                         Page 20

<PAGE>

                         (B)    in relation to a failure to comply with an
                                obligation under Part 5(9), satisfy the
                                obligations of Citibank as Party A under Part
                                5(9); and

                  (v)     Party B acknowledges that a payment made by the
                          Standby Swap Provider in full compliance with Part
                          5(11)(a)(iv)(A) will fully satisfy and discharge the
                          obligation of Party A to make that payment.

         (b)      (Reimbursement): If on any day the Standby Swap Provider:

                  (i)     makes a payment pursuant to Part 5(11)(a)(iv)(A),
                          Citibank as Party A must by 2.00 pm (New York time) on
                          the next following Business Day (or such other time as
                          the Standby Swap Provider may agree in writing) pay to
                          the Standby Swap Provider an amount equal to that
                          payment by depositing such amount into the account
                          which the Standby Swap Provider nominates for this
                          purpose in cleared funds; or

                  (ii)    satisfies the obligations of Citibank as Party A
                          pursuant to Part 5(11)(a)(iv)(B), Citibank as Party A
                          must:

                          (A)   within 3 Business Days, fulfill its obligations
                                under Part 5(9) such that any Eligible Credit
                                Support transferred by the Standby Swap
                                Provider pursuant to Part 5(9)(a)(i) or any
                                other arrangement made by the Standby Swap
                                Provider pursuant to Part 5(9)(a)(iii) is
                                returned to the Standby Swap Provider or will
                                cease (but Citibank as Party A will have no
                                obligations to the Standby Swap Provider
                                under this Part 5(11)(b)(ii)(A) in relation
                                to any novation pursuant to Part 5(9)(a)(ii));
                                and

                          (B)   upon demand by the Standby Swap Provider,
                                indemnify the Standby Swap Provider from and
                                against any other cost or liability incurred
                                by the Standby Swap Provider in satisfying
                                those obligations.

                  Each of the Standby Swap Provider and Party B acknowledges
                  that a payment made by Citibank as Party A in full compliance
                  with Part 5(11)(b)(i) will fully satisfy and discharge the
                  obligation of Party A to make that payment.

         (c)      (Novation):  If:

                  (i)     Citibank as Party A defaults in its payment
                          obligations under Part 5(11)(b)(i) or (b)(ii)(B) for
                          reasons other than solely a technical, computer or
                          similar error outside the control of Party A and such
                          default is not remedied on or before one Business Day
                          after such failure; or

                  (ii)    Citibank as Party A fails to fulfill its obligations
                          under Part 5(11)(b)(ii)(A),

                  then:

                  (iii)   Citibank's rights, powers, privileges and obligations
                          as Party A under this Agreement and each Transaction
                          terminate other than its rights, powers, privileges
                          and obligations pursuant to Part 5(11)(d);

                  (iv)    subject to Part 5(11)(c)(vi), Citibank will be taken
                          to have transferred its rights powers and privileges
                          as Party A under this Agreement and each

                                                                         Page 21

<PAGE>

                          Transaction to the Standby Swap Provider and the
                          Standby Swap Provider will be taken to have assumed
                          obligations equivalent to those that Citibank as
                          Party A had under this Agreement and each Transaction;

                  (v)     Party B and the Standby Swap Provider will be taken to
                          have released Citibank as Party A from all its
                          unperformed and future obligations under this
                          Agreement and each Transaction other than its present
                          and future obligations pursuant to Part 5(11)(d);

                  (vi)    this Agreement and the Confirmation relating to each
                          Transaction shall be construed as if the Standby Swap
                          Provider was a party to it in place of Party A except
                          that:

                          (A)   references to "Citibank as Party A" will not
                                apply to the Standby Swap Provider as Party A;

                          (B)   references to any jointly supported credit
                                rating of Party A and the Standby Swap Provider
                                will be deemed to be references to the relevant
                                credit rating of the Standby Swap Provider;

                          (C)   without limiting Part 5(11)(c)(vi)(A), this
                                Part 5(11) will not apply to the Standby Swap
                                Provider as Party A;

                          (D)   the Standby Swap Provider must (if it has not
                                already done so) satisfy the obligations of
                                Party A under Part 5(9)(a) within 10 Business
                                Days of the Novation Date on the basis that
                                any collateral lodged by Citibank as Party A
                                will be dealt with in accordance with the
                                provisions of Paragraph 11(h)(vi) of the
                                Credit Support Annex and, any other
                                arrangements made by Citibank as Party A
                                pursuant to Part 5(9)(a)(iii) will cease (but
                                such arrangements will only cease upon
                                compliance by the Standby Swap Provider with
                                its obligations under this Part
                                5(11)(c)(vi)(D) and otherwise, where
                                applicable, in accordance with the terms of
                                such arrangements).

         (d)      (Termination Payment): Following novation under Part 5(11)(c),
                  Citibank as Party A must pay the Standby Swap Provider or the
                  Standby Swap Provider must pay Citibank as Party A an amount
                  (the "Novation Settlement Amount") being:

                  (i)     in the case of payment by Citibank as Party A to the
                          Standby Swap Provider, an amount equal to the amount
                          (if any) that would be payable by Party A to Party B;
                          and

                  (ii)    in the case of payment by the Standby Swap Provider to
                          Citibank as Party A, an amount equal to the amount (if
                          any) that would be payable by Party B to Party A,

                  if each Transaction had been terminated, calculated and
                  payable in accordance with Sections 6(d) and (e) on the basis
                  that:

                                                                         Page 22

<PAGE>

                  (i)     the Novation Date is the Early Termination Date and
                          the Novation Settlement Amount is due and payable on
                          the day that notice of the amount payable is
                          effective;

                  (ii)    the Early Termination Date has resulted from an Event
                          of Default in respect of which Party A is the
                          Defaulting Party;

                  (iii)   all calculations and determinations which would have
                          been done by Party B are done by the Standby Swap
                          Provider and all calculations and determinations that
                          would have been done by Party A are done by Citibank;

                  (iv)    a reference to Unpaid Amounts owing to Party B is a
                          reference to such amounts payable by Party A to the
                          Standby Swap Provider pursuant to Part 5(11)(b) and
                          (e) and there are no Unpaid Amounts owing to Party A;

                  (v)     without limiting the foregoing, for the purposes of
                          the definition of "Market Quotation" in Section 14
                          each Reference Market-maker would be required, upon
                          entering into a Replacement Transaction, to fulfill
                          the obligations of Party A under Part 5(9)(a) and to
                          comply with Section 2(d) as amended by Part (5)(1)(e);
                          and

                  (vi)    the Termination Currency is U.S. Dollars.

         (e)      (Default Interest): If Citibank as Party A defaults in the
                  performance of any payment obligations under Part 5(11)(b) or
                  Part 5(11)(d), it must pay interest (before as well as after
                  judgment) on the overdue amount to the Standby Swap Provider
                  on demand in the same currency as such overdue amount, for the
                  period from (and including) the original due date for payment
                  to (but excluding) the date of actual payment, at the Default
                  Rate. Such interest will be calculated on the basis of daily
                  compounding and the actual number of days elapsed.

         (f)      (Irrevocable Notice): If the Standby Swap Provider satisfies
                  the obligations of Citibank as Party A under Part
                  5(11)(a)(iv)(B) by transferring Eligible Credit Support on
                  behalf of Citibank as Party A pursuant to Part 5(9)(a),
                  Citibank as Party A must promptly provide an irrevocable
                  notice to Party B (copied to the Standby Swap Provider)
                  directing Party B that any such Eligible Credit Support, and
                  any Distribution or Interest Amount (as those terms are
                  defined in the Credit Support Annex) with respect to such
                  Eligible Credit Support, is to be returned or paid to the
                  Standby Swap Provider and not to Citibank as Party A.

(12)     Inconvertibility

         If prior to the Novation Date an Inconvertibility Event occurs the
         Standby Swap Provider's rights, powers, privileges and obligations
         under this Agreement and each Transaction will terminate upon the
         Standby Swap Provider delivering a notice expressed to be given under
         this provision to Party A, Party B and the Manager and Party B will be
         taken to have released the Standby Swap Provider from all its
         unperformed and future obligations under this Agreement and each
         Transaction. Following the delivery of such a notice in accordance with
         this Part 5(12), references to any jointly supported credit rating of
         Party A

                                                                         Page 23

<PAGE>

         and the Standby Swap Provider will be deemed to references to the
         relevant credit rating of Party A.

                                                                         Page 24

<PAGE>

Citibank Cross Currency Swap

Paragraph 11.  Elections and Variables

<TABLE>
<CAPTION>
                  <S>     <C>                                                         <C>

(a)      Base Currency and Eligible Currency.

         (i)      "Base Currency" means United States Dollars.

         (ii)     "Eligible Currency" means the Base Currency and any other
                  currency agreed from time to time between Party A, Party B,
                  the Standby Swap Provider and each Designated Rating Agency.

(b)      Credit Support Obligations.

         (i)      Delivery Amount, Return Amount and Credit Support Amount.

                  (A)     "Delivery Amount" for a Valuation Date means the
                          amount of Eligible Credit Support calculated in
                          accordance with Part 5(9)(b) of the Schedule to the
                          Agreement for that Valuation Date.

                  (B)     "Return Amount" for a Valuation Date means the amount
                          of Eligible Credit Support calculated in accordance
                          with Part 5(9)(b) of the Schedule to the Agreement for
                          that Valuation Date.

                  (C)     "Credit Support Amount" has the meaning given in
                          Paragraph 10.

         (ii)     Eligible Credit Support. The following items will qualify as
                  "Eligible Credit Support" for Party A:

                                                                                                   Valuation
                                                                                                   Percentage

                  (A)
                          negotiable debt obligations issued by the U.S. Treasury Department          98%
                          having a remaining maturity of not more than one year
                  (B)
                          negotiable debt obligations issued by the U.S. Treasury Department          95%
                          having a remaining maturity of more than one year but not more than
                          five years
                  (C)
                          negotiable debt obligations issued by the U.S. Treasury Department          93%
                          having a remaining maturity of more than five years but not more than
                          ten years
                  (D)
                          negotiable debt obligations issued by the U.S. Treasury Department          90%
                          having a remaining maturity of more than ten years
                  (E)
                          Agency Securities having a remaining maturity of not more than one          97%
                          year

                  (F)
                          Agency Securities having a remaining maturity of more than one year         94%
                          but not more than five years

</TABLE>

                                                                         Page 25

<PAGE>

<TABLE>
                  <S>     <C>                                                                      <C>

                  (G)     Agency Securities having a remaining maturity of more                       92%
                          than five years but not more than ten years

                  (H)     Agency Securities having a remaining maturity of more than ten years.       89%

                  (I)     cash in an Eligible Currency.                                              100%

                  (J)     other Eligible Credit Support and Valuation Percentage agreed by the
                          parties and acceptable to each Rating Agency

                  Notwithstanding the foregoing to the contrary, the Valuation
                  Percentage with respect to all Eligible Credit Support shall
                  be deemed to be 100% with respect to a Valuation Date which is
                  an Early Termination Date.

                  "Agency Securities" means negotiable debt obligations which
                  are fully guaranteed as to both principal and interest by the
                  Federal National Mortgage Association, the Government National
                  Mortgage Corporation or the Federal Home Loan Mortgage
                  Corporation and which have been assigned a short term credit
                  rating of A-1+ by S&P, but exclude: (i) interest only and
                  principal only securities; and (ii) collateralized mortgage
                  obligations, real estate mortgage investment conduits and
                  similar derivative securities.

         (iii)    Thresholds.

                  (A)      "Minimum Transfer Amount" means, with respect to both
                           Party A and Party B: US$100,000.

                  (B)      Rounding. The Delivery Amount and the Return Amount
                           will be rounded up and down respectively to the
                           nearest integral multiple of US $10,000.

(c)      Valuation and Timing.

         (i)      "Valuation Agent" means Party A.

         (ii)     "Valuation Date" means the last Business Day of each week and,
                  at the option of either Party A or the Standby Swap Provider,
                  any Business Day between Valuation Dates.

         (iii)    "Valuation Time" means the close of business on the Business
                  Day before the Valuation Date; provided that the calculations
                  of Value and Exposure will be made as of approximately the
                  same time on the same date.

         (iv)     "Notification Time" means 11.00 a.m. New York time on the
                  second Business Day after the Valuation Date.

(d)      Exchange Date.  "Exchange Date" has the meaning specified in
         Paragraph 3(c)(ii).

</TABLE>
                                                                         Page 26

<PAGE>

(e)      Dispute Resolution.

         (i)      "Resolution Time" means 11.00 am New York time.

         (ii)     Value. For the purpose of Paragraphs 4(a)(4)(i)(C) and
                  4(a)(4)(ii), the Value of the outstanding Credit Support
                  Balance or of any transfer of Eligible Credit Support or
                  Equivalent Credit Support, as the case may be, will be
                  calculated as follows:

                  Any disputes over the Value of all or any portion of the
                  outstanding Credit Support Balance or of any transfer of
                  Eligible Credit Support or Equivalent Credit Support will be
                  resolved by the Valuation Agent seeking three mid-market
                  quotations as of the relevant Valuation Date or date of
                  transfer from leading dealers in the relevant market for the
                  securities or other property in question. The Value in each
                  such case will be the arithmetic mean of the quotations
                  received by the Valuation Agent.

         (iii)    Alternative. The provisions of Paragraph 4 will apply.

(f)      Distributions and Interest Amount.

         (i)      Interest Rate. The "Interest Rate", in respect of Eligible
                  Security which is denominated in US$, for any day means the
                  Federal Funds Overnight Rate. For the purposes hereof,
                  "Federal Funds Overnight Rate" means, for any day, an interest
                  rate per annum equal to the rate published as the Federal
                  Funds Effective Rate that appears on Telerate Page 118 for
                  such day. The "Interest Rate" in respect of Eligible Security
                  denominated in any other Eligible Currency means the rate as
                  agreed between the parties.

         (ii)     Transfer of Interest Amount. The Transfer of Interest Amount
                  will be made monthly on the second Business Day of each
                  calendar month.

         (iii)    Alternative to Interest Amount. The provisions of
                  Paragraph 5(c)(ii) will apply.

(g)      Addresses for Transfers

         Party A:

         In respect of cash transferred in accordance with Paragraph 3(a):

         As notified in writing by Party A to the other parties to this
         agreement from time to time

         In respect of securities to be transferred in accordance with
         Paragraph 3(a):

         As notified in writing by Party A to the other parties to this
         agreement from time to time

         Party B:

         In respect of cash transferred in accordance with Paragraph 3(a):

         As notified in writing by Party B to the other parties to this
         agreement from time to time

                                                                         Page 27

<PAGE>

         In respect of securities to be transferred in accordance with
         Paragraph 3(a):

         As notified in writing by Party B to the other parties to this
         agreement from time to time

(h)      Other Provisions

         (i)      All demands, specifications and notices under this Annex will
                  be made pursuant to Section 12 of the Agreement; provided,
                  that any such demand, specification or notice may be made by
                  telephone ("Telephone Notice") between duly authorised
                  employees of each party if such Telephone Notice is confirmed
                  by a subsequent written instruction (which may be delivered
                  via facsimile) by the close of business of the same day that
                  such Telephone Notice is given.

         (ii)     Party B's expenses

                  Subject  to Section 15 of the Agreement, Party B agrees to pay
                  Party A's costs and expenses in relation to or caused by any
                  breach by Party B of its obligations under this Annex. Party A
                  acknowledges and agrees that its obligations under this Annex
                  will not be affected by a failure by Party B to comply with
                  its obligations under this paragraph (h)(ii).

         (iii)    No trial by jury

                  Each party waives, to the fullest extent permitted by
                  applicable law, any right it may have to a trial by jury in
                  respect of any suit, action or proceeding relating to this
                  Annex.

         (iv)     Transferor and Transferee

                  In this Annex:

                  (a)      "Transferor" means only Party A; and

                  (b)      "Transferee" means only Party B.

         (v)      Dispute Resolution

                  Paragraph 4(a)(4)(i) is amended by:

                  (A)     replacing the word "Exposure" with the words "the
                          Delivery Amount or the Return Amount, as the case may
                          be" in the first paragraph of Paragraph 4(a)(4)(i);

                  (B)     adding the word "and" at the end of Paragraph
                          4(a)(4)(i)(A) and deleting Paragraph 4(a)(4)(i)(B).

         (vi)     Rights in Relation to Swap Provider's Eligible Credit
                  Support Following Novation

                  (A)     The Transferee will hold any Eligible Credit Support
                          transferred to or received by the Transferee from
                          Citibank as Party A (or from the Standby Swap Provider
                          on behalf of Citibank as Party A but not from the
                          Standby Swap Provider in its capacity as Party A)
                          hereunder on trust for the benefit of:

                                                                         Page 28

<PAGE>

                          (1)      itself as trustee of the Trust, to be applied
                                   in satisfaction of the obligations of
                                   Citibank as Party A to the Transferee as
                                   trustee of the Trust (other than pursuant to
                                   Paragraph 11(h)(vi)(B)); and

                          (2)      the Standby Swap Provider, to be applied in
                                   satisfaction of the obligations of Citibank
                                   as Party A to the Standby Swap Provider
                                   pursuant to Parts 5(11)(d) and (e) of the
                                   Schedule to this Agreement,

                          in accordance with the provisions of this Paragraph
                          11(h)(vi), and Paragraph 5(a) is varied accordingly.

                  (B)     Citibank as Party A covenants in favour of the
                          Transferee that it will duly and punctually pay to the
                          Transferee:

                          (1)      all its obligations to the Standby Swap
                                   Provider pursuant to Parts 5(11)(d) and (e)
                                   of the Schedule to this Agreement; and

                          (2)      all its present and future obligations to the
                                   Standby Swap Provider under Paragraph
                                   11(h)(vi) of the credit support annex to the
                                   ISDA Master Agreement between Westpac as
                                   Party A, Westpac Securities Administration
                                   Limited as Party B and others, dated on or
                                   about the date of this Agreement,

                          as and when the same fall due for payment.
                          Notwithstanding the foregoing, every payment by
                          Citibank as Party A, or the Transferee in accordance
                          with Paragraph 11(h)(vi)(C)(2)(b), to the Standby Swap
                          Provider will operate as a payment by Citibank as
                          Party A to the Transferee in satisfaction of
                          Citibank's obligations as Party A pursuant to this
                          Paragraph 11(h)(vi)(B). The Transferee will hold the
                          benefit of its rights under this Paragraph
                          11(h)(vi)(B) on trust for the Standby Swap Provider in
                          accordance with the provisions of this Paragraph
                          11(h)(vi).

