Document:

[EXHIBIT 10.7]
[LOAN AGREEMENT WITH SOUTHTRUST BANK, N.A.]

                               PROMISSORY NOTE

<TABLE>
<CAPTION>
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Principal        Loan Date     Maturity      Loan No.    Call/Coll    Account    Officer   Initials
<S>             <C>           <C>           <C>         <C>         <C>         <C>       <C>
$205,327.00     03-12-2002    03-13-2005    0000250498    001/590   0955232160     LH4
---------------------------------------------------------------------------------------------------
          References in the shaded area are for Lender's use only and do not limit the
            applicability of this document to any particular loan or item.  Any item
             containing "***" has been omitted due to text length limitations.
---------------------------------------------------------------------------------------------------
</TABLE>

Borrower: PET MED EXPRESS, IN.           Lender: SouthTrust Bank
          (SSN:65-0680967)                       West Palm Beach
          1441 SW 29th Ave.                      (Comm Loans - Ft. Lauderdale)
          POMPANO BEACH, FL 33069                225 N. Federal Highway
                                                 (8th Floor)
                                                 Pompano Beach, FL 33062
                                                 (561) 712-1001
==============================================================================

Principal                  Initial             Date of
Amount:   $205,327.00      Rate:   5.750%      Note:   March 12, 2002

PROMISE TO PAY. PET MED EXPRESS, INC. ("Borrower") promises to pay to
SouthTrust Bank ("Lender"), or order, in lawful money of the United
States of America, the principal amount of Two Hundred Five Thousand
Three Hundred Twenty-seven & 00/100 Dollars ($295,327.00), together
with interest on the unpaid principal balance from March 12, 2002,
until paid in full.

PAYMENT. Subject to any payment changes resulting from changes in the
Index, Borrower will pay this loan in 35 principal payments of
$5,703.52 each and one final principal and interest payment of
$5,729.31. Borrower's first principal payment is due April 13, 2002,
and all subsequent principal payments are due on the same day of each
month after that. In addition, Borrower will pay regular monthly
payments of all accrued unpaid interest due as of each payment date,
beginning April 13, 2002, with all subsequent interest payments to be
due on the same day of each month after that. Borrower's final payment
due March 13, 2005, will be for all principal and all accrued interest
not yet paid. Unless otherwise agreed or required by applicable law,
payments will be applied first to accrued unpaid interest, then to
principal, and any remaining amount to any unpaid collection costs and
late charges. The annual interest rate for this Note is computed on a
365/360 basis; that is, by applying the ratio of the annual interest
rate over a year of 360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal balance
is outstanding. Borrower will pay Lender at Lender's address shown
above or at such other place as Lender may designate in writing.

VARIABLE INTEREST RATE:  The interest rate on this Note is subject to
change from time to time based on changes in an index which is the
"base rate." The term "base rate" means the rate of interest
designated by the Lender periodically as its Base Rate (the "Index").
The Index is not necessarily the lowest rate charged by Lender on its
loans and is set by Lender in its sole discretion. If the Index
becomes unavailable during the term of this loan, Lender may designate
a substitute index after notifying Borrower. Lender will tell Borrower
the current Index rate upon Borrower's request. The interest rate
change will not occur more often than each day. The frequency of the
rate change is further defined below in paragraph titled "VARIABLE
RATE CHANGE FREQUENCY". Borrower understands that Lender may make
loans based on other rates as well. The Index currently is 4.750% per
annum. The interest rate to be applied to the unpaid principal balance
of this Note will be at a rate of 1.000 percentage point over the
Index, resulting in an initial rate of 5.750% per annum.  NOTICE:
Under no circumstances will the effective rate of interest on this
Note be more than the maximum rate allowed by law.

PREPAYMENT. 	Borrower may pay without penalty all or a portion of
the amount owed earlier than it is due. Early payments will not,
unless agreed to by Lender in writing, relieve Borrower of Borrower's
obligation to continue to make payments under the payment schedule.
Rather, early payments will reduce the principal balance due and may
result in Borrower's making fewer payments.  Borrower agrees not to
send Lender payments marked "paid in full", "without recourse" or
similar language. If Borrower sends such a payment, Lender may accept
it without losing any of the Lender's rights under this Note, and
Borrower will remain obligated to pay any further amount owed to
Lender. All written communications concerning disputed amounts,
including any check or other payment instrument that indicates that
the payment constitutes "payment in full" of the amount owed or that
is tendered with other conditions or limitations or as full
satisfaction of a disputed amount must be mailed or delivered to:
SouthTrust Bank, West Palm Beach (Comm Loans - Ft. Lauderdale), 225 N
Federal Highway (8th Floor), Pompano Beach, FL 33062

LATE CHARGE. If payment is 10 days or more late, Borrower will be
charged 5.000% of the unpaid portion of the regularly scheduled
payment of $10.00, whichever is greater.

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon
final maturity, at Lender's option, and if permitted by applicable
law, Lender may add any unpaid accrued interest to principal and such
sum will bear interest therefrom until paid at the rate provided in
this Note. Upon default, the total sum due under this Note will bear
interest from the date of acceleration of maturity at the variable
interest rate on this Note.

DEFAULT. Each of the following shall constitute an event of default
("Event of Default") under this Note:

   Payment Default. Borrower fails to make any payment when due
   under this Note.

   Other Defaults. Borrower fails to comply with or to perform any
   other term, obligation, covenant or condition contained in this
   Note or in any of the related documents or to comply with or to
   perform any term, obligation, covenant or condition contained in
   any other agreement between Lender and Borrower.

   Default in Favor of Third Parties. Borrower or any Grantor
   defaults under any loan, extension of credit, security agreement,
   purchase or sales agreement, or any other agreement, in favor of
   any other creditor or person that may materially affect any of
   Borrower's property or Borrower's ability to repay this Note or
   perform Borrower's obligations under this Note or any of the
   related documents.

   False statements. Any warranty, representation or statement made
   or furnished to Lender by Borrower or on Borrower's behalf under
   this Note or the related documents is false or misleading in any
   material respect, either now or at the time made or furnished or
   becomes false or misleading at any time thereafter.

   Insolvency. The dissolution or termination of Borrower's
   existence as a going business, the insolvency of Borrower, the
   appointment of a receiver for any part of Borrower's property,
   any assignment for the benefit of creditors, any type of creditor
   workout, or the commencement of any proceeding under any
   bankruptcy or insolvency laws by or against Borrower.

   Creditor or Forfeiture Proceedings. Commencement of foreclosure
   or forfeiture proceedings, whether by judicial proceeding, self-
   help, repossession or any other method, by the creditor of
   Borrower or by any governmental agency against any collateral
   securing the loan. This includes a garnishment of any Borrower's
   accounts, including deposit accounts, with Lender. However, this
   Event of Default shall not apply if there is a good faith dispute
   by Borrower as to the validity or reasonableness of the claim
   which is the basis of the creditor or forfeiture proceeding and
   if Borrower gives Lender written notice of the creditor or
   forfeiture proceeding and deposits with Lender monies or a surety
   bond for the creditor or forfeiture proceeding, in an amount
   determined by Lender, in its sole discretion, as being an
   adequate reserve or bond for the dispute.

   Events Affecting Guarantor. Any of the preceding events occurs
   with respect to any Guarantor of any of the indebtedness or any
   Guarantor dies or becomes incompetent, ore revokes or disputes
   the validity of, or liability under, any guaranty of the
   indebtedness evidenced by this Note. In the event of a death,
   Lender at its option, may, but shall not be required to, permit
   the Guarantor's estate to assume unconditionally the obligations
   arising under the guaranty in a manner satisfactory to Lender,
   and, in doing so, cure any Event of Default.

   Change in Ownership. Any change in ownership of twenty-five
   percent (25%) or more of the common stock of Borrower.

   Adverse Change. A material adverse change occurs in Borrower's
   financial condition, or Lender believes the prospect of payment
   or performance of this Note is impaired.

   Insecurity. Lender in good faith believes itself insecure.

   Cure provisions. If any default, other than a default in payment
   is curable and if Borrower has not been given a notice of a
   breach of the same provision of this Note within the preceding
   twelve (12) months, it may be cured (and no event of default will
   have occurred) if Borrower, after receiving written notice from
   Lender demanding cure of such default: (1) cures the default
   within fifteen (15) days; or (2) if the cure requires more than
   fifteen (15) days, immediately initiates steps which Lender deems
   in Lender's sole discretion to be sufficient to cure the default
   and thereafter continues and completes all reasonable and
   necessary steps sufficient to produce compliance as soon as
   reasonably practical.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest
immediately due, and then Borrower will pay that amount.

<PAGE>  Exhibit 10.7 - Pg. 1

                              PROMISSORY NOTE
Loan No: 0000250498             (Continued)                    Page 2
______________________________________________________________________

ATTORNEY'S FEES; EXPENSES. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower will pay Lender
the amount of these costs and expenses, which includes, subject to any
limits under applicable law, Lender's reasonable attorneys' fees and
Lender's legal expenses whether or not there is a lawsuit, including
reasonable attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay
or injunction), and appeals. If not prohibited by applicable law,
Borrower also will pay any court costs, in addition to all other sums
provided by law.

JURY WAIVER. Lender and Borrower hereby waive the right to any jury
trial in any action, proceeding, or counterclaim brought by either
Lender or Borrower against the other. (Initial Here /s/M.A.)

GOVERNING LAW. This Note will be governed by, construed and enforced
in accordance with federal law and the laws of the State of Florida.
This Note has been accepted by Lender in the State of Florida.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender
reserves a right of setoff in all Borrower's accounts with Lender
(whether checking, savings, or some other account). This includes all
accounts Borrower holds jointly with someone else and all accounts
Borrower may open in the future. However, this does not include any
IRA or Keogh accounts, or any trust accounts for which setoff would be
prohibited by law. Borrower authorizes Lender, to the extent permitted
by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts, and, at Lender's
option, to administratively freeze all such accounts to allow Lender
to protect Lender's charge and setoff rights provided in this
paragraph.

COLLATERAL. Borrower acknowledges this Note is secured by  SEE EXHIBIT
"A" ATTACHED HERETO AND MADE A PART THEREOF.

CHANGE IN OWNERSHIP. Any aggregate change of twenty-five (25%) or more
in the ownership of the common stock or other ownership interest in
Borrower in any period of 12 consecutive months shall constitute a
default under this loan.

FINANCIAL STATEMENTS. Until this loan is paid in full, Borrower will
furnish to Lender, as soon as available but in any event within 120
days after the end of each fiscal year, Borrower's balance sheet and
statements of income, cash flows and changes in capital for the fiscal
year just ended, setting forth in comparative form the corresponding
figures for the prior year, together with accompanying schedules and
footnotes. If the financial statements were compiled or certified by a
public accountant, Borrower will also furnish Lender the accountant's
letter accompanying financial statements. Borrower will furnish to
Lender, as soon as available but in any event within 30 days after the
end of the first three quarters of Borrower's fiscal year, Borrower's
balance sheet and profit and loss statement for the quarter just
ended. All financial reports provided to Lender will be certified in
writing  by the chief executive officer, chief financial officer,
managing partner or comparable financial officer of Borrower to be
true and complete to the best of his or her knowledge and belief and
to have been prepared in accordance with generally accepted accounting
principles applied on a basis consistent with the financial statements
previously furnished to Lender or, if not so prepared, setting forth
the manner in which the financial statements depart therefrom.
Borrower will furnish Lender, within 30 days after Lender's request
therefore, a copy of the federal income tax return most recently filed
by Borrower. Borrower will cause each guarantor or endorser of this
loan to furnish to Lender, within 30 days after Lender's request
therefore, a current financial statement of such guarantor or endorser
in form acceptable to Lender and a copy of the federal income tax
return most recently filed by such guarantor or endorser.

OBLIGATION TO DEVELOP BUSINESS PLAN. Before approving this loan,
Lender required Borrower to furnish
Lender with financial statements and other information concerning the
financial history and the future prospects of Borrower's business.
Lender requested and reviewed that information solely to enable it to
make a decision whether to extend credit. Borrower understands that
Lender has not necessarily approved Borrower's business plan and has
not undertaken any duty or obligation to advise borrower on business
matters now or in the future. Lender is not a financial or business
advisor, and Borrower will not look to Lender for business advice.
Lender's role is solely that of a Lender, and Borrower's relationship
with Lender is that of debtor and creditor. Lender expressly disclaims
any fiduciary or other duties or obligations to Borrower except those
expressly provided in the written loan documents signed by Lender.

NO ORAL AGREEMENTS. Lender's agreement to lend, Borrower's obligation
to repay the loan, and all other agreements between Lender and
Borrower have been reduced to writing. This instrument and the other
documents signed concurrently with it contain the entire agreement
between Lender and Borrower. Any prior conversations and discussions
that Lender or Borrower may have had concerning the transaction are
not binding unless reflected in the written loan documents. Borrower
acknowledges that the loan documents reflect everything the Lender has
agreed to do or not to do in connection with this transaction.

COMMERCIAL PURPOSES. Borrower intends to use the loan proceeds solely
for business or commercial related purposes and under no circumstances
will such proceeds be used for personal, family or household purposes.

VARIABLE RATE FREQUENCY. The interest rate change will occur each day
the Index Rate changes. This change will not occur more often than
once each day.

CROSS DEFAULT CLAUSE. IT IS UNDERSTOOD AND AGREED THAT IN THE EVENT A
DEFAULT EXISTS UNDER THE LOANS HELD BY THE LENDER IN WHICH PET MED
EXPRESS INC. IS BORROWER THEREUNDER, THEN THE LENDER MAY, AT ITS
OPTION, DECLARE THE ENTIRE ENDEBTEDNESS EVIDENCED HEREBY IMMEDIATELY
DUE AND PAYABLE.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon
Borrower, and upon Borrower's heirs, personal representatives,
successors and assigns, and shall inure to the benefit of Lender and
its successors and assigns.

NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING
AGENCIES. Please notify us if we report any inaccurate information
about your account(s) to a consumer reporting agency. Your written
notice describing the specific inaccuracy(ies) should be sent to us at
the following address: SouthTrust Bank, West Palm Beach (Comm Loans -
Ft. Lauderdale), 225 N Federal Highway (8th Floor), Pompano Beach, FL
33062

GENERAL PROVISIONS. If any part of this Note cannot be enforced, this
fact will not affect the rest of the Note. Borrower does not agree or
intend to pay, and Lender does not agree or intend to contract for,
charge, collect, take, reserve or receive (collectively referred to
herein as "charge or collect"), any amount in the nature of interest
or in the nature of a fee for this loan, which would in any way or
event (including demand, prepayment, or acceleration) cause Lender to
charge or collect more for this loan than the maximum Lender would be
permitted to charge or collect by federal law or the law of the State
of Florida (as applicable). Any such excess interest or unauthorized
fee shall, instead of anything stated to the contrary, be applied
first to reduce the principal balance of this loan, and when the
principal has been paid in full, be refunded to Borrower. Lender may
delay or forgo enforcing any of its rights or remedies under this Note
without losing them. Borrower and any other person who signs,
guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, and notice of dishonor. Upon any
change in the terms of this Note, and unless otherwise expressly
stated in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this loan or release any party
or guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other
action deemed necessary by Lender without the consent of or notice to
anyone. All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with
whom the modification is made. The obligations under this Note are
joint and several.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INITEREST RATE
PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSARY
NOTE.

BORROWER:

PET MED EXPRESS, INC.

By:___________/s/Mendo Akdag________________
   MENDO AKDAG, CEO of PET MED EXPRESS, INC.

<PAGE>  Exhibit 10.7 - Pg. 2

                            Schedule A
                         (Loan Covenants)

To induce SouthTrust Bank (herein referred to as "Lender") to make the
loan pursuant to the Note (attached hereto) Pet Med Express, Inc.,
(herein referred to as "Borrower") and each guarantor hereby covenant
and agree, that so long as any indebtedness whatsoever due and owing
from Borrower to Lender shall remain outstanding and until full and
final payment of all outstanding indebtedness due and owing from
Borrower to Lender, unless the Lender waives compliance in writing,
Borrower and each Guarantor shall comply with the following
covenants:

1.	Borrower shall provide to Lender a) Audited Fiscal Year End
Financial Statements of Borrower, in form and substance acceptable to
Lender, as soon as available and in any event no later than one
hundred twenty (120) days following the end of the fiscal year of
Borrower . b) Compiled quarterly Interim Financial Statements within
forty five (45) days of quarter end.

2.	Guarantor shall provide to Lender a) Personal Financial
Statements annually, in form and substance to lender, as soon as
available but in any event no later than one hundred twenty (120) days
following year end. B0 Personal Guarantor Tax Returns annually within
fifteen (15) days of filing.

3.	Borrower shall maintain an "all-risk" casualty insurance and
flood insurance policy insuring its property, covering full
replacement cost of said property and written through a company and in
an amount acceptable to Lender. Policy must provide at least 30-days
written notice of any cancellation, modification or non-renewal of
coverage, which must be in effect through the term of the loan.
Insurance premiums are required to be paid in full by the required due
dates with evidence of same provided to Lender.

4.      Borrower shall not create or incur any future indebtedness except
from SouthTrust Bank. Borrower shall not merge, consolidate or
transfer assets. Borrower shall not guarantee or become contingently
liable for any future debt.  Borrower shall not make any future loans.

