Document:

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                                                                   EXHIBIT 10.18

                             AGREEMENT OF EMPLOYMENT

         AGREEMENT, made as of this 6th day of August, 1999, between Humboldt
Industries, Inc., a Pennsylvania corporation (the "Employer") and Judith
Patterson (the "Employee").

                                   WITNESSETH:

         WHEREAS, the Employer and the Employee desire to enter into an
Agreement relating to the employment of the Employee by the Employer.

         NOW, THEREFORE, the parties hereby agree as follows:

         1. EMPLOYMENT. The Employer hereby employs Employee and Employee hereby
accepts employment by the Employer, upon the terms and conditions hereinafter
set forth.

         2. EFFECTIVE DATE. The effective date of this Agreement shall be the
closing date of the PetQuarters.com acquisition of Humboldt Industries. This
Agreement shall continue in full force and effect until July 31, 2001 or until
terminated or amended by the parties hereto.

         3. DUTIES. The Employee shall devote her full time and attention to the
Employer's business of catalog sales and direct marketing of pet supplies and
products, as an employee of the Employer, and the Employee shall not, without
the written consent of the Chief Executive Officer of Employer, either directly
or indirectly, engage in any other profession or business activity, whether or
not such professional or business activity is pursued for gain, profit or other
pecuniary advantage; provided, however, that the Employee may engage in personal
non-financial pursuits that do not substantially interfere with the performance
of her duties under this Agreement and nothing contained herein shall be
construed as preventing the Employee from investing

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her assets in such form or manner as will not require her services in the
operation of the affairs of the company or companies in which such investment or
investments are made.

         The Employee shall abide by all of the rules, regulations and policies
established or promulgated by the Employer. The Employee shall devote such time
to the administration and operation of the business of the Employer as the
Employer shall determine.

         4. DIRECTION OF SERVICES. The Employer shall direct, control and
supervise the duties and work of the Employee; provided, however, that the
Employer shall not impose employment duties or constraints of any kind which
would require the Employee to infringe the ethics of her profession or violate
any ordinance or law.

         5. RELATIONSHIP OF PARTIES. The relationship between the Employee and
the Employer is that of employee and employer. The Employee, by virtue of this
relationship, shall not have any interest in the Employer's tangible or
intangible assets.

         6. COMPENSATION.

                  A. Salary: Employee shall have and receive, subject to
         withholding and other applicable employment taxes a yearly salary of
         Eighty Thousand Dollars ($80,000), payable on a bi-weekly basis. Such
         yearly salary is based upon One Thousand, Five Hundred (1,500) hours
         per average minimum work year, and may be raised by written agreement
         of the Chief Executive Officer, and subject to the approval of the
         Board of Directors of the Employer, but it shall not be reduced under
         the amount set forth herein, unless by written agreement of the
         Employee.

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                  B. Vehicle: Employer shall provide Employee with a monthly
         vehicle allowance of $1,200 for the term of this Agreement. Employee
         shall be responsible for all expenses ordinarily and customarily
         associated with the use of a vehicle, including, but not limited to
         gas, oil, tires, maintenance and cleaning.

                  C. Other Expenses: Employer shall upon presentation of
         acceptable receipts, reimburse Employee for all travel and other out of
         pocket expenses paid by Employee and related to her carrying out of her
         duties under this Agreement. This shall include, but is not limited to
         lodging, transportation, meals, entertaining of suppliers and potential
         suppliers, gratuities, and all other customary expenses.

                  D. Withholding: Employer shall be responsible for making all
         withholding of taxes and other such expenses, including federal, states
         and local taxes.

                  E. Health Plan: Employer shall, at its expense, if Employee
         elects, include Employee as a participant in the Group Health Coverage
         Plan. The Employee's rights and entitlements with respect to any such
         benefits will be subject to the provisions of the relevant contracts,
         policies or plans providing such benefits. Nothing contained herein
         shall be deemed to impose any obligation on the Employer to initiate or
         maintain any such plan.

                  F. Other Plans: In addition to the items listed here, Employee
         shall be entitled to participate in all other employee benefit plans in
         which any other full time employee of Employer is entitled to
         participate.