                  (C)     The Transferee must deal with all Eligible Credit
                          Support transferred to or received by the Transferee
                          from Citibank as Party A (or from the Standby Swap
                          Provider on behalf of Citibank as Party A but not from
                          the Standby Swap Provider in its capacity as Party A)
                          hereunder:

                          (1)      prior to the Novation Date, in accordance
                                   with the provisions of this Agreement other
                                   than this Paragraph 11(h)(vi);

                          (2)      on or after the Novation Date:

                                   (a)      until the date upon which the
                                            Standby Swap Provider has initially
                                            fulfilled its obligations as Party A
                                            pursuant to Part 5(9)(a) of the
                                            Schedule to this Agreement, such
                                            Eligible Credit Support must be held
                                            by the Transferee in accordance with
                                            Paragraph 11(h)(vi)(E);

                                   (b)      on or after the date upon which the
                                            Standby Swap Provider has initially
                                            fulfilled its obligations as Party A
                                            pursuant to Part 5(9)(a) of the
                                            Schedule to this Agreement and until

                                                                         Page 29

<PAGE>

                                            Citibank as Party A has paid in full
                                            all of its obligations to the
                                            Standby Swap Provider pursuant to
                                            Parts 5(11)(d) and (e) of the
                                            Schedule to this Agreement, the
                                            Transferee must, upon the
                                            instructions of the Standby Swap
                                            Provider, transfer such Eligible
                                            Credit Support to the Standby Swap
                                            Provider in satisfaction of
                                            Citibank's obligations as Party A to
                                            the Standby Swap Provider pursuant
                                            to Parts 5(11)(d) and (e) of the
                                            Schedule to this Agreement as and
                                            when these are due and payable until
                                            all such obligations have been paid
                                            in full; and

                                   (c)      on or after the date upon which the
                                            Standby Swap Provider has initially
                                            fulfilled its obligations as Party A
                                            pursuant to Part 5(9)(a) of the
                                            Schedule to this Agreement and
                                            Citibank as Party A has paid in full
                                            all its obligations to the Standby
                                            Swap Provider pursuant to Parts
                                            5(11)(d) and (e) of the Schedule to
                                            this Agreement and no amounts are or
                                            thereafter may become payable in
                                            respect to such obligations, the
                                            Transferee must transfer to Citibank
                                            as Party A all such Eligible Credit
                                            Support and the Interest Amount in
                                            relation to such Eligible Credit
                                            Support, if any.

                  (D)     Citibank as Party A releases the Transferee from any
                          liability incurred by the Transferee in complying with
                          the instructions of the Standby Swap Provider pursuant
                          to Paragraph 11(h)(vi)(C)(2)(b) and the Standby Swap
                          Provider indemnifies the Transferee from and against
                          any cost or liability incurred by the Transferee in
                          complying with such instructions. The Standby Swap
                          Provider acknowledges and agrees that the Transferee
                          may not, and is not required, to transfer any Eligible
                          Credit Support pursuant to Paragraph
                          11(h)(vi)(C)(2)(b) except upon the directions of the
                          Standby Swap Provider and in accordance with this
                          Paragraph 11(h)(vi).

                  (E)     The Transferee must ensure that any Eligible Credit
                          Support transferred to or received by the Transferee
                          from Citibank as Party A is held separately from, and
                          is not co-mingled with other property of the
                          Transferee, including Eligible Credit Support
                          transferred to or received by the Transferee from the
                          Standby Swap Provider as Party A.

                  (F)     This paragraph 11(h)(vi) applies notwithstanding any
                          other provision of this Agreement.

(vii)             Return Amounts

                  If under this Agreement a Novation Date has occurred, each
                  obligation of the Transferee under Paragraphs 2, 4 and 5(c) is
                  subject to the condition precedent that the Standby Swap
                  Provider, in its discretion, has consented to the transfer
                  unless Citibank as Party A has paid in full all its
                  Obligations to the Standby Swap Provider pursuant to Sections
                  24(d) and (e) of the Agreement and no amounts are or
                  thereafter may become payable with respect to such
                  obligations.

                                                                         Page 30

<PAGE>

<TABLE>

<S>                                                 <C>
To:  Westpac Securities Administration Limited      Westpac Securitisation Management Pty Limited
     as trustee of the Series 2002-1G WST Trust     Level 25
     Level 25                                       60 Martin Place
     60 Martin Place                                Sydney  NSW  2000
     Sydney  NSW  2000                              AUSTRALIA
     AUSTRALIA

                                                    Attention: Cameron Kelly

     Attention: Bob Hamilton

     Westpac Banking Corporation
     Level 3, 255 Elizabeth Street,
     Sydney NSW 2000

     Attention: Senior Manager, Global
     Derivative Operations

</TABLE>

CONFIRMATION - SERIES 2002-1G WST TRUST

The purpose of this letter is to confirm the terms and conditions of the
Transaction entered into between us on the terms specified below (the
"Transaction"). This letter constitutes a "Confirmation" as referred to in the
Master Agreement specified below.

This Confirmation is entered into by Westpac Securities Administration Limited,
ABN 77 000 049 472 as trustee of the Series 2002-1G WST Trust (the "Trust").

This Confirmation supplements, forms part of, and is subject to, the 1992 ISDA
Master Agreement dated as of 12 March 2002 as amended, novated or supplemented
from time to time (the "Agreement"), between Citibank N.A. ("Party A"), Westpac
Securities Administration Limited, ABN 77 000 049 472 as trustee of, the Series
Trust ("Party B") and Westpac Securitisation Management Pty. Limited, ABN 73 081
709 211 (the "Manager") and Westpac Banking Corporation, ABN 33 007 457 141 (the
"Standby Swap Provider").

All provisions contained in the Agreement govern this Confirmation except as
expressly modified below. All other terms used and not defined in this
Confirmation have the meaning given in the Master Trust Deed ("Trust Deed")
between Party B and The Mortgage Company Pty Limited and the Series 2002-1G WST
Trust Series Notice (the "Series Notice") between Party A, Party B, the Manager
and others.

The terms of the particular Transaction to which this Confirmation relates are
specified below:

<TABLE>

<S>                                             <C>
1.   Our Reference:

2.   Trade Date:                                12 March 2002

3.   Effective Date:                            14 March 2002

4.   Termination Date:                          The earlier of:
                                                (a)  the date  which is one  month  after  the  Class A
                                                     Notes  have been  redeemed  in full in  accordance
                                                     with the Series Notice; or

                                                (b)  the date on which Party B enters into a swap
                                                     transaction, as previously notified to the
                                                     Designated Ratings Agency, and which the Designated
                                                     Ratings Agency has confirmed will not cause a
                                                     reduction in or
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S>                                         <C>
                                                    withdrawal of the rating of the Class A
                                                    Notes, to replace this Swap Transaction, or

                                               (c)  Maturity Date

5.   Maturity Date                             Payment Date falling in June 2033

6.   Floating Amounts

     US$ Floating Rate Payer:                  Party A

     Calculation Amount:                       One half of the aggregate Invested Amount of the Class A
                                               Notes as at the first day of each Calculation Period

     Calculation Period:                       From and  including  one Period End Date to and  excluding
                                               the next  Period  End Date,  commencing  on and  including
                                               the  Effective Date to but excluding the Termination Date.

     Period End Date:                          Each Payment Date

     Payment Dates:                            Each 5 June, 5 September, 5 December and 5 March, from and
                                               including 5 June 2002 to and  including the Termination
                                               Date, subject to adjustment in accordance with the
                                               Applicable Business Day Convention

     Floating Rate Option:                     USD-LIBOR-BBA (except that references to "London Banking Days"
                                               in section  7.1(w)(xvii) Annex to the 2000 ISDA
                                               Definitions will be replaced with references to "Business Days" as
                                               that expression is defined in the Note Conditions) plus the Spread

     Designated Maturity:                      Three months (except that Linear Interpolation using two
                                               and three months will apply in respect of the first
                                               Calculation Period)

     Spread:                                   0.16 percent per annum for Payment Dates from and
                                               including 5 June 2002 to and including  5 June 2009 and
                                               0.32 per cent per annum from and excluding 5 June 2009 to
                                               the Termination Date provided that if the Step Up Margin
                                               on the Class A Notes reverts to 0.0 per cent per annum on
                                               any payment date under Clause 4.10 of the Series Notice
                                               then the Spread will revert to 0.16 per cent per annum on
                                               and from the corresponding Payment Date for this Swap
                                               Transaction.

     Floating Rate Day Count Fraction:         Actual/360

     Applicable Business Day Convention

     - Period End Dates                        Not applicable

     - Payment Date                            Following Business Day Convention

     - Termination Date                        Following Business Day Convention

     Business Days                             Sydney, London, New York
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
       <S>                                     <C>
       Reset Dates:                            Two Business Days prior to each Period End Date except the
                                               First Reset Date

       First Reset Date:                       Two Business Days prior to the Effective Date

       Compounding:                            Inapplicable

       A$ Floating Rate Payer:                 Party B

       Calculation Amount:                     The A$ Equivalent of the Calculation Amount pursuant to the
                                               US$ Floating Rate Payer

       Calculation Period                      From and including one Period End Date to and
                                               excluding the next Period End Date, commencing and
                                               including the Effective Date to but excluding the
                                               Termination Date.

       Period End Dates                        Each Payment Date

       Payment Dates:                          Each 5 June, 5 September, 5 December and 5 March, from and
                                               including 5 June 2002 to and  including the Termination
                                               Date, subject to adjustment in accordance with the
                                               Applicable Business Day Convention

       Floating Rate Option:                   Bank Bill Rate plus the Spread

       Designated Maturity:                    90 days (except that Linear Interpolation using two and
                                               three months will apply in respect of the first Calculation
                                               Period)

       Spread:                                 0.3275 per cent per annum for Payment Dates from and
                                               including 5 June 2002 to and including the 5 June 2009 and
                                               0.4875 per cent per annum from and excluding 5 June 2009
                                               to the Termination Date provided that if the Step Up
                                               Margin on the Class A Notes reverts to 0.0 per cent per
                                               annum on any payment date under Clause 4.10 of the Series
                                               Notice then the Spread will revert to 0.3275 per cent per
                                               annum on and from the corresponding Payment Date for this
                                               Swap Transaction.

       Floating Rate Day Count Fraction:       Actual/365

       Applicable Business Day Convention

       - Period End Dates                      Not applicable

       - Payment Date                          Following Business Day Convention

       - Termination Date                      Following Business Day Convention

       Business Days                           Sydney, London, New York

       Reset Dates:                            Each Period End Date, except the First Reset Date

       First Reset Date:                       Effective Date

       Compounding:                            Inapplicable
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

<S>                                            <C>
7.   Exchanges

     Initial Exchange:

     Initial Exchange Date:                    14 March 2002

     Party A Initial Exchange Amount:          The A$ Equivalent of the Party B Initial Exchange Amount,
                                               being A$1,072,870,601.81

     Party B Initial Exchange Amount:          One half of the Initial Invested Amount of the Class A
                                               Notes on the Issue Date, being US$558,000,000

                                               Notwithstanding anything to the contrary in the Agreement,
                                               Party A must pay the Party A Initial Exchange Amount to
                                               Party B by 11.00am (Sydney time) on the Initial Exchange
                                               Date and Party B must pay Party A the Party B Initial
                                               Exchange Amount (or procure the payment to Party A of the
                                               Party B Initial Exchange Amount) by 9.00am (New York time)
                                               on the Initial Exchange Date.
     Periodic Exchange:

     Periodic Exchange Date:                   Each Payment Date (other than the Final Exchange Date)

     Party A Periodic Exchange Amount:         In respect of a Periodic Exchange Date means the US$
                                               Equivalent of one half of the amount of principal in A$
                                               available to be paid by Party B under the Series Notice in
                                               respect of the Class A Notes in relation to the Payment Date
                                               occurring on that Periodic Exchange Date

     Party B Periodic Exchange Amount:         In respect of a Periodic Exchange Date means
                                               one half of the amount available to be paid by
                                               Party B under the Series Notice in respect of
                                               the Class A Notes in A$ in relation to the
                                               Payment Date occurring on that Periodic Exchange Date

     Final Exchange:

     Final Exchange Date:                      Termination Date

     Party A Final Exchange Amount:            The US$ Equivalent of one half  of the amount available to be paid
                                               by Party B under the Series Notice in respect of the Class A
                                               Notes in A$ in relation to the Payment Date which is
                                               the Final Exchange Date

     Party B Final Exchange Amount:            One half of the amount available to be paid by Party B
                                               under the Series Notice in respect of the Class A Notes in
                                               A$ in relation to the Quarterly Distribution Date which is
                                               the Final Exchange Date

8.   Exchange Rates:

     For the purpose of the definitions of "A$
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

<S>                                            <C>
     Equivalent" and "US$ Equivalent":

     US$ Exchange Rate:                        US$1.00 = A$1.92270717169775

     A$ Exchange Rate:                         A$1.00 = US$0.5201

9.   Account Details:

     Payments to Party A

     Account for payments in US$:              The account notified in writing by Part A to Party B in
                                               accordance with Part 5(1)(vii) of the Schedule to the
                                               Agreement

     Account for payments in A$:               The account notified in writing by Party A to Party B in
                                               accordance with Part 5(1)(vii) of the Schedule to the
                                               Agreement
     Payments to Party B

     Account for payments in US$:              The account notified in writing by the Principal Paying
                                               Agent to Party A in accordance with Part 5(1)(vii) of the
                                               Schedule to the Agreement

     Account for payments in A$:               The account notified in writing by Party B to Party A in
                                               accordance with Part 5(1)(vii) of the Schedule to the
                                               Agreement

10.  Offices:                                  The Office of Citibank (on and from the Novation Date) as
                                               Party A is New York.

                                               The Office of Party B for each Transaction is New York.
</TABLE>

Please confirm that the above correctly sets out the terms of our agreement in
respect of each Transaction to which this Confirmation relates by signing and
returning this Confirmation to us by facsimile today.

Executed documents will follow by mail.

Yours sincerely

/s/ Thomas E. O'Callaghan

Citibank, N.A.

<PAGE>

<TABLE>
<CAPTION>

<S>                                                    <C>
Confirmed as at the date first written                 Confirmed as at the date first written above:
above:

SIGNED for and on behalf of                            SIGNED for and on behalf of
WESTPAC SECURITIES ADMINISTRATION LIMITED, ABN 77      WESTPAC SECURITISATION MANAGEMENT
000 049 472                                            PTY. LIMITED, ABN 73 081 709 211
as trustee of the Series 2002-1G WST Trust

By: /s/ Robert George Hamilton
         (Authorised Officer)
                                                       By: /s/ G.P.D. Rennie

                                                           (G.P.D. Rennie)
                                                         (Authorised Officer)
Name: Robert George Hamilton

                                                       Name:

Title: Manager, Trustee Securitisation

                                                       Title: Attorney

</TABLE>

Confirmed as at the date first written
above:

SIGNED for and on behalf of
Westpac Banking Corporation

By: /s/ John Lowrey
       (Authorised Officer)

Name: John Lowrey

Title: Tier 3 Attorney<PAGE>

                                                                   Exhibit 10.18

                                CREDIT AGREEMENT
                                ----------------

         This Credit Agreement (the "Agreement") is entered into as of this
31/st/ day of December, 2001, by and between OURPET'S COMPANY, a Colorado
corporation ("OurPet's"), and VIRTU COMPANY, an Ohio corporation ("Virtu")
(OurPet's and Virtu are each individually referred to as "Corporation" and
collectively as "Corporations"), STEVEN TSENGAS, individually as a natural
person ("ST") and EVANGELIA S. TSENGAS, individually as a natural person ("EST")
(OurPet's, Virtu, ST and EST are hereinafter collectively referred to as
"Borrower"), jointly and severally, and FIRSTMERIT BANK, N.A., a national
banking association (hereinafter referred to as "Bank").

Section 1.   Definitions.
             -----------

         Certain capitalized terms have the meanings set forth in Section 8.1
hereof or in the Security Agreement. All financial terms used in this Agreement
but not defined herein or in the Security Agreement have the meanings given to
them by generally accepted accounting principles. All other undefined terms have
the meanings given to them in the Uniform Commercial Code as in effect from time
to time in the State of Ohio.

Section 2.   Loan.
             ----

         2.1 Revolving Credit Loans. (a) Subject to the terms and conditions
             ----------------------
hereof, Bank hereby extends to Borrower a line of credit facility (the "Line of
Credit Facility") under which Bank will make loans (the "Revolving Loans") to
Borrower at Borrower's request from time to time during the term of this
Agreement in amounts up to the lesser of (i) One Million Five Hundred Thousand
and no/100 Dollars ($1,500,000.00) or (ii) the sum of (A) Seventy-Five Percent
(75%) of the net amount of Corporations' Eligible Accounts, plus (B) Forty
Percent (40%) of the net amount of Corporations' Eligible Inventory, provided,
however, that Revolving Loans outstanding at any time based upon Eligible
Inventory shall not exceed Seven Hundred Fifty Thousand and no/100 Dollars
($750,000.00). However, Bank shall have sole discretion at all times as to
whether or not to make any Revolving Loans. Borrower may borrow, prepay (without
penalty or charge), and reborrow under the Line of Credit Facility, provided
that the principal amount of all Revolving Loans outstanding at any one time
under the Line of Credit Facility shall not exceed the foregoing limits. If the
amount of Revolving Loans outstanding at any time under the Line of Credit
Facility exceeds the limits set forth above, Borrower shall immediately pay the
amount of such excess to Bank in cash.

             (b) Borrower may request a Revolving Loan by written or telephone
notice to Bank. Bank will make Revolving Loans by crediting the amount thereof
to Borrower's demand deposit account at Bank. Loan proceeds shall be used for
Corporation's general working capital and other related corporate purposes and
for no other purposes.

             (c) On the date hereof, Borrower shall duly execute and deliver to
Bank a Revolving Note in the form of Exhibit 2.1 attached hereto and
                                     -----------
incorporated herein by reference (the "Revolving Note"), in the principal amount
of One Million Five Hundred Thousand and no/100 Dollars ($1,500,000.00). The
Revolving Note shall bear interest and will be repayable in the manner set forth
in the Revolving Note, the terms of which are incorporated herein by this
reference.

