Document:

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                                                                   EXHIBIT 10.10

                               AMENDMENT NO. 1 TO
                 SPONSORSHIP, LICENSING, AND PROMOTION AGREEMENT

         This is AMENDMENT NO. 1 TO SPONSORSHIP, LICENSING, AND PROMOTION
AGREEMENT (this "Amendment"), is dated as of March ___, 2000, by and between
WeRPets.com, Inc., a Tennessee corporation ("WeRPets.com"), and AHN/FIT
Internet, LLC, a Delaware limited liability company ("AHN/FIT").

                                   WITNESSETH:

         WHEREAS, the parties hereto are the parties to that certain
Sponsorship, Licensing, and Promotion Agreement (the "Agreement"), dated as of
July 23, 1999; and

         WHEREAS, the parties desire to amend certain of the provisions of the
Agreement and to acknowledge the transferability of the Agreement in connection
with the acquisition of all of the outstanding common stock of WeRPets.com by a
third party;

         NOW, THEREFORE, in consideration of the premises, the mutual covenants
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

         Section 1. Amendment of Section 4 of the Agreement. Sections 4(a) and
4(b) of the Agreement are amended by deleting such sub-sections in their
entirety and replacing such sub-sections with the following:

         "Section 4(a):

                           (a) an annual fee in the amount of $110,000 for the
                  licensing of the AHN Content, payable in quarterly
                  installments by WeRPets.com at the end of each quarter (i.e.,
                  each March 31, June 30, September 30, and December 31)
                  following the Launch Date for so long as this Agreement
                  remains effective; provided, that a pro-rated fee shall be due
                  on the date upon which this Agreement expires or is
                  terminated.

         Section 4(b):

                           (b) on the date hereof, certificates representing
                  1,000 shares of WeRPets.com common stock, $.01 par value per
                  share issued to AHN/FIT Internet, LLC, which amount shall
                  represent ten percent (10%) of the equity ownership of
                  WeRPets.com as of the date hereof,"

         Section 2. Amendment of Section 5 of the Agreement. Subsection 5(b) is
amended by deleting such section in its entirety and replacing such section with
the following:

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                  (b) Capitalization. Upon the date of the issuance of the
         common stock (pursuant to Section 4(b) hereof), the authorized capital
         stock of the Company shall consist of 10,000 shares of Common Stock,
         par value $.01 per share (the "Company Common Stock"), 9,000 shares of
         which shall be issued and outstanding. There are and shall be no other
         classes of securities of the Company outstanding. All of the shares of
         Company Common Stock will have been duly authorized, validly issued and
         be fully paid, nonassessable and free of preemptive rights. Other than
         this Agreement, there are currently no contracts or commitments
         relating to the issuance, sale, transfer, or registration of the
         Company Common Stock or any other securities of the Company. Other than
         this Agreement, there are no options, warrants, preemptive rights,
         calls, subscriptions, pledges, liens, convertible securities or other
         rights, agreements or commitments that obligate the Company to issue,
         transfer or sell any shares of Company Common Stock or any other
         securities of the Company.

         Section 3. Acknowledgement by AHN/FIT. AHN/FIT acknowledges that,
pursuant to Section 14e) of the Agreement, WeRPets.com is permitted to assign or
transfer its rights under and pursuant to the Agreement (i) in connection with
the transfer of substantially all of the business operations of WeRPets.com
(whether by asset sale, stock sale, merger or otherwise) if such assignee is not
a "direct competitor" of AHN/FIT or (ii) with the written permission of AHN/FIT,
which shall not be unreasonably withheld. WeRPets.com has disclosed to AHN/FIT
that WeRPets.com is in discussions with certain third parties to merge with
WeRPets.com or to acquire all of the outstanding stock of WeRPets.com or all or
substantially all of the assets of WeRPets.com. It is specifically acknowledged
by AHN/FIT that the Agreement, if transferred or assigned pursuant to such asset
sale, stock sale, merger or otherwise, will continue in full force and effect
thereafter and that the successor or purchaser of WeRPets.com will succeed to
the rights and obligations of WeRPets.com under and pursuant to the Agreement as
if such successor's or purchaser's name appears in each and every place in the
Agreement where the name "WeRPets.com" appears.

         IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the day and date first above written.

                                       AHN/FIT INTERNET, LLC

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

                                       WERPETS.COM, INC.

