Document:

<PAGE>   1
                                                                   EXHIBIT 10.2

                                OPTION AGREEMENT

         THIS OPTION AGREEMENT is made this 5th day of August, 1999 ("the
AGREEMENT"). Jack Rosenzweig and Helene Rosenzweig, his wife, (collectively,
the "OPTIONOR"), hereby agree to grant to Humboldt Industries Incorporated (the
"OPTIONEE"), a Pennsylvania corporation, or its assignee or nominee (the
"OPTION"), to purchase all that certain ground, together with the improvements
erected on it, situate in the Humboldt Industrial Park, Hazle Township, Luzerne
County, Pennsylvania, more particularly described in Exhibit "A" attached
hereto and made a part hereof (the "PREMISES").

                                  BACK-GROUND:

         A. Contemporaneously herewith, the Optionor has entered into a Lease
Agreement with Optionee for the Premises (hereinafter, the "LEASE"), in
accordance with the provisions of an Agreement of Purchase and Sale of Stock
dated the 10th day of June, 1999, between Optionor, Optionee, Maplewood
Industries, Inc., PetQuarters, Inc. and PQ Acquisition Company, Inc.
(hereinafter, the "AGREEMENT OF PURCHASE").

         B. The Agreement of Purchase provides in Section 4.14.1(xxi) that the
Optionee has the right to lease the real estate from the Optionor for a period
of five (5) years (hereinafter, the "LEASE TERM").

         C. The Purchase Agreement provides in 4.14.1(xx) that the Optionor, or
its assignee, shall have the option to purchase the Premises. It is the purpose
of this instrument to provide that option.

         NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, and intending to be legally bound, the parties agree as
follows:

<PAGE>   2

         1. Optionor hereby grants Optionee, or its assignee or nominee, an
option to purchase the Premises on the terms set forth in this Agreement. The
purchase price for the Premises shall be Two Million Five Hundred Thousand
($2,500,000.00), payable in immediately available funds at closing.

         2. Settlement shall take place within five (5) years of the date
hereof. This option will expire at midnight on June 9, 2005. The time of the
payments and of the settlement is of the essence of this Agreement. The
exercise of the option and the settlement thereon is conditioned on the
Optionee being in full compliance with all of the terms and conditions of the
Lease.

         3. At closing, the Lease shall be automatically terminated.

         4. The Premises shall be conveyed by special warranty Deed free of all
liens and encumbrances, except easements, rights, rights of way (recorded or
unrecorded), and matters which an accurate survey would disclose. This
conveyance is also subject to existing restrictions of record and/or physically
noticeable easements, governmental regulations regarding sale, leasing or
possession, possible street improvements, if any, and provisions of zoning
ordinances and/or any act or ordinance affecting the use of and improvements to
the Premises (the "EXCEPTIONS"), provided such Exceptions do not affect the
Optionee's intended use of the Premises.

         5. Optionor shall deliver good and marketable title, clear of all
monetary and other liens, and such as will be insured at regular rates by any
responsible title insurance company; otherwise, the Optionor shall be in
default of this Agreement. Optionee shall be entitled to specific performance
of Optionor's covenants in this Agreement respecting title.

                                       2
<PAGE>   3

         6. The Option shall be exercised by the Optionee giving notice, in
writing, to both the Optionor and their counsel by certified mail, no less than
thirty (30) days prior to the scheduled closing time and date of Optionee's
selection. The closing shall take place at the law offices of Laputka, Bayless,
Ecker & Cohn, P.C., 2 East Broad Street, 6th Floor, Hazleton, Pennsylvania
18201.

         7. The parties shall share equally the applicable Realty Transfer
Taxes. Inasmuch as Optionee is obligated to pay all real estate taxes under the
provisions of this Lease, there will be no apportionment of these taxes.
Optionee may, at its own cost, procure a Level I Environmental Audit. If
required by the title insurance company insuring the Optionee, Optionor shall
provide a survey map as prepared by a surveyor licensed in the Commonwealth of
Pennsylvania.