             (d) The Line of Credit Facility shall be effective as of the date
hereof and shall continue in full force and effect until such time as all of
Borrower's Revolving Loans have been paid in full, including principal,
interest, costs, expenses, attorney's fees and other fees and charges or until
April 1, 2003, unless earlier demand for payment is made by Bank to Borrower as
provided herein. Borrower may

<PAGE>

prepay the principal balance of the Revolving Note, in whole or in part, at any
time without premium or penalty.

                  (e) ANYTHING HEREIN TO THE CONTRARY NOTWITHSTANDING, THE LINE
OF CREDIT FACILITY IS A DISCRETIONARY FACILITY AND NOTHING CONTAINED IN THIS
AGREEMENT SHALL REQUIRE BANK, AT ANY TIME, TO MAKE REVOLVING LOANS OR OTHER
EXTENSIONS OF CREDIT TO BORROWER, AND THE GRANTING AMOUNT OF ANY REVOLVING LOAN
OR OTHER EXTENSIONS OF CREDIT HEREUNDER, SHALL AT ALL TIMES BE IN BANK'S SOLE
DISCRETION.

            2.2   Fees.
                  ----

                  (a) Origination Fee. Borrower has paid to Bank an origination
                      ---------------
fee in the amount of Three Thousand Seven Hundred Fifty and no/100 Dollars
($3,750.00), said fee being deemed earned in full upon payment and shall be
non-refundable.

                  (b) Loan Documentation Fee. Borrower shall pay to Bank its
                      ----------------------
reasonable out-of-pocket fees, costs and expenses incurred in negotiating,
reviewing, administering and preparing this Agreement, the Revolving Note, the
other Loan Documents and all other documents required to consummate the
transactions contemplated hereby.

                  (c) Loan Monitoring Fees. Borrower shall pay to Bank a Two
                      --------------------
Hundred Fifty and no/100 Dollars ($250.00) quarterly loan monitoring fee,
payable in advance, commencing on January 1, 2002, and continuing on the first
day of each quarter thereafter during the term of this Agreement. Said loan
monitoring fee shall be deemed earned upon receipt and shall be non-refundable.

            2.3   Security. To secure the prompt payment when due of all
                  --------
principal and interest advanced by Bank pursuant to the Revolving Note, as well
as for the payment of the Obligations and any and all other sums owing pursuant
to this Agreement or the other Loan Documents, and for the performance and
observance of all of the covenants, agreements and conditions contained in the
Revolving Note, this Agreement, all other Loan Documents or with respect to the
Obligations, whether now existing or hereafter arising, either created by
Borrower alone or together with another or others, primary or secondary, secured
or unsecured, absolute or contingent, liquidated or unliquidated, direct or
indirect, whether evidenced by note, draft, application for letters of credit or
otherwise, and any and all renewals, amendments, modifications, restatements of
or substitutes therefore, each Corporation hereby grants to Bank a first
continuing security interest in all of such corporation's accounts, chattel
paper, instruments and general intangibles, machinery and equipment, inventory
and supplies, all furniture and fixtures and interest in joint ventures or other
entities, as more fully described in, and pursuant to, the Security Agreement
executed and delivered by each such corporation dated of even date herewith, and
all additions, substitutions, increments, proceeds and products with respect
thereto, whether now or later acquired (all of the property described in each
Security Agreement being hereinafter collectively referred to as the
"Collateral"), subject to Permitted Liens (as herein defined). It is each
Corporation's express intention that this Agreement and the continuing security
interest granted hereby and pursuant to each Security Agreement, in addition to
covering all present Obligations of Borrower to Bank, shall extend to all future
Obligations of Borrower, whether jointly or severally, to Bank, whether or not
such Obligations are increased, reduced or entirely extinguished and thereafter
increased, reduced or reincurred, and whether or not such Obligations are
specifically contemplated by Borrower and Bank as of the date hereof. The
absence of any reference to this Agreement in any documents, instruments or
agreements evidencing or relating to any Obligation secured hereby shall not
limit or be construed to limit the scope or applicability of this Agreement.

Section 3.        Representations And Warranties.
                  ------------------------------

                                       2

<PAGE>

         Borrower, jointly and severally, hereby warrants and represents to Bank
the following:

         3.1 Organization and Qualification. OurPet's is a duly organized,
             ------------------------------
validly existing corporation in good standing under the laws of the State of
Colorado, has the requisite corporate power and authority to carry on its
business and to enter into and perform this Agreement, the Revolving Note, the
Security Agreement and the other Loan Documents to which it is a party, is
qualified and licensed to do business in each jurisdiction in which such
qualification or licensing is required. Virtu is a duly organized, validly
existing corporation in good standing under the laws of the State of Ohio, has
the requisite corporate power and authority to carry on its business and to
enter into and perform this Agreement, the Revolving Note, the Security
Agreement and the other Loan Documents to which it is a party, is qualified and
licensed to do business in each jurisdiction in which such qualification or
licensing is required. All information provided to Bank with respect to OurPet's
and Virtu and their operations is true, correct and complete. ST and EST have
the power, authority and capacity to enter into this Agreement, the Revolving
Note and the other Loan Documents, to which each is a party.

         3.2 Due Authorization. The execution, delivery and performance by
             -----------------
Borrower of this Agreement, the Security Agreement, the Revolving Note and the
other Loan Documents have been duly authorized by all necessary corporate or
individual action, as the case may be, and will not contravene any law or any
governmental rule or order binding on Borrower, or the articles of incorporation
or bylaws of each Corporation, nor violate any agreement or instrument by which
Borrower is bound nor result in the creation of a Lien on any assets of each
Corporation except the Lien to Bank granted herein. Borrower has duly executed
and delivered this Agreement, the Security Agreement, the Revolving Note, and
the other Loan Documents to which each is a party and they are valid and binding
obligations of Borrower enforceable against Borrower in accordance with their
respective terms except as limited by equitable principles and by bankruptcy,
insolvency or similar laws affecting the rights of creditors generally. No
notice to or consent by any governmental body is needed in connection with this
transaction, except for the approval of the U.S. Small Business Administration
regarding its loan to OurPet's (the "SBA Loan").

         3.3 Litigation. Except as set forth on Schedule 3.3 attached hereto,
             ----------                         ------------
there are no suits or proceedings pending or to the best of Borrower's
knowledge, threatened, against or affecting Borrower or Borrower's assets or
properties, and no proceedings before any governmental body are pending or
threatened, against Borrower or Borrower's assets or properties.

         3.4 Margin Stock. No part of the Revolving Loans shall be used to
             ------------
purchase or carry, or to reduce or retire or refinance any credit incurred to
purchase or carry, any margin stock (within the meaning of Regulations U and X
of the Board of Governors of the Federal Reserve System) or to extend credit to
others for the purpose of purchasing or carrying any margin stock. If requested
by Bank, Borrower shall furnish to Bank statements in conformity with the
requirements of Federal Reserve Form U-1.

         3.5 Business. Borrower is not a party to or subject to any agreement or
             --------
restriction which is so unusual or burdensome that it might have a material
adverse effect on Borrower's business, properties, assets or prospects.

         3.6 Licenses, etc. Except as set forth on Schedule 3.6 attached hereto,
             -------------                         ------------
Borrower has obtained any and all licenses, permits, franchises, governmental
authorizations, patents, trademarks, copyrights or other rights necessary for
the ownership of its properties and the advantageous conduct of Borrower's
business. Borrower possesses adequate licenses, patents, patent applications,
copyrights, trademarks, trademark applications, and trade names to continue to
conduct Borrower's business as heretofore conducted by Borrower, without any
conflict with the rights of any other person or entity. All of the

                                       3

<PAGE>

foregoing are in full force and effect and none of the foregoing are known to be
in conflict with the rights of others.

         3.7  Laws and Taxes. Borrower is in compliance with all laws,
              --------------
regulations, rulings, orders, injunctions, decrees, conditions or other
requirements applicable to or imposed upon Borrower by any law or by any
governmental authority, court or agency (collectively, "Requirements of Law").
Borrower has filed all required tax returns and reports that are now required to
be filed by Borrower in connection with any federal, state and local tax, duty
or charge levied, assessed or imposed upon Borrower or Borrower's assets,
including unemployment, social security, and real estate taxes. Borrower has
paid all taxes that are now due and payable. Except as set forth on Schedule 3.7
                                                                    ------------
attached hereto, no taxing authority has asserted or assessed any additional tax
liabilities against Borrower that are outstanding on the date of this Agreement,
and Borrower has not filed for any extension of time for the payment of any tax
or the filing of any tax return or report.

         3.8  Financial Condition. All financial information relating to
              -------------------
Borrower that has been or may hereafter be delivered to Bank is true and correct
and has been prepared in accordance with generally accepted accounting
principles consistently applied. Borrower has no material obligations or
liabilities of any kind not disclosed in that financial information, and there
has been no material adverse change in the financial condition of Borrower nor
has Borrower suffered any damage, destruction or loss which has adversely
affected Borrower's business or assets since the submission of the most recent
financial information to Bank.

         3.9  Title. Borrower has good and marketable title to the assets
              -----
reflected on the most recent balance sheet or personal financial statement
submitted to Bank and the Collateral, free and clear from all liens and
encumbrances of any kind, except for (collectively, the "Permitted Liens"): (a)
current taxes and assessments not yet due and payable, (b) liens and
encumbrances, if any, reflected or noted on such balance sheets or notes
thereto, (c) assets disposed of in the ordinary course of business, (d) any
security interests, pledges, assignments or mortgages granted to Bank to secure
the repayment or performance of the Obligations, and (e) the capital leases
described on Schedule 3.9 attached hereto and the SBA loan.
             ------------

         3.10 Defaults. Borrower is in compliance with all material agreements
              --------
applicable to it and there does not now exist any default or violation by
Borrower of or under any of the terms, conditions or obligations of (a) each
Corporation's Articles of Incorporation or Regulations/Bylaws, or (b) any
indenture, mortgage, deed of trust, franchise, permit, contract, agreement or
other instrument to which Borrower is a party or by which it is bound, and the
consummation of the transactions contemplated by this Agreement shall not result
in such default or violation.

         3.11 Environmental Laws. (a) Borrower has obtained all permits,
              ------------------
licenses and other authorizations which are required under Environmental Laws
and Borrower is in compliance in all respects with all terms and conditions of
the required permits, licenses and authorizations, and is also in compliance in
all respects with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
the Environmental Laws.

         (b)  Borrower is not aware of, and has not received notice of, any
past, present or future events, conditions, circumstances, activities,
practices, incidents, actions or plans which may interfere with or prevent
compliance or continued compliance, in any material respect, with Environmental
Laws, or may give rise to any material common law or legal liability, or
otherwise form the basis of any material claim, action, demand, suit,
proceeding, hearing, study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling or the emission, discharge, release or threatened release
into the environment, of any pollutant, contaminant, chemical, or industrial,
toxic or hazardous substance or waste.

                                       4

<PAGE>

         (c)  There is no civil, criminal or administrative action suit, demand,
claim, hearing, notice or demand letter, notice of violation, investigation or
proceeding pending or threatened against Borrower, relating in any way to
Environmental Laws.

         3.12 Subsidiaries and Partnerships. OurPet's has no subsidiaries other
              -----------------------------
than Virtu and SMP Company, Inc., an Ohio corporation ("SMP"). Neither OurPet's
nor Virtu is not a party to any partnership agreement or joint venture
agreement. Except as set forth on Schedule 3.12 attached hereto, SMP neither has
                                  -------------
nor will have during the term of this Agreement, any assets or liabilities.

         3.13 ERISA. Corporation is in compliance with all of Borrower's
              -----
obligations to contribute to any employee benefit plan or pension plan regulated
by the Federal Employee Retirement Income Security Act of 1974 ("ERISA").
Corporation has not received notice informing Borrower that Borrower is not in
full compliance with any of the requirements of ERISA, and the regulations
promulgated thereunder and, there exists no event described in Section 4043(3)
thereof ("Reportable Event").

         3.14 Statements. Any certificate or written statement or the most
              ----------
recent projections furnished prior to the date of this Agreement by Borrower to
Bank or any other person in connection with the negotiation of this Agreement or
any of the other Loan Documents or the transactions contemplated hereby, to the
best knowledge of Borrower after reasonable inquiry, does not contain any untrue
statement of a material fact and does not omit any material fact necessary to
make the statements contained herein or therein, in the light of the
circumstances under which it was made, not misleading.

         3.15 Solvency. Borrower is Solvent and upon consummation of the
              --------
transactions contemplated by this Agreement will be Solvent. "Solvent" means
that: (a) the present fair salable value of Borrower's assets is in excess of
the total amount of its liabilities (including contingent liabilities); (b)
Borrower does not have unreasonably small capital and is able to pay Borrower's
debts as they become due; and (c) Borrower does not intend to or believe
Borrower will incur obligations beyond Borrower's ability to pay as they mature.

         3.16 Office and Principal Place of Business.  Corporation  has its at
              --------------------------------------
at 1300 East Street, Fairport Harbor, Lake County, Ohio 44077.

         3.17 Legal  Name.  The exact  legal  name of  OurPet's  and  Virtu
              -----------
(including  the name  given  each  such  Corporation's organization documents)
is as set forth on Page 1 of this Agreement.

Section 4.    Affirmative Covenants. For so long as any obligation of Borrower
              ---------------------
in connection with this Agreement or any of the other Loan Documents remains
outstanding, Borrower shall, unless the Bank otherwise consents in writing,
which consent may be withheld in Bank's sole discretion, do all of the
following:

         4.1  Protection of Security Interest in Collateral. Subject only to the
              ---------------------------------------------
Permitted Encumbrances, Borrower shall maintain the lien created by the Security
Agreement as a first lien upon the Collateral encumbered thereby, and take such
actions and execute and deliver to the Bank such instruments and documents as
the Bank may reasonably require from time to time at Borrower's expense in
connection therewith, including without limitation any supplemental security
agreements, UCC financing statements, continuation statements or other
instruments and documents extending or perfecting the security interest of the
Bank in and to the Collateral as it may exist from time to time.

         4.2  Books and Records. Borrower shall maintain proper books of account
              -----------------
records and enter therein complete and accurate entries and records of all of
its transactions in accordance with

                                       5

<PAGE>

generally accepted accounting principles and give representatives of Bank access
thereto at all reasonable times, including permission to examine, copy and make
abstracts from any such books and records and such other information which might
be helpful to Bank in evaluating the status of the Revolving Loans as it may
reasonably request from time to time. Borrower shall give Bank reasonable access
to the Collateral and the other property securing the Obligations for the
purpose of performing examinations thereof and to verify its condition or
existence.

         4.3   Financial Statements.  Borrower shall maintain a standard and
               --------------------
modern system for accounting and shall furnish to Bank:

               (a)   Within forty-five (45) days after the end of each fiscal
quarter, a copy of Corporation's consolidated financial statements for the
previous quarter and for the year to date in a form reasonably acceptable to
Bank, prepared and certified as complete and correct, subject to changes
resulting from year-end adjustments, by the chief financial officer of
Corporation;

               (b)   Within one hundred twenty (120) days after the end of each
fiscal year, a copy of Corporation's consolidated financial statements for the
previous year audited by a firm of independent certified public accountants
acceptable to Bank (which acceptance will not be unreasonably withheld), and
accompanied by an audit opinion of such accountants without significant
qualification;

               (c)   With the statements submitted under (a) and (b) above, a
certificate signed by the chief financial officer of Corporation, (i) stating
such officer is familiar with all documents relating to Bank and that no Event
of Default specified in this Agreement, nor any event which upon notice or lapse
of time, or both would constitute such an Event of Default, has occurred, or if
any such condition or event existed or exists, specifying it and describing what
action such corporation has taken or proposes to take with respect thereto, and
(ii) setting forth, in summary form, figures showing the financial status of
such corporation in respect of the financial covenants and restrictions
contained in this Agreement;

               (d)   Within two hundred fifty (250) days after the end of each
fiscal year, a copy of Corporation's  consolidated federal income tax return;

               (e)   Within one hundred sixty (160) days after each calendar
year, a copy of each individual Borrower's current annual personal financial
statement and federal income tax return for such year;

               (f)   Within twenty (20) days after the end of each month,
Corporation shall deliver to Bank a Collateral Report, including monthly
accounts receivable aging certification with all receivables and retainages
identified, in a form proscribed by or acceptable to Bank;

               (g)   Within twenty (20) days after each month, a monthly
Borrowing Base Certificate in the form of Exhibit 4.3 attached hereto and
                                          -----------
incorporated herein by reference (the "Borrowing Base Certificate"); and

               (h)   Such other information of Borrower as Bank may from time
to time reasonably request.

         If at any time Borrower has any subsidiaries which have financial
statements that could be consolidated with those of Borrower under generally
accepted accounting principles, the financial statements required by subsections
(a) and (b) above shall be the financial statements of Borrower and all such
subsidiaries prepared on a consolidated and consolidating basis.

                                       6

<PAGE>

         4.4   Condition and Repair. Each Corporation shall maintain its assets
               --------------------
in good repair and working order and shall make all appropriate repairs and
replacements thereof.

         4.5   Insurance. Each Corporation shall insure their respective
               ---------
properties and businesses against loss or damage of the kinds and in the amounts
customarily insured against by corporations with established reputations engaged
in the same or similar business as such corporations. All such policies shall
(a) be issued by financially sound and reputable insurers, (b) name Bank as an
additional insured, as the Bank's interest may appear and, where applicable, as
loss payee under a lender loss payable endorsement satisfactory to Bank, and (c)
shall provide for thirty (30) days written notice to Bank before such policy is
altered or canceled all of which shall be evidenced by a Certificate of
Insurance delivered to Bank by such corporations on the date of execution of
this Agreement.

         4.6   Taxes. Borrower shall pay when due all taxes, assessments and
               -----
other governmental charges imposed upon Borrower or Borrower's assets,
franchises, business, income or profits before any penalty or interest accrues
thereon, and all claims (including, without limitation, claims for labor,
services, materials and supplies) for sums which by law might be a lien or
charge upon any of Borrower's assets, provided that (unless any material item or
property would be lost, forfeited or materially damaged as a result thereof) no
such charge or claim need be paid if it is being diligently contested in good
faith, if Bank is notified in advance of such contest.

         4.7   Existence; Business. Each Corporation shall (a) maintain its
               -------------------
corporate existence, (b) engage primarily in business of the same general
character as that now conducted, and (c) refrain from entering into any lines of
business substantially different from the business or activities in which it is
presently engaged.

         4.8   Compliance with Laws. Each Corporation shall comply with all
               --------------------
federal, state and local laws, regulations and orders applicable to it or its
business assets or prospects including, but not limited to, Requirements of Law
and all Environmental Laws, and shall immediately notify Bank of any violation
of any rule, regulation, statute, ordinance, order or law relating to the public
health or the environment and of any complaint or notifications received by it
regarding to any environmental or safety and health rule, regulation, statute,
ordinance or law.

