Stock Option Agreement
Aarica Holdings, Inc. (hereafter ("Aarica") does hereby formally grant to
Continental Capital & Equity Corporation ("CCEC") an option to purchase 200,000
shares of Aarica's common stock, at a price of $2.00 per share. This issuance
shall be in addition to any other shares, options, and warrants already issued
to CCEC. This option represents compensation for services provided by CCEC
through September 30, 2000 on behalf of Aarica. This Option agreement is
executed this 22nd day of September , 2000, subject to the following conditions:
1. The option grant is irrevocable.
2. Aarica shall issue no further shares, warrants, nor options without
the prior written consent of CCEC until such time as all shares held by
CCEC have become fully registered as free trading shares (this shall
included shares underlying all options held by CCEC) and are free from any
underwriter lock-up. The parties mutually agree that Aarica is free to
issue any shares, warrants, or options that (i) are referenced in Aarica's
SB-2 Prospectus filed with the Securities and Exchange Commission on August
15, 2000; and (ii) any such shares, options, or warrants formally approved
by the Board of Directors on or before September 22, 2000; and (iii) up to
300,000 options at $2.00 per share that may be issuable to Robert E.
Schmidt, Jr., ("Schmidt") provided that Schmidt shall forego any rights to
200,000 shares of common stock to have been issued at no cost to Schmidt s
referenced in Aarica's August 15, 2000 Prospectus. 3. The parties agree
that any portion of this agreement which may need further approval of
Aarica's Board of Directors shall be subject to such approval, and that in
the event such approval is required, Carol Kolozs shall proxy his vote on
such approval to James Schnorf.
4. Aarica shall provide piggy-back registration rights to the
referenced 200,000 shares underlying said options, and if said
shares are not registered on or before April 30, 2001, then Aarica
shall initiate a registration statement upon the written request
of CCEC, at Aarica's expense, and will utilize its best efforts to
make such registration statement effective as soon as possible.
Should said registration statement for any reason not be effective
within one year of the first exercise date of any option shares,
then Aarica shall issue an opinion letter and a non-objection
letter, at Aarica's expense, indicating that such shares are free
trade under Rule 144. The parties acknowledge that the
registration requirement is subject to Aarica's common stock being
publicly traded.
5. CCEC shall be entitled to sell up to 100,000 of its Aaricaa common
shares already held by CCEC in the event of an over-allotment
capability for the initial public offering ("IPO") of Aarica.
6. The option shall expire ninety (90) days from the later of (i) the
date all shares of Aarica held by CCEC are freely tradable; or
(ii) the date all shares of Aarica held by CCEC are free from any
underwriter lock-up.
7. In the event CCEC fails to exercise (i ) a minimum of $50,000 in
options by October 15 2000, and (ii) a minimum of an additional
$50,000 in options by October 31, 2000, unless such action is so
waived by the President of Aarica, then the $2.00 option price
shall increase to $4.00 on November 1, 2000. If the preceding
obligation is met, and CCEC fails to exercise a minimum of an
additional $50,000 by November 20, 2000, unless such action is so
waived by the President of Aarica, then the option price on all
options not so exercised by November 21, 2000 shall increase to
$2.50 per share.
8. CCEC and Aarica shall jointly determine if Aarica's cash position
requires further infusions of cash in excess of the $150,000 referenced in
clause 7 of this Agreement after November 21, 2000 but prior to Aarica's
IPO date. The parties anticipate that Aarica's IPO will occur no later than
December 2000. In the event the parties jointly agree that such additional
cash is required, then such cash requirement shall be fulfilled either by
(i) CCEC exercising additional options in tranches of $50,000 approximately
every two to three weeks, or (ii) should CCEC not exercise at least and
additional $150,000 in such options (presuming the cash requirement has
been so determined) then Aarica shall be entitled to request CCEC to
transfer a quantity of CCEC options priced at $2.00 (such quantity to not
exceed the balance of the referenced $150,000 not so exercised by CCEC) to
any third party that shall agree to provide funding to Aarica under terms
substantially similar to the CCEC option terms.
The parties acknowledge that no modifications may be made to this Agreement
unless both parties assent to such modification in writing.
Aaraica Holdings, Inc. Continental Capital & Equity Corporation
By: /s/ Carol Kolozs By: /s/ Jim Schnorf
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Carol Kolozs, President Jim Schnorf, General Manager