         8. In addition to the other representations and warranties set forth
in this Agreement, Optionor makes the following additional representations and
warranties to Optionee, which shall also be conditions of closing: (a) except
for the Lease, there are no leases in existence for the Premises; (b) Optionor
is not in bankruptcy, nor has there been any petition or insolvency proceedings
filed for the reorganization of Optionor; (c) there are no rights, options or
other agreements of any kind to sell or transfer any interest in the Premises;
(d) the representations and warranties stated in this paragraph, and in other
paragraphs of this Agreement, shall be true as of the date hereof and as of
settlement, and shall survive settlement under this Agreement.

         9. The Agreement contains the entire understanding between the parties
as to the Option and there are no other terms, obligations, covenants,
representations, statements or conditions, or otherwise of any kind, concerning
the subject matter. All

                                       3
<PAGE>   4

amendments and modifications to this Option Agreement must be in writing and
signed all of the parties.

         10. It is understood and agreed that with respect to all dates set
forth in this Agreement, time is of the essence.

         11. Either party may assign its rights and obligations hereunder.

         12. This instrument shall be binding upon the heirs, successors and
assigns of the parties.

         13. Optionee shall have the right to record a Memorandum of this
Option Agreement in the Office of the Recorder of Deeds in and for Luzerne
County, Pennsylvania, in a form reasonably acceptable to counsel for both
parties.

         14. Notice under this Agreement shall be deemed received on the date
sent and shall be sent to the following addresses:

         If to the Optionor:

                  Jack Rosenzweig and Helene Rosenzweig
                  Humboldt Industrial Park
                  One Maplewood Drive
                  Hazleton, PA 18201

         If to Optionee:

                  Humboldt Industries Incorporated
                  Humboldt Industrial Park
                  One Maplewood Drive
                  Hazleton, PA 18201

         With a copy to:

                  Laputka, Bayless, Ecker & Cohn, P.C.
                  2 East Broad Street, 6th Floor
                  Hazleton, PA 18201
                  Attn: Martin D. Cohn, Esquire or Robert S. Sensky, Esquire

                                       4
<PAGE>   5

         If to PetQuarters, Inc.:

                  PetQuarters, Inc.
                  P.O. Box 410
                  Lonoke, AR 72086
                  Attn: Steve Dempsey

         With a copy to:

                  Wright, Lindsey, Jennings, LLP
                  200 West Capitol Avenue, Suite 2200
                  Little Rock, AR 72201
                  Attn: C. Tad Bohannon, Esquire

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed on the date first written above by their respective officers thereunto
duly authorized.

                                                   OPTIONOR:

WITNESS:                                           JACK ROSENZWEIG

-------------------------------                    -----------------------------
                                                            (Signature)

WITNESS:                                           HELENE ROSENZWEIG

-------------------------------                    -----------------------------
                                                            (Signature)

ATTEST:                                            HUMBOLDT INDUSTRIES
                                                   INCORPORATED

                                                   By:
                                                      --------------------------
                                                   Title:
                                                         -----------------------

                                       5
<PAGE>   6

COMMONWEALTH OF PENNSYLVANIA            :
                                              ss.
COUNTY OF LUZERNE                       :

         On this the ____ day of August, 1999, before me, a Notary Public, the
undersigned officer, personally appeared Jack Rosenzweig and Helene Rosenzweig,
his wife, known to me (or satisfactorily proven) to be the person whose name is
subscribed to the within instrument, and acknowledged that they executed the
same for the purposes therein contained.
         WITNESS hand and seal the day and year aforesaid.

                                                    ----------------------------
                                                    Notary Public

STATE OF ARKANSAS        :
                              ss.

COUNTY OF PULASKI        :

         On this the ____ day of August, 1999, before me, a Notary Public, the
undersigned officer, personally appeared who acknowledged himself/herself to
the of Humboldt Industries Incorporated, and that he/she as such officer, being
authorized to do so, executed the foregoing instrument for the purposes therein
contained by signing the name of the corporation by himself/herself as such
officer.

         WITNESS hand and seal the day and year aforesaid.