5.	This agreement shall be binding upon the parties hereto, their
respective heirs, personal representatives, successors and permitted
assigns.

Agreed to this 12 day of March, 2002.

BORROWER:

Pet Med Express, Inc.

By:____/s/Mendo Akdag________
   Mendo Akdag, CEO

By:___/s/Marc Puleo__________
   Marc Puleo, Guarantor

LENDER:

SouthTrust Bank

____/s/Antonio Coley_________
Antonio Coley, Vice President

<PAGE>  Exhibit 10.7 - Pg. 3

                          COMMERCIAL SECURITY AGREEMENT

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
Principal        Loan Date     Maturity      Loan No.    Call/Coll    Account    Officer   Initials
<S>             <C>           <C>           <C>         <C>         <C>         <C>       <C>
$205,327.00     03-12-2002    03-13-2005    0000250498    0001/590  0955232160     LH4
---------------------------------------------------------------------------------------------------
          References in the shaded area are for Lender's use only and do not limit the
            applicability of this document to any particular loan or item.  Any item
             containing "***" has been omitted due to text length limitations.
---------------------------------------------------------------------------------------------------
</TABLE>

Grantor:  PET MED EXPRESS, IN.           Lender: SouthTrust Bank
          (SSN:65-0680967)                       West Palm Beach
          1441 SW 29th Ave.                      (Comm Loans - Ft. Lauderdale)
          POMPANO BEACH, FL 33069                225 N. Federal Highway
                                                 (8th Floor)
                                                 Pompano Beach, FL 33062
                                                 (561) 712-1001

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

THIS COMMERCIAL SECURITY AGREEMENT dated March 12, 2002, is made and
executed between PET MED EXPRESS, INC. ("Grantor") and SouthTrust Bank
("Lender").

GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants
to Lender a security interest in the Collateral to secure the
Indebtedness and agrees that Lender shall have the rights stated in
this Agreement with respect to the Collateral, in addition to all
other rights which lender may have by law.

COLLATERAL DESCRIPTION. The word "Collateral" as used in this
Agreement means the following described property, whether now owned or
hereafter acquired, whether now existing or hereafter arising, and
wherever located, in which Grantor is giving Lender a security
interest for the payment of the Indebtedness and performance of all
other obligations under the Note of this Agreement:

	SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART THEREOF.

In addition, the word "Collateral" also includes all the following,
whether now owned or hereafter acquired, whether now existing or
hereafter arising, and wherever located:

   (A)     All accessions, attachments, accessories, tools, parts,
   supplies, replacements of and additions to any of the
   collateral described herein, whether added now or later.

   (B)     All products and produce of any property described in this
   Collateral section.

   (C)     All accounts, general intangibles, instruments, rents,
   monies, payments, and all other rights, arising out of a sale,
   lease or other disposition of any of the property described in
   this Collateral section.

   (D)     All proceeds (including insurance proceeds) from the sale,
   destruction, loss, or other disposition of any of the property
   described in this Collateral section, and sums due from a
   third party who has damaged or destroyed the Collateral or
   from that party's insurer, whether due to judgment, settlement
   or other process.

   (E)     All records and data relating to any of the property
   described in this Collateral section, whether in the form of a
   writing, photograph, microfilm, microfiche, or electronic
   media, together with all of Grantor's right, title, and
   interest in and to all computer software required to utilize,
   create, maintain, and process any such records or data on
   electronic media.

Despite any other provision of this Agreement, Lender is not granted,
and will not have, a nonpurchase security interest in household goods,
to the extent such a security interest would be prohibited by
applicable law. In addition, if because of the type of any Property,
Lender is required to give a notice of the right to cancel under Truth
in Lending for the Indebtedness, then Lender will not have a security
interest in such Collateral unless and until such a notice is given.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender
reserves a right of setoff in all Grantor's accounts with Lender
(whether checking, savings, or some other account). This includes all
accounts Grantor holds jointly with someone else and all accounts
Grantor may open in the future. However, this does not include any IRA
or Keogh accounts, or any trust accounts for which setoff would be
prohibited by law. Grantor authorizes Lender, to the extent permitted
by applicable law, to charge or setoff all sums owing on the
Indebtedness against any and all such accounts, and, at Lenders
option, to administratively freeze all such accounts to allow Lender
to protect Lender's charge and setoff rights provided in this
paragraph.

GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE
COLLATERAL. With respect to the Collateral, Grantor represents and
promises to Lender that:

   Perfection of Security Interest. Grantor agrees to execute
   financing statements and to take whatever other actions are
   requested by Lender to perfect and continue Lender's security
   interest in the Collateral. Upon request of Lender, Grantor will
   deliver to Lender any and all of the documents evidencing or
   constituting the Collateral, and Grantor will note Lender's
   interest upon any and all chattel paper if not delivered to
   Lender for possession by Lender.

   Notices to Lender. Grantor will promptly notify Lender in writing
   at Lender's address shown above (or such other addresses as
   Lender may designate from time to time) prior to any (1) change
   in Grantor's name; (2) change in Grantor's assumed business
   names(s); (3) change in the management of the Corporation
   Grantor; (4) change in the authorized signer(s); (5) change in
   Grantor's principal office address; (6) change in Grantor's state
   of organization; (7) conversion of Grantor to a new or different
   type of business entity; or (8) change in any other aspect of
   Grantor that directly or indirectly relates to any agreements
   between Grantor and Lender. No change in Grantor's name or state
   of organization will take effect until after Lender has received
   notice.

   No Violation. The execution and delivery of this Agreement will
   not violate any law or agreement governing Grantor or to which
   Grantor is a party, and is certificate or articles of
   incorporation and bylaws do no prohibit any term or condition of
   this agreement.

   Enforceability of Collateral. To the extent the Collateral
   consists of accounts, chattel paper, or general intangibles, as
   defined by the Uniform Commercial Code, the Collateral is
   enforceable in accordance with its terms, is genuine, and fully
   complies with all applicable laws and regulations concerning
   form, content and matter of preparation and execution, and all
   persons appearing to be obligated on the Collateral have
   authority and capacity to contract and are in fact obligated as
   they appear to be on the Collateral. There shall be no setoffs or
   counterclaims against any of the Collateral, and no agreement
   shall have been made under which any deductions or discounts may
   be claimed concerning the Collateral except those disclosed to
   the Lender in writing.

   Location of the Collateral. Except in the ordinary course of
   Grantor's business, Grantor agrees to keep the Collateral at
   Grantor's address shown above or at such other locations
   acceptable to Lender. Upon Lender's request, Grantor will deliver
   to Lender in form satisfactory to Lender a schedule of real
   properties and Collateral locations relating to Grantor's
   operations, including without limitation the following: (1) all
   real property Grantor owns or is purchasing; (2) all real
   property Grantor is renting or leasing; (3) all storage
   facilities Grantor owns, rents, leases, or uses; and (4) all
   other properties where Collateral is or may be located.

   Removal of the Collateral. Except in the ordinary course of
   Grantor's business, Grantor shall not remove the Collateral from
   its existing location without Lender's prior written consent.
   Grantor shall, whenever requested, advise Lender of the exact
   location of the Collateral.

   Transactions Involving Collateral. Except for inventory sold or
   accounts collected in the ordinary course of Grantor's business,
   or as otherwise provided for in this Agreement, Grantor shall not
   sell, offer to sell, or otherwise transfer or dispose of the
   Collateral. Grantor shall not pledge, mortgage, encumber or
   otherwise permit the Collateral to be subject to any lien,
   security interest, encumbrance, or interests even if junior in
   right to the security interest granted under this Agreement.
   Unless waived by Lender, all proceeds from any disposition of
   the Collateral (for whatever reason) shall be held in trust for
   Lender and shall not be commingles with any other funds; provided
   however, this requirement shall not constitute consent by Lender
   to any sale of other disposition. Upon receipt, Grantor shall
   immediately deliver any such proceeds to Lender.

   Title. Grantor represents and warrants to Lender that Grantor
   holds good and marketable title to the Collateral, free and clear
   of all liens and encumbrances except for the lien of this
   Agreement. No financing statement covering any of the Collateral
   is on file in any public office other than those which reflect
   the security interest created by this Agreement or to which
   Lender has specifically consented. Grantor shall defend Lender's
   rights in the Collateral against the claims and demands of all
   other persons.

   Repairs and Maintenance. Grantor agrees to keep and maintain, and
   to cause others to keep and maintain, the Collateral in good
   order, repair and condition at all times while this Agreement
   remains in effect. Grantor further agrees to pay when due all
   claims for work done on, or services rendered or material
   furnished in connection with the Collateral so that no lien or
   encumbrance may ever attach to or be

<PAGE>  Exhibit 10.7 - Pg. 4

                    COMMERCIAL SECURITY AGREEMENT
Loan No: 0000250498        (Continued)                          Page 2
______________________________________________________________________

   filed against the Collateral.

   Inspection of Collateral. Lender and Lender's designated
   representatives and agents shall have the right at all reasonable
   times to examine and insect the Collateral wherever located.

   Taxes, Assessments and Liens. Grantor will pay when due all
   taxes, assessments and liens upon the Collateral, its use or
   operation, upon this Agreement, upon any promissory note or notes
   evidencing the Indebtedness, or upon any of the other Related
   Documents. Grantor may withhold any such payment or may elect to
   contest any lien of Grantor is in good faith conducting an
   appropriate proceeding to contest the obligation to pay and so
   long as Lender's interest in the Collateral is not jeopardized in
   Lender's sole opinion. If the Collateral is subjected to a lien
   which is not discharged within fifteen (15) days, Grantor shall
   deposit with Lender's cash, a sufficient corporate surety bond or
   other security satisfactory to Lender in an amount adequate to
   provide for the discharge of the lien plus any interest, costs,
   reasonable attorneys' fees or other charges that could accrue as
   a result of foreclosure or sale of the Collateral. In any contest
   Grantor shall defend itself and Lender and shall satisfy any
   final adverse judgment before enforcement against the Collateral.
   Grantor shall name Lender as an additional obligee under any
   surety bond furnished in the contest proceedings. Grantor further
   agrees to furnish Lender with evidence that such taxes,
   assessments, and governmental and other charges have been paid in
   full and in a timely manner. Grantor my withhold any such payment
   or may elect to contest any lien if Grantor is in good faith
   conducting an appropriate proceeding to contest the obligation to
   pay and so long as Lender's interest in the Collateral is not
   jeopardized.

   Compliance with Governmental Requirements. Grantor shall comply
   promptly with all laws, ordinances, rules and regulations of all
   governmental authorities, now or hereafter in effect, applicable
   to the ownership, production, disposition, or use of the
   Collateral. Grantor may contest in good faith any such law,
   ordinance or regulation and withhold compliance during any
   proceeding, including appropriate appeals, so long as Lender's
   interest in the Collateral, in Lender's opinion, is not
   jeopardized.

   Hazardous Substances.  Grantor represents and warrants that the
   Collateral never has been, and never will be so long as this
   Agreement remains a lien on the Collateral, used in violation of
   any Environmental Laws or for the generation, manufacture,
   storage, transportation, treatment, disposal, release or
   threatened release of any Hazardous Substance. The
   representations and warranties contained herein are based on
   Grantor's due diligence in investigating the Collateral for
   Hazardous Substances. Grantor hereby (1) releases and waives any
   future claims against Lender for indemnity or contribution in the
   event Grantor becomes liable for cleanup or other costs under any
   Environmental Laws, and (2) agrees to indemnify and hold harmless
   Lender against any and all claims and losses resulting from a
   breach of this provision of this Agreement. The obligation to
   indemnify shall survive the payment of the Indebtedness and the
   satisfaction of this Agreement.

   Maintenance of Casualty Insurance.  Grantor shall procure and
   maintain all risks insurance, including without limitation fire,
   theft and liability coverage together with such other insurance
   as Lender may require with respect to the Collateral, in form,
   amounts, coverages and basis reasonably acceptable to Lender and
   issued by a company or companies reasonably acceptable to Lender.
   Grantor, upon request of Lender, will deliver to Lender and
   issued by a company or companies reasonably acceptable to Lender.
   Grantor, upon request of Lender, will deliver to Lender from time
   to time the policies or certificates of insurance in form
   satisfactory to Lender, including stipulations that coverages
   will not be cancelled or diminished without at least ten (10)
   days' prior written notice to Lender and not including any
   disclaimer of the insurer's liability for failure to give such a
   notice. Each insurance policy also shall include an endorsement
   providing that with all policies covering assets in which Lender
   holds or is offered a security interest, Grantor will provide
   Lender with such loss payable or other endorsements as Lender may
   require. If Grantor ay any time fails to obtain or maintain any
   insurance as required under this Agreement, Lender may (but shall
   not be obligated to) obtain such insurance as Lender deems
   appropriate, including if Lender so chooses "single interest
   insurance," which will cover only Lender's interest in the
   Collateral.

   Application of Insurance Proceeds. Grantor shall promptly notify
   Lender of any loss or damage to the Collateral. Lender may make
   proof of loss if Grantor fails to do so within fifteen (15) days
   of the casualty. All proceeds of any insurance on the Collateral,
   included accrued proceeds thereon, shall be held by Lender as
   part of the Collateral. If Lender consents to repair or
   replacement of the damaged or destroyed Collateral, Lender shall,
   upon satisfactory proof of expenditure, pay or reimburse Grantor
   from the proceeds for the reasonable cost of repair or
   restoration. If Lender does not consent to repair or replacement
   of the Collateral, Lender shall retain a sufficient amount of the
   proceeds to pay all of the Indebtedness, and shall pay the
   balance to Grantor. Any proceeds which have not been disburses
   within six (6) months after their receipt and which Grantor has
   not committed to the repair or restoration of the Collateral
   shall be used to prepay the Indebtedness.

   Insurance Reserves. Lender may require Grantor to maintain with
   Lender reserves for payment of insurance premiums, which reserves
   shall be created by monthly payments from Grantor of a sum
   estimated by Lender to be sufficient to produce, at least fifteen
   (15) days before  the premium due date, amounts at least equal to
   the insurance premiums to be paid. If fifteen (15) days before
   the payment is due, the reserve funds are insufficient, Grantor
   shall upon demand pay any deficiency to Lender. The reserve funds
   shall be held by Lender as a general deposit and shall constitute
   a non-interest-bearing account which Lender may satisfy by
   payment of the insurance premiums required to be paid by Grantor
   as they become due. Lender does not hold the reserve funds in
   trust for Grantor, and Lender is not the agent of Grantor for
   payment of the insurance premiums required to be paid by Grantor.
   The responsibility for the payment of premiums shall remain
   Grantor's sole responsibility.

   Insurance Reports. Grantor, upon request of Lender, shall furnish
   to Lender reports on each existing policy of insurance showing
   such information as Lender may reasonably request including the
   following: (1) the name of the insurer; (2) the risks insured;
   (3) the amount of the policy; (4) the property insured; (5) the
   then current value on the basis of which insurance has been
   obtained and the manner of determining that value; and (6) the
   expiration date of the policy.  In addition, Grantor shall upon
   request by Lender (however not more often than annually) have an
   independent appraiser satisfactory to Lender determine, as
   applicable, the cash value or replacement cost of the Collateral.

   Financing Statements. Grantor authorizes Lender to files a UCC-1
   financing statement, or alternatively, a copy of this Agreement
   to perfect Lender's security interest. At Lender's request,
   Grantor additionally agrees to sign all other documents that are
   necessary to perfect, protect, and continue Lender's security
   interest in the Property. Grantor will pay all filing fees, title
   transfer fees, and other fees and costs involved unless
   prohibited by law or unless Lender is required by law to pay such
   fees and costs. Grantor irrevocably appoints Lender to execute
   financing statements and documents of the title in Grantor's name
   and to execute all documents necessary to transfer title if there
   is a default. Lender may file a copy of the Agreement as a
   financing statement. If Grantor changes Grantor's name or
   address, or the name or address of any person granting a security
   interest under this Agreement changes, Grantor will promptly
   notify the Lender of such change.

GRANTOR'S RIGHT TO POSSESSION.  Until default, Grantor may have
possession of the tangible personal property and beneficial use of all
the Collateral and may use it in any lawful manner not inconsistent
with this Agreement or the Related Documents, provided that Grantor's
right to possession and beneficial use shall not apply to any
Collateral where possession of the Collateral by Lender is required by
law to perfect Lender's security interest in such Collateral. If
Lender at any time has possession of any Collateral, whether before or
after an Event of Default, Lender shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral if
Lender takes such action for that purpose as Grantor shall request or
as Lender, in Lender's sole discretion, shall deem appropriate under
the circumstances, but failure to honor any request by Grantor shall
not of itself be deemed to be a failure to exercise reasonable care.
Lender shall not be required to take any steps necessary to preserve
any rights in the Collateral against prior parties, nor to protect,
preserve or maintain any security interest given to secure the
Indebtedness.