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

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                                                                   EXHIBIT 10.11

                              EMPLOYMENT AGREEMENT

              THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made and entered
into as of June 6, 2000 by and between PET QUARTERS, INC., an Arkansas
corporation (the "COMPANY"), and Steven B. Dempsey, an Arkansas resident
("EXECUTIVE").

              WHEREAS, Executive and the Company deem it to be in their
respective best interests to enter into an agreement providing for the Company's
employment of Executive pursuant to the terms herein stated.

              NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree as follows:

1.       START DATE. This Agreement shall be effective as of the date hereof,
         and the "TERM OF EMPLOYMENT" (as defined herein) shall commence as of
         June 1, 2000 (the "START DATE").

2.       POSITION AND DUTIES. The Company hereby employs Executive in the
         capacity as Chief Executive Officer commencing as of the Start Date for
         the Term of Employment. Executive shall devote his best efforts to the
         performance of the services customarily incident to such offices and
         positions and to such other services of a senior executive nature as
         may be reasonably requested by the Board of Directors of the Company
         (collectively, "COMPANY MATTERS"). Executive, in his capacity as an
         employee and officer of the Company, shall be responsible to and obey
         the reasonable and lawful directives of the Board of Directors.
         Executive shall report directly to the Board of Directors of Company
         only, and Executive shall have such authority and duties as are
         customary in such position. During the Term of Employment, Executive's
         office shall be located within the City of Lonoke, Arkansas or the City
         of Little Rock, Arkansas, and Executive shall not be required to locate
         outside of either of these two cities without Executive's written
         consent.

3.       COMPENSATION.

         (a)      BASE SALARY. The Company shall pay to Executive for the
                  duration of the Term of Employment a minimum salary at the
                  rate of one hundred thousand dollars ($100,000.00) per
                  calendar year and agrees that such salary shall be reviewed
                  quarterly by the Board and, if appropriate, will be increased
                  based on the Company's ability to meet its budgetary and
                  strategic goals and objectives (the "Base Salary"). Such
                  salary shall be payable at least monthly in accordance with
                  the Company's normal payroll procedures. At no time during the
                  Term of Employment shall Executive's Base Salary be decreased
                  from the amount of the Base Salary then in effect without the
                  consent of Executive.

         (b)      PERFORMANCE BONUS. In addition to the compensation otherwise
                  payable to Executive pursuant to this Agreement, Executive be
                  eligible to receive additional

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                  annual bonuses to the extent, if any, awarded by the Board in
                  the sole discretion of the Board (the "DISCRETIONARY BONUS").

         (c)      STOCK OPTIONS. In addition to the compensation otherwise
                  payable to Executive pursuant to this Agreement, Executive
                  shall receive, under a separate agreement, stock options
                  according to terms and conditions comparable to
                  similarly-situated officers of the Company.

4.       BENEFITS. During the Term of Employment:

         (a)      Executive shall be eligible to participate in any life, health
                  and long-term disability insurance programs, pension and
                  retirement programs, stock option and other incentive
                  compensation programs, and other fringe benefit programs made
                  available to senior executive employees of the Company from
                  time to time, and Executive shall be entitled to receive such
                  other fringe benefits as may be granted to him from time to
                  time by the Company's Board.

         (b)      Executive shall be allowed vacations and leaves of absence
                  with pay in accordance with Company policy.

         (c)      The Company shall reimburse Executive for reasonable business
                  expenses incurred in performing Executive's duties and
                  promoting the business of the Company, including, but not
                  limited to, reasonable entertainment expenses, travel and
                  lodging expenses, long distance and cellular telephone
                  expenses, and approved professional memberships, following
                  presentation of documentation in accordance with the Company's
                  business expense reimbursement policies.

         (d)      Executive shall be added as an additional named insured under
                  all liability insurance policies now in force or hereafter
                  obtained covering any officer or director of the Company in
                  his or her capacity as an officer or director. Company shall
                  indemnify Executive in his capacity as an officer or director
                  and hold him harmless from any cost, expense or liability
                  arising out of or relating to any acts or decisions made by
                  him on behalf of or in the course of performing services for
                  the Company (to the maximum extent provided by the Bylaws of
                  the Company and applicable law).