                  G. Stock grants: Employee shall receive 5,000 shares of common
         stock of PetQuarters, Inc., pursuant to the terms and conditions of the
         Restricted Stock Agreement attached hereto as Exhibit A, upon the
         effective date of this

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         Agreement and conditioned upon her continued employment for one year
         and one day from the date hereof. In the event of a change of voting
         control of PetQuarters, Inc., Employee shall be immediately vested in
         all shares previously granted to her pursuant to this Exhibit A. In the
         event Employee either is terminated for cause or terminates her
         employment on or prior to one year and one day from the date hereof,
         all shares granted to but not vested in Employee shall be forfeited by
         Employee to PetQuarters and these grants shall be deemed null and void.

         7. VACATION. The Employee shall be entitled to Twenty (20) working days
of vacation with pay per year of this Agreement. Such vacation to be taken by
the Employee at such time or times as shall be approved by the Chief Executive
Officer of Employer. In addition, the Employee shall be entitled to such
holidays as the Board of Directors of Employer may approve for all employees.
Unused days of vacation may not be carried over from one fiscal year to another.

         8. TERMINATION OF EMPLOYMENT. This Agreement, and the Employee's
employment hereunder, may be terminated by Employee upon Thirty (30) days
written notice by Employee to Employer and shall be terminated immediately upon
the happening of any of the following events:

                  A. The death or disability of the Employee.

                  B. The Employee's being convicted for the commission of a
         felony under any federal or state law.

                  C. For purposes of this Agreement, "disability" shall mean a
         physical or mental disability of Employee which results in her absence
         from work for One Hundred Twenty (120) days during any Six (6) month
         period. Such disability

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         shall be determined by a physician selected by a licensed Arbitrator
         appointed by the Philadelphia Regional Office of the American
         Arbitration Association, in accordance with the terms of the Uniform
         Arbitration Act, and such physician's determination shall be binding
         upon Employer and Employee.

                  D. By the Employer with "good cause" upon the giving of 3 days
         written notice. For the purpose of this Agreement, "good cause" shall
         include, alcohol or drug abuse, proven dishonesty, theft, fraud,
         embezzlement, conviction of a felony, or other actions by the Employee
         which cause material harm to, or publicly defame the name of, the
         Employer.

         Upon any such termination of this Agreement, the Employee's employment
shall terminate and the Employee shall be entitled to receive her monthly salary
prorated through the date of such termination. The Employee shall not be
entitled to receive any severance pay or other additional compensation, unless
the Employer, in the sole discretion of the Board of Directors, shall so elect.

         In the event of such termination, the Employee shall immediately pay
any indebtedness owed to the Employer, and shall reimburse the Employer for any
unearned prepaid expenditures incurred on behalf of or for the benefit of the
Employee. The Employer may, in its sole discretion, deduct or offset any such
amounts owed to it by the Employee from any amounts that may otherwise be due to
the Employee from the Employer. All amounts due to the Employee under the
provisions of this Paragraph 8 shall be determined by the accountant or the
accounting firm then employed by the Employer and the determination of such
accountant or accounting firm shall be conclusive and binding on the parties
hereto. Following termination, Employee shall fully cooperate with Employer and
all matters relating to the winding up of her pending

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work on behalf of Employer and the orderly transfer of any such pending work to
other employees of Employer.

         9. CONFIDENTIALITY AND NONDISCLOSURE AGREEMENT. Employee acknowledges
that, as an employee of Employer, Employee has been and will be in a position to
receive or have access to confidential information (as hereafter defined)
regarding the business carried on by Employer through its employees.
Confidential Information includes, but is not limited to, all information
regarding Employer's: (a) customers and customer lists, including all names,
addresses, phone numbers and any other pertinent information; (b) sources of
supply, price lists and costs; (c) marketing strategies and procedures,
advertising strategies and sales methods; (d) corporate strategies, plans and
goals; (e) information contained in training manuals; (f) technical information;
(g) prospective and executed contracts, financial information and other business
arrangements; (h) all other proprietary knowledge or data acquired or obtained
through Employee's relationship with Employer. Employee hereby agrees that,
except with the prior written consent of Employer, Employee will not, during the
course of employment with Employer or at any time thereafter, directly or
indirectly use, disclose or disseminate (in any manner) to any other person
(including any individual or entity) any Confidential Information. In the event
Employee's employment with Employer terminates or is terminated for any reason,
Employee agrees to return to Employer all documentation pertaining or relating
to any Confidential Information.