LENDER'S EXPENDITURES. If any action or proceeding is commenced that
would materially affect Lender's interest in the Collateral or if
Grantor fails to comply with any provision of this Agreement or any
Related Documents, including but not limited to Grantor's failure to
discharge or pay when due any amounts Grantor is required to discharge
or pay under this Agreement or any Related Documents, Lender on
Grantor's behalf may (but shall not be obligated to) take any action
that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interest,
encumbrances and other claims, at any time levied or placed on the
Collateral and paying all costs for insuring, maintaining and
preserving the Collateral. All such expenditures incurred or paid by
Lender for such purposes will then bear interest at the rate charged
under the Note from the date incurred or paid by Lender to the date of
repayment by Grantor. All such expenses will become a part of the
Indebtedness and, at Lender's option, will (A) be payable on demand;
(B) be added to the balance of the Note and be apportioned among and
be payable with any installment payments to become due during either
(1) the term of any applicable insurance policy; or (2) the remaining
term of the Note; or (C) be treated as a balloon payment which will be
due and payable at the Note's maturity. The Agreement also will secure
payment of these amounts. Such right shall be in addition to all other
rights and remedies to which Lender may be entitled upon Default.

DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:

<PAGE>  Exhibit 10.7 - Pg. 5

                    COMMERCIAL SECURITY AGREEMENT
Loan No: 0000250498        (Continued)                          Page 3
______________________________________________________________________

   Other Defaults. Grantor fails to comply with or to perform any
   other term, obligation, covenant or condition contained in this
   Agreement  or in any of the Related Documents or to comply with
   or to perform any term, obligation, covenant or condition
   contained in any other agreement between Lender and Borrower.

   Default in Favor of Third Parties. Should Borrower or any Grantor
   default under any loan, extension of credit, security agreement,
   purchase or sales agreement, or any other agreement, in favor of
   any other creditor or person that may materially affect any of
   Borrower's property or Borrower's ability to repay this Note or
   perform Borrower's obligations under this Note or any of the
   Related Documents.

   False Statements. Any warranty, representation or statement made
   or furnished to Lender by Grantor or on Grantor's behalf under
   this Agreement or the related documents is false or misleading in
   any material respect, either now or at the time made or furnished
   or becomes false or misleading at any time thereafter.

   Defective Collateralization. This Agreement or any of the Related
   Documents ceases to be in full force and effect (including
   failure of any collateral document to create a valid and
   perfected security interest or lien) at any time for any reason.

   Insolvency. The dissolution or termination of Grantor's existence
   as a going business, the insolvency of Grantor, the appointment
   of a receiver for any part of Grantor's property, any assignment
   for the benefit of creditors, any type of creditor workout, or
   the commencement of any proceeding under any bankruptcy or
   insolvency laws by or against Grantor.

   Creditor or Forfeiture Proceedings. Commencement of foreclosure
   or forfeiture proceedings, whether by judicial proceeding, self-
   help, repossession or any other method, by the creditor of
   Grantor or by any governmental agency against any collateral
   securing the loan. This includes a garnishment of any Grantor's
   accounts, including deposit accounts, with Lender. However, this

   Event of Default shall not apply if there is a good faith dispute
   by Grantor as to the validity or reasonableness of the claim
   which is the basis of the creditor or forfeiture proceeding and
   if Grantor gives Lender written notice of the creditor or
   forfeiture proceeding and deposits with Lender monies or a surety
   bond for the creditor or forfeiture proceeding, in an amount
   determined by Lender, in its sole discretion, as being an
   adequate reserve or bond for the dispute.

   Events Affecting Guarantor. Any of the preceding events occurs
   with respect to Guarantor of any Indebtedness or Guarantor dies
   or becomes incompetent, ore revokes or disputes the validity of,
   or liability under, any guaranty of the indebtedness.

   Adverse Change. A material adverse change occurs in Grantor's
   financial condition, or Lender believes the prospect of payment
   or performance of this Note is impaired.

   Insecurity. Lender in good faith believes itself insecure.

   Cure provisions. If any default, other than a default in payment
   is curable and if Grantor  has not been given a notice of a
   breach of the same provision of this Agreement within the
   preceding twelve (12) months, it may be cured (and no event of
   default will have occurred) if Grantor, after receiving written
   notice from Lender demanding cure of such default: (1) cures the
   default within fifteen (15) days; or (2) if the cure requires
   more than fifteen (15) days, immediately initiates steps which
   Lender deems in Lender's sole discretion to be sufficient to cure
   the default and thereafter continues and completes all reasonable
   and necessary steps sufficient to produce compliance as soon as
   reasonably practical.

RIGHTS AND REMEDIES ON DEFAULT. If  an Event or Default occurs under
this Agreement, at any time thereafter, Lender shall have all the
rights of a secured party under the Florida Uniform Commercial Code.
In addition and without limitation, Lender may exercise any one or
more of the following rights and remedies.

   Accelerate Indebtedness. Lender may declare the entire
   Indebtedness, including any prepayment penalty which Grantor
   would be required to pay, immediately due and payable, without
   notice of any kind to Grantor.

   Assemble Collateral. Lender may require Grantor to deliver to
   Lender all or any portion of the Collateral and any and all
   certificates of title and other documents relating to the
   Collateral. Lender may require Grantor to assemble the Collateral
   and make it available to Lender at a place to be designated by
   Lender. Lender also shall have full power to enter upon the
   property of Grantor to take possession of and remove the
   Collateral. If the Collateral contains other goods not covered by
   this Agreement at the time of repossession, Grantor agrees Lender
   may take other such goods, provided the Lender makes reasonable
   efforts to return them to Grantor after repossession.

   Sell the Collateral.  Lender shall have full power to sell,
   lease, transfer, or otherwise deal with the Collateral or
   proceeds thereof in Lender's own name or that of Grantor. Lender
   May sell the Collateral at public auction or private sale. Unless
   the Collateral threatens to decline speedily in value or is of a
   type customarily sold on a recognized market, Lender will give
   Grantor, and all other persons required by law, reasonable notice
   of the time and place of any pubic sale. The requirements of
   reasonable notice shall be met if such notice is given at lease
   ten (10) days before the time of the sale or disposition. All
   expenses relating to the disposition of the Collateral, including
   without limitation the expenses of retaking, holding, insuring,
   preparing for sale and selling the Collateral, shall become part
   of the Indebtedness secured by this Agreement and shall be
   payable on demand, with interest at the Note rate from the date
   of expenditure until repaid.

   Appoint Receiver. In the event of a suit being instituted to
   foreclose this Agreement, Lender shall be entitled to apply at
   any time pending such foreclosure suit to the court having
   jurisdiction thereof, from whatsoever source. The parties agree
   that the court shall forthwith appoint such receiver with the
   usual powers and duties of receivers in the cases. Such
   appointment shall be made by the court as a matter of strict
   right t Lender and without notice to Grantor, and without
   reference to the adequacy or inadequacy of the value of the
   Collateral, or to Grantor's solvency or any other party defendant
   to such suit. Grantor hereby specifically waives the right to
   object to the appointment of a receiver and agrees that such
   appointment shall be made as admitted equity and as a matter of
   absolute right to Lender, and consents to the appointment of any
   officer or employee of Lender as receiver. Lender shall have the
   right to have a receiver appointed to take possession of all or
   any part of the Collateral, with the power to protect and
   preserve the Collateral, to operate the Collateral, to operate
   the Collateral preceding foreclosure or sale, and to collect the
   Rents from the Collateral and apply the proceeds, over and above
   the cost of receivership, against the Indebtedness. The receiver
   may serve without bond if permitted by law. Lender's right to the
   appointment of a receiver shall exist whether or not the apparent
   value of the Collateral exceeds the Indebtedness by a substantial
   amount. Employment by Lender shall not disqualify a person from
   serving as a receiver.

   Collect Revenues, Apply Accounts. Lender, either itself or
   through a receiver, may collect the payments, rents, income and
   revenues from the Collateral. Lender may at any time in Lender's
   discretion transfer any Collateral into Lender's own name or that
   of Lender's nominee and receive the payments, rents, income and
   revenues therefrom and hold the same as security for the
   Indebtedness or apply it to payment of the Indebtedness in such
   order of preference as Lender may determine. Insofar as the
   Collateral consists of accounts, general intangibles, insurance
   policies, instruments, chattel paper, choses in action, or
   similar property, Lender may demand, collect, receipt for,
   settle, compromise, adjust, sue for, foreclose, or realize on the
   Collateral as Lender may determine, whether or not Indebtedness
   or Collateral is then due. For these purposes, Lender may, on
   behalf of and in the name of Grantor, receive, open and dispose
   of mail addressed to Grantor; change any address to which mail
   and payments are to be sent; and endorse notes, checks, drafts,
   money orders, documents of title, instruments and items
   pertaining to payment, shipment, or storage of any Collateral. To
   facilitate collection, Lender may notify account debtors and
   obligors on any Collateral to may payments directly to Lender.

   Obtain Deficiency. If Lender chooses to sell any or all of the
   Collateral, Lender may obtain a judgment against Grantor for any
   deficiency remaining on the Indebtedness due to Lender after
   application of all amounts received from the exercise of the
   rights provided in this Agreement. Grantor shall be liable for a
   deficiency even if the transaction described in this subsection
   is a sale of accounts or chattel paper.

   Other Rights and Remedies. Lender shall have all the rights and
   remedies of a secured creditor under the provision of the Uniform
   Commercial Code, as my be amended from time to time. In addition,
   Lender shall have and may exercise any or all other rights and
   remedies it may have available at law, in equity, or otherwise.

   Election of Remedies. Except as may be prohibited by applicable
   law, all of Lender's rights and remedies, whether evidenced by
   this Agreement, the Related Documents, or by any other writing,
   shall be cumulative and may be exercised singularly or
   concurrently. Election by Lender to pursue any remedy shall not
   exclude pursuit of any other remedy, and an election to make
   expenditures or to take action to perform an obligation of
   Grantor under this Agreement, after Grantor's failure to perform,
   shall not affect Lender's right to declare a default and exercise
   its remedies.

<PAGE>  Exhibit 10.7 - Pg. 6

                    COMMERCIAL SECURITY AGREEMENT
Loan No: 0000250498        (Continued)                          Page 4
______________________________________________________________________

ADDITIONAL CROSS COLLATERALIZATION. In addition to the Note, this
Agreement secures all obligations, debts and liabilities, plus
interest thereon, of Borrower or Grantor to Lender, or any one or ore
of them, as well as all claims by Lender against Borrower or Grantor
or any on or more of them, whether now existing or hereafter arising,
whether related or unrelated to the purpose of the Note, whether
voluntary or otherwise, whether due or not due, direct or indirect,
determined or undetermined, absolute or contingent, liquidated or
unliquidated whether Borrower or Grantor may be liable individually or
jointly with others, whether obligated as guarantor, surety,
accommodation party or otherwise, and whether recovery upon such
amounts may be or hereafter may become barred by any statue of
limitations, and whether the obligation to repay such amounts may be
or hereafter may become otherwise enforceable.

CROSS DEFAULT CLAUSE. IT IS UNDERSTOOD AND AGREED THAT IN THE EVENT A
DEFAULT EXISTS UNDER THE LOANS HELD BY THE LENDER IN WHICH PET MED
EXPRESS, INC. IS BORROWER THEREUNDER, THEN THE LENDER MAY, AT ITS
OPTION, DECLARE THE ENTIRE INDEBTEDNESS EVIDENCED HEREBY IMMEDIATELY
DUE AND PAYABLE.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a
part of this agreement:

   Amendments. This Agreement, together with any Related Documents,
   constitutes the entire understanding and agreement of the parties
   as to the matters set forth on this Agreement. No alteration of
   or amendment to this Agreement shall be effective unless given in
   writing and signed by the party or parties sought to be charged
   or bound by the alteration or amendment.

   Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all
   of Lender's costs and expenses, including Lender's reasonable
   attorneys' fees and Lender's legal expenses, incurred in
   connection with the enforcement of this Agreement. Lender may
   hire or pay someone else to help enforce this Agreement, and
   Grantor shall pay the costs and expenses of such enforcement.
   Costs and expenses include Lender's reasonable attorneys' fees
   and legal expenses whether or not there is a lawsuit, including
   reasonable attorneys' fees and legal expenses for bankruptcy
   proceedings (including efforts to modify or vacate any automatic
   stay or injunction), appeals, and any anticipated post-judgment
   collection services. Grantor also shall pay all court costs and
   such additional fees as may be directed by the court.

   Caption Headings. Caption headings in this Agreement are for
   convenience purposes only and are not to be used to interpret or
   define the provisions of this Agreement.

   Governing Law. This agreement will be governed by, construed and
   enforced in accordance with federal law and the laws of the Stare
   of Florida. This Agreement has been accepted by Lender in the
   State of Florida.

   No Waiver by Lender.  Lender shall not be deemed to have waived
   any rights under this Agreement unless such waiver is given in
   writing and signed by Lender. No delay or omission on the part of
   Lender in exercising any right shall operate as a waiver of such
   right or any other right. A waiver by Lender of a provision of
   this Agreement shall not prejudice or constitute a waiver of
   Lender's right otherwise to demand strict compliance with that
   provision or any other provision of this Agreement. No prior
   waiver by Lender, nor any course of dealing between Lender and
   Grantor, shall constitute a waiver of any of Lender's rights or
   of any of Grantor's obligations as to any future transactions.
   Whenever the consent of Lender is required under this Agreement,
   the granting of such consent by Lender in any instance shall not
   constitute continuing consent to subsequent instances where such
   consent is required and in all cases such consent may be granted
   or withheld in the sole discretion of Lender.

   Notices. Any notice required to be given under this Agreement
   shall be given in writing, and shall be effective when actually
   delivered, when actually received by telefacsimile (unless
   otherwise required by law), when deposited with a nationally
   recognized overnight courier, or, if mailed, when deposited in
   the United States mail, as first class, certified or registered
   mail postage prepaid, directed to the addresses shown  near the
   beginning of this Agreement. Any party may change its address for
   notices under this Agreement by giving written notice to the
   other parties, specifying that the purpose of the notice is the
   change the party's address. For notice purposes, Grantor agrees
   to keep Lender informed at all times of Grantor's current
   address. Unless otherwise provided or required by law, if there
   is more than one Grantor, any notice given by Lender to any
   Grantor is deemed to be notice given to all Grantors.

   Power of Attorney. Grantor hereby appoints Lender as Grantor's
   irrevocable attorney-in-fact for the purpose of executing any
   documents necessary to perfect, amend, or to continue the
   security interest granted in this Agreement or to demand
   termination of filings of other secured parties. Lender may at
   any time, and without further authorization from Grantor, file a
   carbon, photographic or other reproduction of any financing
   statement or of this Agreement for use as a financing statement.
   Grantor will reimburse Lender for all expenses for the perfection
   and the continuation of the perfection of Lender's security
   interest in the Collateral.

   Severability. If a court of  competent jurisdiction finds any
   provision of this Agreement to be illegal, invalid, or
   unenforceable as to any circumstance, that finding shall not make
   the offending provision illegal, invalid, or unenforceable s to
   any other circumstance. If feasible, the offending provision
   shall be considered modified so that it becomes legal, valid and
   enforceable. If the offending provision cannot be so modified, it
   shall be considered deleted from this Agreement. Unless otherwise
   required by law, the illegality, invalidity, or unenforceability
   of any provision of this Agreement shall not affect the legality,
   validity or enforceability of any other provision of this
   Agreement.

   Successors and Assigns. Subject to any limitations stated in this
   Agreement on transfer of Grantor's interest, this Agreement shall
   be binding upon and inure to the benefit of the parties, their
   successors and assigns. If ownership of the Collateral becomes
   vested in a person other than Grantor, Lender, without notice to
   Grantor, may deal with Grantor's successors with reference to
   this Agreement or liability under the Indebtedness.

   Survival of Representations and Warranties. All representations,
   warranties, and agreements made by Grantor in this Agreement
   shall survive the execution and delivery of this Agreement, shall
   be continuing in nature, and shall remain in full force and
   effect until such time as Grantor's Indebtedness shall be paid in
   full.

   Time is of the Essence. Time is of the essence in the performance
   of this Agreement.

   Waive Jury. All parties to this Agreement hereby waive the right
   to any jury trial in any action, proceeding, or counterclaim
   brought by any party against any other party. (Initial here /s/M.A.)

DEFINITIONS. The following capitalized words and terms shall have the
following meanings when used in this Agreement. Unless specifically
stated to the contrary, all references to dollar amounts in lawful
money of the United States of America. Words and terms used in the
singular shall include the plural and the plural shall include the
singular, as the context may require. Words and terms not otherwise
defined in this Agreement shall have the meanings attributed to such
terms in the Uniform Commercial Code.

   Agreement. The word "Agreement" means this Commercial Security
   Agreements, as this Commercial Security Agreement may be amended
   or modified from time to time, together with all exhibits and
   schedules attached to this Commercial Security Agreement from
   time to time.

   Borrower. The word "Borrower" means  PET MED EXPRESS, INC., and
   all other persons and entities signing the note in whatever
   capacity.

   Collateral. The word "Collateral" means all of Grantor's right,
   title and interest in and to all the Collateral as described in
   the Collateral Description section of this Agreement.

   Default. The word "Default" means the Default set forth in this
   Agreement in the section titled "Default".