5.       TERM; TERMINATION OF EMPLOYMENT. As used herein, the phrase "TERM OF
         EMPLOYMENT" 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 Company or Executive
         provides two (2) months notice to the contrary prior to the end of the
         Term of Employment, the Term of Employment shall automatically be
         extended for one (1) year periods. Notwithstanding the foregoing, the
         Term of Employment shall expire on the first to occur of the following
         (the "TERMINATION DATE"):

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

                  i.       Base Salary and Bonuses. Company shall pay or cause
                           to be paid within 15 days of the termination date in
                           a lump sum, an amount equal to Executive's Base
                           Salary and any accrued Bonuses as he would have
                           received such amounts during the period commencing on
                           the effective date of such termination and ending at
                           the latter of the Term of Employment or twelve (12)
                           months after the Termination Date (the "SALARY
                           CONTINUATION PERIOD").

                  ii.      Benefits. During the first six months of the Salary
                           Continuation Period, Executive and his spouse,
                           dependents and beneficiaries shall be entitled to
                           continue to be covered by all group medical, health
                           and accident insurance or other such health care
                           arrangements in which Executive was a participant as
                           of the effective date of such termination pursuant to
                           this Subsection, at the same coverage level and on
                           the same terms and conditions which applied
                           immediately prior to the effective date of
                           Executive's termination of employment pursuant to
                           this Subsection, until Executive obtains alternative
                           comparable coverage under another group plan, which
                           coverage does not contain any pre-existing condition
                           exclusions or limitations. At the termination of the
                           benefits coverage under the preceding sentence,
                           Executive and his spouse, dependents and
                           beneficiaries shall be entitled to continuation
                           coverage pursuant to Section 4980B of the Internal
                           Revenue Code of 1986, as amended, Sections 601-608 of
                           the Employee Retirement Income Security Act of 1974,
                           as amended, and under any other applicable law, to
                           the extent required by such laws, as if Executive had
                           terminated employment with the Company on the date
                           such benefits coverage terminates.

                  iii.     Stocks/Stock Options. Any unvested stock options,
                           stock appreciation rights, warrants, bonus units, or
                           comparable rights (collectively, "options") granted
                           or to be granted to Executive, and any shares or
                           other units (collectively "shares") granted or to be
                           granted to Executive, pursuant to any plan involving
                           or based upon equity in the Company, shall
                           automatically and fully vest in Executive (and any
                           and all conditions applicable thereto shall be deemed
                           satisfied). In addition, any options granted or to be
                           granted to Executive, vested or unvested, and all
                           shares of common stock of the Company owned by
                           Executive shall automatically double. Such options
                           shall be fully vested in accordance with this

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                           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 granted pursuant to this subsection
                           shall be deemed to be validly issued, fully paid, and
                           nonassessable.

         (b)      TERMINATION FOR CAUSE. The Company shall have the right to
                  terminate Executive's employment at any time for Cause by
                  giving Executive 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 Company
                  terminates Executive's employment for Cause, Executive shall
                  be paid his unpaid Base Salary accrued through the date of
                  termination, and the Company shall have no further obligation
                  hereunder from and after the effective date of termination
                  under this Subsection and shall have all other rights and
                  remedies available under this or any other agreement and at
                  law or in equity.

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

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

                  provided, however, that for any such event, activity or
                  omission in clause (iv) of this subsection, Executive shall be
                  given (A) prior written notification of the Company'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 Executive's
                  death while in the employ of the Company, his employment
                  hereunder shall terminate on the date of his death and
                  Executive shall be paid his unpaid Base Salary through the
                  date of termination. In addition, any other benefits payable
                  on behalf of Executive shall be determined under the Company's
                  insurance and other compensation and benefit plans and
                  programs then in effect in accordance with the terms of such
                  programs.

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         (d)      TERMINATION ON ACCOUNT OF DISABILITY. To the extent not
                  prohibited by The Americans With Disabilities Act of 1990, if,
                  as a result of Executive's incapacity due to physical or
                  mental illness (as determined in good faith by a physician
                  acceptable to the Company and Executive), Executive is unable
                  to substantially render to the Company 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 Company advises the Company that
                  it is likely that Executive 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
                  employment may be terminated for "DISABILITY." During any
                  period that Executive fails to perform his duties with the
                  Company as a result of incapacity due to physical or mental
                  illness, he shall continue to receive his Base Salary and
                  other benefits provided hereunder, together with all
                  compensation payable to him under the Company's disability
                  plan or program or other similar plan during such period,
                  until Executive's employment hereunder is terminated pursuant
                  to this subsection. Thereafter, Executive's benefits shall be
                  determined under the Company's retirement, insurance, and
                  other compensation and benefit plans and programs then in
                  effect, in accordance with the terms of such programs.

