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EXHIBIT 10.2
[PET QUARTERS, INC. LETTERHEAD]
October __, 2000
AMRO International, S.A.
c/o UltraFinanz AG
Xxxxxxxxxxxxxxxxxx 0
Xxxxxx XX-0000 Xxxxxxxxxxx
Attn: X.X. Xxxxxxxx
Re: Second Amendment to Loan Agreement and First Amendment to Common
Stock and Warrants Purchase Agreement
Gentlemen:
Reference is made to that certain Loan Agreement (the "Loan
Agreement"), dated May 2, 2000, between Pet Quarters, Inc. (the
"Company") and AMRO International, S.A. (the "Purchaser") and that
certain Common Stock and Warrants Purchase Agreement (the "Stock
Agreement"), dated February 23, 2000, between the Company and the
Purchaser. Paragraph 4 of the Convertible Debenture, as currently
constituted, requires the Company to pay the entire unpaid balance of
the Convertible Debenture plus any accrued but unpaid interest thereon
on November 5, 2000 (the "Maturity Date"). The Company anticipates the
need to extend the Maturity Date an additional six (6) months.
Therefore, the Company wishes to amend the Loan Agreement to extend the
Maturity Date to May 5, 2001.
In consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree to:
(i) amend the definition of Maturity Date in the Convertible
Debenture to be May 5, 2001.
(ii) restate Paragraph 3 of the Convertible Debenture, in its
entirety, as follows:
3. The Holder of this Debenture is entitled, at its option, to
convert on any business day commencing on the date hereof, the
principal amount of this Debenture or any portion thereof and, at the
Holder's election, any accrued but unpaid interest, into shares of
Common Stock of the Company ("Conversion Shares") at a conversion price
for each share of Common Stock equal to, at the Holder's election and
if applicable, (i) $1.00, subject to adjustment for any stock splits,
reverse stock splits or the like effected after the date hereof and
subject to adjustment pursuant to Section 6 of the Loan Agreement, or
(ii) at any time after the Company does not use at least 50% of the net
proceeds of any subsequent equity financing (except for a private
placement of equity
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securities of the Borrower by or through Xxxxx Securities Co., Inc. to
be closed on or about May 8, 2000 or any other equity financing by the
Holder) to redeem this Debenture, the average of the lowest three (3)
closing bid prices of the Company's Common Stock during the 22 business
days prior to the business day on which the notice of conversion is
transmitted to the Holder ("Conversion Price"). The minimum conversion
amount per Notice of Conversion (as defined below) shall not be less
than $50,000, unless the principal amount outstanding is less than
$50,000.
(iii) amend the Exercise Price of the Warrant, Exhibit C to
the Stock Agreement, to be $1.00.
(iv) amend the Exercise Price of the Warrant, Exhibit A to the
Amendment to Loan Agreement, to be $1.00.
All terms used but not defined in this letter shall have the
meanings set forth in the Loan Agreement or the Stock Agreement.
If the foregoing correctly sets forth our understanding and
agreement, please so indicate by signing where indicated below.
Very truly yours,
PET QUARTERS, INC.
By:
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Xxxxxx Xxxxxxx, President
ACCEPTED AND AGREED TO:
AMRO INTERNATIONAL, S.A.
By:
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X.X. Xxxxxxxx, Director
