fsb2ex10a_petecology.htm


    
      TRICON
        HOLDINGS,  L.L.C.

      201
        Alahambre Circle

      Suite
        401

      Coral
        Gables, Florida 33134

      


       

      


       

      February  26,
        2007

       

      Personal
        and Confidential

       

      Ralph
        J.
        Steckel

      President

      Chairman

      Pet
        Ecology Brands, Inc.

      14822
        Venture Dr.

      Dallas,
        Texas 75234

      


      Re: Stock
        Purchase Agreement

       

      Dear
        Mr.
        Steckel:

       

      This
        letter confirms the terms of the Stock Purchase Agreement (“Purchase Agreement”)
        by and between between Tricon Holdings, L.L.C. and Texas Atlantic Capital
        Partners, L.L.C., or assigns,  ("Purchaser") and Pet Ecology Brands,
        Inc. ( “Company”) with respect to the terms and conditions under which Purchaser
        will acquire shares of capital stock of the Company and warrants to purchase
        shares of capital stock of the Company.  Such transaction is
        hereinafter referred to as the "Acquisition."

       

      The
        obligations of the  parties to consummate the Acquisition are subject
        to the terms, conditions and contingencies contained herein; however, in
        the
        event Purchaser elects to terminate this Purchase Agreement in accordance
        with
        Paragraph 13 below, the provsions of Paragraphs 9 and 10, shall survive the
        termination hereof.

       

      1.           
        Purchase of Stock. At the closing (the "Closing"), subject to the satisfaction
        of all conditions precedent contained in the Purchase Agreement, Purchaser
        will
        purchase from Company, and Company will sell and issue to Purchaser, a
        sufficient number of shares of Company’s common stock to consist of Fifty-One
        Percent {51%) of all of the issued and outstanding common stock of the Company,
        fully diluted,  free and clear of any liens, charges, restrictions or
        encumbrances thereon (collectively, the "Shares").

       

      2.           
        Purchase Price. The purchase price for the Shares shall be the sum of One
        Million Three Hundred Fifty Thousand Dollars {$1,350,000) payable at
        Closing.

       

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

       

      3.           
        Warrants. In addition to the shares of stock referred to in Paragraph 1 above,
        contingent upon the closing hereof, Company grants to Purchaser warrants
        to
        purchase for One Million Dollars ($1,000,000) so many shares of the Company’s
        common stock as may be necessary at the time the warrants are exercised to
        constitute an addition Fourteen Percent (14%) of the Company’s common stock. The
        warrants shall   be issued at Closing and shall contain normal
        and customary provisions and provide that Purchaser may purchase all such
        shares, but not less than all the shares, at any time  for a period of
        sixty (60)_months following the date of the Closing.

       

      4.           
        Representations and Warranties. Company represents and warrants to Purchaser
        the
        following:

       

      a.           
        Company’s financial statements provided Purchaser as of the date hereof and any
        additional financial statements or financial information provided Purchaser
        from
        the date of this Agreement and the date of  Closing, although not
        audited, shall be true and correct to the  best of Company’s knowledge
        and belief;

       

      b.           
        Company is the holder of the patents, tradenames, trademarks and service
        marks,
        if any, described on Exhibit “A” attached hereto and incorporated herein for all
        purposes (“Intellectual Property”) and such Intellectual Property has not been
        assigned, licensed or encumbered;

       

      c.           
        Company is in good standing in the State of Texas and, subject to the approval
        of the Company’s Board of Directors, the person executing this Purchase
        Agreement, has the full authority and power to enter into this Purchase
        Agreement; and,

       

      d.           
        Company is the subject of only the lawsuits and judgments as described on
        Exhibit “B” attached hereto and incorporated herein for all purposes and Company
        is aware of no other litigation that has been filed or threatened other than
        lawsuits threatened by trade creditors.

       

      5.           
        Conditions Precedent To Closing. Either party’s obligation to close this
        Purchase Agreement is conditioned upon the following:

       

      a.           
        Company entering into a license agreement with Purchaser or such other party
        as
        Purchaser shall direct, which agreement shall provide for Company to grant
        to
        Purchaser or its assignee or transferee (“Licensee”) a license to manufacture
        and sale domestically and internationally such products as are covered by
        the
        patents now or hereinafter owned by Company so long as such products are
        sold by
        Licensee via telephone,
        internet or other manner devised by Licensee for direct (“home”) delivery to
        consumers. Such License Agreement shall provide for Licensee to pay to Company
        the total sum of One Hundred Fifty Thousand Dollars ($150,000) and pay to
        Company a royalty in an amount equal to 12% of the direct cost to Licensee
        of
        manufacturing and packaging (but not shipping) any product sold pursuant
        to the
        terms of the License Agreement. The parties acknowledge and agree that the
        condition described in this Paragraph 5a. has been satisfied as of the date
        hereof.

       

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

       

      b.           
        Purchaser’s reaching agreements with its trade creditors, including those
        holding judgments,   with amounts outstanding in excess
        of   (90) days, in the total amount of approximately
        $1,100,000  to accept a reduction of the amounts allegedly owed to an
        aggregate balance of approximately $600,000, or such greater sum to which
        Purchaser agrees;

       

      c.           
        Purchaser reviewing and becoming satisfied as to (i) Seller’s compliance with
        all required N.A.S.D. or  other regulatory agencies; (ii) the status
        and probable outcome of  the pending lawsuit filed against the Company
        by David Cawthon, James Stephens, Jr. and Ecology Technologies, a more specific
        reference to which is set forth on Exhibit “B” attached hereto; and, (iii)
        reviewing and becoming satisfied as to the nature, consequence and details
        of
        the Company’s prior relationship with Ron G. Williams (“Williams”) and any and
        all entities or individuals affiliated with Williams.