         4.9   Payment of Obligations. Borrower shall pay, discharge or
               ----------------------
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all its Indebtedness and other obligations of whatever kind or
nature other than de minimus amounts not paid in the ordinary course of
                  -- -------
Borrower's business.

         4.10  Notice of Default. Borrower shall, within three (3) days of
               -----------------
Borrower's knowledge thereof, give written notice to Bank of (a) the occurrence
of any event or the existence of any condition which would be, after notice or
lapse of applicable grace periods, an Event of Default, and (b) the occurrence
of any event or the existence of any condition which would prohibit Borrower
from continuing to make any of the representations set forth in this Agreement.

         4.11  Depository/Banking Services. Bank shall be the primary depository
               ---------------------------
of each Corporation's funds, and the principal bank of account of each
Corporation, as long as this Agreement is in effect, and each Corporation shall
grant Bank the first and last opportunity to provide any corporate banking
services required by Borrower and its Affiliates, including, without limitation,
payroll, cash management and employee benefit plan services.

         4.12  Other Amounts Deemed Loans. If either Corporation fails to pay
               --------------------------
any tax, assessment, governmental charge or levy or to maintain insurance within
the time permitted by this Agreement, or to

                                       7

<PAGE>

discharge any Lien prohibited hereby, or to comply with any other obligation,
Bank may, but shall not be obligated to, pay, satisfy, discharge or bond the
same for the account of such Corporation, and to the extent permitted by law and
at the option of Bank, all monies so paid by Bank on behalf of such Corporation
shall be deemed Loans and Obligations.

Section 5.    Negative Covenants. Without the prior written consent of Bank,
              ------------------
Borrower shall be prohibited from doing the following:

         5.1  Indebtedness. Each Corporation shall not incur, create, assume or
              ------------
permit to exist any additional Indebtedness for borrowed money (other than the
Obligations, the Junior Indebtedness and unsecured Indebtedness on account of
deposits, advances or progress payments under contracts or similar obligations
incurred in the ordinary course of Borrower's business).

         5.2  Prepayments. Each Corporation shall not, voluntarily prepay any
              -----------
Indebtedness owing by such Corporation prior to the stated maturity date thereof
other than (i) the Obligations and (ii) Indebtedness to trade creditors where
the prepayment will result in a discount on the amount due, unless the effect of
such prepayment will cause an Event of Default hereunder.

         5.3  Leases. Except for the operating lease with Senk Properties
              ------
regarding OurPet's lease of its principal business location, each Corporation
shall not enter into any lease of real or personal property as lessee if the
aggregate payments due under such lease and all other leases of Corporation then
in effect, would exceed $50,000 in any fiscal year.

         5.4  Capital Expenditures. Each Corporation shall not make any plant or
              --------------------
fixed capital expenditure, or any commitment therefor, or obtain equipment
subject to a purchase money security interest, trust deed or least, in any
fiscal year on a consolidated basis, which in the aggregate are in excess of
$300,000.

         5.5  Pledge or Encumbrance of Assets. Other than the Permitted Liens,
              -------------------------------
each Corporation shall not create, incur, assume or permit to exist any Lien on
the Collateral (whether or not junior or subordinated), except for Liens to
Bank, Liens existing on the date of this Agreement which have been disclosed to
and approved by Bank in writing and Liens imposed by law which secure amounts
not at the time due and payable.

         5.6  Guarantees and Loans. Each Corporation shall not enter into any
              --------------------
direct or indirect guarantees other than by endorsement of checks for deposit or
other than in the ordinary course of business nor make any advance or loan other
than in the ordinary course of business as presently conducted, including,
without limitation, loans and advances to employees of such Corporation.

         5.7  Capital Stock; Dividends. Each Corporation shall not (a) declare
              ------------------------
or pay any dividend or distributions (except stock dividends or stock
distributions) on its capital stock, (b) make any payments of any kind to its
shareholders (including, without limitation, debt repayments, payments for goods
or services or otherwise, but excluding reasonable and ordinary salary and bonus
payments to shareholders employed by such Corporation and excluding scheduled
interest only with respect to the Junior Indebtedness, provided, however, that
after the payment hereof, no Event of Default shall have occurred hereunder and
all financial covenants herein shall be in compliance) or (c) redeem any shares
of its capital stock in any fiscal year.

         5.8  Merger; Disposition of Assets. Each Corporation shall not (a)
              -----------------------------
change its capital structure, (b) merge or consolidate with any corporation or
other entity (c) amend or change its Articles of

                                       8

<PAGE>

Incorporation or Code of Regulations/Bylaws or (d) sell, transfer or otherwise
dispose of all or any substantial part of its assets whether now owned or
hereafter acquired.

         5.9   Transactions with Affiliates and Subsidiaries. Each Corporation
               ---------------------------------------------
shall not (a) directly or indirectly issue any guarantee for the benefit of any
person, Affiliate or Subsidiary, except for any guarantee in favor of Bank, (b)
directly or indirectly make any loans or advances to or investments in person,
Affiliate or Subsidiary, or (c) enter into any transaction with any of its
Affiliates or Subsidiaries, other than transactions entered into on an arm's
length basis in the normal course of each Corporation's business.

         5.10  Investments. Each Corporation shall not purchase or hold
               -----------
beneficially any stock, securities or evidences or indebtedness of, or make any
investment or acquire any interest, in, any other firm, partnership, corporation
or entity other than short term investments of excess working capital in one or
more of the following: (a) investments (of one year or less) in direct or
guaranteed obligations of the United States, or any agencies thereof; and (b)
investments (of one year or less) in certificates of deposit of banks or trust
companies organized under the laws of the United States or any jurisdiction
thereof, provided that such banks of trust companies are insured by the Federal
Deposit Insurance Corporation and have capital in excess of $25,000,000.

         5.11  Acquisitions. Each Corporation shall not purchase for cash or
               -----------
otherwise acquire all or any part of the business or assets of, or any stock or
other evidence of beneficial ownership of, any company or entity whatsoever,
without the prior written consent of Bank.

         5.12  Minimum Adjusted Tangible Net Worth. Borrower shall not permit
               -----------------------------------
Corporations' Adjusted Tangible Net Worth, on a consolidated basis, to be less
than $1,200,000 as of November 30, 2001, and $1,300,000 as of December 31, 2001
and thereafter, measured quarterly commencing on December 31, 2001 and on each
March 31, June 30, September 30 and December 31 thereafter. "Adjusted Tangible
Net Worth" shall mean the "Net Worth" of the Corporations minus the following
items (without duplication of deductions), if any: (i) all deferred charges (net
of amortization); (ii) the book amount of all assets which would be treated as
intangible assets under GAAP, including, without limitation, such items as
favorable leases, good will, unamortized debt discount and expense, organization
expenses, franchisee fees, trademarks, trademark applications, trade names,
service marks, brand names, copyrights, patents, patent applications and
licenses, and rights with respect to the foregoing; (iii) any write-up in the
book amount of any asset resulting from a revaluation thereof from the book
amount entered upon acquisition; and (iv) any note(s), receivable(s) or
advance(s) to affiliates, related parties, officers or shareholders. "Net Worth"
shall mean the total assets of Corporations (including Junior Indebtedness as
defined in Section 5.15 hereof) less the total liabilities of Corporations as
determined in accordance with GAAP. "GAAP" shall mean all computations and
determinations as to accounting or financial matters made in accordance with
generally accepted accounting principles consistently applied.

         5.13  Debt Service Coverage Ratio. Borrower shall not permit the
               ---------------------------
Corporations' Debt Service Coverage Ratio, on a consolidated basis, to be less
than 1.15 to 1.00 measured quarterly commencing on December 31, 2001 and on each
March 31, June 30, September 30 and December 31 thereafter. "Debt Service
Coverage Ratio" shall mean the sum of the net income or loss of Corporations
after taxes and after cash distributions, cash dividends and advances to
shareholders plus depreciation, plus amortization, plus interest expense,
divided by the sum of the current portion of long term debt plus interest
(whether jointly, severally or jointly and severally) for the applicable
accounting period, including but not limited to required principal and interest
on the Revolving Loans.

         5.14  Notification.  Each Corporation shall promptly provide Bank
               ------------
with at least thirty (30) days prior written notice of: (a) any change in any
location where such Corporation's inventory is maintained,

                                        9

<PAGE>

and any new locations where such Corporation's inventory is to be maintained;
(b) any change in the location of the office where such Corporation's records
pertaining to its respective accounts and contract rights are kept; (c) the
location of any new places of business for such Corporation and the changing or
closing of any of its existing places of business; (d) any change in such
Corporation's name or state of incorporation; and (e) any change in such
Corporation's place of business.

        5.15  Subordination of Debt. Borrower shall cause to be subordinate all
              ---------------------
Indebtedness not owing to Bank, including interest thereon ("Junior
Indebtedness"), which may at any time now or hereafter be owed to any officer,
employee, director, shareholder or Related Person by Borrower in favor of the
Obligations, including, but not limited to, the Junior Indebtedness described on
Exhibit 5.15 attached hereto. Borrower shall obtain and deliver to Bank
------------
subordination agreements from said officers, employees, directors, shareholders
or Related Persons for said Junior Indebtedness in form and content acceptable
to Bank. Upon the occurrence of an Event of Default under this Agreement,
Borrower shall without notice from Bank immediately cease payment of any fees or
advances to any officer, employee, director, shareholder or Related Person, and
shall also cease payment of the sums, if any, allowed to be paid by the terms of
the subordination agreements(s).

Section 6.    Events of Default and Remedies.
              ------------------------------

        6.1   Events of Default.  The occurrence of any one or more of the
              -----------------
              following events shall constitute an Event of Default hereunder
              ("Event of Default"):

        (a)   Borrower defaults in the payment of any principal or interest on
              any Obligation within ten (10) days when due and payable, by
              acceleration or otherwise; or

        (b)   any representation or warranty made by Borrower herein or in any
              of the Loan Documents is incorrect when made or reaffirmed; or

        (c)   Borrower fails to observe or perform any covenant, condition
              or agreement herein and the failure or inability of Borrower
              to cure such default within thirty (30) days of the occurrence
              thereof, provided that such thirty (30) day grace period shall
              not apply to (i) a breach of any covenant which in Bank's good
              faith judgment is incapable of cure, (ii) any failure to maintain
              insurance or permit inspection of the Collateral or of the books
              and records of Borrower, (iii) any breach in any negative covenant
              set forth in Section 5 hereof, or (iv) any breach of any covenant
              which has already occurred; or

        (d)   a court enters a decree or order for relief with respect to
              Borrower in an involuntary case under any applicable bankruptcy,
              insolvency or other similar law then in effect, or appoints a
              receiver, liquidator, assignee, custodian, trustee, sequestrator
              (or other similar official) of Borrower or for any substantial
              part of Borrower's property, or orders the wind-up or liquidation
              of Borrower's affairs; or a petition initiating an involuntary
              case under any such bankruptcy, insolvency or similar law is filed
              and is pending with respect to Borrower for sixty (60) days
              without dismissal; or

        (e)   Borrower commences a voluntary case under any applicable
              bankruptcy, insolvency or other similar law in effect, or makes
              any general assignment for the benefit of creditors, or fails
              generally to pay Borrower's debts as such debts become due, or
              takes any action in furtherance of any of the foregoing; or

        (f)   Borrower defaults (whether due to non-payment or non-performance)
              under the terms of any Indebtedness or lease, and such default
              gives any creditor or lessor the right to

                                       10

<PAGE>

         accelerate the maturity of any such indebtedness or lease payments
         which right is not contested in good faith by Borrower or is determined
         by any court of competent jurisdiction to be valid; or

  (g)    a final judgment for the payment of money which exceeds $5,000 is
         rendered against Borrower and remains undischarged for thirty (30) days
         during which execution is not effectively stayed or is not sufficiently
         bonded over in favor of Bank; or

  (h)    Bank shall deem itself insecure in good faith believing that the
         prospect of repayment of the Obligations or performance of the
         covenants and conditions of this Agreement is materially impaired; or

  (i)    Intentionally Omitted.

  (j)    an Event of Default or default occurs under any Loan Document, or
         Borrower denies any Obligations then existing or attempts  to limit or
         terminate its/his obligation for future Obligations, including future
         Revolving Loans; or

  (k)    the dissolution, termination, consolidation, liquidation or similar
         event with respect to or involving Borrower; or the  death or
         incompetency of any individual Borrower; or

  (l)    the commencement of any foreclosure proceedings, proceedings in aid of
         execution, attachment actions, levies against, or the filing by any
         taxing authority of a lien against any of the Collateral or any
         property securing the repayment of any of the Obligations; or

  (m)    the material loss, theft or substantial damage to the Collateral or any
         property securing the repayment of the Obligations if such occurrence
         is not covered by insurance for which Bank receives the insurance
         proceeds with respect thereto within 90 days from the date of loss, or
         the result of such occurrence will be, in Bank's reasonable judgment,
         the failure or inability of each Corporation to continue substantially
         normal operation of its business within thirty (30) days of the date of
         such occurrence; or

  (n)    Bank ceases to be each Corporation's (i) primary depository bank in
         which substantially all of Borrower's funds are deposited, and (ii)
         primary bank of account; or

  (o)    (i) the validity or effectiveness of any of the Loan Documents or its
         transfer, grant, pledge, mortgage, or assignment by Borrower executing
         such Loan Document is impaired; (ii) any party executing any of the
         Loan Documents asserts that any of such Loan Documents is not a legal,
         valid and binding obligation of the party thereto enforceable in
         accordance with its terms; (iii) the security interest or Lien
         purporting to be created by any of the Loan Documents will for any
         reason cease to be a valid, perfected lien subject to no other liens
         other than Liens permitted by the terms of this Agreement; or (iv) any
         Loan Document is amended, hypothecated, subordinated, terminated or
         discharged, or if any person is released from any of its covenants or
         obligations under any of the Loan Documents except as permitted by Bank
         in writing; or

  (p)    a Reportable Event (as defined in ERISA) occurs with respect to any
         employee benefit plan maintained by each Corporation for its employees
         other than a Reportable Event caused solely by a decrease in
         employment; or a trustee is appointed by a United States District Court
         to administer any employee benefit plan; or the Pension Benefit
         Guaranty

                                       11

<PAGE>

             Corporation institutes proceedings to terminate any of
             Corporation's employee benefit plans; or

         (q) there shall occur any material event of default including
             specifically, but without limitation, due to non-payment or
             non-performance, under any loan, agreement, document or instrument
             to which Borrower is now or hereinafter a party, or by which any of
             Borrower's property is bound, creating or relating to any
             indebtedness in favor of Bank, and such default or event of default
             is not cured within the period of grace, if any, provided therein.

       6.2   Remedies. If any Event of Default shall occur, Bank may cease
             --------
advancing money hereunder, and/or declare all Obligations to be due and payable
forthwith, whereupon they shall forthwith become due and payable without
presentment, demand, protest, or notice of any kind, all of which are hereby
expressly waived by Borrower, and/or implement any remedies available to Bank
under or in connection with this Agreement or any of the other Loan Documents,
or otherwise as a secured creditor including, without limitation, foreclosing
on, or proceeding against, any security, and exercising any other rights to
security whether under the Loan Documents or any other agreement or as provided
by law, all in such order and in such manner as Bank in its sole discretion may
determine.

       6.3   Setoff. If any Event of Default shall occur, Bank is authorized,
             ------
without notice to Borrower, to offset and apply to all or any part of the
Obligations all moneys, credits and other property of any nature whatsoever of
Borrower now or at any time hereafter in the possession of, in transit to or
from, under the control or custody of, or on deposit with (whether held by
Borrower individually or jointly with another party), Bank, including but not
limited to certificates of deposit.

       6.4   Default Rate. After the occurrence of an Event of Default, all
             ------------
amounts of principal outstanding as of the date of the occurrence of such Event
of Default shall bear interest at the Default Rate (as defined in the Revolving
Note), in Bank's sole discretion, without notice to Borrower. This provision
does not constitute a waiver of any Events of Default or an agreement by Bank to
permit any late payments whatsoever.

       6.5   Late Payment Penalty. If any payment is not paid when due (whether
             --------------------
by acceleration or otherwise after the expiration of applicable notice grace and
cure periods, if any), Borrower agrees to pay to Bank a late payment fee equal
to the greater of Thirty-Five Dollars ($35.00) or seven percent (7%) of the
payment amount then due.

       6.6   No Remedy Exclusive. No remedy set forth herein is exclusive of any
             -------------------
other available remedy or remedies, but each is cumulative and in addition to
every other remedy available under this Agreement, the Loan Documents or as may
be now or hereafter existing at law, in equity or by statute. Borrower waives
any requirement of marshalling of assets which may be secured by any of the Loan
Documents.

       6.7   Effect of Termination. The termination of this Agreement shall not
             ---------------------
affect any rights of either party or any obligation of either party to the
other, arising prior to the effective date of such termination, and the
provisions hereof shall continue to be fully operative until all transactions
entered into, rights created or Obligations incurred prior to such termination
have been fully disposed of, concluded or liquidated. The security interest,
lien and rights granted to Bank hereunder and under the Loan Documents shall
continue in full force and effect, notwithstanding the termination of this
Agreement or the fact that no Loans are outstanding to Borrower, until all of
the obligations, have been paid in full.

Section 7.   Conditions Precedent.
             --------------------

                                       12

<PAGE>

         7.1 Conditions to Initial Loans. Bank shall have no obligation to make
             ---------------------------
or advance any Revolving Loan until Borrower has delivered to Bank at or before
the closing date, in form and substance satisfactory to Bank:

             (a) Executed Revolving Note.

             (b) A corporate resolution of each Corporation regarding the
authorization of the transactions contemplated hereby in form satisfactory to
Bank.

             (c) A Closing Certificate of each Corporation regarding the
certification each of Corporation's Articles of Incorporation, Code of
Regulations, directors and officers.

             (d) A Good Standing Certificate for each Corporation issued by the
Secretary of State of the jurisdiction of its incorporation.

             (e) Intentionally Omitted.

             (f) Executed Security Agreement of each Corporation in the form of
Exhibit 8.4 attached hereto.
-----------

             (g) All appropriate financing statements (Form UCC-1) and consents
or waivers of landlords, warehousemen and mortgagees, as requested by Bank.

             (h) Intentionally Omitted.

             (i) Intentionally Omitted.