         Employee also recognizes and agrees that in the event of Employee's
breach or violation of any provisions of this paragraph, Employer may suffer
irreparable injury that cannot adequately be compensated for monetary damages
and agrees that Employer shall have the immediate right to obtain a preliminary
or final injunction against Employee

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issued by a court of competent jurisdiction enjoining any breach or violation of
this paragraph.

         10. COVENANT NOT COMPETE. To induce Employer to employ Employee,
Employee agrees, commencing on the date of Employee's termination of employment
for any reason except if Employee is terminated by Employer, without good cause,
and continuing a period of one year, she shall not solicit, accept business, or
in any way compete with Employer, whether on her own account or as a
shareholder, partner, joint venturer, employee, consultant, advisor and/or agent
of any person, firm, corporation or other entity. Employee acknowledges,
represents and warrants to Employer that the covenant of Employee hereunder is
reasonably necessary for the protection of Employer's interest and is not unduly
restrictive upon Employee.

         Employee also recognizes and agrees that in the event of Employee's
breach or violation of any provisions of this paragraph, Employer may suffer
irreparable injury that cannot adequately be compensated for monetary damages
and agrees that Employer shall have the immediate right to obtain a preliminary
or final injunction against Employee issued by a court of competent jurisdiction
enjoining any breach or violation of this paragraph.

         11. BENEFIT. This Agreement shall bind all parties, the respective
heirs, executors, administrators and assigns, but nothing contained herein shall
be construed as an authorization or right of any party to assign his rights or
obligations hereunder.

         12. WAIVER OF BREACH OR VIOLATION NOT DEEMED CONTINUING. The waiver by
either party of a breach or violation of any provision of this Agreement shall
not operate as or be construed to be a waiver of any subsequent breach hereof.

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         13. NOTICES. Any and all notices required or permitted to be given
under this Agreement will be sufficient if, in the case of the Employee,
furnished in writing and sent by registered mail to the Employee's last known
residence or, in the case of the Employer, to its principal office in Lonoke,
Arkansas.

         14. AUTHORITY. The provisions of this Agreement required to be approved
by the Board of Directors have been so approved and authorized.

         15. GOVERNING LAW. This Agreement shall be interpreted, construed and
governed according to the laws of the State of Pennsylvania.

         16. FORCE MAJEURE. Employee and Employer shall be excused for the
period of any delay in the performance of any obligations under this Agreement
when prevented from performing such obligations by cause or causes beyond their
reasonable control, including, without limitation, civil commotion, war,
invasion, rebellion, hostilities, military or usurped power, sabotage,
pestilence, riots, fire or other casualty or acts of God.

         17. SURVIVAL. The covenants contained in or liabilities accrued under
this Agreement which, by their terms, require their performance after the
expiration or termination of this Agreement shall be enforceable notwithstanding
the expiration or other termination of this Agreement.

         18. PARAGRAPH HEADINGS. The paragraph headings contained in this
Agreement are for convenience only and shall in no manner be construed as part
of this Agreement.

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

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         20. ENTIRE AGREEMENT. This instrument contains the entire agreement of
the parties and may not be changed except by a writing signed by the party
against whom the enforcement of any waiver, change, modification or discharge is
sought.

         IN WITNESS WHEREOF, the Employer has hereunto caused this Agreement to
be executed by its duly authorized officers and the Employee has hereunto set
her hand, all being done in duplicate originals with One (1) original being
delivered to each party on the day and year first above written.

                                       EMPLOYER:

                                       HUMBOLDT INDUSTRIES, INC., a wholly-owned
                                       subsidiary of PetQuarters, Inc.

