Document:

Unassociated Document

     

     

    MYECHECK,
INC.

    

    2009
EQUITY INCENTIVE PLAN

    

    ARTICLE
I

    

    PURPOSES

    

    The purposes of this MyECheck, Inc.,
2009 Equity Incentive Plan (the “Plan”) are to encourage selected employees,
directors and consultants of MyEcheck, Inc., together with any successor thereto
(the “Company”) and its Affiliates (as defined below) to acquire a proprietary
interest in the growth and performance of the Company, to generate an increased
incentive to contribute to the Company’s future success and prosperity, thus
enhancing the value of the Company for the benefit of its shareholders, and to
enhance the ability of the Company and its Affiliates to attract and retain
exceptionally qualified individuals upon whom, in large measure, the sustained
progress, growth and profitability of the Company depend.

    

    

    ARTICLE
II

    

    DEFINITIONS

    

    As used in the Plan, the following
terms shall have the meanings set forth below:

    

    (a)           “Affiliate”
shall mean (i) any entity that, directly or through one or more intermediaries,
is controlled by the Company and (ii) any entity in which the Company has a
significant equity interest, as determined by the Board or the
Committee.

    

    (b)           “Award”
shall mean any Option, Stock Appreciation Right, Restricted Stock, Restricted
Stock Unit, Performance Award, Dividend Equivalent, or Other Stock-Based Award
granted under the Plan.

    

    (c)           “Award
Agreement” shall mean any written agreement, contract, or other instrument or
document evidencing any Award granted under the Plan.

    

    (d)           “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to
time.

    

    (e)           “Consultant”
shall mean a consultant or adviser who provides bona fide services to the
Company or an Affiliate as an independent contractor. Service as a consultant
shall be considered employment for all purposes of the Plan, except for purposes
of satisfying the requirements of Incentive Stock Options.

    

    (f)           “Committee”
shall mean a committee of not fewer than two members, each of whom is a member
of the Board and all of whom are disinterested persons, as contemplated by Rule
16b-3 (“Rule 16b-3”) promulgated under the Securities Exchange Act of 1934, as
amended (“Exchange Act”) and each of whom is an outside director for purposes of
Section 162(m) of the Code, acting in accordance with the provisions of Section
3, designated by the Board to administer the Plan.

    

    (g)           “Dividend
Equivalent” shall mean any right granted under Section 6
(e) of the Plan.

    

    (h)           “Employee”
shall mean any employee of the Company or of any Affiliate.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i)           “Fair
Market Value” shall mean, with respect to any property (including, without
limitation, any Shares or other Securities), the fair market value of such
property determined by such methods or procedures as shall be established from
time to time by the Board or the Committee.

    

    (j)           “Incentive
Stock Option” shall mean an option granted under Section 6
(a) of the Plan that is intended to meet the requirements of Section 422
of the Code, or any successor provision thereto.

    

    (k)           “Non-Qualified
Stock Option” shall mean an option granted under Section 6
(a) of the Plan that is not intended to be an Incentive Stock
Option.

    

    (l)           “Option”
shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.

    

    (m)           “Other
Stock-Based Award” shall mean any right granted under Section 6
(f) of the Plan.

    

    (n)           “Participant”
shall mean any person that renders bona fide services to the Company (including,
without limitation, the following: a person employed by the Company or an
Affiliate in a key capacity; an officer or director of the Company; a person
engaged by the Company as a consultant; or a lawyer, law firm, accountant or
accounting firm) who receives an Award under the Plan.

    

    (o)           “Performance
Award” shall mean any right granted under Section 6
(d) of the Plan.

    

    (p)           “Person”
shall mean any individual, corporation, partnership, association, joint-stock
company, trust, unincorporated organization, or government or political
subdivision thereof.

    

    (q)           
“Released Securities” shall mean shares of Restricted Stock as to which all
restrictions imposed by the Board or the Committee have expired, lapsed, or been
waived.

    

    (r)           “Restricted
Stock” shall mean any Share granted under Section 6
(c) of the Plan.

    

    (s)           “Restricted
Stock Unit” shall mean any right granted under Section 6
(c) of the Plan that is denominated in Shares.

    

    (t)           “Shares”
shall mean the shares of common stock of the Company, $.001 par value, and such
other securities or property as may become the subject of Awards, or become
subject to Awards, pursuant to an adjustment made under Section 4
(b) of the Plan.

    

    (u)           “Stock
Appreciation Right” shall mean any right granted under Section 6
(b) of the Plan.

    

    

    ARTICLE
III

    

    ADMINISTRATION

    

    (a)           The
Plan shall be administered by the Board; provided, however, that the Board may
delegate such administration to the Committee.

    

    (b)           Subject
to the provisions of the Plan, the Board and/or the Committee shall have
authority to

    

    (i)           determine
the type or types of Awards to be granted to each Participant under the
Plan;

    

    (ii)           determine
the number of Shares to be covered by (or with respect to which payments,
rights, or other matters are to be calculated in connection with)
Awards;

    

    (iii)           determine
the terms and conditions of any award;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iv)           determine
the time or times when each Award shall become exercisable and the duration of
the exercise period;

    

    (v)           determine
whether, to what extent, and under what circumstances Awards may be settled in
or exercised for cash, Shares, other securities, other Awards, or other
property, or canceled, forfeited, or suspended, and the method or methods by
which Awards may be settled, exercised, canceled, forfeited, or
suspended;

    

    (vi)           determine
whether, to what extent, and under what circumstances cash, shares, other
securities, other Awards, other property, and other amounts payable with respect
to an Award under the Plan shall be deferred eitherautomatically or at the
election of the holder thereof or of the Board or the Committee;

    

    (vii)           construe
and interpret the Plan;

    

    (viii)           promulgate,
amend, and rescind rules and regulations relating to its administration, and
correct defects, omissions and inconsistencies in the Plan or any
Award;

    

    (ix)           consistent
with the Plan and with the consent of the Participant, as appropriate, amend any
outstanding Award or amend the exercise date or dates;

    

    (x)           determine
the duration and purpose of leaves of absence which may be granted to
Participants without constituting termination of their employment for the
purpose of the Plan; and

    

    (xi)    make all other
determinations necessary or advisable for the Plan’s
administration.

