AMENDED AND RESTATED STOCK OPTION AGREEMENT
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AGREEMENT dated as of January 14, 2004, and amended and restated as of
April 20, 2004, by and between DISTINCTIVE DEVICES, INC., a Delaware
corporation, (the "Company"), and __________ (the "Optionee") .
W I T N E S S E T H
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WHEREAS, in consideration of the services provided to the Company by
the Optionee, including his services in connection with the Company's
acquisition of galaxis technology ag, the Company desires to provide the
Optionee with an opportunity to acquire shares of the Company's Common Stock,
par value $.001 per share (the "Common Stock"), and thereby obtain a greater
proprietary interest in the progress and success of the business of the Company,
and the Optionee desires to obtain such a proprietary interest in the Company,
subject to the terms and conditions herein;
NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein set forth and other good and valuable consideration, the Company and the
Optionee hereby agree as follows;
1. Grant of Option. The Company hereby grants to the Optionee an
option (the "Option") to purchase an aggregate of _________ shares (the "Option
Shares") of Common Stock at an exercise price of seventy cents ($0.70) per share
(the "Exercise Price"), and the Optionee accepts the grant of the Option,
subject to adjustment as provided in Section 5 herein.
2. Vesting of Option. This Option shall vest as to all of the Option
Shares commencing on ____________ (the "Vesting Date"), provided that the
Optionee is then an officer and/or director of the Company.
3. Exercise of Option. The Option may be exercised at any time, or
from time to time, commencing on the Vesting Date and terminating on the fifth
anniversary of the date hereof (the "Expiration Date"). The Option may be
exercised, as provided in this Section 3, by notice and payment to the Company
as provided in Section 7 hereof.
4. Non-Transferability. The Option shall not be transferable in whole
or in part by the Optionee, except by will or the laws of descent or
distribution, and shall be exercised during the lifetime of the Optionee only by
him; provided, however, the Optionee shall have the right to pledge or otherwise
hypothecate the Option pursuant to a Pledge Agreement, dated April 20, 2004,
among the Company, the Optionee and other option holders (the "Pledge"), for the
benefit of Twinkle International FZE (the "Holder"), in connection with the
issuance and sale by the Company of an Unsecured Promissory Note, dated April
20, 2004 (the "Note"), to the Holder, and upon the Event of Default by the
Company under Section 4.1 of the Note, and in accordance with the Pledge, the
Optionee shall have the right to transfer or assign all or part of the Option
and this Agreement to the Holder or its designee. Any transfer or attempted
transfer, except as provided for herein, of all or part of the Option in
violation of this Agreement shall be null and void, and, at the discretion of
the Company, the Option shall then be terminated.
5. Adjustments. In the event of a stock dividend, stock split-up,
share combination, exchange of shares, recapitalization, merger, consolidation,
disposition of all or substantially all of its property, reorganization,
liquidation or other similar changes or transactions, of or by the Company, the
Board of Directors of the Company shall make (or shall undertake to have the
Board of Directors of any corporation which merges with, or acquires the stock
or assets of, the Company make) such adjustment of the number and class of
shares then covered by the Option, or of the Exercise Price, or both. To the
extent practicable, the Company shall give the Optionee prior written notice of
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any such event, provided that the failure by the Company to give such notice
shall not subject the Company to any liability herein. After an event which
results in an adjustment in the Option, the Company shall give written notice to
the Optionee specifying the adjusted number or type of Option Shares or other
security and/or the Exercise Price, together with a calculation of the
adjustment. The determination of the adjustment by the Company shall be final
and binding on the Optionee.
6. Reservation of Shares. The Company shall at all times during the
term of the Option reserve and keep available such number of shares of Common
Stock or such other class of stock then subject to the Option as shall be
sufficient to satisfy the requirements of this Agreement.