             (j) UCC searches, tax lien and litigation searches, insurance
certificates, notices or other document which Bank may require to reflect,
perfect or protect Bank's first priority lien in the Collateral and all other
property pledged to secure the Obligations and to fully consummate this
transaction.

             (k) All requisite releases of liens, termination statements and
satisfactions of mortgages necessary to release all liens and encumbrances
against the Collateral and any other property pledged to secure the Revolving
Loans and all requisite waivers and subordination agreements, in a form
satisfactory to Bank, to be executed and delivered by each Corporation's
creditors, landlords and mortgagees which are necessary to grant Bank a first
lien in the Collateral, including but not limited to all Inventory and Equipment
of each Corporation.

             (l) The Origination Fee and Loan Documentation Fee have been paid
in full.

             (m) A Certificate of Insurance as described in Section 4.5 hereof.

             (n) The monthly Borrowing Base Certificate referred to in Section
7.2(d), if applicable.

             (o) A Subordination Agreement with respect to any subordinated
indebtedness, in form and substance satisfactory to Bank.

                                       13

<PAGE>

             (p) Bank shall have received to its reasonable satisfaction from
Corporation, an accounts receivable report, equipment list, inventory list and
leases and other information regarding the Collateral, together with such other
financial information requested by Bank to evidence compliance with the
financial covenants set forth herein.

             (q) Such additional documentation, certifications, information and
materials as Bank may reasonably request.

     7.2     Conditions to Each Revolving Loan. On the date of each Revolving
             ----------------------------------
Loan, the following statements in subparagraphs (a) through (c) below shall be
true and the documents required by subparagraph (d) below shall be required:

             (a) All of the representations and warranties contained herein and
in the Loan Documents shall be correct in all material respects as though made
on such date;

             (b) No event shall have occurred and be continuing, or would result
from such Loan, which constitutes an Event of Default, or would constitute an
Event of Default but for the requirement that notice be given of lapse of time
or both;

             (c) The aggregate unpaid principal amount of the Revolving Loans
after giving effect to such Revolving Loan shall not violate the lending limits
set forth in Section 2.1 of this Agreement; and

             (d) Corporation shall provide Bank with the monthly Borrowing Base
Certificate.

             The acceptance by Borrower of the proceeds of each Revolving Loan
shall be deemed to constitute a representation and warranty by Borrower that the
conditions in Section 7.2 of this Agreement, other than those that have been
waived in writing by Bank, have been satisfied. Borrower authorizes Bank to make
distributions of loan proceeds to any one or more of them.

Section 8.   Miscellaneous Provisions.
             ------------------------

     8.1     Definitions. Certain terms are defined in the context of this
             -----------
Agreement. The terms hereinafter set forth, not defined in the context, shall
have the following meanings:

         "Affiliate" means, (a) any Person which, directly or indirectly, is in
control of, is controlled by or is under common control with, Borrower, or (b)
any person who is a shareholder, director, officer or employee (i) of Borrower
or (ii) of any Person described in the preceding clause (a). A Person will be
deemed to control another Person if such Person possesses, directly or
indirectly, the power to (a) vote ten percent (10%) or more of the voting equity
of such other Person, or (b) direct or cause the direction of the management and
policies of such other Person, whether through voting securities, by contract or
otherwise.

         "Eligible Accounts" means at any time, all of each Corporation's
Accounts (as "Accounts" is defined in the Uniform Commercial Code as in effect
from time to time in the state of Borrower's organization) which contain selling
terms and conditions acceptable to Bank. The net amount of any Eligible Account
against which Borrower may borrow shall exclude all returns, discounts, credits,
and offsets of any nature. Unless otherwise agreed to by Bank in writing,
Eligible Accounts do not include:

         (a) Accounts with respect to which the Account Debtor is employee or
             agent of Borrower.

         (b) Accounts with respect to which the Account Debtor is a subsidiary
             of, or affiliated with Borrower or its shareholders, officers, or
             directors.

                                       14

<PAGE>

              (c)  Accounts with respect to which goods are placed on
                   consignment, guaranteed sale, or other terms by reason of
                   which the payment by the Account Debtor may be conditional.

              (d)  Accounts with respect to which the Account Debtor is not a
                   resident of the United States, except to the extent such
                   Accounts are supported by insurance, bonds or other
                   assurances satisfactory to Lender.

              (e)  Accounts with respect to which Borrower is or may become
                   liable to the Account Debtor for goods sold or services
                   rendered by the Account Debtor to Borrower.

              (f)  Accounts which are subject to dispute, counterclaim or
                   setoff.

              (g)  Accounts with respect to which the goods have not been
                   shipped or delivered, or the services have not been rendered,
                   to the Account Debtor.

              (h)  Accounts with respect to which Lender, in its sole
                   discretion, deems the creditworthiness or financial condition
                   of the Account Debtor to be unsatisfactory.

              (i)  Accounts of any Account Debtor who has filed or has had filed
                   against it a petition in bankruptcy or an application for
                   relief under any provision of any state or federal
                   bankruptcy, insolvency, or debtor-in-relief acts; or who has
                   had appointed a trustee, custodian, or receiver for the
                   assets of such Account Debtor; or who has made an assignment
                   for the benefit of creditors or has become insolvent or fails
                   generally to pay its debts (including its payrolls) as such
                   debts become due.

              (j)  Accounts with respect to which the Account Debtor is the
                   United States government or any department or agency of the
                   United States.

              (k)  Accounts which have not been paid in full within under 90
                   days from the invoice date. The entire balance of any Account
                   of any single Account Debtor will be ineligible whenever the
                   portion of the Account which has not been paid within under
                   90 days from the invoice date is in excess of 50.00% of the
                   total amount outstanding on the Account.

              "Account Debtor" means the Person who is obligated on an account
receivable.

              "Eligible Inventory" means at any time, all of each Corporation's
Inventory as defined below except:

              (a)  Inventory which is not owned by such Corporation free and
                   clear of all security interests, liens, encumbrances, and
                   claims of third parties.

              (b)  Inventory which Bank, in its sole discretion, deems to be
                   obsolete, unsalable, damaged, defective or unfit for further
                   processing.

              (c)  Work in progress.

              (d)  Components.

              (e)  Inventory stored outside of Ohio with Bank's consent.

                                       15

<PAGE>

          "Environmental Laws" means all federal, state, local and foreign laws
relating to pollution or protection of the environment, including laws relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial toxic or hazardous substances or wastes
into the environment (including without limitation ambient air, surface water,
ground water or land), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
or wastes, and any and all regulations, codes, plans, orders, decrees,
judgments, injunctions, notices or demand letters issued, entered promulgated or
approved thereunder.

          "ERISA" means the Federal Employee Retirement Income Security Act of
1974.

          "Indebtedness" means (a) all items (except items of capital stock,
capital surplus, general contingency reserves, retained earnings, deferred
income taxes, amounts attributable to minority interests, if any) which in
accordance with generally accepted accounting principles would be included in
determining total liabilities on a consolidated basis as shown on the liability
side of a balance sheet as at the date as of which Indebtedness is to be
determined, (b) all indebtedness secured by any mortgage, pledge, lien or
conditional sale or other title retention agreement to which any property or
asset owned or held is subject, whether or not the indebtedness secured thereby
will have been assumed (excluding non-capitalized leases which may amount to
title retention agreements but including capitalized leases), and (c) all
indebtedness of others which Borrower or any Subsidiary of Borrower has directly
or indirectly guaranteed, endorsed (otherwise than for collection or deposit in
the ordinary course of business), discounted or sold with recourse or agreed
(contingently or otherwise) to purchase or repurchase or otherwise acquire, or
in respect of which Borrower or any Subsidiary of Borrower has agreed to apply
or advance funds (whether by way of loan, stock purchase, capital contribution
or otherwise) or otherwise to become directly or indirectly liable.

          "Inventory" means all of each Corporation's raw materials, work in
process, finished goods, merchandise, parts and supplies, of every kind and
description, and goods held for sale or lease or furnished under contracts of
service in which such Corporation now has or hereafter acquires any right,
whether held by such Corporation or others, and all documents of title,
warehouse receipts, bills of lading, and all other documents of every type
covering all or any part of the foregoing. Inventory includes inventory
temporarily out of such Corporation's custody or possession and all returns on
Accounts.

          "Lien" means any security interest, mortgage, pledge, assignment, lien
or other encumbrance of any kind, including interests of vendors or lessors
under conditional sale contracts and capitalized leases.

          "Loan Documents" means the Agreement, the Revolving Note, the Security
Agreements, and every other document or agreement executed by any party
evidencing or securing any of the Obligations; and "Loan Document" means any one
of the Loan Documents.

          "Loan" means the Revolving Loans.

          "Obligation(s)" is used in its most comprehensive sense and includes,
without limitation, all loans, advances, debts, indebtedness, liabilities and
obligations (including, principal, interest, late charges, collection costs,
attorneys' fees and the like) of Borrower owed to Bank and/or any affiliate of
Bank, of every kind, nature and description, whether now existing or hereafter
arising, either created by Borrower alone or together with another or others, or
acquired by Bank or any affiliate of Bank, by purchase, assignment or otherwise,
and whether direct or indirect, primary or as guarantor or surety, secured or
unsecured, absolute or contingent, liquidated or unliquidated, whenever and
however arising, whether evidenced by note, draft, application for letter of
credit or otherwise, and any renewals, amendments, modifications, restatements
of or substitutes therefor. The term "Obligations" shall include, but not be

                                       16

<PAGE>

limited to, all indebtedness owed by Borrower to Bank by reason of credit
extended or to be extended under the Agreement, the Revolving Note, the other
Loan Documents and any other document or instrument related to any of the
foregoing. It is Borrower's express intention that the term "Obligations" shall
include, but not be limited to, all present Obligations of Borrower to Bank,
shall extend to all future Obligations of Borrower to Bank, whether or not such
Obligations are increased, reduced or entirely extinguished and thereafter
increased, reduced or reincurred, whether or not such Obligations are related to
the indebtedness identified above by class, type or kind and whether or not such
Obligations are specifically contemplated by Borrower and Bank as of the date
hereof.

     "Permitted Liens" has the meaning assigned thereto as set forth in Section
3.9 of the Agreement.

     "Person" means and includes an individual, corporation, partnership,
limited liability company, limited liability partnership, trust, unincorporated
organization or association and a government or any department or agency
thereof.

     "Prime Rate" means the rate of interest per annum announced to be its prime
rate from time to time by Bank at its principal office in Akron, Ohio whether or
not Bank will at times lend to borrowers at lower rates of interest or, if there
is no such prime rate, then its base rate or such other rate as may be
substituted by Bank for the prime rate.

     "Related Person" shall mean any Person who controls, is controlled by or is
under common control with Borrower.

     "Security Agreement" means each Security Agreement of even date herewith by
and between each Corporation and Bank securing the Obligations.

     "Subsidiary" means any corporation of which each Corporation directly or
indirectly owns or controls at the time outstanding stock having under ordinary
circumstances (not depending on the happening of a contingency) voting power to
elect a majority of the board of directors of said corporation.

     8.2 Miscellaneous. This Agreement, the exhibits and the other Loan
         -------------
Documents are the complete agreement of the parties hereto and supersede all
previous understandings relating to the subject matter hereof. This Agreement
may be amended only in writing signed by the party against whom enforcement of
the amendment is sought. This Agreement may be executed in counterparts. If any
part of this Agreement is held invalid, the remainder of this Agreement shall
not be affected thereby. This Agreement is and is intended to be a continuing
agreement and shall remain in full force and effect until the Revolving Loans
are finally and irrevocably paid in full and the Line of Credit Facility is
terminated. Time is of the essence in this Agreement and the Loan Documents.

     8.3 Waiver by Borrower. Borrower waives notice of non-payment, demand,
         ------------------
presentment, protest or notice of protest of any Accounts or other Collateral,
and all other notices (except those notices specifically provided for in this
Agreement); consents to any renewals or extensions of time of payment thereof;
and generally waives any and all suretyship defenses and defenses in the nature
thereof.

     8.4 Binding Effect. This Agreement shall be binding upon and inure to the
         --------------
benefit of the respective legal representatives, successors and assigns of the
parties hereto; however, Borrower may not assign any of their rights or delegate
any of their obligations hereunder. Bank (and any subsequent assignee) may
transfer and assign this Agreement or may assign partial interests or
participation in the Revolving Loans to other persons. Bank may disclose to all
prospective and actual assignees and

                                       17

<PAGE>

participants all financial, business and other information about Borrower which
Bank may possess at any time.

     8.5  Security. The Obligations are secured as provided herein, in the
          --------
Security Agreement, in the Loan Documents and in each other document or
agreement which by its terms secures the repayment or performance of the
Obligations.

     8.6  Survival. All representations, warranties, covenants and agreements
          --------
made by Borrower herein and in the Loan Documents shall survive the execution
and delivery of this Agreement, the Loan Documents and the issuance of the
Revolving Note.

     8.7  Delay or Omission. No delay or omission on the part of Bank in
          -----------------
exercising any right, remedy or power arising from any Event of Default shall
impair any such right, remedy or power or any other right, remedy or power or be
considered a waiver of any right, remedy or power of any Event of Default nor
shall the action or omission to act by Bank upon the occurrence of any Event of
Default impair any right, remedy or power arising as a result thereof or affect
any subsequent Event of Default of the same or different nature.

     8.8  Notices. Any notices under or pursuant to this Agreement shall be
          -------
deemed duly sent when delivered in hand, by recognized overnight courier service
or when mailed by registered or certified mail, return receipt requested,
addressed as follows:

                  To Borrower:    OurPet's Company
                                  Virtu Company
                                  Steven Tsengas
                                  Evangelia S. Tsengas
                                  1300 East Street
                                  Fairport, Ohio  44077
                                  Attention: Dr. Steven Tsengas, Chairman/CEO

                  To Bank:        FirstMerit Bank, N.A.
                                  7800 Reynolds Road
                                  Mentor, Ohio  44060
                                  Attention:  Ken Sinha, Vice President

     Either party may change such address by sending notice of the change to the
other party.

     8.9  No Partnership. Nothing contained herein or in any of the Loan
          --------------
Documents is intended to create or shall be construed to create any relationship
between Bank and Borrower other than as expressly set forth herein or therein
and shall not create any joint venture, partnership or other relationship.

     8.10 Indemnification. If after receipt of any payment of all or part of the
          ---------------
Obligations, Bank is for any reason compelled to surrender such payment to any
person or entity, because such payment is determined to be void or voidable as a
preference, impermissible setoff, or diversion of trust funds, or for any other
reason, this Agreement shall continue in full force and effect and Borrower
shall be liable to, and shall indemnify, save and hold Bank, its officers,
directors, attorneys and employees harmless of and from the amount of such
payment surrendered. The provisions of this Section shall be and remain
effective notwithstanding any contrary action which may have been taken by Bank
in reliance on such payment, and

                                       18

<PAGE>

any such contrary action so taken shall be without prejudice to Bank's rights
under this Agreement and shall be deemed to have been conditioned upon such
payment becoming final, indefeasible and irrevocable. In addition, Borrower
shall indemnify, defend, save and hold Bank, its officers, directors, attorneys
and employees harmless of, from and against all claims, demands, liabilities,
judgments, losses, damages, costs and expenses, joint or several (including all
accounting fees and attorneys' fees reasonably incurred), that Bank or any such
indemnified party may incur arising out of this Agreement, any of the Loan
Documents, any Environmental Laws, or any act taken by Bank hereunder except for
the willful misconduct or gross negligence of such indemnified party. The
provisions of this Section shall survive the termination of this Agreement.

     8.11 Further Assurances. Borrower shall, at its sole cost and expense, upon
          ------------------
Bank's request, promptly execute and deliver or cause to be executed and deliver
to Bank any and all documents, instruments, agreements and information deemed
necessary by Bank, in Bank's reasonable discretion, to perfect or to continue
the perfection of Bank's liens created hereunder, to facilitate the collection
of the Collateral or otherwise to give effect to or carry out the terms or
intent of this Agreement or any of the other Loan Documents.

     8.12 Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement, the
          -------------------------------------------------
Revolving Note, and the other Loan Documents shall be governed by the domestic
laws of the State of Ohio. Borrower agrees that the state and federal courts in
or having jurisdiction over Lake County, Ohio, has exclusive jurisdiction over
all matters arising out of this Agreement, and that service of process in any
such proceeding shall be effective if mailed to Borrower at the address
described in the Notices section of this Agreement. BANK AND BORROWER EACH
HEREBY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     8.13 Joint and Several Liability. If there is more than one Borrower
          ---------------------------
hereunder, the obligations, covenants, promises, warranties and representations
of each Borrower shall be joint and several. Each natural person executing this
Note as a Borrower acknowledges and agrees that he or she (a) was a co-applicant
to the Loan and intends to be bound as a co-obligor hereunder, and shall not be
deemed to be an accommodation party or surety with respect to the Loan, (b) has
the joint right to control the distribution of proceeds of the Loan, and (c) has
a direct economic interest in the success of the Corporation and shall benefit
from the Loan.

     8.14 Confession of Judgment. Each Borrower hereby irrevocably authorizes
          ----------------------
any attorney-at-law to appear for Borrower in any court of record in the State
of Ohio, or in any other state or territory of the United States, admit the
maturity of the Obligations after the same become due either by lapse of time or
acceleration of maturity or otherwise, and waive the issuing and service of
process and confess judgment against Borrower for the amount then appearing due,
together with costs of suit, and thereupon to waive all errors and all rights of
appeal and stay of execution. Each Borrower expressly (a) waives a conflict of
interest as to any attorney retained by the holder of the Obligations to confess
judgment against Borrower upon the Obligations, and (b) consents to the attorney
retained by the holder hereof receiving a legal fee from such holder for legal
services rendered for confessing judgment against Borrower upon the Obligations.
A copy of this Agreement, certified by the holder hereof, may be filed in each
such proceeding in place of filing the original as a warrant of attorney. The
authority and power to appear for and enter judgment against Borrower, or
additional exercises thereof or by any imperfect exercise thereof, shall not be
extinguished by any judgment entered pursuant thereto. This warrant of attorney
to confess judgment shall remain in full force and effect so long as any portion
of the Obligations remains unpaid, and any confession of judgment and subsequent
vacation thereof shall not constitute termination of this warrant of attorney to
confess judgment.

                                       19

<PAGE>

     IN WITNESS WHEREOF, Borrower and Bank have executed this Agreement by their
duly authorized officers as of the date first above written.