Attest:
                                       By:
                                          -------------------------------------
                                           President

----------------------------------
Assistant Secretary

                                       EMPLOYEE:

                                       ----------------------------------------
                                       Judith Patterson

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                                                                  EXHIBIT 10.19

                        PROFESSIONAL SERVICES AGREEMENT

         THIS AGREEMENT, made as of this 6th day of June, 2000, between Dino
Moshova, a New York resident ("Provider"), and Pet Quarters, Inc., an Arkansas
corporation whose principal place of business is located at 720 East Front
Street in Lonoke, Arkansas 72086 ("Customer").

                                  WITNESSETH:

         WHEREAS, Customer desires to acquire consulting services from Provider
upon the terms, conditions and provisions as hereinafter set forth, and
Provider desires to provide such consulting services as Customer desires upon
the terms, conditions and provisions as hereinafter set forth;

         NOW, THEREFORE, in consideration of the premises and mutual
undertakings of the parties herein contained and for other good and valuable
consideration, the receipt of which the parties hereby acknowledge, intending
to be legally bound Provider and Customer hereby agree as follows:

         1. Duties of Provider. Customer hereby contracts with Provider as an
e-commerce consultant whose responsibilities shall include, but not be limited
to, the design and development of interactive Web sites for Customer and its
subsidiaries for Internet, Intranet, and E-Commerce. In addition to such
described duties, Customer anticipates that it will request Provider to perform
additional consulting and managerial tasks for Customer and Provider shall
accept such additional assignments without additional compensation unless
otherwise agreed upon by Customer. Provider agrees to perform all such services
in a prompt, professional and workmanlike manner consistent with generally
accepted professional and business practices and standards. As payment for all
such services, including any additional tasks as contemplated above, Provider
shall receive the amounts described in paragraph 3 hereof.

         Provider shall devote the time and attention necessary for Provider to
fulfill his commitment and obligations to Customer's business of developing the
premier Internet pet supply, information and resource site, designing and
developing Customer's Web sites, and assuring that Customer's computer systems
and operations are sufficient to meet Customer's internet and e-commerce needs.
Provider shall exert his best efforts to discharge the responsibilities
assigned to him by Customer. Provider shall discharge his responsibilities to
Customer in such a manner and he shall not at anytime do anything which may
cause or tend or be likely to cause any loss or damage to Customer in business,
reputation or otherwise. Provider shall consult exclusively with Customer
during the term of this Agreement; provided, however, that Provider may engage
in personal pursuits that do not substantially interfere with the performance
of his duties under this Agreement.

         2. Term. This Agreement shall be effective as of the date hereof, and
the "TERM OF ENGAGEMENT" (as defined herein) shall commence as of June 1, 2000
(the "START DATE"). As used herein, the phrase "TERM OF ENGAGEMENT" shall mean
the period commencing on the Start Date and ending approximately two (2) years
from the Start Date on May 31, 2000; provided, however, that, unless either the
Customer or Provider provides two (2) months notice to the contrary prior to
the end of the Term of Engagement, the Term of Engagement shall

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automatically be extended for one (1) year periods. Notwithstanding the
foregoing, the Term of Engagement shall expire on the first to occur of the
following (the "TERMINATION DATE"):

         (a)      TERMINATION BY THE CUSTOMER WITHOUT CAUSE. Notwithstanding
                  anything to the contrary in this Agreement, whether express
                  or implied, the Customer may, at any time, terminate
                  Provider's engagement for any reason other than Cause (as
                  defined below), Disability (as defined below), or Death by
                  giving Provider at least thirty (30) days prior written
                  notice of the effective date of termination. In the event
                  Provider's engagement hereunder is terminated by the Customer
                  other than for Cause, Disability or Death, Provider shall be
                  entitled to receive from Customer all amounts specified below
                  as follows:

                  i.       Base Compensation. Customer shall pay or cause to be
                           paid within 15 days of the Termination Date in a
                           lump sum, an amount equal to that portion of
                           Provider's Base Compensation (as defined below) as
                           he would have received during the period commencing
                           on the Termination Date and ending at the latter of
                           the Term of Employment or twelve (12) months after
                           the Termination Date (the "COMPENSATION CONTINUATION
                           PERIOD").