   Environmental Laws. The words "Environmental Laws" mean any and
   all state, federal and local statutes, regulations and ordinances
   relating to the protection of human health or the environment,
   including without limitation the Comprehensive Environmental
   Response, Compensation, and Liability Act of 1980, as amended, 42
   U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments
   and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the
   Hazardous Materials Transportation Act, 49 U.S.C. Section 1801,
   et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
   Section 6901, et seq., or other applicable state or federal laws,
   rules or regulations adopted pursuant thereto.

   Event of Default. The words "Event of Default" mean any of the
   events of default set forth in this Agreement in the default
   section of this Agreement.

   Grantor. The word "Grantor" means PET MED EXPRESS, INC.

   Guarantor. The word "Guarantor" means any guarantor, surety, or
   accommodation party of any or all of the Indebtedness.

   Guaranty. The word "Guaranty" means the guaranty from Guarantor
   to Lender, including without limitation a guaranty of all or part
   of the Note.

<PAGE>  Exhibit 10.7 - Pg. 7

                    COMMERCIAL SECURITY AGREEMENT
Loan No: 0000250498        (Continued)                          Page 5
______________________________________________________________________

   Hazardous Substances. The words "Hazardous Substances" mean
   materials that, because of their quantity, concentration or
   physical, chemical or infectious characteristics, may cause or
   pose a present or potential hazard to human health or the
   environment when improperly used, treated, stored, disposed of,
   generated, manufactured, transported or otherwise handled. The
   words "Hazardous Substances" are used in their very broadest
   sense and include without limitation any and all hazardous or
   toxic substances, materials or waste as defined by or listed
   under the Environmental Laws. The term "Hazardous Substances"
   also includes, without limitation, petroleum and petroleum by-
   products or any fraction thereof and asbestos.

   Indebtedness. The word "Indebtedness" means the indebtedness
   evidenced by the Note or Related Documents, including all
   principal and interest together with all other indebtedness and
   costs and expenses for which Grantor is responsible under this
   Agreement or under any of the Related Documents.

   Lender. The word "Lender" means SouthTrust Bank, its successors
   and assigns.

   Note. The word "Note" means the Note executed by PET MED EXPRESS,
   INC. in the principal amount of $205, 327.00 dated March 12,
   2002, together with all renewals of, extensions of, modifications
   of, refinancings of, consolidations of, and substitutions for the
   note or credit agreement.

   Property. The word "Property" means all of Grantor's right, title
   and interest in and to all the Property as described in the
   "Collateral Description" section of this Agreement.

   Related Documents. The words "Related Documents" mean all
   promissory notes, credit agreements, loan agreements,
   environmental agreements, guaranties, security agreements,
   mortgages, deeds of trust, security deeds, collateral mortgages,
   and other instruments, agreements and documents, whether now or
   hereafter existing, executed in connection with the Indebtedness.

GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL
SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED
MARCH 12, 2002.

GRANTOR

PET MED EXPRESS, INC.

By:_____/s/Mendo Akdag______________________
   MENDO AKDAG, CEO of PET MED EXPRESS, INC.

<PAGE>  Exhibit 10.7 - Pg. 8

UCC FINANCING STATEMENT
FOLLOW THE INSTRUCTIONS (front and back)  CAREFULLY

A. NAME & PHONE OF CONTACT AT FILER [optional]

B. SEND ACKNOWLEDGEMENT TO: (Name and Address)

	SouthTrust Bank
	1700 Palm Beach Lakes Blvd
	Suite 600
        West Palm Beach, FL 33401
                                                     THE SPACE ABOVE IS FOR
                                                     FILING OFFICE USE ONLY
____________________________________________________________________________

1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or
   1b) - do not abbreviate or combine names

   1a. ORGANIZATION'S NAME

       PET MED EXPRESS, INC.   (Loan #0955232160-250498)
OR _________________________________________________________________________

   1b. INDIVIDUAL'S LAST NAME      FIRST NAME              MIDDLE NAME
       SUFFIX
____________________________________________________________________________

   1c. MAILING ADDRESS          CITY          STATE    POSTAL CODE   COUNTRY
       1441 SW 29TH AVE      POMPANO BEACH      FL      33069          USA
____________________________________________________________________________

   1d. TAX ID#. SSN OR EIN      ADD'L INFO RE   1e. TYPE OF ORGANIZATION
                                ORGANIZATION
           65-0680967           DEBTOR                  Corporation
   _________________________________________________________________________

   1f. JURISDICTION OR ORGANIZATION     1g. ORGANIZATIONAL ID #, if any

                 FL                                    N/A          [ ] NONE
____________________________________________________________________________

2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor
   name (2a or 2b) - do not abbreviate or combine names

   2a. ORGANIZATION'S NAME

OR _________________________________________________________________________

   2b. INDIVIDUAL'S LAST NAME      FIRST NAME              MIDDLE NAME
       SUFFIX
____________________________________________________________________________

   2c.   MAILING ADDRESS        CITY          STATE    POSTAL CODE   COUNTRY
____________________________________________________________________________

   2d.   TAX ID#. SSN OR EIN    ADD'L INFO RE   2e. TYPE OF ORGANIZATION
                                ORGANIZATION
                                DEBTOR
   _________________________________________________________________________

   2f.   JURISDICTION OR ORGANIZATION     2g. ORGANIZATIONAL ID #, if any

                                                                    [ ] NONE
____________________________________________________________________________

3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P -
   insert only one secured party name (3a or 3b)

   3a. ORGANIZATION'S NAME

       SouthTrust Bank
OR _________________________________________________________________________

   3b. INDIVIDUAL'S LAST NAME      FIRST NAME              MIDDLE NAME
       SUFFIX
   _________________________________________________________________________

   3c. MAILING ADDRESS          CITY          STATE    POSTAL CODE   COUNTRY

       225 N Federal Highway  POMPANO BEACH     FL        33062
       (8th Floor)
____________________________________________________________________________

4. This FINANCING STATEMENT covers the following collateral:

   SEE ATTACHED EXHIBIT "A" ATTACHED HERETO AND MADE A PART THEREOF.

____________________________________________________________________________

5. ALTERNATIVE DESIGNATION [if applicable]:

   [ ] LESSEE/LESSOR  [ ] CONSIGNEE/CONSIGNOR  [ ] BAILEE/BAILOR
   [ ] SELLER/BUYER   [ ] AG.LIEN              [ ] NON-UCC FILING
____________________________________________________________________________

6. [X] THIS FINANCING STATEMENT is to be filed [for record] (or recorded) in
   the REAL ESTATE RECORDS

   Attach Addendum      [if applicable]
____________________________________________________________________________

7. Check to REQUEST SEARCH REPORT (S) on Debtor(s)
   [ADDITIONAL FEE]        [optional]

   [ ] All debtors    [ ] Debtor 1             [ ] Debtor 2
____________________________________________________________________________

8. OPTIONAL FILER REFERENCE DATA

   FLORIDA DOCUMENTARY STAMP TAX HAS BEEN PAID.
____________________________________________________________________________

FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1)
(REV. 07/29/98)
                                 Harland Financial Solutions
                                 400 S.W. 6th Avenue, Portland, Oregon 97204

<PAGE>  Exhibit 10.7 - Pg. 9

                                   EXHIBIT A
<TABLE>
<CAPTION>

Qty   Prod #       Description
<S>   <C>          <C>                                         <C>   <C>             <C>
 1    A4902A       HP9000 Std Rack System E41                   2     A3583A 0D1      Factory integrated
 1    A3639C       HP server rp7400 Ent. Server Solution        1     B6951BA         OV Omniback II Cell Mgr HP-UX, LTU only
 6    A6688A       750 MHz PA8700 CPU 2.25MB cache              1     B6951BA  3Y6    Three Years of System Support Option
 6    A6688A 0D1   Factory integrated                           1     B6960AA         OV OB 3.5 all Media, Manuals HP-UX / Win
 3    A6689A       Processor Support Mod. for 650, 750 CPUs     1     C4315A          SMART Field Int. DVD-ROM module
 3    A6689A 0D1   Factory integrated                           1     C4317A          Smart Field Int half-ht Enclosure
 4    A4923A       1024MB High Density SyncDRAM Memory Mod      1     C7745RA         HP SureStore DLT Autoldr 1/9 HVDS Rk
 4    A4923A 0D1   Factory integrated                           1     C7745RA ABA     U.S. - English localization
 1    A4882A       HP server rp74X0 Memory Carrier Board        1     A3401A          SCSI Cables for HP Storage Solutions
 1    A4882A 0D1   Factory integrated                           1     A3401A 812      2.5 M VHDCI to 68 pin HD SCSI cable
 2    A6739A       18GB HotPlug Ultra160 SCSI LP Disk           1     C2972A          SCSI Terminator Active SE HDTS68
 2    A6739A 0D1   Factory integrated                           9     C5141F          HP DLT/IV Data Cartridge,40/70/80GB,qty1
 2    A5158A       One Port PCI 2x Fibre Channel Adapter        1     C5142A          HP DLTtape cleaning cartridge 1 piece.
 2    A5158A 0D1   Factory integrated                           1     C7740R          HP Autoloader 1/9 Rackmount Kit
 1    A4800A       PCI FWD SCSI-2 card for HP 9000 Servers      1     H4405Y          24x7 System Support, Phone/Updates, 3yr
 1    A4800A 0D1   Factory integrated                           1     H4405Y 0BC      Manuals on CD-ROM
 2    A4926A       1000BaseSX PCI LAN Adapter                   1     H4405Y 447      Support -SMART Intgr Module
 2    A4926A 0D1   Factory integrated                           1     H4405Y 451      Support -HP SureStore DLT/LTO Autoloader
 1    A6735A       Racking Kit for HP server rp7400             1     H4405Y 615      Support - N4000/rp7400 Server Solution
 1    A6735A 0D1   Factory integrated                           6     H4405Y 616      Support - N4000/rp7400 CPU
 1    B7993AA      HP-UX Enterprise OE Server Media             2     H4405Y 699      For Internal Entitlement Purposes
 1    B7993AA UM9  HP-UX version 11i                            6     H4405Y 6M2      Support - Enterprise OE per processor
 1    B7993AA AAF  CD-ROM (disk only)                           1     H4405Y 8AE      Support - VA 7100 w/ Dual Controller
 1    B7993AA 0D1  Factory integrated                           9     H4405Y 8AL      Support-EntrprseClass18GB 15K RPM FC HDD
 1    B7993AA ABA  U.S. - English localization                  1     H4405Y AAF      CD-ROM (disk only)
 6    B9090AC      HP-UX Enterprise OE LTU 1 CPU w/ system      1     H4725A          Installation - System and Network
 1    A6262AZ VA   7100 Dual Cntl,512MB Cache Fact Inst         1     H4725A 562      Installation -Add-On Storage Component
 9    A6191A       Enterprise Class 18GB 15K RPM FC HDD.        1     H4725A 590      Install - Sure Store Autoloader SA
 9    A6191A 0D1   Factory integrated                           1     H4725A 594      Installation - SMART Storage Enclosure
 1    A6584A       PowerTrust II-MR 6.5 kW (9 kVA) UPS 230V     1     H4726A          Implementation or Network Configuration
 1    A6584A 009   6-50p Input w/PDP-2 Output US/Japan          1     H4726A 510      Installation -N-Class Server
 1    A6584A 0D1   Factory integrated                           9     H4726A 5CG      Installation - HP VA 18GB HDD
 1    A5543AZ      E41 Depth Ext. Kit, Factory Integrated       1     H4726A 5CM      Installation - HP VA7100, 512MB
 1    A5213AZ      Rear Door for Std. Rack System E41           1     A6749A          PCI 64 port serial MUX adapter
 2    A5137AZ      Modular Power Dist. Unit for std racks       1     A6749A 001      Port Module Accessory Kit
 2    A5137AZ A5N  250V/16Amp 2.5M PDU jumper cord C19/C20      1     A6749A 0D1      Factory integrated
 2    A3583A       Fbr Optic Cable 2m SC Duplex 50/125 M/M      1     J2485A          16 port RS-232 DB25 Port Module
</TABLE>

<PAGE>  Exhibit 10.7 - Pg. 10

                          COMMERCIAL GUARANTY

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
Principal        Loan Date     Maturity      Loan No.    Call/Coll    Account    Officer   Initials
<S>             <C>           <C>           <C>         <C>         <C>         <C>       <C>
                                                         0001/590   0955232160     LH4
---------------------------------------------------------------------------------------------------
          References in the shaded area are for Lender's use only and do not limit the
            applicability of this document to any particular loan or item.  Any item
             containing "***" has been omitted due to text length limitations.
---------------------------------------------------------------------------------------------------
</TABLE>

Borrower:  PET MED EXPRESS, IN.          Lender: SouthTrust Bank
           (SSN:65-0680967)                      West Palm Beach
           1441 SW 29th Ave.                     (Comm Loans - Ft. Lauderdale)
           POMPANO BEACH, FL 33069               225 N. Federal Highway
                                                 (8th Floor)
                                                 Pompano Beach, FL 33062
                                                 (561) 712-1001

Guarantor: MARC PULEO (SSN: ###-##-####)
           2727 N. ATLANTA BLVD.
           FT LAUDERDALE, FL 33308

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

AMOUNT OF GURANTY. The amount of Guaranty is Unlimited.

CONTINUING UNLIMITED GUARANTY. For good and valuable consideration,
MARC PULEO ("Guarantor") absolutely and unconditionally guarantees and
promises to pay to SouthTrust Bank ("Lender") or its order, in legal
tender of the United States of America, the Indebtedness (as that term
is defined below) of PET MED EXPRESS, INC. ("Borrower") to Lender in
the terms and conditions set forth in this Guaranty. Under this
Guaranty, the liability, the liability of Guarantor is unlimited and
the obligations of Guarantor are continuing.

INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty
includes any and all of Borrower's indebtedness to Lender and is used
in the most comprehensive sense and means and includes any and all of
Borrower's liabilities, obligations and debts to Lender, now existing
or hereinafter incurred or created, including, without limitation, all
loans, advances, interest, costs, debts, overdraft indebtedness,
credit card indebtedness, lease obligations, other obligations, and
liabilities of Borrower, or any of them, and any present or future
judgments against Borrower, or any of them; and whether any such
Indebtedness is voluntarily or involuntarily incurred, due or not due,
absolute or contingent, liquidated or unliquidated, determined or
undetermined; whether Borrower may be liable individually or jointly
with others, or primarily or secondarily, or as guarantor or surety;
whether recovery on the Indebtedness may be or may become barred or
unenforceable against Borrower for any reason whatsoever; and whether
the Indebtedness arises from transactions which may be voidable on
account of infancy, insanity, ultra vires or otherwise.

DURATION OF GUARANTY. This Guaranty will take effect when received by
Lender without the necessity of any acceptance by Lender, or any
notice to Guarantor or to Borrower, and will continue in full force
until all Indebtedness incurred or contracted before receipt by Lender
of any notice of revocation shall have been fully and finally paid and
satisfied an all of Guarantor's other obligations under this Guaranty
shall have been performed in full. If Guarantor elects to revoke the
Guaranty, Guarantor may only do so in writing. Guarantor's written
notice of revocation must be mailed to Lender, by certified mail, at
Lender's address listed above or such other place as Lender may
designate in writing. Written revocation of this Guaranty will apply
only to advances or new Indebtedness created after actual receipt by
Lender of Guarantor's written revocation. For this purpose and without
limitation, the term, "new Indebtedness" does not include Indebtedness
which at the time of notice of revocation is contingent, unliquidated,
undetermined or not due and which later becomes absolute, liquidated,
determined or due. This Guaranty will continue to bind Guarantor for
all Indebtedness incurred by Borrower or committed by Lender prior to
receipt of Guarantor's written notice of revocation is contingent,
unliquidated, undetermined and not due and which later becomes
absolute, liquidated, determined or due. This written notice of
revocation, including any extensions, renewals, substitutions or
modifications of the Indebtedness. All renewals, extensions,
substitutions, and modifications of the Indebtedness granted after
Guarantor's revocation, are contemplated under this Guaranty and,
specifically will not be considered to be new Indebtedness. This
Guaranty shall bind Guarantor's estate as to Indebtedness created both
before and after Guarantor's death or incapacity, regardless of
Lender's actual notice of Guarantor's death. Subject to the foregoing,
Guarantor's executor or administrator or other legal representative
may terminate this Guaranty in the same manner in which Guarantor
might have terminated it and with the same effect. Release of any
other guarantor or termination of any other guaranty of the
Indebtedness shall not affect the liability of Guarantor under this
Guaranty. A revocation Lender receives from any one or more Guarantors
shall not affect the liability of any remaining Guarantors under this
Guaranty. It is anticipated that fluctuations may occur in the
aggregate amount of Indebtedness covered by this Guaranty, and
Guarantor specifically acknowledges and agrees that reductions in the
amount of Indebtedness, even to zero dollars ($0.00), prior to
Guarantor's written revocation of this Guaranty shall not constitute a
revocation of this Guaranty. This Guaranty is binding upon Guarantor
and Guarantor's heirs, successors and assigns so long as any of the
guaranteed Indebtedness remains unpaid and even though the
Indebtedness guaranteed may from time to time be zero dollars ($0.00).

GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender,
either before or after any revocation thereof, without notice or
demand and without lessening Guarantor's liability under this
Guaranty, from time to time: (A) prior to revocation as set forth
above, to make one or more additional secured or unsecured loans to
Borrower, to lease equipment or other goods to Borrower, or otherwise
to extend additional credit to Borrower; (B) to alter, compromise,
renew, extend, accelerate, or otherwise change one or more times the
time for payment or other terms of the Indebtedness or any part of the
Indebtedness, including increases and decreases of the rate of
interest on the Indebtedness; extensions may be repeated and may be
for longer than the original loan term; (C) to take and hold security
for the payment of this Guaranty or the Indebtedness, and exchange,
enforce, waive, subordinate, fail or decide not to perfect, and
release any such security, with or without the substitution of new
collateral; (D) to release, substitute, agree not to sue, or deal with
any one or more of Borrower's sureties, endorsers, or other guarantors
on any terms or in any manner Lender may choose; (E) to determine how,
when and what application of payments and credits shall be made on the
Indebtedness (F) to apply such security agreement or deed or trust as
Lender in its discretion may determine; (G) to sell, transfer, assign
or grant participations in all or any part of the Indebtedness; and
(H) to assign or transfer this Guaranty in whole or part.

GUARANTOR'S REPRESENTATION AND WARRANTIES. Guarantor represents and
warrants to Lender that (A) no representations or agreements of any
kind have been made to Guarantor which would limit or qualify in any
way the terms of this Guaranty; (B) this Guaranty is executed at
Borrower's request and not at the request of Lender; (C) Guarantor has
full power, right and authority to enter into this Guaranty; (D) the
provisions of this Guaranty do not conflict with or result in a
default under any agreement or other instrument binding upon Guarantor
and do not result in a violation of any law, regulation, court decree
or order applicable to Guarantor; (E) Guarantor has not and will not,
without the prior written consent of Lender, sell, lease, assign,
encumber, hypothecate, transfer, or otherwise dispose of all or
substantially all of Guarantor's assets, or any interest therein; (F)
upon Lender's request, Guarantor will provide to Lender financial and
credit information in form acceptable to Lender, and all such
financial information which currently has been, and all future
financial information which will be provided to Lender is and will be
true and correct in all material respects and fairly present
Guarantors financial condition as of the dates the financial
information is provided; (G) no material adverse change has occurred
in Guarantor's financial condition since the date of the most recent
financial statements provided to Lender and no event has occurred
which may materially adversely affect Guarantor's financial condition;
(H) no litigation, claim, investigation, administrative proceeding or
similar action (including those for unpaid taxes) against Guarantor is
pending or threatened; (I) Lender has made no representation to
Guarantor as to the creditworthiness of Borrower; and (J) Guarantor
has established adequate means of obtaining from Borrower on a
continuing basis information regarding Borrower's financial condition.
Guarantor agrees to keep adequately informed from such means of any
facts, events, or circumstances which might in any way affect
Guarantor's risks under this Guaranty, and Guarantor further agrees
that, absent a request for information, Lender shall have no
obligation to disclose to Guarantor any information or documents
acquired by Lender in the course of its relationship with the
Borrower.

GURANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor
waives any right to require Lender (A) to continue lending money or to
extend other credits to Borrower; (B) to make any presentment,
protest, demand, or notice of any kind, including notice of any
nonpayment of the Indebtedness or of any nonpayment related to any
collateral, or notice of any action or nonaction on the part of
Borrower, Lender, and surety, endorser, or other guarantor in
connection with the Indebtedness or in connection with the creation of
new or additional loans or obligations; (C) to resort for payment or
to proceed directly or at once against any person, including Borrower
or any other guarantor; (D) to proceed directly against or exhaust any
collateral held by Lender from Borrower, or any other guarantor, or
any other person; (E) to give notice of the terms, time, and place of
any public or private sale of personal property security held by
Lender from Borrower or to comply with any other applicable provisions
of the Uniform Commercial Code; (F) to pursue any other remedy within
Lender's power; or (G) to commit any act or omission of any, or at any
time, with respect to any matter whatsoever.

Guarantor also waives any and all rights or defenses arising by reason
of (A) any "one action" or "anti-deficiency" law or any other law
which may prevent Lender from bringing any action, including a claim
for deficiency, against Guarantor, before or after Lender's
commencement or completion of any foreclosure action, either
judicially or by exercise of a power of sale; (B) any election of
remedies by Lender which destroys or otherwise adversely affects
Guarantor's subrogation rights or Guarantor's rights to proceed
against Borrower for reimbursement, including

<PAGE>  Exhibit 10.7 - Pg. 11

                       COMMERCIAL GUARANTY
Loan No: 0000250498        (Continued)                          Page 2
______________________________________________________________________

without limitation, any loss of rights Guarantor may suffer by reason
of any law limited, qualifying, or discharging the Indebtedness; (C)
any disability or other defense of Borrower, of any other guarantor,
or of any other person, or by reason of the cessation of Borrower's
liability from any cause whatsoever, other than payment in full in
legal tender, of the Indebtedness; (D) any right to claim discharge of
the Indebtedness on the basis of unjustified impairment of any
collateral for the Indebtedness; (E) any statue of limitations, if at
any time any action or suit brought by Lender against Guarantor is
commenced, there is outstanding Indebtedness of Borrower to Lender
which is not barred by any applicable statute of limitations; or (F)
any defenses given to guarantors at law or in equity other than actual
payment and performance of the Indebtedness. If payment is made by
Borrower, whether voluntarily or otherwise, or by any third party, on
the Indebtedness and thereafter Lender is forced to remit the amount
of that payment to Borrower's trustee in bankruptcy or to any similar
person under any federal or state bankruptcy law or law for the relief
of debtors, the Indebtedness shall be considered unpaid for the
purpose of the enforcement of this Guaranty.

Guarantor further waives and agrees not to assert or claim at any time
any deductions to the amount guaranteed under this Guaranty for any
claim of setoff, counterclaim, counter demand, recoupment or similar
right, whether such claim, demand or right may be asserted by the
Borrower, the Guarantor, or both.

GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants
and agrees that each of the waivers set forth above is made with
Guarantor's full knowledge of its significance and consequences and
that, under the circumstances, the waivers are reasonable and not
contrary to public policy or law. If any such waiver is determined to
be contrary to any applicable law or public policy, such waiver shall
be effective only to the extent permitted by law or pubic policy.

SUBORDINATION OF BORROWER'S DEBTED TO GUARANTOR. Guarantor agrees that
the Indebtedness of Borrower to Lender, whether now existing or
hereafter created, shall be superior to any claim that Guarantor may
now have or hereafter acquire against Borrower, whether or not
Borrower becomes insolvent. Guarantor hereby expressly subordinates
any claim Guarantor may have against Borrower, upon any account
whatsoever, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the
assets of Borrower, through bankruptcy, by an assignment for the
benefit of creditors, by voluntary liquidation, or otherwise, the
assets of Borrower applicable to the payment of the claims of both
Lender and Guarantor shall be paid to Lender and shall be first
applied by Lender to the Indebtedness of Borrower to Lender. Guarantor
does hereby assign to Lender all claims which it may have or acquire
against Borrower or Indebtedness of Borrower to Lender. Guarantor does
hereby assign to Lender all claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy of
Borrower; provided however, that such assignment shall be effective
only for the purpose of assuring to Lender full payment in legal
tender of the Indebtedness. If Lender so requests, any notes or credit
agreements now or hereafter evidencing any debts or obligations of
Borrower to Guarantor shall be marked with a legend that the same are
subject to this Guaranty and shall be delivered to Lender. Guarantor
agrees, and Lender is hereby authorized, in the name of Guarantor,
from time to time to execute and file financing statements and
continuation statements and to execute such other documents and take
such other actions as Lender deems necessary or appropriate to
perfect, preserve and enforce its rights under this Guaranty.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a
part of this Guaranty.

   Amendments.  This Guaranty, together with any Related Documents,
   constitutes the entire understanding and agreement of the parties
   as to the matters set forth on this Guaranty. No alteration of or
   amendment to this Guaranty shall be effective unless given in
   writing and signed by the party or parties sought to be charged
   or bound by the alteration or amendment.

   Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand
   all of Lender's costs and expenses, including Lender's attorneys'
   fees and Lender's legal expenses incurred in connection with the
   enforcement of this Guaranty. Lender may hire or pay someone else
   to help enforce this Guaranty, and Guarantor shall pay the costs
   and expenses of such enforcement. Costs and expenses include
   Lender's attorneys' fees and legal expenses whether or not there
   is a lawsuit, including attorneys' fees and legal expenses for
   bankruptcy proceedings (including efforts to modify or vacate any
   automatic stay or injunction), appeals, and any anticipated post-
   judgment collection services. Guarantor also shall pay all court
   costs and such additional fees as may be directed by the court.

   Caption Headings. Caption headings in this Guaranty are for
   convenience purposes only and are not to be used to interpret or
   define the provisions of this Guaranty.

   Governing Law. This Guaranty will be covered by, construed and
   enforced in accordance with federal law and the laws of the State
   of Florida. However, in the event that the enforceability or
   validity of any provision of this Guaranty is challenged or
   questioned, such provision shall be governed by whichever
   applicable state or federal law would uphold or would enforce
   such challenged or questioned provision. The loan transaction
   which is evidenced by the Note and this Guaranty has been applied
   for, considered, approved and made, and all necessary loan
   documents have been accepted by Lender in the State of Florida.

   Integration. Guarantor further agrees that Guarantor has read and
   fully understands the terms of this Guaranty; Guarantor has had
   the opportunity to be advised by Guarantor's attorney with
   respect to this Guaranty; the Guaranty fully reflects Guarantor's
   intentions and parol evidence is not required to interpret the
   terms of this Guaranty. Guarantor hereby indemnifies and holds
   Lender harmless from all losses, claims, damages, and costs
   (including Lender's attorneys' fees) suffered or incurred by
   Lender as a result of any breach by Guarantor of the warranties,
   representations and agreements of this paragraph.

   Interpretation. In all cases where there is more than one
   Borrower or Guarantor, then all words used in this Guaranty in
   the singular shall be deemed to have been sued in the plural
   where the context and construction so require; and where there is
   more than one Borrower named in this Guaranty or when this
   Guaranty is executed by more than one Guarantor, the words
   "Borrower" and "Guarantor" respectively shall mean all and any
   one or more of them. The words "Guarantor," "Borrower," and
   "Lender" includes their heirs, successors, assigns, and
   transferees of each of them. If a court finds that any provision
   of this Guaranty is not valid or should not be enforced, that
   fact by itself will not mean that the rest of this Guaranty will
   not be valid or enforced. Therefore, a court will enforce the
   rest of the provisions of this Guaranty even if a provision of
   this Guaranty may be found to be invalid or unenforceable. If any
   one or more of Borrower or Guarantor are corporations,
   partnerships, limited liability companies, or similar entities,
   it is not necessary for Lender to inquire into the powers of
   Borrower or Guarantor or of the officers, directors, partners,
   managers, or other agents acting or purporting to act on their
   behalf, and any Loan indebtedness made or created in reliance
   upon the professed exercise of such powers shall be guaranteed
   under this Guaranty.

   Notices. Any notice required to be given under this Guaranty
   shall be given in writing, and, except for revocation notices by
   rantor, shall be effective when actually delivered, when
   actually received by telefacsimile (unless otherwise required by
   law), when deposited with a nationally recognized overnight
   courier, or, if mailed, when deposited in the United States mail,
   as first class, certified or registered mail postage prepaid,
   directed to the addresses shown near the beginning of this
   Guaranty. All revocation notices by Guarantor shall be in writing
   and shall be effective upon delivery to Lender as provided in the
   section of this Guaranty entitled "DURATION OF GUARANTY."  Any
   party may change its address for notices under this Guaranty by
   giving formal written notice to the other parties, specifying
   that the purpose of the notice is to change the party's address.
   For notice purpose, Guarantor agrees to keep Lender informed at
   all times of Guarantor's current address. Unless otherwise
   provided by applicable law, if there is more than one Guarantor,
   any notice given by Lender to any Guarantor is deemed to be
   notice given to all Guarantors.

   No Waiver by Lender. Lender shall not be deemed to have waived
   any rights under this Guaranty unless such waiver is given in
   writing and signed by Lender. No delay or omission on the part of
   Lender in exercising any right shall operate as a waiver of such
   right or any other right. A waiver by Lender of a provision of
   this Guaranty shall not prejudice or constitute a waiver of
   Lender's right otherwise to demand strict compliance with that
   provision or any other provision of this Guaranty. No prior
   waiver by Lender, not any other course of dealing between Lender
   and Guarantor, shall constitute a waiver of any of Lender's
   rights or of any Guarantor's obligations as to any future
   transactions. Whenever to consent of Lender is required under
   this Guaranty, the granting of such consent by Lender in any
   instance shall not constitute continuing consent to subsequent
   instances where such consent is required and in all cases such
   consent is required and in all cases such consent may be granted
   or withheld in the sole discretion of Lender.

   Successors and Assigns. Subject to any limitations stated in this
   Guaranty on transfer of Guarantor's interest, this Guaranty on
   transfer of Guarantor's interest, this Guaranty shall be binding
   upon and inure to the benefit of the parties, their successors
   and assigns.

DEFINITIONS. The following capitalized words and terms shall have the
following meanings when used in this Guaranty. Unless specifically
stated to the contrary, all references to dollar amounts shall mean
amounts in lawful money of the United States of America. Words and
terms used in the singular shall include the plural, and the plural
shall include the singular, as the context may require. Words and
terms not otherwise defined in this Guaranty shall have the meanings
attributed to such terms in the Uniform Commercial Code.

   Borrower. The word "Borrower" means PET MED EXPRESS, INC., and
   all other persons and entities signing the note in whatever
   capacity.

   Guarantor. The word "Guarantor" means each and every person or
   entity signing this Guaranty, including without limitation MARC

<PAGE>  Exhibit 10.7 - Pg. 12

                       COMMERCIAL GUARANTY
Loan No: 0000250498        (Continued)                          Page 3
______________________________________________________________________

   PULEO.

   Guaranty. The word "Guaranty" means the guaranty from Guarantor
   to Lender, including without limitation a guaranty of all or part
   of the Note.

   Indebtedness. The word "Indebtedness" means Borrower's
   Indebtedness to Lender as more particularly described in this
   Guaranty.

   Lender. The word "Lender" means SouthTrust Bank, its successors
   and assigns.

   Note. The word "Note" means the promissory note dated March 12,
   2002, in the original amount of %205, 327.00 from Borrower to
   Lender, together with all renewals of, extensions of,
   modifications of, refinancings of, consolidations of, and
   substitutions for the promissory note or agreement.

   Related Documents. The words "Related Documents" mean all
   promissory notes, credit agreements, loan agreements,
   environmental agreements, guaranties, security agreements,
   mortgages, deeds of trust, security deeds, collateral mortgages,
   and other instruments, agreements and documents, whether now or
   hereafter existing, executed in connection with the Indebtedness.

EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS
OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR
UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION
AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL
CONTINUE UNTIL TERMINED IN THE MANNER SET FORTH IN THE SECTION TITLED
"DURATION OF GUARANTY." NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO
MAKE THIS GUARANTY EFFECTIVE. THIS GUARNATY IS DATED MARCH 12, 2002.

GUARANTOR:

/s/___Marc Puleo________
MARC PULEO, Individually

<PAGE>  Exhibit 10.7 - Pg. 13

           CORPORATE RESOLUTION TO BORROW / GRANT COLLATERAL

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
Principal        Loan Date     Maturity      Loan No.    Call/Coll    Account    Officer   Initials
<S>             <C>           <C>           <C>         <C>         <C>         <C>       <C>
$205,327.00     03-12-2002     03-13-2005   0000250498   0001/590   0955232160      LH4
---------------------------------------------------------------------------------------------------
          References in the shaded area are for Lender's use only and do not limit the
            applicability of this document to any particular loan or item.  Any item
             containing "***" has been omitted due to text length limitations.
---------------------------------------------------------------------------------------------------
</TABLE>

Corporation:  PET MED EXPRESS, IN.       Lender: SouthTrust Bank
              (SSN:65-0680967)                   West Palm Beach
              1441 SW 29th Ave.                  (Comm Loans - Ft. Lauderdale)
              POMPANO BEACH, FL 33069            225 N. Federal Highway
                                                 (8th Floor)
                                                 Pompano Beach, FL 33062
                                                 (561) 712-1001

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

I, THE UNDERSIGNED, DO HEREBY CERTIFY THAT:

THE CORPORATION'S EXISTENCE. The complete and correct name of the
Corporation is PET MED EXPRESS, INC. ("Corporation"). The Corporation
is a corporation for profit which is, and at all times shall be, duly
organized, validity existing, and in good standing under and by virtue
of the laws of the State of Florida. The Corporation is duly
authorized to transact business in all other states in which the
Corporation is doing business. Specifically, the Corporation is, and
at all times shall be, duly qualified as a foreign corporation in all
states in which the failure to do so qualify would have a material
adverse effect on its business or financial condition. The Corporation
has the full power and authority to own its properties and to transact
the business in which it is presently engaged or presently proposes to
engage. The Corporation maintains an office at 1441 SW 29TH AVE,
POMPANO BEACH, FL 33069.  Unless the Corporation has designated
otherwise in writing, the principal office is the office at which the
Corporation keeps its books and records. The Corporation will notify
Lender prior to any change in the location of the Corporation's state
of organization or any change in the Corporation's name. The
Corporation shall do all things necessary to preserve and to keep in
full force and effect its existence, rights and privileges, and shall
comply with all regulations, rules, ordinances, statues, orders and
decrees of any governmental or quasi-governmental authority or court
applicable to the Corporation and the Corporation's business
activities.