                                                      --------------------------
                                                      Notary Public

                                       6
<PAGE>   7

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed on the date first written above by their respective officers thereunto
duly authorized.

                                                   OPTIONOR:

WITNESS:                                           JACK ROSENZWEIG

-------------------------------                    -----------------------------
                                                            (Signature)

WITNESS:                                           HELENE ROSENZWEIG

-------------------------------                    -----------------------------
                                                            (Signature)

ATTEST:                                            HUMBOLDT INDUSTRIES
                                                   INCORPORATED
-------------------------------                    By:
                                                      --------------------------
                                                   Title:
                                                         -----------------------

COMMONWEALTH OF PENNSYLVANIA                       :
                                                     ss.
COUNTY OF LUZERNE                                  :

         On this the ____ day of August, 1999, before me, a Notary Public, the
undersigned officer, personally appeared Jack Rosenzweig and Helene Rosenzweig,
his wife, known to me (or satisfactorily proven) to be the person whose name is
subscribed to the within instrument, and acknowledged that they executed the
same for the purposes therein contained.

         WITNESS hand and seal the day and year aforesaid.

                                                     ---------------------------
                                                     Notary Public

                                       7
<PAGE>   8

STATE OF ARKANSAS      :
                       ss.
COUNTY OF PULASKI      :

         On this the ____ day of August, 1999, before me, a Notary Public, the
undersigned officer, personally appeared __________________________________ who
acknowledged himself/herself to the ____________________ of Humboldt Industries
Incorporated, and that he/she as such officer, being authorized to do so,
executed the foregoing instrument for the purposes therein contained by signing
the name of the corporation by himself/herself as such officer.

         WITNESS hand and seal the day and year aforesaid.

                                                   -----------------------------
                                                   Notary Public

My Commission Expires:

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

                                       8
<PAGE>   9

                                  EXHIBIT "A"

                               LEGAL DESCRIPTION

         ALL that certain parcel of land as shown on Ebeco Associates, Inc.
drawing number Three thousand two hundred ten (3210), known as Site Six (6),
situate in the park known as Humboldt Industrial Park, Township of Hazle,
County of Luzerne, Commonwealth of Pennsylvania bounded and described as
follows to wit:

         BEGINNING at a point on the westerly line of a Eighty (80.00) foot
wide right of way known as Maplewood Drive, said point being further described
as the northeast corner of Site Seven (7);

         THENCE along the northerly line of said site South Seventy-two degrees
One minute and No seconds West (S 72-01-00 W) for a distance of One thousand
sixty-four and eighteen hundredths (1064.18) feet to a point on the easterly
line of a Sixty (60.00) foot wide Railroad and Utility corridor right of way;

         THENCE along the easterly line of said right of way North Eighteen
degrees Seven minutes and No seconds West (N 18-07-00 W) for a distance of
Three hundred three and sixty-seven hundredths (303.67) feet to a point; said
point being on the southerly line of lands nor or formerly Can-Do. Inc.;

         THENCE along the southerly line of said lands North Seventy-two
degrees Three minutes and No seconds East (N 72-03-00 E) for a distance of One
hundred (100.00) feet to a point;

         THENCE continuing along said lands North Eighteen degrees Seven
minutes and No seconds West (N 18-07-00 W) for a distance of One (100.00) feet
to a point on the southerly line of a Twenty-five (25.00) foot wide Utility
Corridor;

         THENCE along the southerly line of said right of way North Seventy-two
degrees Three minutes and No seconds East (N 72-03-00 E) for a distance of One
thousand forty-six and twenty-eight hundredths (1046.28) feet to a point on the
westerly line of a Eighty (80.00) foot wide right of way known as Maplewood
Drive;

         THENCE along the westerly line of said right of way South Six degrees
Twenty-seven minutes and No seconds East (S 06-27-00 E) for a distance of Three
hundred fifty-five and forty-eight hundredths (355.48) feet to a point;