                  ii.      Stocks/Stock Options. Any unvested stock options,
                           stock appreciation rights, warrants, bonus units, or
                           comparable rights (collectively, "options") granted
                           or to be granted to Provider, and any shares or
                           other units (collectively "shares") granted or to be
                           granted to Provider, pursuant to any plan involving
                           or based upon equity in the Customer, shall
                           automatically and fully vest in Provider (and any
                           and all conditions applicable thereto shall be
                           deemed satisfied). In addition, any options granted
                           or to be granted to Provider, vested or unvested,
                           and all shares of common stock of the Customer owned
                           by Provider shall automatically double. Such options
                           shall be fully vested in accordance with this
                           subsection except the exercise price for such
                           options granted pursuant to this subsection shall be
                           the closing bid price for shares of common stock of
                           the Company on the Termination Date, and such shares
                           of common stock shall be deemed to be validly
                           issued, fully paid, and nonassessable.

         (b)      TERMINATION FOR CAUSE. The Customer shall have the right to
                  terminate Provider's engagement at any time for Cause by
                  giving Provider written notice of the effective date of
                  termination (which effective date may, except as otherwise
                  provided below, be the date of such notice). If the Customer
                  terminates Provider's engagement for Cause, Provider shall be
                  paid his unpaid Base Compensation accrued through the
                  Termination Date, and the Customer shall have no further
                  obligation hereunder from and after the effective Termination
                  Date under this subsection and shall have all other rights
                  and remedies available under this or any other agreement and
                  at law or in equity.

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                           For purposes of this Agreement, "CAUSE" shall mean:

                  (i)      theft, forgery, fraud, misappropriation,
                           embezzlement, moral turpitude or other act of
                           material misconduct against the Customer or any of
                           its affiliates;

                  (ii)     willful and knowing violation of any rules or
                           regulations of any governmental or regulatory body,
                           which is or is reasonably expected to be materially
                           injurious to the financial condition of the
                           Customer; or

                  (iii)    conviction of, or plea of guilty or nolo contendere
                           to, a felony or any crime of theft, forgery, fraud,
                           misappropriation, embezzlement, moral turpitude or
                           other act of material misconduct;

                  (iv)     a material violation of any fiduciary duty owed to
                           the Customer;

                  provided, however, that for any such event, activity or
                  omission in clause (iv) of this subsection, Provider shall be
                  given (A) prior written notification of the Customer's
                  intended actions and a description of the alleged events,
                  activities or omissions giving rise thereto, and (B) with
                  respect to those events, activities or omissions for which a
                  cure is reasonably possible, a reasonable opportunity (of not
                  less than thirty (30) days) to cure such breach.

         (c)      TERMINATION ON ACCOUNT OF DEATH. In the event of Provider's
                  death while engaged by the Customer, his engagement hereunder
                  shall terminate on the date of his death and Provider shall
                  be paid his unpaid Base Compensation through the Termination
                  Date.

         (d)      TERMINATION ON ACCOUNT OF DISABILITY. To the extent not
                  prohibited by The Americans With Disabilities Act of 1990,
                  if, as a result of Provider's incapacity due to physical or
                  mental illness (as determined in good faith by a physician
                  acceptable to the Customer and Provider), Provider is unable
                  to substantially render to the Customer the services required
                  under this Agreement for more than ninety (90) days out of
                  any consecutive one hundred and eighty (180) day period or if
                  a physician acceptable to the Customer advises the Customer
                  that it is likely that Provider will be unable to return to
                  the performance of his duties for more than ninety (90) days
                  out of any consecutive one hundred and eighty (180) day
                  period his engagement may be terminated for "DISABILITY."
                  During any period that Provider fails to perform his duties
                  with the Customer as a result of incapacity due to physical
                  or mental illness, he shall continue to receive his Base
                  Compensation until Provider's engagement hereunder is
                  terminated pursuant to this subsection.