7. Methods of Exercise of Option.
7.1 Exercise Notice. Subject to the terms and conditions of this
Agreement, the Option shall be exercisable by notice (the "Exercise Notice"),
together with delivery of this Agreement and payment to the Company by a
certified check or wire transfer payable to the order of the Company in the full
amount of the purchase price for the Purchased Shares. Each Exercise Notice
shall:
(i) state the election to exercise the Option and the
number of Option Shares (such number being the "Purchased
Shares") in respect of which it is being exercised;
(ii) If at the time of exercise the Purchased Shares
are not covered by an effective registration statement filed
under the Securities Act of 1933, as amended (the "Securities
Act"), contain a representation and agreement as to investment
intent with respect to the Purchased Shares, and an
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acknowledgement as to restrictions on resale or transfer of such
Shares by reason of the Securities Act of 1933;
(iii) be signed by the person or persons entitled to
exercise the Option and, if the Option is being exercised by any
person or persons other than the Optionee, be accompanied by
proof, satisfactory to counsel for the Company, of the right of
such person or persons to exercise the Option; and
(iv) be sent to the company in accordance with Section
10 hereof.
7.2 Stock Certificate. Upon receipt of the documents to be
provided for in Section 7.1 hereof in proper form, the Company shall deliver to
the person or person exercising the Option certificates for the Purchased
Shares. In the event the Purchased Shares are not then covered by an effective
Securities Act registration statement, each certificate shall be subject to stop
transfer instructions and bear the following legend.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT IF 1933, AS
AMENDED. THEY MAY NOT PUBLICLY BE OFFERED FOR SALE,
SOLD OR DELIVERED AFTER SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER SUCH ACT EXCEPT AS AUTHORIZED UNDER SAID ACT, AND
UNLESS HEREAFTER REGISTERED WILL NOT BE TRANSFERRED
UPON THE RECORDS OF THE CORPORATION IN THE ABSENCE OF
AN OPINION OF COUNSEL TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED.
7.3 Partial Exercise. If the Option is being exercised for less
than the full number of Option Shares, the company shall deliver to the Optionee
a new Stock Option Agreement for the remaining number of Option Shares.
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8. Rights of Holder.
8.1 As Stockholder. The Optionee shall not have any rights to
voting, dividends or any other rights of a stockholder with respect to any
Option Shares until the certificates for such Option Shares shall have been
issued to him as evidenced by the appropriate entry on the stock record books of
the Company upon purchase of such Option Shares upon exercise of the Option.
8.2 As Employee. Nothing in this Agreement shall constitute an
employment agreement or arrangement between the Optionee and the Company nor
shall give the Optionee any rights as an employee.
9. Registration. At any time after the Vesting Date the Optionee may
request the Company to file a registration statement on Form S-8 (or successor
form) under the Securities Act coverning the Option Shares. Assuming the Company
is eligible to file a Form S-8 (or successor form) for the Option Shares, it
shall use its best efforts to file and cause such registration statement to
become effective and thereafter maintain the effectiveness thereof for at least
the earliest of (i) one year after the Expiration Date, (ii) the termination of
this Agreement, assuming no Option Shares have been purchased hereunder or (iii)
the date when all the Purchased Shares may be sold in accordance with Rule 144
under the Securities Act. The Company shall bear all costs related to such
registration statement. This shall be the only right of the Optionee to include
his Option Shares in a Securities Act registration statement. The Company may
include in such registration statement shares of Common Stock on behalf of other
holders of Company options and warrants.
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10. Notices. Any notice relating to this Agreement shall be in writing
and delivered in person, by certified mail, hand, express courier or fax as
follows to the following address:
If to the Company:
Distinctive Devices, Inc.
One Bridge Plaza, Suite 100
Fort Lee, New Jersey 07024
Attn: President
If to the Optionee:
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or to such other address as either party hereto may hereafter duly give to the
other.
11. Miscellaneous.
11.1 Benefits of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors, assigns, heirs and administrators.
11.2 Governing Law. This Agreement shall be construed by and
governed in accordance with the laws of the State of Delaware, without giving
effect to principles of conflicts of law.
11.3 Severability. In the event that any one or more provisions
of this Agreement shall be deemed to be illegal, invalid or unenforceable, such
illegality, invalidity or unenforceability shall not affect the legality,
validity and enforceability of the remaining legal, valid and enforceable
provisions hereof, which shall be construed as if such illegal, invalid or
unenforceable provision or provisions had not been inserted.
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11.4 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto as to the subject matter herein, and cannot
be amended, modified or terminated except by a writing executed by the parties
hereto.
11.5 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which shall
constitute a single instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
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DISTINCTIVE DEVICES, INC.
By:_________________________________