         (e)      TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive shall have
                  the right to terminate Executive's employment, without further
                  obligation or liability to Company, except that any
                  termination of Executive's employment under this Section 5(f)
                  shall have the same effect as a termination without cause by
                  Company under Section 5(a) above, upon the occurrence of any
                  one or more of the following events, which events shall be
                  deemed termination by Executive for "Good Reason":

                  i.       CHANGE IN REPORTING. If Executive no longer reports
                           directly to the Board of Directors of Company.

                  ii.      REDUCTION IN DUTIES OR TITLE. If Executive's duties
                           hereunder are diminished in any material respect or
                           Executive's title as Chief Executive Officer is
                           diminished without his prior written consent;

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

                  iv.      CHANGE IN LOCATION. If Executive's office is
                           re-located outside of the cities listed in Section 2
                           without his prior written consent;

                  v.       EFFECTIVENESS OF NOTICE. Upon the failure to cure any
                           of the events/breaches set out in Section 5(b)(i)
                           through 5(b)(iv) within thirty (30) days after
                           Company's receipt of written notice from Executive
                           specifying the applicable events/breaches and
                           expressly referring to this Section 5(f) (the
                           "Initial Notice"), Executive shall have the right to
                           elect to terminate

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                           his employment for Good Reason by giving a second
                           written notice (the "Second Notice") to Company to
                           such effect and referring to this Section 5(f);
                           provided, however, that with respect to any such
                           events/breaches that are capable of prospective cure,
                           if Company commences to effect such a cure within the
                           foregoing thirty (30) day period, Company 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. Executive shall be deemed to have
                           terminated his employment for Good Reason under this
                           Section 5(f) effective ten (10) days following Second
                           Notice.

6.       CONFIDENTIAL INFORMATION, NON-SOLICITATION AND NON-COMPETITION.

         (a)      During the Term of Employment and thereafter, Executive shall
                  not, except as may be required to perform his duties hereunder
                  or as required by applicable law, disclose to others or use,
                  whether directly or indirectly, any Confidential Information
                  regarding the Company. "CONFIDENTIAL INFORMATION" shall mean
                  information about the Company, its subsidiaries and
                  affiliates, and their respective clients and customers that is
                  not available to the general public and that was learned by
                  Executive in the course of his employment by the Company,
                  including, but not limited to, any proprietary knowledge,
                  trade secrets, data, formulae, information, and client and
                  customer lists and all papers, resumes, records (including
                  computer records) and the documents containing such
                  Confidential Information. Executive acknowledges that such
                  Confidential Information is specialized, unique in nature and
                  of great value to the Company, and that such information gives
                  the Company a competitive advantage. Upon the termination of
                  his employment for any reason whatsoever, Executive shall
                  promptly deliver to the Company all documents, computer tapes
                  and disks (and all copies thereof) containing any Confidential
                  Information.

         (b)      During the period that Executive is receiving payments under
                  this Agreement, Executive shall not, directly or indirectly in
                  any manner or capacity (e.g., as an advisor, principal, agent,
                  partner, officer, director, shareholder, employee, member of
                  any association or otherwise) engage in, work for, consult,
                  provide advice or assistance or otherwise participate in any
                  activity which is competitive with the business of the
                  Company. Executive further agrees that during such period he
                  will not assist or encourage any other person in carrying out
                  any activity that would be prohibited by the foregoing
                  provisions of this Section if such activity were carried out
                  by Executive and, in particular, Executive agrees that he will
                  not induce any employee of the Company to carry out any such
                  activity; provided, however, that the "beneficial ownership"
                  by Executive, either individually or as a member of a "group,"
                  as such terms are used in Rule 13d of the General Rules and
                  Regulations under the Exchange Act, of not more than one
                  percent (1%) of the voting stock of any publicly held
                  corporation shall not be a violation of this Agreement. It is
                  further expressly agreed that the Company will or would suffer
                  irreparable injury if Executive were to compete with the
                  Company or any subsidiary or affiliate of the Company in
                  violation of this Agreement and that the Company would by
                  reason of

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                  such competition be entitled to injunctive relief in a court
                  of appropriate jurisdiction, and Executive further consents
                  and stipulates to the entry of such injunctive relief in such
                  a court prohibiting Executive from competing with the Company
                  or any subsidiary or affiliate of the Company in violation of
                  this Agreement.