       

      d.           
        Company reversing the number of Company’s issued and outstanding shares, options
        and warrants to the extent mutually agreed by the parties but, at a minimum,
        to
        a degree and in amounts to enable the Company to perform its obligations
        at
        Closing to issue the shares and warrants as described in Paragraphs 1 and
        3
        above;

       

      e.           
        On or before the Closing, with the exception of Ralph J. Steckel, Company
        seeking and obtaining tenders of the written resignations of the current
        members
        of the Company’s Board of Directors and the number of the directors shall be
        increased to five (5)  with  Purchaser being allowed to
        designate a minimum of  three (3) directors to be elected by a
        shareholder or director vote, whichever shall be appropriate;

       

      Company
        agrees to take any and all steps reasonably necessary to ensure that Company
        satisfies all conditions precedent to Purchaser’s obligation to close the
        Agreement. Additionally, at Purchaser’s sole discretion, Purchaser may elect to
        waive any or all of such conditions of closing and close the transaction,
        the
        parties agreeing that such conditions are for the benefit of
        Purchaser.

       

      6.           
        Access to Company Books and Records. Prior to closing, Seller agrees to provide
        Purchaser and/or its representatives full access to any personnel and all
        properties, documents, contracts, books, records and operations of Company
        relating to its business Seller agrees to furnish Purchaser with copies of
        documents and such other information as the Purchaser may request.

       

      7.           
        No Other Offers. Company will not solicit, encourage or entertain proposals
        from
        or enter into negotiations with or furnish any nonpublic information to any
        other person or entity regarding the possible sale of the Company's business,
        assets or stock. Seller shall promptly notify Purchaser of any proposals
        by
        third parties with respect to the acquisition of all or any portion of Company's
        business, assets or stock and furnish the Purchaser the material terms
        thereof.

       

      8.           
        Conduct of Business. Company shall conduct its business in the ordinary course,
        consistent with the present conduct of its business and previous practice,
        with
        no dividend or stock distributions.

       

       

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

       

      9.           
        Expenses. Each of the parties shall pay all of its expenses incident to this
        Purchase Agreement and consummation of the transactions contemplated
        hereby.

       

      10.           
        Confidentiality. Other than to the extent required by law or regulation,
        and
        then only after prior written notice to the other party, the parties agree
        that
        they will not disclose the existence of this Purchase Agreement or use, or
        permit the use of, any of the information provided pursuant to the terms
        hereof
        other than for purposes provided by the terms of this Purchase
        Agreement.

       

      11.           
        Disclosure. Without the prior written consent of the other party hereto,
        neither
        party hereto will, and each party hereto will cause its directors, officers,
        employees, agents, other representatives and affiliates not to, disclose
        to any
        person the existence of this Purchase Agreement or the transactions contemplated
        hereby, unless in the opinion of such party disclosure is required to be
        made
        under the Securities Act of 1933 or the Securities Exchange Act of 1934,
        and
        such disclosure is made after prior consultation with the other party. Neither
        party will issue any public announcement concerning the transaction without
        the
        approval of the other party, except as may be required by law.

       

      12.           
        Closing. Closing of this Agreement shall occur on or before June 30, 2007,
        with
        fifteen (15) days prior written notice from Purchaser.

       

      At
        the
        closing, Company shall issue to Purchaser the following:

       

      a..           
        Company’s common stock in an amount to ensure Purchaser owns 51%, undiluted, of
        the Company’s issued and oustandin common stock; and,

       

      b.           
        Warrants as herein described authorizing Purchaser to purchase an additional
        14%, undiluted, of the Company’s common  stock.

       

      At
        the closing, Purchaser shall deliver
        to Company in immediately available funds the sum of One Million Five Hundred
        Thousand Dollars ($1,500,000)

       

      13.           
        Termination. Termination of this Purchase Agreement shall be without liability
        and no party hereto shall be entitled to any form of relief whatsoever,
        including, without limitation, injunctive relief or damages. Upon the earlier
        of
        (a) the mutual written agreement of the parties hereto or (b) the failure
        by the
        parties hereto to Close on or prior to June 30, 2007, this Purchase Agreement
        shall terminate and the parties shall be released from all liabilities and
        obligations with respect to the subject matter hereof, except as provided
        in the
        second paragraph of page 1 of this letter.

       

      14.           
        Counterparts.

       

      This
        letter may be executed in one or more counterparts, each of which shall be
        deemed an original, and all of which together shall constitute one and the
        same
        instrument.

       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

       

       

      If
        the
        foregoing correctly sets forth our mutual understanding, please so indicate
        by
        signing two copies of this letter in the spaces provided below and returning
        one
        copy to us no later than 5:00 p.m. on February 26.  2007.

       

      


       

      


       

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        Intentionally Left Blank]

       

      


       

      


       

      


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      


       

      


       

      Sincerely,

       

      Tricom
        Holdings, L.L.C.

       

      By:
/s/
        Emel
        Yesil

      Name:  Emel
        Yesil

      Its:       Managing
        Director

      


      


      Texas
        Atlantic Capital Partners, L.L.C.

      


      


      By:
/s/
        E.
        Denton Jones

      Name:  E.
        Denton Jones

      Its:        Manager

      


      


      


       

      


      AGREED:

       

      Pet
        Ecology Brands, Inc.

       

      By:  /s/
        Ralph J. Steckel 

                 Ralph
        J. Steckel

      President

      


            /s/
        Ralph J. Steckel 

                 
        Ralph J. Steckel

      Individually

      


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