RESOLUTIONS ADOPTED. At a meeting of the Directors of the Corporation,
or if the Corporation is a close corporation having no Board of
Directors then at a meeting of the Corporation's shareholders, duly
called and held on ________________, at which a quorum was present and
voting, or by other duly authorized action in lieu of a meeting, the
resolutions set forth in this Resolution were adopted.

OFFICER. The following named person is an officer of PET MED EXPRESS,
IN.:

<TABLE>
<CAPTION>
  NAMES         TITLES      AUTHORIZED      ACTUAL SIGNATURES
  -----         ------      ----------      -----------------
<S>             <C>         <C>             <C>
MENDO AKDAG      CEO            Y           /S/____Mendo Akdag_______
</TABLE>

ACTIONS AUTHORIZED. The authorized person listed above may enter into
any agreements of any nature with Lender, and those agreements will
bind the Corporation. Specifically, but without limitation, the
authorized person is authorized, empowered, and directed to do the
following for and on behalf of the Corporation:

   Borrow Money. To borrow, as a cosigner or other, from time to
   time from Lender, on such terms as may be agreed upon between the
   Corporation and Lender, such sum or sums of money as in his or
   her judgment should be borrowed, without limitation.

   Execute Notes. To execute and deliver to Lender the promissory
   note or notes, or other evidence of the Corporation's credit
   accommodations, on Lender's forms, at such rates of interest and
   on such terms as may be agreed upon, evidencing the sums of money
   so borrowed or any of the Corporation's indebtedness to Lender,
   and also to execute and deliver to Lender one or more renewals,
   extensions, modifications, refinancing, consolidations, or
   substitutions for one or more of the notes, or any other evidence
   of credit accommodations.

   Grant Security. To mortgage, pledge, transfer, endorse,
   hypothecate, or otherwise encumber and deliver to Lender any
   property now or hereafter belonging to the Corporation or in
   which the Corporation now or hereafter may have an interest,
   including without limitation all real property and all personal
   property (tangible or intangible) of the Corporation, as security
   for the payment of any loans or credit accommodations so
   obtained, any promissory notes so executed (including any
   amendments to or modifications, renewals, and extensions of such
   promissory notes), or any other further indebtedness of the
   Corporation to Lender at any time owing, however the same may be
   evidenced. Such property may be mortgaged, pledged, transferred,
   endorsed, hypothecated or encumbered at the time such loans are
   obtained or such indebtedness is incurred, or at any time or
   times, and may be either in addition to or in lieu of any
   property theretofore mortgaged, pledged, transferred, endorsed,
   hypothecated or encumbered.

   Execute Security Documents. To execute and deliver to Lender the
   forms of mortgage, deed of trust, pledge agreement, hypothecation
   agreement, and other security agreements and financing statements
   which Lender may require and which shall evidence the terms and
   conditions under the pursuant to which such liens and
   encumbrances, or any of them, are given; and also to execute and
   deliver to Lender any other written instruments, and chattel
   paper, or any other collateral, or any kind or nature, which
   Lender may deem necessary or proper in connection with or
   pertaining to the giving of the liens and encumbrances.
   Negotiate Items. To draw, endorse, and discount with Lender all
   drafts, trade acceptances, promissory notes, or other evidences
   of indebtedness payable to or belonging to the Corporation or in
   which the Corporation may have an interest, and either to receive
   cash for the same or to cause such proceeds to be credited to the
   Corporation's account with Lender, or to cause such other
   disposition of the proceeds derived therefrom as he or she may
   deem advisable.

   Further Acts. In the case of lines of credit, to designate
   additional or alternate individuals as being authorized to
   request advances under such lines, and in all cases, to do and
   perform such other acts and things, to pay any and all fees and
   costs, and to execute and deliver such other documents and
   agreements, including agreements waiving the right to a trial by
   jury, as the officer may in his or her discretion deem reasonably
   necessary or proper in order to carry into effect the provisions
   of this resolution.

ASSUMED BUSINESS NAMES. The Corporation has filed or recorded all
documents or filings required by law relating to all assumed business
names used by the Corporation. Excluding the name of the Corporation,
the following is a complete list of all assumed business names under
which the Corporation does business: None.

NOTICES TO LENDER.  The Corporation will promptly notify Lender in
writing at Lender's address shown above (or such other addresses as
Lender may designate from time to time) prior to any (A) change the
Corporation's name; (B) change in the Corporation's assumed business
name(s); (C) change in the management of the Corporation; (D) change
in the authorized signer(s); (E) change in the Corporation's principal
office address; (F) change in the Corporation's state of organization;
(G) conversion of the Corporation to a new or different type of
business entity; or (H) change in any other aspect of the Corporation
that directly or indirectly relates to any agreements between the
Corporation and Lender. No change in the Corporation's name or state
of organization will take effect until after Lender has received
notice.

CERTIFICATION CONCERNING OFFICERS AND RESOLUTIONS. The officer named
above is duly elected, appointed, or employed by or for the
Corporation, as the case may be, and occupies the position set
opposite his or her respective name. This Resolution now stands of
record on the books of the Corporation, is in full force and effect,
and has not been modified or revoked in any manner whatsoever.

NO CORPORATE SEAL. The Corporation has no corporate seal, and
therefore, no seal is affixed to this Resolution.

CONTINUING VALIDITY. Any and all acts authorized pursuant to this
Resolution and performed prior to the passage of this Resolu6tion are
hereby ratified and approved. This Resolution shall be continuing,
shall remain in full force and effect and Lender may rely on it until
written notice of its revocation shall have been delivered to and
received by Lender at Lender's address shown above (or such addresses
as Lender may designate from time to time). Any such notice shall not
affect any of the Corporation's agreements or commitments in effect at
the time notice is given.

IN TESTIMONY WHEREOF, I have hereunto set my hand and attest that the
signature set opposite the name listed above is his or her genuine
signature.

I have read all the provisions in this Resolution, and I personally
and on behalf of the Corporation certify that all statements and
representations made this Resolution are true and correct. This
Corporate Resolution to Borrow / Grant Collateral is
dated_________________.

<PAGE>  Exhibit 10.7 - Pg. 14

          CORPORATE RESOLUTION TO BORROW / GRANT COLLETERAL
Loan No: 0000250498        (Continued)                          Page 2
______________________________________________________________________

                                  CERTIFIED TO AND ATTESTED BY:

                                  /S/______Mendo Akdag________________
                                     MENDO AKDAG, CEO

<PAGE>  Exhibit 10.7 - Pg. 15

                 DISBURSEMENT REQUEST AND AUTHORIZATION
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
Principal        Loan Date     Maturity      Loan No.    Call/Coll    Account    Officer   Initials
<S>             <C>           <C>           <C>         <C>         <C>         <C>       <C>
$205,327.00     03-12-2002     03-13-2005   0000250498   0001/590   0955232160      LH4
---------------------------------------------------------------------------------------------------
          References in the shaded area are for Lender's use only and do not limit the
            applicability of this document to any particular loan or item.  Any item
             containing "***" has been omitted due to text length limitations.
---------------------------------------------------------------------------------------------------
</TABLE>

Borrower:  PET MED EXPRESS, IN.          Lender: SouthTrust Bank
           (SSN:65-0680967)                      West Palm Beach
           1441 SW 29th Ave.                     (Comm Loans - Ft. Lauderdale)
           POMPANO BEACH, FL 33069               225 N. Federal Highway
                                                 (8th Floor)
                                                 Pompano Beach, FL 33062
                                                 (561) 712-1001

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

LOAN TYPE: This is a Variable Rate Nondisclosable Loan to a
Corporation for $205,327.00 due on March 13, 2005. The reference rate
("base rate". The term "base rate" means the rate of interest
designated by the Lender periodically as its Base Rate, currently
4.750%) is added to the margin of 1.000%, resulting in an initial rate
of 5.750.

PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for
(please initial):

    [ ]  _______ Personal, Family or Household Purposes or Personal
                 Investment

    [X]  _______ Business (Including Real Estate Investment).

SPECIFIC PURPOSE.  The specific purpose of this loan is: CAP
EXPENDITURES - PURCHASE EQUIPMENT.

DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds
will be disbursed until all of Lender's conditions for making the loan
have been satisfied. Please disburse the loan proceeds of $205,326.00
as follows:

      Amount paid to Borrower directly:        	$202,530.10
        $202.530.10 Lender's Check #

      Other Charges Financed:                     $2,796.90
        $2,050.00 LOAN FEE
        $28.00 UCC FILING FEE
        $718.90 DOC STAMP FEE (FLA ONLY)
                                                ___________

      Note Principal:                           $205,327.00

AUTOMATIC PAYMENTS. Borrower hereby authorizes Lender automatically to
deduct from Borrower's Checking account numbered 50390015, ABA
numbered the amount of any loan payment. If the funds in the account
are insufficient to cover any payment, Lender shall not be obligated
to advance funds to cover the payment. At any time and for any reason,
Borrower or Lender may voluntarily terminate Automatic Payments.

FINAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS
AND WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND
CORRECT AND THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN THE
BORROWER'S FINANCIAL CONDITION AS DISCLOSED IN BORROWER'S MOST RECENT
FINANCIAL STATEMENT TO LENDER. THIS AUTHORIZATION IS DATED MARCH 12,
2002.

BORROWER:

PET MED EXPRESS, INC.

By:/S/____Mendo Akdag____________________
MENDO AKDAG, CEO of PET MED EXPRESS, INC.

<PAGE>  Exhibit 10.7 - Pg. 16<PAGE>
                                                                    EXHIBIT 10.3

                         WALLACE COMPUTER SERVICES, INC.
                          EXECUTIVE SEVERANCE PAY PLAN

                (AS AMENDED AND RESTATED EFFECTIVE MARCH 6, 2002)

          Wallace Computer Services, Inc., a Delaware corporation (the
"Company"), hereby adopts the Wallace Computer Services, Inc. Executive
Severance Pay Plan, as amended and restated effective March 6, 2002 (the "Plan")
for the benefit of certain employees of the Company and its subsidiaries. The
Plan supersedes in its entirety the Wallace Computer Services, Inc. Executive
Severance Pay Plan as adopted effective as of September 13, 1989, as amended by
Amendment No. 1, Amendment No. 2 and Amendment No. 3 thereto.

          The Plan is intended to secure the continued services and ensure the
continued dedication and objectivity of the Employees (as defined in Section
1(f)) in the event of any threat or occurrence of, or negotiation or other
action that could lead to, or create the possibility of, a Change in Control (as
defined in Section 1(c)) of the Company, by providing to such Employees certain
protections so that such Employees need not be hindered or distracted by
personal uncertainties and risks created by any such possible Change in Control.

          1. Definitions. As used in this Plan, the following terms shall have
the respective meanings set forth below:

          (a) "Board" means the Board of Directors of the Company.

          (b) "Cause" means:

               (1) a material breach by an Employee of those duties and
          responsibilities of the Employee which do not differ in any material
          respect from the duties and responsibilities of the Employee during
          the 90-day period immediately prior to a Change in Control (other than
          as a result of incapacity due to physical or mental illness) which is
          demonstrably willful and deliberate on the Employee's part, which is
          committed in bad faith or without reasonable belief that such breach
          is in the best interests of the Company and which is not remedied in a
          reasonable period of time after receipt of written notice from the
          Company specifying such breach;

               (2) the commission by the Employee of a felony involving moral
          turpitude;

               (3) the commission by the Employee of theft, fraud, breach of
          trust or any act of dishonesty involving the Company or its
          subsidiaries; or

               (4) the significant violation by the Employee of any statutory or
          common law duty of loyalty to the Company or its subsidiaries.

<PAGE>

          (c)  "Change in Control" means:

               (1) the acquisition by any individual, entity or group (a
     "Person"), including any "person" within the meaning of Section 13(d)(3) or
     14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
     Act"), of beneficial ownership (within the meaning of Rule 13d-3
     promulgated under the Exchange Act) of 35% or more of either (i) the then
     outstanding shares of common stock of the Company (the "Outstanding Common
     Stock") or (ii) the combined voting power of the then outstanding
     securities of the Company entitled to vote generally in the election of
     directors (the "Outstanding Voting Securities"); excluding, however, the
     following: (A) any acquisition directly from the Company (excluding any
     acquisition resulting from the exercise of an exercise, conversion or
     exchange privilege unless the security being so exercised, converted or
     exchanged was acquired directly from the Company), (B) any acquisition by
     the Company, (C) any acquisition by an employee benefit plan (or related
     trust) sponsored or maintained by the Company or any corporation controlled
     by the Company, or (D) any acquisition by any corporation pursuant to a
     transaction which complies with clauses (i), (ii) and (iii) of subsection
     (3) of this Section 1(c); provided further, that for purposes of clause
     (B), if any Person (other than the Company or any employee benefit plan (or
     related trust) sponsored or maintained by the Company or any corporation
     controlled by the Company) shall become the beneficial owner of 35% or more
     of the Outstanding Common Stock or 35% or more of the Outstanding Voting
     Securities by reason of an acquisition by the Company, and such Person
     shall, after such acquisition by the Company, become the beneficial owner
     of any additional shares of the Outstanding Common Stock or any additional
     Outstanding Voting Securities and such beneficial ownership is publicly
     announced, such additional beneficial ownership shall constitute a Change
     in Control;

               (2) individuals who, as of the date hereof, constitute the Board
     (the "Incumbent Board") cease for any reason to constitute at least a
     majority of such Board; provided that any individual who becomes a director
     of the Company subsequent to the date hereof whose election, or nomination
     for election by the Company's stockholders, was approved by the vote of at
     least a majority of the directors then comprising the Incumbent Board shall
     be deemed a member of the Incumbent Board; and provided further, that any
     individual who was initially elected as a director of the Company as a
     result of an actual or threatened solicitation by a Person other than the
     Board for the purpose of opposing a solicitation by any other Person with
     respect to the election or removal of directors, or any other actual or
     threatened solicitation of proxies or consents by or on behalf of any
     Person other than the Board shall not be deemed a member of the Incumbent
     Board;

               (3) the consummation of a reorganization, merger or consolidation
     or sale or other disposition of all or substantially all of the assets of
     the Company (a "Corporate Transaction"); excluding, however, a Corporate
     Transaction pursuant to which (i) all or substantially all of the
     individuals or entities who are the beneficial owners, respectively, of the
     Outstanding Common Stock and the Outstanding Voting Securities immediately

                                       2
<PAGE>

     prior to such Corporate Transaction will beneficially own, directly or
     indirectly, more than 65% of, respectively, the outstanding shares of
     common stock, and the combined voting power of the outstanding securities
     entitled to vote generally in the election of directors, as the case may
     be, of the corporation resulting from such Corporate Transaction
     (including, without limitation, a corporation which as a result of such
     transaction owns the Company or all or substantially all of the Company's
     assets either directly or indirectly) in substantially the same proportions
     relative to each other as their ownership, immediately prior to such
     Corporate Transaction, of the Outstanding Common Stock and the Outstanding
     Voting Securities, as the case may be, (ii) no Person (other than: the
     Company; any employee benefit plan (or related trust) sponsored or
     maintained by the Company or any corporation controlled by the Company; the
     corporation resulting from such Corporate Transaction; and any Person which
     beneficially owned, immediately prior to such Corporate Transaction,
     directly or indirectly, 35% or more of the Outstanding Common Stock or the
     Outstanding Voting Securities, as the case may be) will beneficially own,
     directly or indirectly, 35% or more of, respectively, the outstanding
     shares of common stock of the corporation resulting from such Corporate
     Transaction or the combined voting power of the outstanding securities of
     such corporation entitled to vote generally in the election of directors
     and (iii) individuals who were members of the Incumbent Board will
     constitute at least a majority of the members of the board of directors of
     the corporation resulting from such Corporate Transaction; or

               (4) the consummation of a plan of complete liquidation or
     dissolution of the Company.

          (d)  "Code" means the Internal Revenue Code of 1986, as amended.

          (e)  "Company" means Wallace Computer Services, Inc., a Delaware
     corporation.

          (f)  "Employee" means any person who is employed by the Company in an
executive or officer position and who is designated by the Plan Administrator,
in his or her sole discretion, as a participant in this Plan from time to time,
excluding any person who enters into an individual severance agreement with the
Company. The Plan Administrator, in his or her sole discretion, shall designate
each Employee as a Benefit Level I Employee or a Benefit Level II Employee for
purposes of this Plan.