         THENCE continuing along said right of way on a curve to the left,
having a radius of One thousand four hundred seventy-four and eighty-nine
hundredths (1474.89) feet, an arc length of Fifty-five and sixty-two hundredths
(55-62) feet to a point and the PLACE OF BEGINNING.<PAGE>   1
                                                                    EXHIBIT 10.3

                                B-III CAPITAL LLC
                               105 ROWAYTON AVENUE
                                NORWALK, CT 06853

ROBERT M. BROWN, III
PRESIDENT

September 24, 1999

Steven B. Dempsey
President
PetQuarters, Inc.
Post Office Box 4 10
Lonoke, AR 72086

Dear Steve,

I offer the professional services of B-III Capital ("B-III") as an investment
banker, fundraiser and strategic advisor to PetQuarters, Inc. ("PetQuarters") on
the following terms and conditions (the "Agreement"):

         1.   Scope of B-III's Services

              o ON A NON-EXCLUSIVE BASIS, arrange and participate in meetings
                with prospective EQUITY OR DEBT investors, both financial and
                strategic

              o ON A NON-EXCLUSIVE BASIS, solicit feedback and negotiate
                investment agreements with investors in one or more private
                rounds of EQUITY OR DEBT funding leading to PetQuarters
                registration and trading of registered shares

              o Serve as a director of PetQuarters if elected/ appointed,
                subject to acceptable indemnification provisions

              o Work closely with PetQuarters to drive the Company to the stage
                of a SEC-registered company with actively traded, NASDAQ listed
                stock

              o Advise PetQuarters on Internet content development

              o Participate in strategic planning meetings with Company
                directors and management

              o Help identify and recruit advisory board members

              o Help develop strategic affiliations and partnerships

              o Maintain liaison with outside shareholders

              o Share network of and coordinate contacts with "Madison Avenue",
                i.e. New York advertising and media companies

              o Help recruit additional members of management team as necessary
                to sustain growth and credibility for actively traded public
                company

              o Use contacts to assist in developing commercial banking
                relationships

<PAGE>   2

              o Use contacts to help develop coverage by Wall Street securities
                analysts and market makers

              o Prepare and coordinate RFP for investment bankers, conduct
                interviews and recommend selection of underwriters for public
                offering of registered shares

              B-III's services shall commence on the date of signing of this
              Agreement and shall continue until this Agreement is terminated or
              expires.

         2.   Compensation

              o Retainer - PetQuarters shall pay B-III a monthly retainer of
                $5,000, credited against any success fees, payable on B-III's
                instructions.

              o Warrants - Upon the signing of this Agreement, PetQuarters shall
                grant B-III or its designee warrants to purchase the number of
                PetQuarters shares equal to 5.0% of PetQuarters fully diluted
                shares on the date of signing. The exercise price of the
                warrants shall be equal to the closing price of PetQuarters
                shares traded on the OTC bulletin board on the date of signing.
                The warrants shall contain customary anti-dilutive protection,
                including protection against below-market issuance. The warrants
                shall vest in monthly increments over the two year term of this
                Agreement, one twenty-fourth per month, subject to forfeiture as
                provided in section 5. Unvested warrants shall vest immediately
                in the event of a change of control of PetQuarters or in the
                event of a successful public offering of registered shares or in
                the event of termination of this Agreement by PetQuarters
                without cause as provided in section 5. Unexercised warrants
                shall expire five years after vesting.

              o Success Fees - In connection with the private placement of any
                PetQuarters shares NEGOTIATED by B-III TO AN INVESTOR PROCURED
                FOR PETQUARTERS BY B-III, the Company agrees to pay B-III a
                success fee in cash in an amount of 3% of the CASH CONSIDERATION
                PAID FOR such shares, less any retainer fees paid and not
                previously so credited, payable on B-III's instructions at
                closing of the private placement. The success fee of 3% also
                applies to any debt placed by B-III on the Company's behalf,
                less any retainer fees paid and not previously credited.

              o Trailer Fees - Should an investment ("Trailer Transaction") be
                obtained by the Company, its affiliates, or any other entity
                formed by the Company whose business purpose is similar to the
                Company, from an investor introduced to PetQuarters by B-III
                during the term of this Agreement, and such transaction is
                completed or committed within a six (6) month period following
                the termination of this Agreement, the Company shall pay to
                B-III the full 3% success fee. If a Trailer Transaction is
                completed or committed more than six (6) but less than one (1)
                year after such termination, the Company shall pay to B-III half
                of the compensation provided herein. Thereafter, no compensation
                shall be due to B-III.