         (c)      During the period that Executive is receiving payments under
                  this Agreement and for one (1) year after such payments
                  terminate, Executive shall not, directly or indirectly,
                  influence or attempt to influence suppliers, customers or
                  affiliates of the Company to divert their business to any
                  competitor of the Company.

         (d)      Executive recognizes that he will possess confidential
                  information about other employees of the Company relating to
                  their education, experience, skills, abilities, compensation
                  and benefits, and interpersonal relationships with customers
                  of the Company. Executive recognizes that the information he
                  will possess about these other employees is not generally
                  known, is of substantial value to the Company in developing
                  its business and in securing and retaining customers, and will
                  be acquired by him because of his business position with the
                  Company. Executive agrees that, during the period that
                  Executive is receiving payments under this Agreement and for
                  one (1) year after such payments terminate, Executive will
                  not, directly or indirectly, solicit or recruit any employee
                  of the Company for the purpose of being employed by Executive
                  or by any competitor of the Company on whose behalf he is
                  acting as an agent, representative or employee and that he
                  will not convey any such confidential information or trade
                  secrets about other employees of the Company to any other
                  person.

         (e)      If it is determined by a court of competent jurisdiction in
                  any state that any restriction in this Section is excessive in
                  duration or scope or is unreasonable or unenforceable under
                  the laws of that state, it is the intention of the parties
                  that such restriction may be modified or amended by the court
                  to render it enforceable to the maximum extent permitted by
                  the law of that state.

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 Company shall consolidate with, or merge
                  with and into, any other entity (other than a subsidiary of
                  the Company), and the Company shall not be the continuing or
                  surviving corporation of such consolidation or merger, (y) any
                  person (other than a subsidiary of the Company) shall
                  consolidate with, or merge with or into, the Company, and the
                  Company 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 Company shall be changed into or
                  exchanged for stock or other securities of any other entity or
                  cash or any other property, or (z) the Company 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

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                  more than 50% of the assets, operating income, cash flow or
                  earning power of the Company and its subsidiaries (taken as a
                  whole) to any person(s) or entity(ies) (other than the Company
                  or any subsidiary of the Company), then, and in each such case
                  and except as contemplated by subsection (d), Executive shall
                  have been deemed terminated without cause for purposes of
                  Section 5(a)(iii), regardless of whether Executive remains
                  employed by Company or its survivor pursuant to this
                  Agreement, and any termination of Executive 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 Company 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 Executive in
                  accordance with Section 5(a)(iii) and unless prior thereto the
                  Company and such surviving entity shall have executed and
                  delivered to the Executive an agreement acknowledging the
                  Company'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 Executive or to be acquired by Executive 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 Executive has sold all of his shares of common stock in
                  the Company or the surviving entity or Executive can sell of
                  his shares of common stock in the Company 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.       DESIGNATED BENEFICIARY. In the event of the death of Executive while in
         the employ of the Company, or at any time thereafter during which
         amounts remain payable to Executive under SECTION 5, such payments
         (other than the right to continuation of welfare benefits) shall
         thereafter be made to such person or persons as Executive may
         specifically designate (successively or contingently) to receive
         payments under this Agreement following Executive's death by filing a
         written beneficiary designation with the Company during Executive's
         lifetime. Such beneficiary designation shall be in such form as may be
         prescribed by the Company and may be amended from time to time or may
         be revoked by Executive pursuant to written instruments filed with the
         Company during his lifetime. Beneficiaries designated by Executive may
         be any natural or legal person or persons, including a fiduciary, such
         as a trustee or a trust or the legal representative of an estate.
         Unless otherwise provided by the beneficiary designation filed by
         Executive, if all of the persons so designated die before Executive on
         the occurrence of a contingency not contemplated in such beneficiary
         designation, then the amounts payable under this Agreement shall be
         paid to Executive's estate.