         (e)      TERMINATION BY PROVIDER FOR GOOD REASON. Provider shall have
                  the right to terminate Provider's engagement, without further
                  obligation or liability to Customer, except that any
                  termination of Provider's engagement under this Section 5(e)
                  shall have the same effect as a termination without cause by
                  Customer under Section 5(a) above, upon the occurrence of any
                  one or more of

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                  the following events, which events shall be deemed
                  termination by Provider for "Good Reason":

                  i.       MATERIAL BREACH. If Customer willfully commits a
                           material breach of this Agreement with the actual
                           knowledge that its conduct constitutes a breach of
                           this Agreement;

                  ii.      EFFECTIVENESS OF NOTICE. Upon the failure to cure
                           any of the events/breaches set out in Section
                           5(e)(i) within thirty (30) days after Customer's
                           receipt of written notice from Provider specifying
                           the applicable events/breaches and expressly
                           referring to this Section 5(e) (the "Initial
                           Notice"), Provider shall have the right to elect to
                           terminate his engagement for Good Reason by giving a
                           second written notice (the "Second Notice") to
                           Customer to such effect and referring to this
                           Section 5(e); provided, however, that with respect
                           to any such events/breaches that are capable of
                           prospective cure, if Customer commences to effect
                           such a cure within the foregoing thirty (30) day
                           period, Customer shall be permitted additional time
                           to cure and not be deemed in breach so long as it
                           diligently continues to seek to effect a cure.
                           Provider shall be deemed to have terminated his
                           engagement for Good Reason under this Section 5(e)
                           effective ten (10) days following Second Notice.

         3. Compensation. For all the services to be rendered by Provider,
Customer agrees to pay Provider for the duration of the Term of Engagement
Compensation of no less than eight-five thousand dollars ($85,000) per calendar
year, payable no less than monthly, commencing June 30, 2000. Provider may also
participate, as deemed appropriate by the Board of Directors of Customer, in
any of the Customer's stock option plans.

         4. Independent Contractor. In its performance of services pursuant to
this Agreement, Provider shall at all times act in his own capacity and right
as an independent contractor, and nothing herein may be construed to make
Provider an agent, partner, or joint venturer of Customer. Provider shall not
have any claim to Customer's revenues. Provider shall be solely responsible for
all taxes due upon or as a result of Provider's receipt of the compensation
contemplated herein, and Customer shall not be responsible in any manner,
except as required by the income tax laws of the United States, for withholding
or payment of taxes related to any amounts paid by Customer to Provider.

         5. Confidentiality And Nondisclosure Agreement. Provider acknowledges
that, as a consultant to Customer, Provider has been and will be in a position
to receive or have access to confidential information (as hereafter defined)
regarding the business carried on by Customer. Confidential Information
includes, but is not limited to, all information regarding Customer's: (a)
customers and customer lists, including all names, addresses, phone numbers and
any other pertinent information; (b) sources of supply, price lists and costs;
(c) marketing strategies and procedures, advertising strategies and sales
methods; (d) corporate strategies, plans and goals; (e) information contained
in training manuals; (f) technical information; (g) prospective and executed
contracts, financial information and other business arrangements; (h) all other
proprietary knowledge or data acquired or obtained through Provider's
relationship with Customer. Provider

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hereby agrees that, except with the prior written consent of Customer, Provider
will not, during the course of his association with Customer or at any time
thereafter, directly or indirectly use, disclose or disseminate (in any manner)
to any other person (including any individual or entity) any Confidential
Information. In the event Provider's contract with Customer terminates or is
terminated for any reason, Provider agrees to return to Customer all
documentation pertaining or relating to any Confidential Information.

         Provider also recognizes and agrees that in the event of Provider's
breach or violation of any provisions of this paragraph, Customer may suffer
irreparable injury that cannot adequately be compensated for monetary damages
and agrees that Customer shall have the immediate right to obtain a preliminary
or final injunction against Provider issued by a court of competent
jurisdiction enjoining any breach or violation of this paragraph.