     WARNING - BY SIGNING THIS PAPER, YOU GIVE UP YOUR RIGHT TO
     ----------------------------------------------------------
     NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME, A COURT
     ----------------------------------------------------------
     JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR
     ----------------------------------------------------
     KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
     ----------------------------------------------------------
     FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
     ----------------------------------------------------------
     CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE
     ----------------------------------------------------------
     ON HIS PART TO COMPLY WITH THE AGREEMENT OR ANY OTHER CAUSE.
     -----------------------------------------------------------

                                        OURPET'S COMPANY, a Colorado corporation

                                        By: /s/ Steven Tsengas
                                            ------------------------------------
                                                Steven Tsengas,
                                                Chairman, President and CEO

     WARNING - BY SIGNING THIS PAPER, YOU GIVE UP YOUR RIGHT TO
     ----------------------------------------------------------
     NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME, A COURT
     ----------------------------------------------------------
     JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR
     ----------------------------------------------------
     KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
     ----------------------------------------------------------
     FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
     ----------------------------------------------------------
     CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE
     ----------------------------------------------------------
     ON HIS PART TO COMPLY WITH THE AGREEMENT OR ANY OTHER CAUSE.
     -----------------------------------------------------------
                                        VIRTU COMPANY, an Ohio corporation

                                        By: /s/ Steven Tsengas
                                            ------------------------------------
                                                Steven Tsengas,
                                                Chairman, President and CEO

     WARNING - BY SIGNING THIS PAPER, YOU GIVE UP YOUR RIGHT TO
     ----------------------------------------------------------
     NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME, A COURT
     ----------------------------------------------------------
     JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR
     ----------------------------------------------------
     KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
     ----------------------------------------------------------
     FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
     ----------------------------------------------------------
     CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE
     ----------------------------------------------------------
     ON HIS PART TO COMPLY WITH THE AGREEMENT OR ANY OTHER CAUSE.
     -----------------------------------------------------------

                                            /S/ Steven Tsengas
                                            ------------------------------------
                                            STEVEN TSENGAS, Individually

                               20

<PAGE>

     WARNING - BY SIGNING THIS PAPER, YOU GIVE UP YOUR RIGHT TO
     ----------------------------------------------------------
     NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME, A COURT
     ----------------------------------------------------------
     JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR
     ----------------------------------------------------
     KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
     ----------------------------------------------------------
     FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
     ----------------------------------------------------------
     CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE
     ----------------------------------------------------------
     ON HIS PART TO COMPLY WITH THE AGREEMENT OR ANY OTHER CAUSE.
     -----------------------------------------------------------

                                             /s/ Evangelia S. Tsengas
                                             -----------------------------------
                                             EVANGELIA S. TSENGAS, Individually

                                             FIRSTMERIT BANK, N.A.,
                                             a national banking association

                                             By: /s/ Ken Sinha
                                                 -------------------------------
                                                 Ken Sinha, Vice President

                                                                          "Bank"

                                       21

<PAGE>

                                 REVOLVING NOTE

$1,500,000.00                                                  Lake County, Ohio
                                                               December 31, 2001

     FOR VALUE RECEIVED, the undersigned, OurPet's Company, a Colorado
corporation, Virtu Company, an Ohio corporation, Steven Tsengas, individually,
and Evangelia S. Tsengas, individually, (collectively, "Borrower"), jointly and
severally, promise to pay immediately ON DEMAND, to the order of FirstMerit
Bank, N.A. ("Bank") at 7800 Reynolds Road, Mentor, Ohio 44060, or at such other
place as Bank shall designate, the principal sum of ONE MILLION FIVE HUNDRED
THOUSAND AND 00/100 DOLLARS ($1,500,000.00), or the aggregate unpaid principal
amount of all Revolving Loans made by Bank to Borrower pursuant to Section 2.1
of the Credit Agreement, as hereinafter defined, whichever is less, in lawful
money of the United States of America, with interest at a variable rate per
annum equal to One Percent (1.0%) greater than the Prime Rate (as defined in the
Loan Agreement). The rate of interest shall increase and decrease automatically
and without notice on the same date that the Prime Rate increases or decreases
to that rate which shall be greater than the new Prime Rate by the amount stated
above in this paragraph. Interest shall be payable monthly on the first (1st)
day of each month commencing on February 1, 2002, and continuing on the first
(1st) day of each and every month thereafter, and on demand. As used herein,
"Credit Agreement" means the Credit Agreement dated of even date herewith,
between Borrower and Bank, as the same may from time to time be restated,
amended or otherwise modified. Capitalized terms used herein shall have the
meanings ascribed to them in the Loan Agreement.

     Borrower shall pay interest on the unpaid principal amount of each
Revolving Loan from time to time outstanding, from the date of such Loan until
the payment in full thereof, at the rates per annum and at the times as set
forth above; provided, however, that interest on any principal portion which is
not paid when due shall be payable on demand.

     The principal balance and all accrued and unpaid interest thereon and any
and all other amounts due hereunder or under the Credit Agreement or the Loan
Documents (as defined in the Credit Agreement) shall be due and payable
immediately on demand.

     The amount of Revolving Loans, and payments of principal and interest
thereon, shall be shown on the records of Bank by such method as Bank may
generally employ; provided, however, that failure to make any such entry shall
in no way detract from Borrower's obligations under this Note.

     If this Note shall not be paid at maturity, whether such maturity occurs by
reason of demand, lapse of time, by operation of any provision for acceleration
of maturity contained in the Loan Agreement, or otherwise, the principal hereof
and the unpaid interest thereon shall bear interest, until paid, at a rate per
annum which shall be equal to seven percent (7%) above the rate

                                  Page 1 of 5

<PAGE>

otherwise then payable (the "Default Rate"). All payments of principal of and
interest on this Note shall be made in immediately available funds at Bank's
address indicated above or at such other place as the holder hereof shall
designate. In the event of a failure to pay interest or principal, within ten
(10) days after the same becomes due, Bank may collect and Borrower agree to pay
a late charge of an amount equal to seven percent (7%) of the amount of such
late payment or thirty-five dollars ($35.00), whichever is greater.

     This Note is the Revolving Note referred to in the Credit Agreement.
Reference is made to the Credit Agreement for a description of any additional
rights of the holder with respect to this Note, and other terms and conditions
upon which this Note is issued.

     Borrower may prepay all or any portion of this Note in part at any time
without premium or penalty.

     All payments received by Bank under this Note will be applied first to
payment of amounts advanced by Bank on behalf of Borrower or which may be due
for insurance, taxes and attorneys' fees or other charges to be paid by Borrower
pursuant to the Credit Agreement and the Loan Documents, then to accrued
interest on this Note, then to principal.

     In no event will the interest rate on this Note exceed the highest rate
permissible under any law which a court of competent jurisdiction will, in a
final determination, deem applicable hereto. In the event that a court
determines that Bank has received interest and other charges under this Note in
excess of the highest permissible rate applicable hereto, such excess will be
deemed received on account of, and will automatically be applied to reduce the
amounts due to Bank from Borrower under this Note, other than interest, and the
provisions hereof will be deemed amended to provide for the highest permissible
rate. If there are no such amounts outstanding, Bank will refund to Borrower
such excess.

     Borrower and all endorsers, sureties, guarantors and other persons liable
on this Note hereby: (a) waive presentment for payment, demand, notice of
dishonor, protest, notice of protest and all other demands and notices in
connection with the delivery, performance and enforcement of this Note; (b)
consent to one or more renewals, supplements, modifications, restatements,
amendments or extensions of this Note; (c) agree to any substitution, exchange,
addition or release of any such property or the addition or release of any party
or person primarily or secondarily liable herein; (d) agree that Bank or holder
shall not be required first to institute any suit, or to exhaust its remedies
against any Borrower or any other person or party in order to enforce payment of
this Note; (e) consent to any extension, rearrangement, renewal or postponement
of time of payment of this Note and to any other indulgence with respect hereto
without notice, consent or consideration to any of them; and (f) agree that,
notwithstanding the occurrence of any of the foregoing, except as to any such
person expressly released in writing by Bank or holder, they shall be and remain
jointly and severally, directly and primarily, liable for all sums due hereunder
and under any and all of the Loan Documents.

     This Note may not be changed orally, but only by an instrument in writing.

                                   Page 2 of 5

<PAGE>

     To the extent that any of the terms and provisions of this Note are
inconsistent with the terms and provisions of the Credit Agreement, the terms
and provisions of this Note shall control.

     If any of the terms or provisions of this Note shall be deemed to be
unenforceable or invalid, the enforceability or validity of the remaining terms
and provisions shall not be affected.

     This Note is being delivered in, is intended to be performed in, will be
construed and enforceable in accordance with, and be governed by the internal
laws of, the State of Ohio without regard to principles of conflict of laws.
Borrower agree that the State and Federal courts in, or having jurisdiction
over, Lake County, Ohio or any other court in which Bank institutes proceedings
will have exclusive jurisdiction over all matters arising out of this Note, and
that service of process in any such proceeding will be effective if mailed to
Borrower at the address described in the Notices section of the Credit
Agreement. EACH BORROWER HEREBY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY MATTERS
ARISING OUT OF THIS NOTE.

     If there is more than one Borrower hereunder, the obligations, covenants,
promises, warranties and representations of each Borrower shall be joint and
several. Each natural person executing this Note as a Borrower acknowledges and
agrees that he or she (a) was a co-applicant to the Loan and intends to be bound
as a co-obligor hereunder, and shall not be deemed to be an accommodation party
or surety with respect to the Loan, (b) has the joint right to control the
distribution of proceeds of the Loan, and (c) has a direct economic interest in
the success of the corporate co-obligor and shall benefit from the extension of
credit under this Note.

     Borrower hereby irrevocably authorizes any attorney-at-law to appear for
Borrower in any court of record in the State of Ohio, or in any other state or
territory of the United States, admit the maturity of this Note after the same
becomes due either by lapse of time or acceleration of maturity or otherwise,
and waive the issuing and service of process and confess judgment against
Borrower for the amount then appearing due, together with costs of suit, and
thereupon to waive all errors and all rights of appeal and stay of execution.
Borrower expressly (a) waives a conflict of interest as to any attorney retained
by the holder of this Note to confess judgment against Borrower upon this Note,
and (b) consents to the attorney retained by the holder hereof receiving a legal
fee from such holder for legal services rendered for confessing judgment against
Borrower upon this Note. A copy of this Note, certified by the holder hereof,
may be filed in each such proceeding in place of filing the original as a
warrant of attorney. The authority and power to appear for and enter judgment
against Borrower, or additional exercises thereof or by any imperfect exercise
thereof, shall not be extinguished by any judgment entered pursuant thereto.
This warrant of attorney to confess judgment shall remain in full force and
effect so long as any portion of the indebtedness evidenced hereby remains
unpaid, and any confession of judgment and subsequent vacation thereof shall not
constitute termination of this warrant of attorney to confess judgment.

                                   Page 3 of 5

<PAGE>

--------------------------------------------------------------------------------
"WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT
OR ANY OTHER CAUSE."
--------------------------------------------------------------------------------

                                        OURPET'S COMPANY, a Colorado corporation

                                        By: /s/ Steven Tsengas
                                            ------------------------------------
                                                Steven Tsengas,
                                                Chairman, President and CEO

--------------------------------------------------------------------------------
"WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT
OR ANY OTHER CAUSE."
--------------------------------------------------------------------------------

                                        VIRTU COMPANY, an Ohio corporation

                                        By: /s/ Steven Tsengas
                                            ------------------------------------
                                                Steven Tsengas,
                                                Chairman, President and CEO

--------------------------------------------------------------------------------
"WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT
OR ANY OTHER CAUSE."
--------------------------------------------------------------------------------

                                        /s/ Steven Tsengas
                                        ----------------------------------------
                                        STEVEN TSENGAS, Individually

                                   Page 4 of 5

<PAGE>

--------------------------------------------------------------------------------
"WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT
OR ANY OTHER CAUSE."
--------------------------------------------------------------------------------

                                        /s/ Evangelia S. Tsengas
                                        ----------------------------------------
                                        Evangelia S.TSENGAS, Individually

                                  Page 5 of 5

<PAGE>

                               SECURITY AGREEMENT

Lake County, Ohio                                              December 31, 2001

       VIRTU company, an Ohio corporation, located at 1300 East Street,
Fairport, Ohio 44077 (hereinafter the "Debtor") hereby assigns to FIRSTMERIT
BANK, N.A., an national banking association, located at 7800 Reynolds Road,
Mentor, Ohio 44060 (hereinafter the "Secured Party") as collateral and grants to
Secured Party a security interest in and to all items of property described in
paragraph 2 of this Security Agreement (the "Agreement").

1.    OBLIGATIONS: This assignment of collateral and grant of security interest
      shall secure all loans, advances, indebtedness and each and every other
      obligation or liability of Debtor owed to Secured Party, however created,
      of every kind and description, whether now existing or hereafter arising
      and whether direct or indirect, primary or as guarantor or surety,
      absolute or contingent, due or to become due, liquidated or unliquidated,
      matured or unmatured, participated in whole or in part, created by trust
      agreement, lease, overdraft, agreement, or otherwise, whether or not
      secured by additional collateral, whether originated with Secured Party
      or owed to others and acquired by Secured Party by purchase, assignment
      or otherwise, and including, without limitation, all loans, advances,
      indebtedness and each and every other obligation or liability arising
      under the Credit Agreement of even date herewith by and between the
      Debtor, other Co-Borrowers and the Secured Party, the Revolving Note in
      the amount of One Million Five Hundred Thousand and 00/100 Dollars
      ($1,500,000.00) of even date herewith executed by Debtor and the other
      Co-Borrowers in favor of Secured Party, letters of credit now or hereafter
      issued by Secured Party for the benefit of or at the request of Debtor,
      all obligations to perform or forbear from performing acts, and all
      agreements, instruments and documents evidencing, guarantying or securing
      or otherwise executed in connection with any of the foregoing, together
      with any amendments, modifications, extensions and restatements thereof,
      and all expenses and attorneys' fees incurred or other sums disbursed by
      Secured Party under this Agreement or any other document, instrument or
      agreement related to any of the foregoing (collectively the
      "Obligations").

2.    COLLATERAL: The collateral hereby assigned and in which a security
      interest is granted includes that collateral now existing and hereafter
      arising or acquired by Debtor, regardless of where it is located, and is
      defined as follows (together with all proceeds and products thereof and
      all additions and accession thereto, replacements thereof, supporting
      obligations therefor, guaranties thereof, insurance or condemnation
      proceeds thereof, documents related thereto, all sales of accounts
      constituting a right to payment therefrom, all tort or other claims
      against third parties arising out of damage thereto or destruction
      thereof, all property received wholly or partly in trade or exchange
      thereof, all fixtures attached or appurtenant thereto, all leases thereof,
      and all rents, revenues, issues, profits and proceeds arising from the
      sale, lease, license, encumbrance, collection or any other temporary or
      permanent disposition thereof, or any other interest therein,
      collectively, the "Collateral"):

<PAGE>

       (a) all Accounts, all Inventory, all Equipment, all General Intangibles,
           all Investment Property;
       (b) all instruments, chattel paper, electronic chattel paper, documents,
           securities, moneys, cash, letters of credit, letter of credit rights,
           promissory notes, warrants, dividends, distributions, commercial tort
           claims, contracts, agreements, contract rights or other property,
           owned by Debtor or in which Debtor has an interest, including but not
           limited to, those which are now or hereafter in the possession or
           control of Secured Party or in transit by mail or carrier to or in
           the possession of any third party acting on behalf of Secured Party,
           without regard to whether Secured Party received the same in pledge,
           for safekeeping, as agent for collection or transmission or otherwise
           or whether Secured Party had conditionally released the same, and the
           proceeds thereof, all rights to payment from, and all claims against
           Secured Party, and any deposit accounts of Debtor with Secured Party,
           including all demand, time, savings, passbook or other accounts and
           all deposits therein; and

       (c) all assets and personal property now owned or hereafter acquired; all
           now owned and hereafter acquired inventory, equipment, fixtures,
           goods, accounts, chattel paper, documents, instruments, general
           intangibles, supporting obligations, software, and all rents, issues,
           profits, products and proceeds thereof, wherever any of the foregoing
           is located.
3.     DEFINITIONS: Capitalized terms not otherwise defined in this Agreement
       shall have the meanings attributed thereto in the applicable version of
       the Uniform Commercial Code adopted in the jurisdiction in the state in
       which Debtor is organized, or where appropriate, as the case may be, the
       jurisdiction in which the collateral is located, as such definitions may
       be enlarged or expanded from time to time by legislative amendment
       thereto or judicial decision (the "Uniform Commercial Code"). As used
       herein the following capitalized terms will have the following meanings:

       (a) "Accounts" means all accounts, accounts receivable,
           health-care-insurance receivables, credit card receivables, contract
           rights, instruments, documents, chattel paper, tax refunds from
           federal, state or local governments and all obligations in any form
           including without limitation those arising out of the sale or lease
           of goods or the retention of services by Debtor; all guaranties,
           letters of credit and other security and supporting obligations for
           any of the above; all merchandise resumed to or reclaimed by Debtor,
           and all books and records (including computer programs, tapes and
           data processing software) evidencing an interest in or relating to
           the above; all winnings in a lottery or other game of chance operated
           by a governmental unit or person licensed to operate such game by a
           governmental unit and all rights to payment therefrom; and all
           "Accounts" as same is now or hereafter defined in the Uniform
           Commercial Code.
       (b) "Equipment" means all goods (excluding inventory or consumer goods),
           machinery, machine tools, equipment, fixtures, office equipment,
           furniture, furnishings, motors, motor vehicles, tools, dies, parts,
           jigs, goods (including, without limitation, each of the items of
           equipment set forth on any schedule which is either now or in the
           future attached to Secured Party's copy of this Agreement), and all
           attachments, accessories,

                                       2

<PAGE>

           accessions, replacements, substitutions, additions and improvements
           thereto, and all supplies used or useful in connection therewith, and
           all "Equipment" as same is now or hereafter defined in the Uniform
           Commercial Code.
       (c) "General Intangibles" means all general intangibles, choses in
           action, causes of action, obligations or indebtedness owed to Debtor
           from any source whatsoever, payment intangibles, software and all
           other intangible personal property of every kind and nature (other
           than Accounts) including without limitation patents, trademarks,
           trade names, service marks, copyrights and applications for any of
           the above, and goodwill, trade secrets, permits, licenses,
           franchises, rights under agreements, tax refund claims, and all books
           and records including all computer programs, disks, tapes, printouts,
           customer lists, credit files and other business and financial
           records, and the equipment containing any such information, and all
           "General Intangibles" as same is now or hereafter defined in the
           Uniform Commercial Code.
       (d) "Inventory" means all goods, supplies, wares, merchandises and other
           tangible personal property including raw materials, work in process,
           supplies and components, and finished goods, whether held for sale or
           lease, or furnished or to be furnished under any contract for
           service, or used or consumed in business, and also including products
           of and accessions to inventory, packing and shipping materials, and
           all documents of title, whether negotiable or non-negotiable,
           representing any of the foregoing, and all "Inventory" as same is now
           or hereafter defined in the Uniform Commercial Code.
       (e) "Investment Property" means a security, whether certificated or
           uncertificated, security entitlement, securities account, commodity
           contract or commodity account and all "Investment Property" as same
           is now or hereafter defined in the Uniform Commercial Code.