              It is understood that fees shall be payable to B-III under this
              section when investor funds are received by the Company. If an
              investment transaction is completed in stages, fees payable to
              B-III shall also be paid in stages on a pro rated basis.

                                       2
<PAGE>   3

         3.   Expenses. The Company shall promptly reimburse B-III for
              reasonable and customary expenses incurred by B-III WITH THE PRIOR
              CONSENT OF THE COMPANY and properly invoiced to the Company. The
              Company will allow a maximum monthly sum of $400 for incidental
              expenses without prior written consent. The Company upon receipt
              of the corresponding receipts or other documentation will
              reimburse these expenses.

         4.   Indemnification. It is hereby understood and agreed that the
              Company will indemnify B-III and its directors, officers,
              employees, agents and controlling persons (B-III and each such
              person being an "Indemnified Party") from and against any and all
              losses, claims, damages and liabilities, joint or several, to
              which such Indemnified Party may become subject under any
              applicable federal or state law or otherwise, resulting from a
              claim related to or arising out of any transaction ENGAGED IN or
              service PERFORMED BY B-III AND contemplated by this Agreement. The
              Company will reimburse any Indemnified Party for all expenses
              (including reasonable counsel fees and expenses) as they are
              incurred in connection with the investigation of, preparation for
              or defense of any pending or threatened claim or any action or
              proceeding arising therefrom. The Company will not be liable under
              the foregoing indemnification provision to the extent that any
              loss, claim, damage or liability is found in a final judgment by a
              court of competent jurisdiction to have resulted from B-III's bad
              faith, willful misconduct, MISREPRESENTATION, OMISSION or
              negligence. The Company also agrees that no Indemnified Party
              shall have any liability (whether direct or indirect, in contract
              or tort or otherwise) to the Company related to or arising out of
              the engagement of B-III pursuant to, or the performance by B-III
              of the services contemplated by this Agreement except to the
              extent that any loss claim, damage or liability is found in final
              judgment by a court of competent jurisdiction to have resulted
              from B-III's bad faith, willful misconduct, MISREPRESENTATION,
              OMISSION or negligence.

              If any action or proceeding shall be brought or asserted against
              an Indemnified Party in respect of which indemnity shall be sought
              from the Company, the Indemnified Party shall promptly notify the
              Company in writing and the Company shall assume the defense
              thereof including the employment of counsel reasonably
              satisfactory to the Indemnified Party and the payment of all
              expenses. The Indemnified Party shall have the right to employ
              separate counsel in any such action and to participate in the
              defense thereof, but the fees and expenses of such counsel shall
              be at the expense of the Indemnified Party unless (i) the Company
              has agreed to pay such fees and expenses or (ii) the Company shall
              have failed promptly to assume the defense of such action or
              proceeding and employ counsel, reasonably satisfactory to the
              Indemnified Party in such action or proceeding or (iii) the named
              parties to any such action or proceeding (including any impleaded
              parties) include the Company or an Indemnified Party and the
              Company or such Indemnified Party which are different from or
              additional to those available to the Company (in which case, if
              the Indemnified Party notifies the Company in writing that it
              elects to employ separate counsel at the expense of the Company,
              the Company shall not have the right to assume the defense of such
              action or proceeding on behalf of the Indemnified Party, it being
              understood however, that the Company shall not, in connection with
              any one

                                       3
<PAGE>   4

              such action or proceeding or separate but substantially similar or
              related actions or proceeding arising out of the same general
              allegations or circumstances be liable for the reasonable fees and
              expenses of more than one separate firm of attorneys (together
              with appropriate local counsel) at any time for the Indemnified
              party, which firm shall be designated by the Indemnified Party.