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9.       TAXES. All payments to be made to Executive under this Agreement will
         be subject to any applicable withholding of federal, state and local
         income and employment taxes.

10.      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 Executive, one by the Company, 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 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.

11.      ATTORNEYS' FEES. Except as otherwise provided herein, should either
         party hereto or their successors retain counsel for the purpose of
         enforcing, or preventing the breach of, any provision hereof,
         including, but not limited to, by instituting any action or proceeding
         in arbitration or a court to enforce any provision hereof or to enjoin
         a breach of any provision of this Agreement, or for a declaration of
         such party's rights or obligations under the Agreement, or for any
         other remedy, whether in arbitration or in a court of law, then the
         successful party shall be entitled to be reimbursed by the other party
         for all costs and expenses incurred thereby, including, but not limited
         to, reasonable fees and expenses of attorneys and expert witnesses,
         including costs of appeal. If such successful party shall recover
         judgment in any such action or proceeding, such costs, expenses and
         fees may be included in and as part of such judgment. The successful
         party shall be the party who is entitled to recover the costs of suit,
         whether or not the suit proceeds to final judgment. If no costs are
         awarded, the successful party shall be determined by the arbitrator or
         court, as the case may be.

12.      RELEASE. In exchange for the promises and the payments set forth in
         Section 5(a) above, Executive covenants and agrees to release, acquit,
         and forever discharge the Company of and from any and all claims,
         injuries, demands and causes of action, including, but not limited to:
         breach of contract, wages, severance pay, vacation benefits, bonuses,
         defamation, claims arising under the Arkansas Civil Rights Act of 1993,
         Title VII of the Civil Rights Act of 1964, as amended, Section 1981 of
         the Civil Rights Act of 1866, the Americans with Disabilities Act, the
         Family Medical Leave Act and the Age Discrimination Employment Act of
         1967, as amended, which he may now have and which

                                       9
<PAGE>   10

         he may ever have as a result of, arising out of, or by reason of: his
         employment by the Company; the termination of his employment; any of
         the Company's employment practices, acts or omissions; and any acts or
         omissions of the Company. It is Executive's express desire to release
         and waive each and every claim for injuries, damages and consequences,
         known or unknown, developed or which might develop in the future
         resulting from any practices, acts or omissions of the Company which
         occurred prior to the effective date of any termination of this
         Agreement pursuant to and in accordance with Section 5(a) hereof.

13.      REVIEW PERIOD. Executive understands and agrees that he:

         (a)      Has a full 21 days within which to consider this Agreement
                  before executing it;

         (b)      Has carefully read and fully understands all of the provisions
                  of this Agreement;

         (c)      Is, through this Agreement, releasing the Company from any and
                  all claims he may have against them, including any and all
                  claims under state or federal securities laws;

         (d)      Knowingly and voluntarily agrees to all the terms set forth in
                  this Agreement;

         (e)      Knowingly and voluntarily intends to be legally bound by this
                  Agreement;

         (f)      Was advised and hereby is advised in writing to consider the
                  terms of this Agreement and consult with an attorney of his
                  choice prior to executing this Agreement;

         (g)      Has a full seven days following the execution of this
                  Agreement to revoke this Agreement and has been and hereby is
                  advised in writing that this Agreement shall not become
                  effective or enforceable until the revocation period has
                  expired; and

         (h)      Understands that claims or rights under the Age Discrimination
                  in Employment Act that may arise after the date this Agreement
                  is executed are not waived.

13.      MISCELLANEOUS. This Agreement shall also be subject to the following
         miscellaneous considerations:

         (a)      REPRESENTATIONS AND WARRANTIES.

                  (i)      Executive represents and warrants to the Company that
                           he has the authorization, power and right to deliver,
                           execute and fully perform his obligations under this
                           Agreement in accordance with its terms. Executive
                           further represents and warrants that this Agreement
                           does not require any authorization, consent,
                           approval, exemption or other action by any other
                           party and does not (A) conflict with or result in the
                           breach of the terms, conditions or provisions of, (B)
                           constitute a default under, or (C) result in a

                                       10
<PAGE>   11

                           violation of any agreement, instrument, order,
                           judgment or decree to which Executive is subject.
                           Executive will, to the fullest extent permitted by
                           applicable law, as from time to time in effect,
                           indemnify the Company and hold the Company harmless
                           for any breach of the representations set forth in
                           this subparagraph (i).