         6. Fair Competition Agreement. To induce Customer to retain Provider,
Provider agrees, commencing on the date of Provider's termination of services
to Customer for any reason except if this Agreement is terminated by Customer,
without good cause, and continuing for a period of one (1) year, Provider shall
not solicit, accept business, or in any way compete with Customer, whether on
his own account or as a shareholder, partner, joint venturer, employee,
consultant, advisor and/or agent of any person, firm, corporation or other
entity engaged in the business of providing pet products, supplies, services or
advice to third-parties on the internet or by mail order catalogues anywhere in
the world. Provider acknowledges, represents and warrants to Customer that the
covenant of Provider hereunder is reasonably necessary for the protection of
Customer's interest and is not unduly restrictive upon Provider.

         Provider also recognizes and agrees that in the event of Provider's
breach or violation of any provisions of this paragraph, Customer may suffer
irreparable injury that cannot adequately be compensated for monetary damages
and agrees that Customer shall have the immediate right to obtain a preliminary
or final injunction against Provider issued by a court of competent
jurisdiction enjoining any breach or violation of this paragraph.

         7. Consolidation. Merger or Sale or Transfer of Assets or Earning
Power.

         (a)      In the event that, following the date hereof, directly or
                  indirectly, (x) the Customer shall consolidate with, or merge
                  with and into, any other entity (other than a subsidiary of
                  the Customer), and the Customer shall not be the continuing
                  or surviving corporation of such consolidation or merger, (y)
                  any person (other than a subsidiary of the Customer) shall
                  consolidate with, or merge with or into, the Customer, and
                  the Customer shall be the continuing or surviving corporation
                  of such consolidation or merger and, in connection with such
                  consolidation or merger, all or part of the outstanding
                  shares of common stock of the Customer shall be changed into
                  or exchanged for stock or other securities of any other
                  entity or cash or any other property, or (z) the Customer
                  shall sell or otherwise transfer (or one or more of its
                  subsidiaries shall sell or otherwise transfer), in one
                  transaction or a series of related transactions, assets or
                  earning power aggregating more than 50% of the assets,
                  operating income, cash flow or earning power of the Customer
                  and its subsidiaries (taken as a whole) to any person(s) or
                  entity(ies)

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                  (other than the Customer or any subsidiary of the Customer),
                  then, and in each such case and except as contemplated by
                  subsection (d), Provider shall have been deemed terminated
                  without cause for purposes of Section 5(a)(ii), regardless of
                  whether Provider remains employed by Customer or its survivor
                  pursuant to this Agreement, and any termination of Provider
                  within twelve (12) months of such consolidation or merger
                  shall be deemed to be without cause and the remaining
                  provisions of Section 5(a) shall be applicable.

         (b)      The Customer shall not consummate any such consolidation,
                  merger, sale or transfer unless the surviving entity shall
                  have a sufficient number of authorized shares of its common
                  stock that have not been issued or reserved for issuance to
                  permit the exercise in full of the rights of Provider in
                  accordance with Section 5(a)(ii) and unless prior thereto the
                  Customer and such surviving entity shall have executed and
                  delivered to the Provider an agreement acknowledging the
                  Customer's or the surviving entity's obligation to, as soon
                  as practicable after the date of any Section 7 event, prepare
                  and file a registration statement under the Securities Act of
                  1933 (the "Act"), with respect to all shares of common stock
                  owned by Provider or to be acquired by Provider pursuant to
                  any option, and will use its best efforts to cause such
                  registration statement to (A) become effective as soon as
                  practicable after such filing and (B) remain effective (with
                  a prospectus at all times meeting the requirements of the
                  Act) until Provider has sold all of his shares of common
                  stock in the Customer or the surviving entity or Provider can
                  sell of his shares of common stock in the Customer or the
                  surviving entity without such current registration statement.

         (c)      The provisions of this Section 7 shall similarly apply to
                  successive mergers or consolidations or sales or other
                  transfers.

         8. Benefit. This Agreement shall bind all parties, the respective
heirs, executors, administrators and assigns, but nothing contained herein
shall be construed as an authorization or right of any party to assign his
rights or obligations hereunder.