              If the indemnification provided herein is for any reason held
              unenforceable by an Indemnified Party although otherwise
              applicable in accordance with its terms, the Company agrees to
              contribute to the losses, claims, damages and liabilities for
              which such indemnification is held unenforceable (i) in such
              proportion as is appropriate to reflect the relative benefits to
              the Company on the one hand, and B-III, on the other hand, of the
              transaction of the Company or (ii) if (but only if) the allocation
              provided for in clause (I) is for any reason held unenforceable,
              in such proportion as is appropriate to reflect not only the
              relative benefits referred to in clause (I) but also the relative
              fault of the Company, on one hand, and B-III on the other hand, as
              well as any other relevant equitable considerations. The Company
              agrees that for purposes of this paragraph the relative benefits
              to the Company and B-III of a transaction shall be deemed to be in
              the same proportion that the total value received by the Company
              as a result of or in connection with the transaction bears to the
              fees to be paid to B-III under this contract.

              The Company agrees that, without B-III's prior written consent, it
              will not settle, compromise or consent to the entry of any
              judgement in any pending or threatened claim, action or proceeding
              in respect of which indemnification could be sought under the
              indemnification provision of this letter agreement (whether or not
              B-III or any other Indemnified Party is an actual or potential
              party to such claim, action or proceeding) unless the foregoing
              releases B-III from all liability or obligation. B-III shall act
              as an independent entity, and any duties of B-III arising out of
              its engagement pursuant to this Agreement shall be owed solely to
              the Company.

              Any advice (written or oral) rendered by B-III in connection with
              an engagement pursuant to this Agreement or any similar letter
              shall be covered by the terms of this Agreement to the extent not
              otherwise expressly agreed and this Agreement may not be disclosed
              publicly without B-III's written consent except to the extent
              required by applicable law.

              The foregoing provisions shall survive any termination of this
              Agreement. The parties hereto waive the right to trial by jury in
              connection with any claim relating to the services contemplated by
              this Agreement, including any claim concerning B-III's advice. THE
              PROVISIONS OF THIS PARAGRAPH 4 SHALL NOT APPLY TO ANY LOSSES,
              CLAIMS OR ACTIONS TAKEN OR COMMENCED AGAINST B-III, OR ANY
              DESIGNEE OF B-III, AS A RESULT OF ACTIONS ENGAGED IN AS A DIRECTOR
              OF PETQUARTERS.

         5.   Expiration/Termination. This Agreement shall continue for a term
              of two years from the date it is signed, unless terminated by
              PetQuarters or B-III or extended in writing by both parties.
              Either party may terminate this Agreement on 30 days prior written

                                       4
<PAGE>   5

              notice. If PetQuarters terminates without cause, B-III's warrants
              fully vest immediately. If PetQuarters terminates with cause
              (BEING B-III'S FAILURE TO PERFORM THE DUTIES SPECIFIED IN THE
              "SCOPE OF B-III'S SERVICES" DESCRIBED ABOVE) or B-III terminates
              for any reason, B-III forfeits its unvested warrants. The
              expiration or termination of this Agreement shall in no way affect
              the fees paid or to be paid pursuant to Paragraph 2 hereof or
              B-III's rights to indemnification under Paragraph 4.

         6.   Governing Law/Dispute Resolution. The arrangements set out in this
              letter agreement shall be governed by New York law and each party
              agrees for the benefit of the other that proceedings against it
              may be brought by the New York courts (without prejudice to the
              other's right to bring proceedings elsewhere).

         7.   Assignment. Neither this Agreement nor any rights or obligations
              of either party hereunder may be assigned to any other person
              without the prior written consent of the other party. The
              provisions hereof shall inure to the benefit of and be binding
              upon the successors and permitted assigns of the parties hereto.

Sincerely,

B-III Capital LLC

By:
   -------------------------------
   Robert M. Brown, III
   President

                                       Agreed to and accepted as of the 25th day
                                       of October 1999:

                                       PetQuarters, Inc.

                                       By:
                                          --------------------------------------
                                          Steven B. Dempsey
                                          President

                                       5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}]]