          (g)  "Good Reason" means, without an Employee's express written
consent, the occurrence of any of the following events after a Change in
Control:

               (1)  with respect to a Benefit Level I Employee, (i) a reduction
     by the Company in the Employee's rate of annual base salary or bonus
     opportunity as in effect immediately prior to such Change in Control or as
     the same may be increased from time to time thereafter; (ii) any
     requirement of the Company that the Employee be based more than 50 miles
     from the facility where the Employee is based at the time of the Change in

                                       3
<PAGE>

     Control; (iii) the failure of the Company to (a) continue in effect any
     employee benefit plan or compensation plan in which the Employee is
     participating immediately prior to such Change in Control, unless the
     Employee is permitted to participate in other plans providing the Employee
     with substantially comparable benefits, or the taking of any action by the
     Company which would adversely affect the Employee's participation in or
     materially reduce the Employee's benefits under any such plan and (b)
     provide the Employee and the Employee's dependents welfare benefits
     (including, without limitation, accidental death and travel accident
     insurance plans and programs) in accordance with the most favorable plans,
     practices, programs and policies of the Company and its affiliated
     companies; or (iv) the failure of the Company to obtain from any successor
     or transferee of the Company an express written and unconditional
     assumption of the Company's obligations under this Plan, as further
     described in Section 8(g) of this Plan; and

               (2)  with respect to a Benefit Level II Employee, (i) any of the
     events set forth in Section 1(g)(1) or (ii) any material reduction in the
     Employee's responsibilities so that such responsibilities, in the
     aggregate, are no longer of a type associated with the Employee's position
     with the Company immediately prior to such Change in Control, or a change
     to a materially lesser status of the Employee's titles or offices with the
     Company as in effect immediately prior to such Change in Control.

For purposes of this Plan, an isolated, insubstantial and inadvertent action
taken in good faith and which is remedied by the Company promptly after receipt
of written notice thereof given by the Employee shall not constitute Good
Reason.

          (h) "Nonqualifying Termination" means the termination of an Employee's
employment (i) by the Company for Cause, (ii) by the Employee for any reason
other than Good Reason, (iii) as a result of the Employee's death or (iv) by the
Company due to the Employee's absence from his or her duties with the Company on
a full-time basis for at least 180 consecutive days as a result of the
Employee's incapacity due to physical or mental illness.

          (i) "Severance Period" means (i) with respect to a Benefit Level I
Employee, the period commencing on the Termination Date and ending on the first
anniversary of the Termination Date and (ii) with respect to a Benefit Level II
Employee, the period commencing on the Termination Date and ending on the second
anniversary of the Termination Date.

          (j) "Termination Date" with respect to an Employee means the date
during the Termination Period on which the Employee's employment is terminated
other than by reason of a Nonqualifying Termination.

          (k) "Termination Period" with respect to an Employee means the period
commencing upon a Change in Control and ending on the earlier to occur of (i)
the date which is two years following such Change in Control and (ii) the
Employee's death.

                                       4
<PAGE>

          2. Benefits. If during the Termination Period the employment of an
Employee shall terminate, other than by reason of a Nonqualifying Termination,
and the Employee (or the Employee's executor or other legal representative in
the case of the Employee's death or disability following such termination)
executes a general release and noncompetition, nonsolicitation and
confidentiality agreement substantially in the form of Exhibit A hereto (the
"Release and Noncompetition Agreement") within 60 days of the Termination Date
and has not revoked the Release and Noncompetition Agreement, the Company shall
provide to the Employee, as compensation for services rendered to the Company,
and in consideration of the general release set forth in Section 2 of the
Release and Noncompetition Agreement and the covenants set forth in Sections 3
and 4 of the Release and Noncompetition Agreement, the benefits described in
this Section 2.

          (a) The Company shall pay to the Employee (or the Employee's
beneficiary or estate, as the case may be) within 30 days following the date of
execution of the Release and Noncompetition Agreement:

               (1)  a cash amount (subject to any applicable payroll or other
     taxes required to be withheld pursuant to Section 5) equal to the sum of
     (i) the Employee's full annual base salary from the Company and its
     affiliated companies through the Termination Date, to the extent not
     theretofore paid, (ii) the Employee's then current target annual bonus,
     multiplied by a fraction, the numerator of which is the number of days in
     the fiscal year in which the Change in Control occurs through the
     Termination Date and the denominator of which is 365 or 366, as applicable,
     and (iii) any compensation previously deferred by the Employee (together
     with any interest and earnings thereon) and any accrued vacation pay, in
     each case to the extent not theretofore paid; plus

               (2)  a lump sum cash amount (subject to any applicable payroll or
     other taxes required to be withheld pursuant to Section 5) in an amount
     equal to:

               (i) with respect to a Benefit Level I Employee, the sum of (A)
               one times the Employee's highest annual base salary from the
               Company and its affiliated companies in effect during the
               12-month period prior to the Termination Date and (B) one times
               the Employee's target annual bonus in effect immediately prior to
               the Change in Control or immediately prior to the Termination
               Date, whichever is higher; and

               (ii) with respect to a Benefit Level II Employee, the sum of (A)
               two times the Employee's highest annual base salary from the
               Company and its affiliated companies in effect during the
               12-month period prior to the Termination Date and (B) two times
               the Employee's target annual bonus in effect immediately prior to
               the Change in Control or immediately prior to the Termination
               Date, whichever is higher.

                                       5
<PAGE>

          (b) For the period commencing on the Termination Date and ending on
the earlier of (i) the expiration of the Employee's Severance Period and (ii)
the date on which the Employee becomes eligible to participate in and receive
medical, dental and vision benefits under a plan or arrangement sponsored by
another employer, the Company shall continue the Employee's medical, dental and
vision coverage upon the same terms and otherwise to the same extent as such
coverage shall have been in effect immediately prior to the Termination Date or,
if more favorable to the Employee, as provided generally with respect to other
peer Employees of the Company and its affiliated companies, and the Company and
the Employee shall share the costs of the continuation of such medical, dental
and vision coverage in the same proportion as such costs were shared immediately
prior to the Termination Date.

          (c) During the Employee's Severance Period, the Employee shall be
entitled to outplacement services to be provided by a firm selected by the
Company. The maximum payments to be made by the Company during the Severance
Period for outplacement services with respect to a Benefit Level I Employee
shall be $20,000 and with respect to a Benefit Level II Employee shall be
$35,000. Payments shall be made directly to the outplacement firm upon
submission of proper documentation to the Company. If an Employee elects not to
use such outplacement services, the Employee will not be entitled to cash
compensation in lieu thereof.

          3.   Certain Additional Payments; Reduction of Payments.

          (a)  With respect to a Benefit Level II Employee:

               (1) Anything in this Plan to the contrary notwithstanding, in the
     event it shall be determined that any payment or distribution by the
     Company or its affiliated companies to or for the benefit of the Employee
     (whether paid or payable or distributed or distributable pursuant to the
     terms of this Plan or otherwise, but determined without regard to any
     additional payments required under this Section 3(a)) (a "Payment") would
     be subject to the excise tax imposed by Section 4999 of the Code or any
     interest or penalties are incurred by the Employee with respect to such
     excise tax (such excise tax, together with any such interest and penalties,
     are hereinafter collectively referred to as the "Excise Tax"), then the
     Employee shall be entitled to receive an additional payment (a "Gross-Up
     Payment") in an amount such that after payment by the Employee of all taxes
     (including any interest and penalties imposed with respect to such taxes),
     including, without limitation, any income taxes (and any interest and
     penalties imposed with respect thereto) and the Excise Tax imposed upon the
     Gross-Up Payment, the Employee retains an amount of the Gross-Up Payment
     equal to the Excise Tax imposed upon the Payments. Notwithstanding the
     foregoing provisions of this Section 3(a)(1), if it shall be determined
     that the Employee is entitled to a Gross-Up Payment, but that the Employee,
     after taking into account the Payments and the Gross-Up Payment, would not
     receive a net after-tax benefit (taking into account both income taxes and
     any Excise Tax) which is at least ten percent (10%) greater than the net
     after-tax proceeds to the Employee resulting from an elimination of the
     Gross-Up Payment and a reduction of the Payments, in the aggregate, to an
     amount (the "Reduced Amount") that is one dollar less than the smallest
     amount that would give rise to any Excise Tax, then no Gross-Up Payment
     shall

                                       6
<PAGE>

     be made to the Employee and the Payments, in the aggregate, shall be
     reduced to the Reduced Amount.

               (2) Subject to the provisions of Section 3(a)(3), all
     determinations required to be made under this Section 3(a), including
     whether and when a Gross-Up Payment is required and the amount of such
     Gross-Up Payment and the assumptions to be utilized in arriving at such
     determination, shall be made by the Company's public accounting firm (the
     "Accounting Firm") which shall provide detailed supporting calculations
     both to the Company and the Employee within fifteen (15) business days of
     the receipt of notice from the Employee that there has been a Payment, or
     such earlier time as is requested by the Company. In the event that the
     Accounting Firm is serving as accountant or auditor for the individual,
     entity or group effecting the Change in Control, the Employee shall appoint
     another nationally recognized public accounting firm to make the
     determinations required hereunder (which accounting firm shall then be
     referred to as the Accounting Firm hereunder). All fees and expenses of the
     Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
     as determined pursuant to this Section 3(a), shall be paid by the Company
     to the Employee within five (5) days of the receipt of the Accounting
     Firm's determination. If the Accounting Firm determines that no Excise Tax
     is payable by the Employee, it shall furnish the Employee with a written
     opinion that failure to report the Excise Tax on the Employee's applicable
     federal income tax return would not result in the imposition of a
     negligence or similar penalty. Any determination by the Accounting Firm
     shall be binding upon the Company and the Employee. As a result of the
     uncertainty in the application of Section 4999 of the Code at the time of
     the initial determination by the Accounting Firm hereunder, it is possible
     that Gross-Up Payments which will not have been made by the Company should
     have been made ("Underpayment"), consistent with the calculations required
     to be made hereunder. In the event that the Company exhausts its remedies
     pursuant to Section 3(a)(3) and the Employee thereafter is required to make
     a payment of any Excise Tax, the Accounting Firm shall determine the amount
     of the Underpayment that has occurred and any such Underpayment shall be
     promptly paid by the Company to or for the benefit of the Employee.

               (3) The Employee shall notify the Company in writing of any claim
     by the Internal Revenue Service that, if successful, would require the
     payment by the Company of the Gross-Up Payment. Such notification shall be
     given as soon as practicable but no later than ten (10) business days after
     the Employee is informed in writing of such claim and shall apprise the
     Company of the nature of such claim and the date on which such claim is
     requested to be paid. The Employee shall not pay such claim prior to the
     expiration of the 30-day period following the date on which the Employee
     gives such notice to the Company (or such shorter period ending on the date
     that any payment of taxes with respect to such claim is due). If the
     Company notifies the Employee in writing prior to the expiration of such
     period that it desires to contest such claim, the Employee shall:

                                       7
<PAGE>

               (i) give the Company any information reasonably requested by the
               Company relating to such claim,

               (ii) take such action in connection with contesting such claim as
               the Company shall reasonably request in writing from time to
               time, including, without limitation, accepting legal
               representation with respect to such claim by an attorney
               reasonably selected by the Company,

               (iii) cooperate with the Company in good faith in order
               effectively to contest such claim, and

               (iv) permit the Company to participate in any proceedings
               relating to such claim;

     provided, however, that the Company shall bear and pay directly all costs
     and expenses (including additional interest and penalties) incurred in
     connection with such contest and shall indemnify and hold the Employee
     harmless, on an after-tax basis, for any Excise Tax or income tax
     (including interest and penalties with respect thereto) imposed as a result
     of such representation and payment of costs and expenses. Without
     limitation on the foregoing provisions of this Section 3(a)(3), the Company
     shall control all proceedings taken in connection with such contest and, at
     its sole option, may pursue or forgo any and all administrative appeals,
     proceedings, hearings and conferences with the taxing authority in respect
     of such claim and may, at its sole option, either direct the Employee to
     pay the tax claimed and sue for a refund or contest the claim in any
     permissible manner, and the Employee agrees to prosecute such contest to a
     determination before any administrative tribunal, in a court of initial
     jurisdiction and in one or more appellate courts, as the Company shall
     determine; provided further, that if the Company directs the Employee to
     pay such claim and sue for a refund, the Company shall advance the amount
     of such payment to the Employee on an interest-free basis and shall
     indemnify and hold the Employee harmless, on an after-tax basis, from any
     Excise Tax or income tax (including interest or penalties with respect
     thereto) imposed with respect to such advance or with respect to any
     imputed income with respect to such advance; and provided further, that any
     extension of the statute of limitations relating to payment of taxes for
     the taxable year of the Employee with respect to which such contested
     amount is claimed to be due is limited solely to such contested amount.
     Furthermore, the Company's control of the contest shall be limited to
     issues with respect to which a Gross-Up Payment would be payable hereunder
     and the Employee shall be entitled to settle or contest, as the case may
     be, any other issue raised by the Internal Revenue Service or any other
     taxing authority.

               (4) If, after the receipt by the Employee of an amount advanced
     by the Company pursuant to Section 3(a)(3), the Employee becomes entitled
     to receive, and receives, any refund with respect to such claim, the
     Employee shall (subject to the Company's complying with the requirements of
     Section 3(a)(3)) promptly pay to the Company the amount of such refund
     (together with any interest paid or credited thereon

                                       8
<PAGE>

     after taxes applicable thereto). If, after the receipt by the Employee of
     an amount advanced by the Company pursuant to Section 3(a)(3), a
     determination is made that the Employee shall not be entitled to any refund
     with respect to such claim and the Company does not notify the Employee in
     writing of its intent to contest such denial of refund prior to the
     expiration of 30 days after such determination, then such advance shall be
     forgiven and shall not be required to be repaid and the amount of such
     advance shall offset, to the extent thereof, the amount of Gross-Up Payment
     required to be paid.

          (b) With respect to a Benefit Level I Employee, anything in this Plan
to the contrary notwithstanding, in the event it shall be determined that any
payment or distribution by the Company or its affiliated companies to or for the
benefit of the Employee (whether paid or payable or distributed or distributable
pursuant to the terms of this Plan or otherwise, but determined without regard
to any adjustment required under this Section 3(b)) (in the aggregate, the
"Total Payments") would be subject to the Excise Tax, and if it is determined
that (A) the amount remaining, after the Total Payments are reduced by an amount
equal to all applicable federal and state taxes (computed at the highest
applicable marginal rate), including the Excise Tax, is less than (B) the amount
remaining, after taking into account all applicable federal and state taxes
(computed at the highest applicable marginal rate), after payment or
distribution to or for the benefit of the Employee of the maximum amount that
may be paid or distributed to or for the benefit of the Employee without
resulting in the imposition of the Excise Tax, then the payments due hereunder
shall be reduced so that the Total Payments are One Dollar ($1) less than such
maximum amount.

          4. Plan Administration; Claims Procedure.

          (a) This Plan shall be interpreted and administered by the person or
persons appointed by the Board from time to time to administer this Plan (the
"Plan Administrator"), who shall have complete authority, in his or her sole
discretion subject to the express provisions of this Plan, to make all
determinations necessary or advisable for the administration of this Plan. All
questions arising in connection with the interpretation of this Plan or its
administration shall be submitted to and determined by the Plan Administrator in
a fair and equitable manner in accordance with the procedure for claims and
appeals described in Section 4(b).

          (b) Any Employee whose employment has terminated who believes that he
or she is entitled to receive benefits under this Plan, including benefits other
than those initially determined by the Plan Administrator to be payable, may
file a claim in writing with the Plan Administrator, specifying the reasons for
such claim. The Plan Administrator shall, within 90 days after receipt of such
written claim (unless special circumstances require an extension of time, but in
no event more than 180 days after such receipt), send a written notification to
the Employee as to the disposition of such claim. Such notification shall be
written in a manner calculated to be understood by the claimant and in the event
that such claim is denied in whole or in part, shall (i) state the specific
reasons for the denial, (ii) make specific reference to the pertinent Plan
provisions on which the denial is based, (iii) provide a description of any
additional material or information necessary for the Employee to perfect the
claim and an explanation of why such material or information is necessary, and
(iv) set forth the procedure by

                                       9
<PAGE>

which the Employee may appeal the denial of such claim. The Employee (or his or
her duly authorized representative) may request a review of the denial of any
such claim or portion thereof by making application in writing to the Plan
Administrator within 60 days after receipt of such denial. Such Employee (or his
or her duly authorized representative) may, upon written request to the Plan
Administrator, review any documents pertinent to such claim, and submit in
writing issues and comments in support of such claim. Within 60 days after
receipt of a written appeal (unless special circumstances require an extension
of time, but in no event more than 120 days after such receipt), the Plan
Administrator shall notify the Employee of the final decision with respect to
such claim. Such decision shall be written in a manner calculated to be
understood by the claimant and shall state the specific reasons for such
decision and make specific references to the pertinent Plan provision on which
the decision is based.

          (c) The Plan Administrator may from time to time delegate any of his
or her duties hereunder to such person or persons as the Plan Administrator may
designate. The Plan Administrator is empowered, on behalf of this Plan, to
engage accountants, legal counsel and such other persons as the Plan
Administrator deems necessary or advisable for the performance of his or her
duties under this Plan. The functions of any such persons engaged by the Plan
Administrator shall be limited to the specified services and duties for which
they are engaged, and such persons shall have no other duties, obligations or
responsibilities under this Plan. Such persons shall exercise no discretionary
authority or discretionary control respecting the administration of this Plan.
All reasonable fees and expenses of such persons shall be borne by the Company.