4.     WARRANTIES AS TO DEBTOR: Debtor hereby represents and warrants to Secured
       Party as follows:

       (a) That it is a corporation with its principal place of business located
           at the address otherwise set forth herein, is organized in the State
           of Ohio and its charter number is 933375.
       (b) Debtor further warrants that its exact legal name is set forth in the
           initial paragraph of this Agreement, and its Taxpayer I.D. No. is
           34-1831105.
       (c) Exhibit A, attached to this Agreement and incorporated herein by
           reference, lists the locations of any and all of the Collateral of
           Debtor.

5.     WARRANTIES AS TO COLLATERAL: Debtor hereby represents and warrants to
       Secured Party that:

       (a) Except for the security interest hereby granted, Debtor is, and as to
           any property which at any time forms a part of the Collateral, shall
           be, the sole owner of, with good and marketable title in, each and
           every item of the Collateral, or otherwise shall have the full right
           and power to grant a security interest in the Collateral, free from
           any lien, security interest or encumbrance whatsoever, except for the
           capital leases set forth in Exhibit B

                                       3

<PAGE>

           attached hereto and incorporated herein by reference and the loans
           of Debtor with U.S. Small Business Administration (the "Permitted
           Liens");
       (b) Each item of Collateral is, and shall be, valid, and all information
           furnished to Secured Party with regard thereto is, and shall be,
           accurate and correct in all respects when furnished;
       (c) None of the Collateral shall be sold, assigned, transferred,
           discounted, hypothecated, or otherwise subjected to any lien,
           encumbrance or security interest except for the Permitted Liens, and
           that Debtor shall defend such Collateral and each and every part
           thereof against claims of all persons at any time claiming such
           Collateral or claiming any interest therein adverse to Secured Party;
       (d) The provisions of this Agreement are sufficient to create in favor of
           Secured Party a valid and continuing lien on, and first security
           interest in, the types of Collateral in which a security interest may
           be perfected by the filing of UCC Financing Statements, and when such
           UCC Financing Statements are filed in the requisite filing offices,
           and the requisite filing fees are paid, such filings shall be
           sufficient to perfect such security interest (other than Equipment
           affixed to real property so as to become fixtures);
       (e) If any of the Collateral is or will be attached to real estate in
           such a manner as to become a fixture under applicable state law, that
           said real estate is not encumbered in any way, or if said real estate
           is encumbered, Debtor will secure from the lien holder or the party
           in whose favor it is or will become so encumbered a written
           acknowledgment and subordination to the security interest hereby
           granted or a written disclaimer of any interest in the Collateral, in
           such form as is acceptable to Secured Party.
       (f) The financial statements of Debtor dated October 31, 2001, and
           heretofore submitted, to the Secured Party are true and correct and
           there are no material adverse changes in the conditions, financial or
           otherwise, of Debtor since the date of said financial statements.

6.     DEBTOR'S RESPONSIBILITIES: Debtor covenants with, and warrants to,
       Secured Party that Debtor shall:

       (a) Furnish to Secured Party, in writing, a current list of all
           Collateral for the purpose of identifying the Collateral and,
           further, execute and deliver such supplemental instruments,
           documents, agreements and chattel paper, in the form of assignments
           or otherwise, as Secured Party shall require for the purpose of
           confirming and perfecting, and continuing the perfection of, Secured
           Party's security interest in any or all of such Collateral, or as is
           necessary to provide Secured Party with control over the Collateral
           or any portion thereof;
       (b) At its expense and upon request of Secured Party, furnish copies of
           invoices issued by Debtor in connection with the Collateral, furnish
           certificates of insurance evidencing insurance on Collateral, furnish
           proof of payment of taxes and assessments on Collateral, make
           available to Secured Party, any and all of Debtor's books, records,
           written memoranda, correspondence, purchase orders, invoices and
           other instruments or writings that in any way evidence or relate to
           the Collateral;
       (c) Keep the Collateral insured at all times against risks of loss or
           damage by fire (including so-called extended coverage), theft and
           such other casualties including collision in the case of any motor
           vehicle, all in such amounts, under such forms of policies, upon such

                                        4

<PAGE>

            terms, for such periods and written by such companies or
            underwriters as is satisfactory to Secured Party. In all cases
            losses shall be payable to Secured Party and any surplusage shall be
            paid to Debtor. All policies of insurance shall provide for at least
            thirty (30) days prior written notice of cancellation to Secured
            Party. Should Debtor at any time fail to purchase or maintain
            insurance, pay taxes, or pay for any expense, incident or such
            insurance, Secured Party may, but is not obligated to, pay such
            taxes, order and pay for such necessary items of preservation,
            maintenance or protection of the Collateral, and Debtor agrees to
            reimburse Secured Party for all expenses incurred under this
            paragraph;

      (d)   Pay all taxes or assessments imposed on or with respect to the
            Collateral;

      (e)   Keep all of the Collateral in good condition and repair, protecting
            it from weather and other contingencies which might adversely affect
            it as secured hereunder;

      (f)   Notify Secured Party immediately in writing of any information which
            Debtor has or may receive which might in any way adversely affect
            the value of the Collateral or the rights of Secured Party with
            respect thereto;

      (g)   Notify Secured Party promptly, in writing, of any change in the
            location of the Collateral or of any place of business or mailing
            addresses or the establishment of any new place of business or
            mailing address;

      (h)   Pay all costs of filing any financing, continuation or termination
            statements with respect to the security interest created hereby;

      (i)   Upon the occurrence of an Event of Default or breach of any
            provision of this Security Agreement, pay all expenses and
            reasonable attorneys' fees of Secured Party; and Debtor agrees that
            said expenses and fees shall be secured under this Agreement;

      (j)   Maintain possession of all Collateral at the location disclosed to
            Secured Party and not to remove the Collateral from that location;

      (k)   Not sell, contract to sell, lease, encumber, or otherwise transfer
            the Collateral (other than inventory) until the Obligations have
            been paid and performed, Debtor acknowledging nonetheless that
            Secured Party has a security interest in the proceeds of such
            Collateral.

      (l)   Take any other and further action necessary or desirable as
            requested by Secured Party to grant Secured Party control over the
            Collateral, as "control" is defined in the applicable version of the
            Uniform Commercial Code, including without limitation (i) executing
            and/or authenticating any assignments or third party agreements;
            (ii) delivering, or causing the delivery of, any of the Collateral
            to the possession of Secured Party; (iii) obtaining written
            acknowledgments of the lien of Secured Party and agreements of
            subordination to such lien from third parties in possession of the
            Collateral in a form acceptable to Secured Party. Debtor consents to
            and hereby authorizes any third party in an authenticated record or
            agreement between Debtor, Secured Party, and the third party,
            including but not limited to depository institutions, securities
            intermediaries, and issuers of letters of credit or other support
            obligations, to accept direction from Secured Party regarding the
            maintenance and disposition of the Collateral and the products and
            proceeds thereof, and to enter into agreements with Secured Party
            regarding same, without further consent of the Debtor.

                                       5

<PAGE>

7.    ACCOUNTS RECEIVABLE: Debtor hereby agrees that, notwithstanding the fact
      that all or any part of the Obligations is not matured and Debtor is
      current in payment according to the tenor of the Obligations, Secured
      Party shall have the absolute right to take any one or more of the
      following actions:

      (a)   Secured Party may serve written notice on Debtor instructing Debtor
            to deliver to Secured Party all subsequent payments on accounts
            receivable which Debtor shall do until notified otherwise;

      (b)   Secured Party may notify the account debtor(s) of its security
            interest and instruct such account debtor(s) to make further
            payments on such accounts to Secured Party instead of to Debtor;
            and,

      (c)   Secured Party may serve written notice upon Debtor that all
            subsequent billings or statements of account rendered to any account
            debtor shall bear a notation directing the account debtor(s) to make
            payment directly to Secured Party. Any payment received by Secured
            Party pursuant to this paragraph shall be retained in a separate
            non-interest bearing account as security for the payment and
            performance of all Obligations of Debtor.

8.    POWER OF ATTORNEY: Debtor hereby makes, constitutes and appoints Secured
      Party its true and lawful attorney in fact to act, with full power of
      substitution, with respect to the Collateral in any transaction, legal
      proceeding, or other maker in which Secured Party is acting pursuant to
      this Agreement, including, but not limited to executing, authentication
      and/or filing on its behalf: (i) UCC Financing Statements reflecting the
      lien of Secured Party upon the Collateral and any other documents
      necessary or desirable to perfect or otherwise continue the security
      interest granted herein; and (ii) any third party agreements or
      assignments to grant Secured Party control over the Collateral, including
      but not limited to third party agreements between Debtor, Secured Party,
      and depository institutions, securities intermediaries, and issuers of
      letters of credit or other support obligations, which third party
      agreements direct the third party to accept direction from Secured Party
      regarding the maintenance and disposition of the Collateral and the
      products and proceeds thereof.

9.    EVENTS OF DEFAULT: Any of the following events shall be an "Events of
      Default" hereunder: (a) an event of default occurs under any agreement,
      instrument or document evidencing, guarantying, securing or otherwise
      executed or delivered in connection with any of the Obligations, as "Event
      of Default" shall be defined therein; (b) any representation or warranty
      of Debtor set forth in this Agreement or in any agreement, instrument,
      document, certificate or financial statement evidencing, guarantying,
      securing or otherwise related to, this Agreement or any other Obligation
      shall be materially inaccurate or misleading; (c) Debtor shall fail to
      maintain in force the insurance required in this Agreement or in any
      agreement, instrument, document, certificate or financial statement
      evidencing, guarantying, securing or otherwise related to, this Agreement
      or any other Obligation, or Debtor shall otherwise default in the
      observance or performance of any covenant or agreement set forth in any of
      the foregoing for a period of thirty (30) days; (d) any failure to submit
      to Secured Party current financial information upon request; (e) the
      creation of any lien (except a lien to

                                       6

<PAGE>

      Secured Party) on, the institution of any garnishment proceedings by
      attachment, levy or otherwise against, the entry of a judgment against, or
      the seizure of, any of the property of Debtor or any endorser or guarantor
      of the Obligations, including, without limitation, any property deposited
      with Secured Party; (f) an assignment for the benefit of the creditors of,
      or the commencement of any bankruptcy, receivership, insolvency,
      reorganization or liquidation proceedings by or against Debtor; (g) the
      death or dissolution of Debtor or any endorser or guarantor of the
      Obligations; (h) in the judgment of Secured Party, any adverse change
      occurs in the existing or prospective financial condition of Debtor that
      may affect the ability of Debtor to repay any of the Obligations, or
      Secured Party deems itself insecure; or (i) any sale, conveyance or
      transfer of any rights in the Collateral securing the Obligations, or any
      destruction, loss or damage of or to the Collateral in any material
      respect.

10.   REMEDIES. Upon the occurrence and until the waiver of an Event of Default,
      Secured Party may, without further notice to Debtor, at Secured Party's
      option, declare any note and all of the Obligations to become due and
      payable in its aggregate amount; provided that the Obligations shall be
      accelerated automatically and immediately if the Event of Default is a
      filing under the Bankruptcy Code. Secured Party may resort to the rights
      and remedies of a secured party under the Uniform Commercial Code,
      including but not limited to the right of a secured party to (a) enter any
      premises of Debtor, with or without legal process and take possession of
      the Collateral and remove it and any records pertaining thereto and/or
      remain on such premises and use it for the purpose of collecting,
      preparing and disposing of the Collateral; (b) ship, reclaim, recover,
      store, finish, maintain and repair the Collateral; and (c) sell the
      Collateral at public or private sale. Debtor will be credited with the net
      proceeds of such sale only when they are actually received by Secured
      Party, and any requirement of reasonable notice of any disposition of the
      Collateral will be satisfied if such notice is sent to Debtor ten (10)
      days prior to such disposition. Debtor will, upon request, assemble the
      Collateral and any records pertaining thereto and make them available at a
      place designated by Secured Party. Secured Party may use, in connection
      with any assembly or disposition of the Collateral, any trademark, trade
      name, trade style, copyright, patent right, trade secret or technical
      process used or utilized by Debtor. No remedy set forth herein is
      exclusive of any other available remedy or remedies, but each is
      cumulative and in addition to every other remedy given under this
      Agreement, and of the Obligations, or now or hereafter existing at law or
      in equity or by statute. Secured Party may proceed to protect and enforce
      its rights by an action at law, in equity or by any other appropriate
      proceedings. No failure on the part of Secured Party to enforce any of the
      rights hereunder shall be deemed a waiver of such rights or of any Event
      of Default and no waiver of any Event of Default shall be deemed to be a
      waiver of any subsequent Event of Default.

11.   MISCELLANEOUS PROVISIONS:

      (a)   All rights of Secured Party shall inure to the benefit of its
            successors and assigns and all obligations of Debtor shall bind the
            heirs, executors, administrators, successors and assigns of Debtor.

      (b)   Debtor acknowledges and agrees that, in addition to the security
            interests granted herein, Secured Party has a banker's lien and
            common law right of set-off in and to

                                       7

<PAGE>

            Debtor's deposits, accounts and credits held by Secured Party and
            Secured Party may apply or set-off such deposits or other sums
            against the Obligations upon the occurrence of an Event Default as
            set forth in paragraph 10 of this Agreement.

      (c)   This Agreement contains the entire Agreement of the parties and no
            oral Agreement whatsoever, whether made contemporaneously herewith
            or hereafter shall amend, modify or otherwise affect the terms of
            this Agreement.

      (d)   All rights and liabilities hereunder shall be governed and limited
            by and construed in accordance with the laws of the state in which
            the Debtor is organized.

      (e)   Any provision herein which may prove limited or unenforceable under
            any law or judicial ruling shall not affect the validity or
            enforceability of the remainder of this Agreement.

      (f)   Debtor hereby authorizes Secured Party to file a copy of this
            Agreement as a Financing Statement with appropriate county and state
            government authorities necessary to perfect Secured Party's security
            interest in the Collateral as set forth herein. Debtor hereby
            further authorizes Secured Party to file UCC Financing Statements on
            behalf of Debtor and Secured Party with respect to the Collateral.

SECURED PARTY:                                 DEBTOR:

FIRSTMERIT BANK, N.A.                          VIRTU COMPANY,
                                               an Ohio corporation

By: /s/ Ken Sinha  V.P.                        By: /s/ Steven Tsengas
    ---------------------------                    -----------------------------
      Ken Sinha                                    Steven Tsengas,
      Vice President                               Chairman, President and CEO

                                       8

<PAGE>

                               SECURITY AGREEMENT

Lake County, Ohio                                              December 31, 2001

       OURPET'S COMPANY, a Colorado corporation, located at 1300 East Street,
Fairport, Ohio 44077 (hereinafter the "Debtor") hereby assigns to FIRSTMERIT
BANK, N.A., an national banking association, located at 7800 Reynolds Road,
Mentor, Ohio 44060 (hereinafter the "Secured Party") as collateral and grants to
Secured Party a security interest in and to all items of property described in
paragraph 2 of this Security Agreement (the "Agreement").

1.     OBLIGATIONS:  This assignment of collateral and grant of security
       interest shall secure all loans, advances, indebtedness and each and
       every other obligation or liability of Debtor owed to Secured Party,
       however created, of every kind and description, whether now existing or
       hereafter arising and whether direct or indirect, primary or as guarantor
       or surety, absolute or contingent, due or to become due, liquidated or
       unliquidated, matured or unmatured, participated in whole or in part,
       created by trust agreement, lease, overdraft, agreement, or otherwise,
       whether or not secured by additional collateral, whether originated with
       Secured Party or owed to others and acquired by Secured Party by
       purchase, assignment or otherwise, and including, without limitation, all
       loans, advances, indebtedness and each and every other obligation or
       liability arising under the Credit Agreement of even date herewith by and
       between the Debtor, other Co-Borrowers and the Secured Party, the
       Revolving Note in the amount of One Million Five Hundred Thousand and
       00/100 Dollars ($1,500,000.00) of even date herewith executed by Debtor
       and the other Co-Borrowers in favor of Secured Party, letters of credit
       now or hereafter issued by Secured Party for the benefit of or at the
       request of Debtor, all obligations to perform or forbear from performing
       acts, and all agreements, instruments and documents evidencing,
       guarantying or securing or otherwise executed in connection with any of
       the foregoing, together with any amendments, modifications, extensions
       and restatements thereof, and all expenses and attorneys' fees incurred
       or other sums disbursed by Secured Party under this Agreement or any
       other document, instrument or agreement related to any of the foregoing
       (collectively the "Obligations").

2.     COLLATERAL:  The collateral hereby assigned and in which a security
       interest is granted includes that collateral now existing and hereafter
       arising or acquired by Debtor, regardless of where it is located, and is
       defined as follows (together with all proceeds and products thereof and
       all additions and accession thereto, replacements thereof, supporting
       obligations therefor, guaranties thereof, insurance or condemnation
       proceeds thereof, documents related thereto, all sales of accounts
       constituting a right to payment therefrom, all tort or other claims
       against third parties arising out of damage thereto or destruction
       thereof, all property received wholly or partly in trade or exchange
       thereof, all fixtures attached or appurtenant thereto, all leases
       thereof, and all rents, revenues, issues, profits and proceeds arising
       from the sale, lease, license, encumbrance, collection or any other
       temporary or permanent disposition thereof, or any other interest
       therein, collectively, the "Collateral"):

<PAGE>

       (a) all Accounts, all Inventory, all Equipment, all General Intangibles,
           all Investment Property;
       (b) all instruments, chattel paper, electronic chattel paper, documents,
           securities, moneys, cash, letters of credit, letter of credit rights,
           promissory notes, warrants, dividends, distributions, commercial tort
           claims, contracts, agreements, contract rights or other property,
           owned by Debtor or in which Debtor has an interest, including but not
           limited to, those which are now or hereafter in the possession or
           control of Secured Party or in transit by mail or carrier to or in
           the possession of any third party acting on behalf of Secured Party,
           without regard to whether Secured Party received the same in pledge,
           for safekeeping, as agent for collection or transmission or otherwise
           or whether Secured Party had conditionally released the same, and the
           proceeds thereof, all rights to payment from, and all claims against
           Secured Party, and any deposit accounts of Debtor with Secured Party,
           including all demand, time, savings, passbook or other accounts and
           all deposits therein; and
       (c) all assets and personal property now owned or hereafter acquired; all
           now owned and hereafter acquired inventory, equipment, fixtures,
           goods, accounts, chattel paper, documents, instruments, general
           intangibles, supporting obligations, software, and all rents, issues,
           profits, products and proceeds thereof, wherever any of the foregoing
           is located.