                  (ii)     The Company represents and warrants to Executive that
                           it has the authorization, power and right to deliver,
                           execute and fully perform its obligations under this
                           Agreement in accordance with its terms. The Company
                           further represents and warrants that this Agreement
                           does not require any authorization, consent,
                           approval, exemption or other action by any other
                           party and does not (A) conflict with or result in the
                           breach of the terms, conditions or provisions of, (B)
                           constitute a default under, or (C) result in a
                           violation of any agreement, instrument, order,
                           judgment or decree to which the Company is subject.
                           The Company will, to the fullest extent permitted by
                           applicable law, as from time to time in effect,
                           indemnify Executive and hold Executive harmless for
                           any breach of its representations set forth in this
                           subparagraph (ii).

         (b)      DIVISIBILITY OF THE AGREEMENT. If any provision of this
                  Agreement or any portion thereof is declared invalid, illegal,
                  or incapable of being enforced by any court of competent
                  jurisdiction, the remainder of such provisions and all of the
                  remaining provisions of this Agreement shall continue in full
                  force and effect.

         (c)      CHOICE OF 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.

         (d)      ASSIGNMENT. This Agreement shall be binding on and shall inure
                  to the benefit of the parties to it and their respective
                  heirs, legal representatives, successors and assigns, except
                  as otherwise provided herein. The Company may assign this
                  Agreement to any direct or indirect subsidiary or parent of
                  the Company or joint venture in which the Company has an
                  interest, or any successor (whether by merger, consolidation,
                  purchase or otherwise) to all or substantially all of the
                  stock, assets or business of the Company and this Agreement
                  shall be binding upon and inure to the benefit of such
                  successors and assigns; provided however that no such
                  assignment shall relieve Company of its obligations due to
                  Executive hereunder. Except as expressly provided herein,
                  Executive may not sell, transfer, assign, or pledge any of her
                  rights or interests pursuant to this Agreement.

         (e)      NO ABROGATION. Any rights of Executive hereunder shall be in
                  addition to any rights Executive may otherwise have under
                  benefit plans, agreements, or

                                       11
<PAGE>   12

                  arrangements of the Company to which he is a party or in which
                  he is a participant, including, but not limited to, any
                  Company-sponsored employee benefit plans. Provisions of this
                  Agreement shall not in any way abrogate Executive's rights
                  under such other plans, agreements, or arrangements.

         (f)      NOTICE. 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 Executive:           Steven B. Dempsey
                                    103 Red River Dr.
                                    Sherwood, Arkansas 72120

         If to the Company:         Pet Quarters, Inc.
                                    720 East Front Street
                                    Lonoke, Arkansas  72086
                                    Attn:  Niloo Razi Howe, President

         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.

         (g)      HEADINGS. Section headings in this Agreement are included
                  herein for convenience of reference only and shall not
                  constitute a part of this Agreement for any other purpose.

         (h)      WAIVER. Failure to insist upon strict compliance with any of
                  the terms, covenants, or conditions hereof shall not be deemed
                  a waiver of such term, covenant, or condition, nor shall any
                  waiver or relinquishment of, or failure to insist upon strict
                  compliance with, any right or power hereunder at any one or
                  more times be deemed a waiver or relinquishment of such right
                  or power at any other time or times.

         (i)      EXECUTIVE'S ACKNOWLEDGMENT. Executive 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 Company, 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.

                                       12
<PAGE>   13

         (j)      COUNTERPARTS. This Agreement may be executed in several
                  counterparts, each of which shall be deemed to be an original
                  but all of which together will constitute one and the same
                  instrument.

         (k)      ENTIRE AGREEMENT; AMENDMENT. This Agreement (i) contains a
                  complete statement of all the arrangements between the parties
                  with respect to Executive's employment by the Company, (ii)
                  supersedes all prior and existing negotiations and agreements
                  between the parties concerning Executive's employment and
                  (iii) can only be changed or modified pursuant to a written
                  instrument duly executed by each of the parties hereto.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                    EXECUTIVE

                                    -----------------------------------------
                                    Steven B. Dempsey

                                    PET QUARTERS, INC.

                           By:      -----------------------------------------
                                    Gregg Rollins, CFO

                                       13

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