          5. Withholding Taxes. The Company may withhold from all payments due
under this Plan to each Employee (or his or her beneficiary or estate) all taxes
which, by applicable federal, state, local or other law, the Company is required
to withhold therefrom.

          6. Amendment and Termination. The Company shall have the right, in its
sole discretion, pursuant to action by the Board, to approve the amendment or
termination of this Plan, which amendment or termination shall not become
effective until the date fixed by the Board for such amendment or termination,
which date, in the case of an amendment which would be adverse to the interests
of any Employee or in the case of termination, shall be at least 120 days after
notice thereof is given by the Company to the Employees in accordance with
Section 8(j) hereof; provided, however, that no such action shall be taken by
the Board during any period when the Board has knowledge that any person has
taken steps reasonably calculated to effect a Change in Control until, in the
opinion of the Board, such person has abandoned or terminated its efforts to
effect a Change in Control; and provided further, that on and after a Change in
Control, in no event shall this Plan be amended in a manner adverse to the
interests of any Employee or terminated.

          7. Reimbursement of Expenses. If any contest or dispute shall arise
under this Agreement involving termination of the Employee's employment with the
Company or involving the failure or refusal of the Company to perform fully in
accordance with the terms hereof, the Company shall reimburse the Employee, on a
current basis, for all legal fees and expenses, if any, incurred by the Employee
in connection with such contest or dispute, together

                                       10
<PAGE>

with interest thereon at a rate equal to the prime rate, as published under
"Money Rates" in The Wall Street Journal from time to time, but in no event
higher than the maximum legal rate permissible under applicable law, such
interest to accrue from the date the Company receives the Employee's written
statement for such fees and expenses through the date of payment thereof;
provided, however, that in the event the resolution of any such contest or
dispute includes a finding denying, in total, the Employee's claims in such
contest or dispute, the Employee shall be required to reimburse the Company,
over a period of 12 months from the date of such resolution, for all sums
advanced to the Employee pursuant to this Section 7.

          8. General Provisions.

          (a) Subject to Section 8(b) of this Agreement, any amount paid
pursuant to this Plan shall be paid in lieu of any other amount of severance
relating to salary or bonus continuation, any other continuation of medical,
dental or vision coverage (other than coverage required by the Consolidated
Omnibus Budget Reconciliation Act of 1985) or any other outplacement services to
be received by the Employee upon termination of employment of the Employee under
any severance plan, policy or arrangement of the Company. Subject to the
foregoing, the rights of, and benefits payable to, an Employee pursuant to this
Plan are in addition to any rights of, or benefits payable to, an Employee under
any other employee benefit plan or compensation program of the Company. All
rights of an Employee under any such plan or program shall be determined in
accordance with the provisions of such plan or program.

          (b) If the Company is obligated by law or contract to pay severance
pay, notice pay or other similar benefits, or if the Company is obligated by law
or by contract to provide advance notice of separation ("Notice Period"), then
any payments hereunder shall be reduced by the amount of any such severance pay,
notice pay or other similar benefits, as applicable, and by the amount of any
severance pay, notice pay or other similar benefits received during any Notice
Period.

          (c) This Plan shall not be funded. No Employee entitled to benefits
hereunder shall have any right to, or interest in, any specific assets of the
Company, but an Employee shall have only the rights of a general creditor of the
Company to receive benefits on the terms and subject to the conditions provided
in this Plan.

          (d) Any benefit payable to or for the benefit of a minor, an
incompetent person or other person incapable of giving a receipt therefor shall
be deemed paid when paid to such person's guardian or to the party providing or
reasonably appearing to provide for the care of such person, and such payment
shall fully discharge the Company, the Plan Administrator and all other parties
with respect thereto. If an Employee shall die while any amounts would be
payable to the Employee under this Plan had the Employee continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Plan to such person or persons appointed in writing by the
Employee to receive such amounts or, if no person is so appointed, to the estate
of the Employee.

                                       11
<PAGE>

          (e) None of the payments, benefits or rights of any Employee shall be
subject to any claim of any creditor, and, in particular, to the fullest extent
permitted by law, all such payments, benefits and rights shall be free from
attachment, garnishment, trustee's process or any other legal or equitable
process available to any creditor of such Employee. Except as otherwise provided
herein or by law, no right or interest of any Employee under this Plan shall be
assignable or transferable, in whole or in part, either directly or by operation
of law or otherwise, including without limitation by execution, levy,
garnishment, attachment or pledge; no attempted assignment or transfer thereof
shall be effective; and no right or interest of any Employee under this Plan
shall be subject to any obligation or liability of such Employee.

          (f) Neither the adoption of this Plan, nor any amendment hereof, nor
the creation of any fund, trust or account, nor the payment of any benefits,
shall be construed as giving any Employee the right to be retained in the
service of the Company, and all Employees shall remain subject to discharge to
the same extent as if this Plan had not been adopted.

          (g) This Plan shall inure to the benefit of and be binding upon the
beneficiaries, heirs, executors, administrators, successors and assigns of the
parties, including each Employee, present and future, and any successor to the
Company or one of its subsidiaries. This Plan shall not be terminated by any
merger or consolidation of the Company whereby the Company is or is not the
surviving or resulting corporation or as a result of any transfer of all or
substantially all of the assets of the Company. In the event of any such merger,
consolidation or transfer of assets, the provisions of this Plan shall be
binding upon the surviving or resulting corporation or the person or entity to
which such assets are transferred. The Company agrees that concurrently with any
merger, consolidation or transfer of assets referred to in this Section 8(g), it
will cause any surviving or resulting corporation or transferee unconditionally
to assume all of the obligations of the Company hereunder.

          (h) The headings and captions herein are provided for reference and
convenience only, shall not be considered part of this Plan and shall not be
employed in the construction of this Plan.

          (i) If any provision of this Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision hereof, and this Plan shall be construed and enforced as if such
provision had not been included.

          (j) Any notice or other communication required or permitted pursuant
to the terms hereof shall have been duly given when delivered or mailed by
United States mail, first class, postage prepaid, addressed to the intended
recipient at his, her or its last known address.

          (k) This Plan shall be effective as of the date hereof and shall
remain in effect unless and until terminated by the Board pursuant to Section 6
hereof.

          (l) For purposes of this Plan, employment with the Company shall
include employment with (i) any corporation or other entity in which the Company
has a direct or indirect ownership interest of 50% or more of the total combined
voting power of the then

                                       12
<PAGE>

outstanding securities of such corporation or other entity entitled to vote
generally in the election of directors or (ii) any limited liability company in
which the Company owns directly or indirectly, through an unbroken chain, an
interest sufficient to elect a majority of the managers of that limited
liability company.

          (m) This Plan shall be governed by, and construed and enforced in
accordance with, the internal laws of the State of Illinois (without regard to
principles of conflicts of laws) to the extent not preempted by Federal law,
which shall otherwise control.

          IN WITNESS WHEREOF, the Company has caused this Plan to be adopted as
of the ___ day of ___________________.

                                         WALLACE COMPUTER SERVICES, INC.

                                         By:
                                             -----------------------------------

                                       13
<PAGE>
                                                                       EXHIBIT A

                         WALLACE COMPUTER SERVICES, INC.
                          EXECUTIVE SEVERANCE PAY PLAN

                       GENERAL RELEASE AND NONCOMPETITION,
                  NONSOLICITATION AND CONFIDENTIALITY AGREEMENT

          This General Release and Noncompetition, Nonsolicitation and
Confidentiality Agreement (this "Release and Noncompetition Agreement") is
executed by _________ (the "Employee") pursuant to the Wallace Computer
Services, Inc. Executive Severance Pay Plan (the "Plan").

          WHEREAS, the Employee's employment with Wallace Computer Services,
Inc. and its subsidiaries (the "Company") is terminating;

          WHEREAS, the Employee has had [21][45] days to consider the form of
this Release and Noncompetition Agreement;

          WHEREAS, the Company advised the Employee in writing to consult with
an attorney before signing this Release and Noncompetition Agreement;

          WHEREAS, the Employee acknowledges that the benefits to be provided to
the Employee under the Plan are in consideration of, and are sufficient to
support, the general release set forth in Section 2 of this Release and
Noncompetition Agreement and the covenants set forth in Sections 3 and 4 of this
Release and Noncompetition Agreement; and

          WHEREAS, the Employee understands that the Company regards the
representations and covenants by the Employee in this Release and Noncompetition
Agreement as material and that the Company is relying on such representations
and covenants in paying amounts to the Employee pursuant to the Plan.

          THE EMPLOYEE THEREFORE AGREES AS FOLLOWS:

          1. Termination Benefits. The Employee's employment with the Company
shall terminate on ________, and the Employee shall receive the termination
benefits set forth in Section 2 of the Plan in accordance with the terms and
subject to the conditions thereof.

          2. General Release. (a) The Employee, on behalf of the Employee and
anyone claiming through the Employee, hereby agrees not to sue the Company or
any division, subsidiary, affiliate or other related entity of the Company
(whether or not such entity is wholly owned) or any of the past, present or
future directors, officers, administrators, trustees, fiduciaries, employees,
agents, attorneys or shareholders of the Company or any of such other entities,
or the predecessors, successors or assigns of any of them (hereinafter referred
to as the

                                       14
<PAGE>

"Released Parties"), and agrees to release and discharge, fully, finally and
forever, the Released Parties from any and all claims, causes of action,
lawsuits, liabilities, debts, accounts, covenants, contracts, controversies,
agreements, promises, sums of money, damages, judgments and demands of any
nature whatsoever, in law or in equity, both known and unknown, asserted or not
asserted, foreseen or unforeseen, which the Employee ever had or may presently
have against any of the Released Parties arising from the beginning of time up
to and including the effective date of this Release and Noncompetition
Agreement, including, without limitation, all matters in any way related to the
Employee's employment by the Company or any of its affiliates, the terms and
conditions thereof, any failure to promote the Employee and the termination or
cessation of the Employee's employment with the Company or any of its
affiliates, and including, without limitation, any and all claims arising under
the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act
of 1866, the Age Discrimination in Employment Act, the Older Workers' Benefit
Protection Act, the Family and Medical Leave Act, the Americans With
Disabilities Act, the Employee Retirement Income Security Act of 1974, the
Illinois Human Rights Act, or the Chicago or Cook County Human Rights Ordinance,
each as may be amended from time to time, or any other federal, state, local or
foreign statute, regulation, ordinance or order, or pursuant to any common law
doctrine; provided, however, that nothing contained in this Release and
Noncompetition Agreement shall apply to, or release the Company from, any
obligation of the Company contained in the Plan. The consideration offered in
the Plan is accepted by the Employee as being in full accord, satisfaction,
compromise and settlement of any and all claims or potential claims, and the
Employee expressly agrees that the Employee is not entitled to, and shall not
receive, any further recovery of any kind from the Company or any of the other
Released Parties, and that in the event of any further proceedings whatsoever
based upon any matter released herein, neither the Company nor any of the other
Released Parties shall have any further monetary or other obligation of any kind
to the Employee, including any obligation for any costs, expenses or attorneys'
fees incurred by or on behalf of the Employee. The Employee agrees that the
Employee has no present or future right to employment with the Company or any of
the other Released Parties.

          (b) The Employee expressly represents and warrants that the Employee
is the sole owner of the actual and alleged claims, demands, rights, causes of
action and other matters that are released herein; that the same have not been
transferred or assigned or caused to be transferred or assigned to any other
person, firm, corporation or other legal entity; and that the Employee has the
full right and power to grant, execute and deliver the general release,
undertakings and agreements contained herein.

          3. Noncompetition; Nonsolicitation. (a) General. The Employee
acknowledges that in the course of the Employee's employment with the Company
the Employee has become familiar with trade secrets and other confidential
information concerning the Company and that the Employee's services were of
special, unique and extraordinary value to the Company.

          (b) Noncompetition. The Employee agrees that during the Employee's
Severance Period (as defined in the Plan) the Employee shall not in any manner,
directly or indirectly, through any person, firm, corporation or enterprise,
alone or as a member of a

                                       15
<PAGE>

partnership or as an officer, director, stockholder, investor or employee of or
consultant to any other firm, corporation or enterprise or otherwise, engage or
be engaged, or assist any other person, firm, corporation or enterprise in
engaging or being engaged, in any business, in which the Employee was involved
or had knowledge, being conducted by, or contemplated by, the Company as of the
termination of the Employee's employment in any geographic area in which the
Company is then conducting such business.

          (c) Nonsolicitation. The Employee further agrees that during the
Employee's Severance Period the Employee shall not (i) in any manner, directly
or indirectly, induce or attempt to induce any employee of the Company to
terminate or abandon his or her employment for any purpose whatsoever or (ii) in
connection with any business to which Section 3(b) of this Release and
Noncompetition Agreement applies, call on, service, solicit or otherwise do
business with any customer of the Company.

          (d) Exceptions. Nothing in this Section 3 shall prohibit the Employee
from being (i) a stockholder in a mutual fund or a diversified investment
company or (ii) an owner of not more than two percent (2%) of the outstanding
stock of any class of a corporation, any securities of which are publicly
traded, so long as the Employee has no active participation in the business of
such corporation.

          (e) Reformation. If, at any time of enforcement of this Section 3 a
court holds that the restrictions stated herein are unreasonable under
circumstances then existing, the Employee agrees that the maximum period, scope
or geographical area reasonable under such circumstances shall be substituted
for the stated period, scope or area and that the court shall be allowed to
revise the restrictions contained herein to cover the maximum period, scope and
area permitted by law. This Agreement shall not authorize a court to increase or
broaden any of the restrictions in this Section 3.

          4. Confidentiality. The Employee agrees that the Employee shall not,
at any time after the termination of the Employee's employment, make use of or
disclose, directly or indirectly, any (i) trade secret or other confidential or
secret information of the Company or (ii) other technical, business, proprietary
or financial information of the Company not available to the public generally or
to the competitors of the Company ("Confidential Information"), except to the
extent that such Confidential Information (a) becomes a matter of public record
or is published in a newspaper, magazine or other periodical or on electronic or
other media available to the general public, other than as a result of any act
or omission of the Employee or (b) is required to be disclosed by any law,
regulation or order of any court or regulatory commission, department or agency,
provided that the Employee gives prompt notice of such requirement to the
Company to enable the Company to seek an appropriate protective order. Promptly
following the termination of the Employee's employment, the Employee shall
surrender to the Company all records, memoranda, notes, plans, reports, computer
tapes and software and other documents and data which constitute Confidential
Information which the Employee may then possess or have under the Employee's
control (together with all copies thereof).

                                       16
<PAGE>

          5. Enforcement. The Employee acknowledges that the Company would be
damaged irreparably in the event that any provision of Section 3 or 4 of this
Release and Noncompetition Agreement were not performed in accordance with its
terms or were otherwise breached and that money damages would be an inadequate
remedy for any such nonperformance or breach. Accordingly, the Employee agrees
that the Company and its successors and permitted assigns shall be entitled, in
addition to other rights and remedies existing in their favor, to an injunction
or injunctions to prevent any breach or threatened breach of any of such
provisions and to enforce such provisions specifically (without posting a bond
or other security). The Employee agrees that the Employee will submit to the
personal jurisdiction of the courts of the State of Illinois in any action by
the Company to obtain injunctive or other relief contemplated by this Section 5.

          6. ACKNOWLEDGMENT BY EMPLOYEE. BY EXECUTING THIS RELEASE AND
NONCOMPETITION AGREEMENT, THE EMPLOYEE EXPRESSLY ACKNOWLEDGES THAT THE EMPLOYEE
HAS READ THIS RELEASE AND NONCOMPETITION AGREEMENT CAREFULLY, THAT THE EMPLOYEE
FULLY UNDERSTANDS ITS TERMS AND CONDITIONS, THAT THE EMPLOYEE HAS BEEN ADVISED
TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE AND NONCOMPETITION
AGREEMENT, THAT THE EMPLOYEE HAS BEEN ADVISED THAT THE EMPLOYEE HAS [21][45]
DAYS WITHIN WHICH TO DECIDE WHETHER OR NOT TO EXECUTE THIS RELEASE AND
NONCOMPETITION AGREEMENT AND THAT THE EMPLOYEE INTENDS TO BE LEGALLY BOUND BY
IT. DURING A PERIOD OF SEVEN DAYS FOLLOWING THE DATE OF THE EMPLOYEE'S EXECUTION
OF THIS RELEASE AND NONCOMPETITION AGREEMENT, THE EMPLOYEE SHALL HAVE THE RIGHT
TO REVOKE THE RELEASE OF CLAIMS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT
BY SERVING WITHIN SUCH PERIOD WRITTEN NOTICE OF REVOCATION.

          7. The Plan and this Release and Noncompetition Agreement constitute
the entire understanding between the parties. The Employee has not relied on any
oral statements that are not included in the Plan or this Release and
Noncompetition Agreement.

          8. If any provision of this Release and Noncompetition Agreement shall
be held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision hereof, and this Release and Noncompetition Agreement
shall be construed and enforced as if such provision had not been included.

          9. This Release and Noncompetition Agreement shall be construed,
interpreted and applied in accordance with the internal laws of the State of
Illinois without regard to the principles of conflicts of laws.

Date: _____________________________         ____________________________________
                                                          [NAME]

                                       17

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