3.     DEFINITIONS: Capitalized terms not otherwise defined in this Agreement
       shall have the meanings attributed thereto in the applicable version of
       the Uniform Commercial Code adopted in the jurisdiction in the state in
       which Debtor is organized, or where appropriate, as the case may be, the
       jurisdiction in which the collateral is located, as such definitions may
       be enlarged or expanded from time to time by legislative amendment
       thereto or judicial decision (the "Uniform Commercial Code"). As used
       herein the following capitalized terms will have the following meanings:

       (a) "Accounts" means all accounts, accounts receivable,
           health-care-insurance receivables, credit card receivables, contract
           rights, instruments, documents, chattel paper, tax refunds from
           federal, state or local governments and all obligations in any form
           including without limitation those arising out of the sale or lease
           of goods or the retention of services by Debtor; all guaranties,
           letters of credit and other security and supporting obligations for
           any of the above; all merchandise resumed to or reclaimed by Debtor,
           and all books and records (including computer programs, tapes and
           data processing software) evidencing an interest in or relating to
           the above; all winnings in a lottery or other game of chance operated
           by a governmental unit or person licensed to operate such game by a
           governmental unit and all rights to payment therefrom; and all
           "Accounts" as same is now or hereafter defined in the Uniform
           Commercial Code.
       (b) "Equipment" means all goods (excluding inventory or consumer goods),
           machinery, machine tools, equipment, fixtures, office equipment,
           furniture, furnishings, motors, motor vehicles, tools, dies, parts,
           jigs, goods (including, without limitation, each of the items of
           equipment set forth on any schedule which is either now or in the
           future attached to Secured Party's copy of this Agreement), and all
           attachments, accessories,

                                       2

<PAGE>

           accessions, replacements, substitutions, additions and improvements
           thereto, and all supplies used or useful in connection therewith, and
           all "Equipment" as same is now or hereafter defined in the Uniform
           Commercial Code.
       (c) "General Intangibles" means all general intangibles, choses in
           action, causes of action, obligations or indebtedness owed to Debtor
           from any source whatsoever, payment intangibles, software and all
           other intangible personal property of every kind and nature (other
           than Accounts) including without limitation patents, trademarks,
           trade names, service marks, copyrights and applications for any of
           the above, and goodwill, trade secrets, permits, licenses,
           franchises, rights under agreements, tax refund claims, and all books
           and records including all computer programs, disks, tapes, printouts,
           customer lists, credit files and other business and financial
           records, and the equipment containing any such information, and all
           "General Intangibles" as same is now or hereafter defined in the
           Uniform Commercial Code.
       (d) "Inventory" means all goods, supplies, wares, merchandises and other
           tangible personal property including raw materials, work in process,
           supplies and components, and finished goods, whether held for sale or
           lease, or furnished or to be furnished under any contract for
           service, or used or consumed in business, and also including products
           of and accessions to inventory, packing and shipping materials, and
           all documents of title, whether negotiable or non-negotiable,
           representing any of the foregoing, and all "Inventory" as same is now
           or hereafter defined in the Uniform Commercial Code.
       (e) "Investment Property" means a security, whether certificated or
           uncertificated, security entitlement, securities account, commodity
           contract or commodity account and all "Investment Property" as same
           is now or hereafter defined in the Uniform Commercial Code.

4.     WARRANTIES AS TO DEBTOR: Debtor hereby represents and warrants to Secured
       Party as follows:

       (a) That it is a corporation with its principal place of business
           located at the address otherwise set forth herein, is organized in
           the State of Colorado and its charter number is   N/A      .
                                                           ---------
       (b) Debtor further warrants that its exact legal name is set forth in the
           initial paragraph of this Agreement, and its Taxpayer I.D. No. is
           34-1480558.
       (c) Exhibit A, attached to this Agreement and incorporated herein by
           reference, lists the locations of any and all of the Collateral of
           Debtor.

5.     WARRANTIES AS TO COLLATERAL: Debtor hereby represents and warrants to
       Secured Party that:

       (a) Except for the security interest hereby granted, Debtor is, and as to
           any property which at any time forms a part of the Collateral, shall
           be, the sole owner of, with good and marketable title in, each and
           every item of the Collateral, or otherwise shall have the full right
           and power to grant a security interest in the Collateral, free from
           any lien, security interest or encumbrance whatsoever except for the
           capital leases set forth in Exhibit B

                                       3

<PAGE>

           attached hereto and incorporated herein by reference and the loans of
           Debtor with U.S. Small Business Administration (the "Permitted
           Liens");
       (b) Each item of Collateral is, and shall be, valid, and all information
           furnished to Secured Party with regard thereto is, and shall be,
           accurate and correct in all respects when furnished;
       (c) None of the Collateral shall be sold, assigned, transferred,
           discounted, hypothecated, or otherwise subjected to any lien,
           encumbrance or security interest except for the Permitted Liens, and
           that Debtor shall defend such Collateral and each and every part
           thereof against claims of all persons at any time claiming such
           Collateral or claiming any interest therein adverse to Secured Party;
       (d) The provisions of this Agreement are sufficient to create in favor of
           Secured Party a valid and continuing lien on, and first security
           interest in, the types of Collateral in which a security interest may
           be perfected by the filing of UCC Financing Statements, and when such
           UCC Financing Statements are filed in the requisite filing offices,
           and the requisite filing fees are paid, such filings shall be
           sufficient to perfect such security interest (other than Equipment
           affixed to real property so as to become fixtures);
       (e) If any of the Collateral is or will be attached to real estate in
           such a manner as to become a fixture under applicable state law, that
           said real estate is not encumbered in any way, or if said real estate
           is encumbered, Debtor will secure from the lien holder or the party
           in whose favor it is or will become so encumbered a written
           acknowledgment and subordination to the security interest hereby
           granted or a written disclaimer of any interest in the Collateral, in
           such form as is acceptable to Secured Party.
       (f) The financial statements of Debtor dated October 31, 2001, and
           heretofore submitted, to the Secured Party are true and correct and
           there are no material adverse changes in the conditions, financial or
           otherwise, of Debtor since the date of said financial statements.

6.     DEBTOR'S RESPONSIBILITIES: Debtor covenants with, and warrants to,
       Secured Party that Debtor shall:

       (a) Furnish to Secured Party, in writing, a current list of all
           Collateral for the purpose of identifying the Collateral and,
           further, execute and deliver such supplemental instruments,
           documents, agreements and chattel paper, in the form of assignments
           or otherwise, as Secured Party shall require for the purpose of
           confirming and perfecting, and continuing the perfection of, Secured
           Party's security interest in any or all of such Collateral, or as is
           necessary to provide Secured Party with control over the Collateral
           or any portion thereof;
       (b) At its expense and upon request of Secured Party, furnish copies of
           invoices issued by Debtor in connection with the Collateral, furnish
           certificates of insurance evidencing insurance on Collateral, furnish
           proof of payment of taxes and assessments on Collateral, make
           available to Secured Party, any and all of Debtor's books, records,
           written memoranda, correspondence, purchase orders, invoices and
           other instruments or writings that in any way evidence or relate to
           the Collateral;
       (c) Keep the Collateral insured at all times against risks of loss or
           damage by fire (including so-called extended coverage), theft and
           such other casualties including collision in the case of any motor
           vehicle, all in such amounts, under such forms of policies, upon such

                                       4

<PAGE>

           terms, for such periods and written by such companies or underwriters
           as is satisfactory to Secured Party. In all cases losses shall be
           payable to Secured Party and any surplusage shall be paid to Debtor.
           All policies of insurance shall provide for at least thirty (30) days
           prior written notice of cancellation to Secured Party. Should Debtor
           at any time fail to purchase or maintain insurance, pay taxes, or pay
           for any expense, incident or such insurance, Secured Party may, but
           is not obligated to, pay such taxes, order and pay for such necessary
           items of preservation, maintenance or protection of the Collateral,
           and Debtor agrees to reimburse Secured Party for all expenses
           incurred under this paragraph;
       (d) Pay all taxes or assessments imposed on or with respect to the
           Collateral;
       (e) Keep all of the Collateral in good condition and repair, protecting
           it from weather and other contingencies which might adversely affect
           it as secured hereunder;
       (f) Notify Secured Party immediately in writing of any information which
           Debtor has or may receive which might in any way adversely affect the
           value of the Collateral or the rights of Secured Party with respect
           thereto;
       (g) Notify Secured Party promptly, in writing, of any change in the
           location of the Collateral or of any place of business or mailing
           addresses or the establishment of any new place of business or
           mailing address;
       (h) Pay all costs of filing any financing, continuation or termination
           statements with respect to the security interest created hereby;
       (i) Upon the occurrence of an Event of Default or breach of any provision
           of this Security Agreement, pay all expenses and reasonable
           attorneys' fees of Secured Party; and Debtor agrees that said
           expenses and fees shall be secured under this Agreement;
       (j) Maintain possession of all Collateral at the location disclosed to
           Secured Party and not to remove the Collateral from that location;
       (k) Not sell, contract to sell, lease, encumber, or otherwise transfer
           the Collateral (other than inventory) until the Obligations have been
           paid and performed, Debtor acknowledging nonetheless that Secured
           Party has a security interest in the proceeds of such Collateral.
       (l) Take any other and further action necessary or desirable as requested
           by Secured Party to grant Secured Party control over the Collateral,
           as "control" is defined in the applicable version of the Uniform
           Commercial Code, including without limitation (i) executing and/or
           authenticating any assignments or third party agreements; (ii)
           delivering, or causing the delivery of, any of the Collateral to the
           possession of Secured Party; (iii) obtaining written acknowledgments
           of the lien of Secured Party and agreements of subordination to such
           lien from third parties in possession of the Collateral in a form
           acceptable to Secured Party. Debtor consents to and hereby authorizes
           any third party in an authenticated record or agreement between
           Debtor, Secured Party, and the third party, including but not limited
           to depository institutions, securities intermediaries, and issuers of
           letters of credit or other support obligations, to accept direction
           from Secured Party regarding the maintenance and disposition of the
           Collateral and the products and proceeds thereof, and to enter into
           agreements with Secured Party regarding same, without further consent
           of the Debtor.

                                       5

<PAGE>

7.     ACCOUNTS RECEIVABLE:  Debtor hereby agrees that, notwithstanding the fact
       that all or any part of the Obligations is not matured and Debtor is
       current in payment according to the tenor of the Obligations, Secured
       Party shall have the absolute right to take any one or more of the
       following actions:

       (a) Secured Party may serve written notice on Debtor instructing Debtor
           to deliver to Secured Party all subsequent payments on accounts
           receivable which Debtor shall do until notified otherwise;
       (b) Secured Party may notify the account debtor(s) of its security
           interest and instruct such account debtor(s) to make further payments
           on such accounts to Secured Party instead of to Debtor; and,
       (c) Secured Party may serve written notice upon Debtor that all
           subsequent billings or statements of account rendered to any account
           debtor shall bear a notation directing the account debtor(s) to make
           payment directly to Secured Party. Any payment received by Secured
           Party pursuant to this paragraph shall be retained in a separate
           non-interest bearing account as security for the payment and
           performance of all Obligations of Debtor.

8.     POWER OF ATTORNEY: Debtor hereby makes, constitutes and appoints Secured
       Party its true and lawful attorney in fact to act, with full power of
       substitution, with respect to the Collateral in any transaction, legal
       proceeding, or other maker in which Secured Party is acting pursuant to
       this Agreement, including, but not limited to executing, authentication
       and/or filing on its behalf: (i) UCC Financing Statements reflecting the
       lien of Secured Party upon the Collateral and any other documents
       necessary or desirable to perfect or otherwise continue the security
       interest granted herein; and (ii) any third party agreements or
       assignments to grant Secured Party control over the Collateral, including
       but not limited to third party agreements between Debtor, Secured Party,
       and depository institutions, securities intermediaries, and issuers of
       letters of credit or other support obligations, which third party
       agreements direct the third party to accept direction from Secured Party
       regarding the maintenance and disposition of the Collateral and the
       products and proceeds thereof.

9.     EVENTS OF DEFAULT: Any of the following events shall be an "Events of
       Default" hereunder: (a) an event of default occurs under any agreement,
       instrument or document evidencing, guarantying, securing or otherwise
       executed or delivered in connection with any of the Obligations, as
       "Event of Default" shall be defined therein; (b) any representation or
       warranty of Debtor set forth in this Agreement or in any agreement,
       instrument, document, certificate or financial statement evidencing,
       guarantying, securing or otherwise related to, this Agreement or any
       other Obligation  shall be materially inaccurate or misleading; (c)
       Debtor shall fail to maintain in force the insurance required in this
       Agreement or in any agreement, instrument, document, certificate or
       financial statement evidencing, guarantying, securing or otherwise
       related to, this Agreement or any other Obligation, or Debtor shall
       otherwise default in the observance or performance of any covenant or
       agreement set forth in any of the foregoing for a period of thirty (30)
       days; (d) any failure to submit to Secured Party current financial
       information upon request; (e) the creation of any lien (except a lien to

                                       6

<PAGE>

          Secured Party) on, the institution of any garnishment proceedings by
          attachment, levy or otherwise against, the entry of a judgment
          against, or the seizure of, any of the property of Debtor or any
          endorser or guarantor of the Obligations, including, without
          limitation, any property deposited with Secured Party; (f) an
          assignment for the benefit of the creditors of, or the commencement of
          any bankruptcy, receivership, insolvency, reorganization or
          liquidation proceedings by or against Debtor; (g) the death or
          dissolution of Debtor or any endorser or guarantor of the Obligations;
          (h) in the judgment of Secured Party, any adverse change occurs in the
          existing or prospective financial condition of Debtor that may affect
          the ability of Debtor to repay any of the Obligations, or Secured
          Party deems itself insecure; or (i) any sale, conveyance or transfer
          of any rights in the Collateral securing the Obligations, or any
          destruction, loss or damage of or to the Collateral in any material
          respect.

10.       REMEDIES. Upon the occurrence and until the waiver of an Event of
          Default, Secured Party may, without further notice to Debtor, at
          Secured Party's option, declare any note and all of the Obligations to
          become due and payable in its aggregate amount; provided that the
          Obligations shall be accelerated automatically and immediately if the
          Event of Default is a filing under the Bankruptcy Code. Secured Party
          may resort to the rights and remedies of a secured party under the
          Uniform Commercial Code, including but not limited to the right of a
          secured party to (a) enter any premises of Debtor, with or without
          legal process and take possession of the Collateral and remove it and
          any records pertaining thereto and/or remain on such premises and use
          it for the purpose of collecting, preparing and disposing of the
          Collateral; (b) ship, reclaim, recover, store, finish, maintain and
          repair the Collateral; and (c) sell the Collateral at public or
          private sale. Debtor will be credited with the net proceeds of such
          sale only when they are actually received by Secured Party, and any
          requirement of reasonable notice of any disposition of the Collateral
          will be satisfied if such notice is sent to Debtor ten (10) days prior
          to such disposition. Debtor will, upon request, assemble the
          Collateral and any records pertaining thereto and make them available
          at a place designated by Secured Party. Secured Party may use, in
          connection with any assembly or disposition of the Collateral, any
          trademark, trade name, trade style, copyright, patent right, trade
          secret or technical process used or utilized by Debtor. No remedy set
          forth herein is exclusive of any other available remedy or remedies,
          but each is cumulative and in addition to every other remedy given
          under this Agreement, and of the Obligations, or now or hereafter
          existing at law or in equity or by statute. Secured Party may proceed
          to protect and enforce its rights by an action at law, in equity or by
          any other appropriate proceedings. No failure on the part of Secured
          Party to enforce any of the rights hereunder shall be deemed a waiver
          of such rights or of any Event of Default and no waiver of any Event
          of Default shall be deemed to be a waiver of any subsequent Event of
          Default.

11.       MISCELLANEOUS PROVISIONS:

         (a) All rights of Secured Party shall inure to the benefit of its
             successors and assigns and all obligations of Debtor shall bind
             the heirs, executors, administrators, successors and assigns of
             Debtor
         (b) Debtor acknowledges and agrees that, in addition to the security
             interests granted herein, Secured Party has a banker's lien and
             common law right of set-off in and to

                                       7

<PAGE>

           Debtor's deposits, accounts and credits held by Secured Party and
           Secured Party may apply or set-off such deposits or other sums
           against the Obligations upon the occurrence of an Event Default as
           set forth in paragraph 10 of this Agreement.
       (c) This Agreement contains the entire Agreement of the parties and no
           oral Agreement whatsoever, whether made contemporaneously herewith or
           hereafter shall amend, modify or otherwise affect the terms of this
           Agreement.
       (d) All rights and liabilities hereunder shall be governed and limited by
           and construed in accordance with the laws of the state in which the
           Debtor is organized.
       (e) Any provision herein which may prove limited or unenforceable under
           any law or judicial ruling shall not affect the validity or
           enforceability of the remainder of this Agreement.
       (f) Debtor hereby authorizes Secured Party to file a copy of this
           Agreement as a Financing Statement with appropriate county and state
           government authorities necessary to perfect Secured Party's security
           interest in the Collateral as set forth herein. Debtor hereby further
           authorizes Secured Party to file UCC Financing Statements on behalf
           of Debtor and Secured Party with respect to the Collateral.

SECURED PARTY:                             DEBTOR:

FIRSTMERIT BANK, N.A.                      OURPET'S COMPANY
                                           a Colorado corporation

By: /s/ Ken Sinha V.P                      By: /s/ Steven Tsengas
------------------------                   -----------------------
Ken Sinha                                    Steven Tsengas,
Vice President                               Chariman, President and CEO

                                       8

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