         9. Resolution of Disputes. If any dispute shall arise under or related
to this Agreement or the transactions contemplated hereby, other than pursuant
to and under Section 6, such dispute shall be settled by arbitration in
accordance with the rules of the American Arbitration Association (the "AAA").
Such dispute shall be settled by arbitration in the City of Little Rock,
Arkansas by three (3) arbitrators, one of whom shall be appointed by Provider,
one by the Customer, and the third by the first two arbitrators. If either
party fails to appoint an arbitrator within ten (10) days of a request in
writing by the other party to do so or if the first two arbitrators cannot
agree on the appointment of a third arbitrator within ten (10) days, then such
arbitrator shall be appointed in accordance with the rules of the AAA. Except
as to the selection of arbitrators which shall be as set forth above, the
arbitration shall be conducted promptly and expeditiously in accordance with
the rules of the AAA so as to enable the arbitrators to render an award within
sixty (60) days of the commencement of the arbitration proceedings. The
decision of the arbitrators shall be binding upon the parties, and judgment
upon the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. The decision of the

                                       6
<PAGE>   7

arbitrators shall include within the arbitration award a recovery by the
prevailing party or parties of its or their expenses of arbitration, including
the fees and expenses of the arbitrators, other costs associated with the
arbitration proceeding and the reasonable attorneys' fees and expenses of the
prevailing party or parties incurred in connection with the arbitration.

         10. Assignment. Neither Customer nor Provider may assign this
Agreement without the prior written consent of the other party.

         11. Waiver Of Breach Or Violation Not Deemed Continuing. The waiver by
either party of a breach or violation of any provision of this Agreement shall
not operate as or be construed to be a waiver of any subsequent breach hereof.

         12. Notices. For the purposes of this Agreement, notices, demands and
all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered or one day
after delivery to an overnight air courier guaranteeing next day delivery,
addressed as follows:

         If to Provider:            Dino Moshova
                                    56 Stuart Place
                                    Munsey Park, New York  11030

         If to the Customer:        Pet Quarters, Inc.
                                    720 East Front Street
                                    Lonoke, Arkansas  72086
                                    Attn:  Steven Dempsey, CEO

         With  copies to:           Wright, Lindsey & Jennings LLP
                                    200 West Capitol Avenue, Suite 2200
                                    Little Rock, Arkansas 72201
                                    Attn:  C. Tad Bohannon

or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

         13. Governing Law. This Agreement shall be construed, interpreted and
the rights of the parties determined in accordance with the internal laws of
the State of Arkansas without reference to the choice of law provisions of such
State's law, except with respect to matters of law concerning the internal
corporate affairs of any corporate entity which is a party to or the subject of
this Agreement, and as to those matters of the law the jurisdiction under which
the respective entity derives its powers shall govern, and to the extent
governed by federal law.

         14. Survival. The covenants contained in or liabilities accrued under
this Agreement which, by their terms, require their performance after the
expiration or termination of this Agreement shall be enforceable
notwithstanding the expiration or other termination of this Agreement.

                                       7
<PAGE>   8

         15. Paragraph Headings. The paragraph headings contained in this
Agreement are for convenience only and shall in no manner be construed as part
of this Agreement.

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

         17. Entire Agreement. This instrument contains the entire agreement of
the parties and may not be changed except by a writing signed by the party
against whom the enforcement of any waiver, change, modification or discharge
is sought.

         18. Provider's Acknowledgment. Provider acknowledges (i) that he has
consulted with or has had the opportunity to consult with independent counsel
of his own choice concerning this Agreement and has been advised to do so by
the Customer, and (ii) that he has read and understands the Agreement, is fully
aware of its legal effect, and has entered into it freely based on his own
judgment.

         IN WITNESS WHEREOF, Customer has hereunto caused this Agreement to be
executed by its duly authorized officers and Provider has hereunto set his
hand, all being done in duplicate originals with One (1) original being
delivered to each party on the day and year first above written.

                                   CUSTOMER:

                                   PET QUARTERS, INC.
                                   720 East Front Street
                                   Lonoke, Arkansas 72056
                                   USA

                            By:
                                   -------------------------------------------
                                   Steve Dempsey, President

                                   PROVIDER:

                                   DINO MOSHOVA

                                   -----------------------------------------
                                   Dino Moshova

                                       8

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