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EXHIBIT 10.1
[B-III CAPITAL, LLC LETTERHEAD]
ROBERT M. BROWN, III
PRESIDENT
October 20, 2000
Steven B. Dempsey
President
PetQuarters, Inc.
Post Office Box 410
Lonoke, AR 72086
Dear Steve,
In addition to the Services Agreement between B-III Capital, LLC ("B-III") and
Pet Quarters, Inc. ("Pet Quarters" or the "Company") dated as of November 8,
1999, as amended ("Services Agreement"), which remains in full force and effect,
we have agreed that B-III will receive the following for any transaction which
brings new capital into Pet Quarters through the sale of shares under the
Company's existing Equity Line of Credit Agreement and the related resale of
shares to an investor introduced by B-III to Pet Quarters:
1. Cash in an amount equal to four percent (4%) of the gross price at
which Pet Quarters sells such shares, less any retainer fees paid
to B-III and not previously credited against success fees, payable
on B-III's instructions from proceeds of such sale.
2. Warrants issued by Pet Quarters to B-III or its designee to
purchase up to 7,500 shares of Pet Quarters' common stock at a
price of $.50 per share, subject to adjustment as set forth in the
warrants, for each $100,000 of shares sold by Pet Quarters. Such
warrants shall be exercisable during the period of five years
subsequent to the date of its issuance, may be exercised on a
"cashless" basis, and shall be in the form attached hereto.
All provisions of the Services Agreement other than "Warrants" and "Success
Fees" shall apply equally to this letter agreement.
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Sincerely,
B-III Capital LLC
By
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Robert M. Brown, III
President
Accepted and agreed as of the 20th day of October, 2000:
Pet Quarters, Inc.
By
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Steven B. Dempsey
President