    

    (c)           The
Board and the Committee’s interpretation and construction of any provisions of
the Plan or of any Award shall be conclusive and final. No member of the Board
or the Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any Award.

    

    (d)           In
the case of any Award that is intended to qualify as performance-based
compensation for purposes of Section 162 (m) of the Code, once the Award is
made, neither the Board nor Committee shall have discretion to increase the
amount of compensation payable under the Award that would otherwise be due upon
attainment of the performance goal.

    

    

    ARTICLE
IV

    

    SHARES
AVAILABLE FOR AWARDS

    

    (a)           Shares Available.

    

    Subject to adjustment as provided in
Section 4
(b) :

    

    (i)           Calculation of Number of Shares
Available:

    

    The number of Shares available for
granting Awards under the Plan shall be:

    

    
      (A)   10,000,000.

    

    

    (ii)           Accounting for
Awards.

    

    For purposes of this Article
IV,

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (A)           if
an Award (other than a Dividend Equivalent) is denominated in Shares, the number
of Shares covered by such Award, or to which such Award relates, shall be
counted on the date of grant of such Award against the aggregate number of
Shares available for granting Awards under the Plan; and

    

    (B)           Dividend
Equivalents and Awards not denominated in Shares shall not be counted against
the aggregate number of Shares available for granting Awards under the
Plan.

    

    (iii)           Sources of Shares Deliverable under
Awards.

    

    
      Any
shares delivered pursuant to an Award may consist, in whole or in part, of
authorized and unissued Shares or of Treasury Shares.

    

    

    (b)           Adjustments.

    

    
      In the
event that the Board or the Committee shall determine that any dividend or other
distribution (whether in the form of cash, Shares, other securities, or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, purchase, or exchange of
Shares or other securities of the Company, issuance of warrants or other rights
to purchase Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an adjustment is
determined by the Board or the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Board or the Committee shall, in such
manner as it may deem equitable, adjust any or all of

    

    

    (i)           the
number and type of Shares (or other securities or property) which thereafter may
be made the subject of Awards;

    

    (ii)           the
number and type of Shares (or other securities or property) subject to
outstanding Awards; and

    

    (iii)           the
grant, purchase, or exercise price with respect to any Award, or, if deemed
appropriate, make provision for a cash payment to the holder of an outstanding
Award;

    

    provided, however, in each
case, that with respect to Awards of Incentive Stock Options no such adjustment
shall be authorized to the extent that such authority would cause the Plan to
violate Section 422(b)(1) of the Code or any successor provision thereto, and;
further, provided,
however, that the number of Shares subject to any award denominated in
Shares shall always be a whole number.

    

    

    SECTION
V

    

    ELIGIBILITY

    

    Any Employee, Director or Consultant
shall be eligible to receive Awards under the Plan. Any Awards granted to
members of the Committee shall be approved by the Board of Directors of the
Company.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    SECTION
VI

    

    AWARDS

    

    
      (a)   Options.

    

    

    
      The Board
and the Committee are hereby authorized to grant Options with the following
terms and conditions and with such additional terms and conditions, in
either  case not inconsistent with the provisions of the Plan, as the
Board or the Committee shall determine:

    

    

    
      (i)   Exercise
Price.

    

    

    The
exercise price per Share of each Option shall be determined by the Board or the
Committee; provided,
however, that such exercise price per Share under any Incentive Stock
Option shall not be less than 100% (110% in the case of a “10-percent
shareholder” as such term is used in Section 422(c)(5) of the Code) of the Fair Market Value
of a Share on the date of grant of such Incentive Stock Option.

    

    
      (ii)   Option
Term.

    

    

    The term
of each Option shall be fixed by the Board or the Committee, provided that no
Incentive Stock Option shall have a term greater than 10 years (5 years in the
case of a “10-percent shareholder,” as such term is used in Section 422(c)(5) of
the Code).

    

    
      (iii)   Time and Method of
Exercise.

    

    

    The Board
or the Committee shall determine the time or times at which an Option may be
exercised in whole or in part, and the method or methods by which, property, or
any combination thereof, having a Fair Market Value on the exercise date equal
to the relevant exercise price, in which, payment of the exercise price with
respect thereto may be made or deemed to have been made.

    

    
      (iv)   Incentive Stock
Options.

    

    

    The terms
of any Incentive Stock Option granted under the Plan shall comply in all
respects with the provisions of Section 422 of the Code, or any successor
provision thereto, and any regulations promulgated thereunder.

    

    
      (b)   Stock Appreciation
Rights.

    

    

    The Board
and the Committee are hereby authorized to grant Stock Appreciation Rights. A
Stock Appreciation Right granted under the Plan shall confer on the holder
thereof a right to receive, upon exercise thereof, the excess of (1) the Fair
Market Value of one Share on the date of exercise or, if the Board or the
Committee shall so determine in the case of any such right other than one
related to any Incentive Stock Option, at any time during a specified period
before or after the date of exercise over (2) the grant price of the right as
specified by the Board or the Committee. Subject to the terms of the Plan, the
grant price, term, methods of exercise, methods of settlement, and any other
terms and conditions of any Stock Appreciation Right shall be as determined by
the Board or the Committee. The Board and the Committee may impose such
conditions or restrictions on the exercise of any Stock Appreciation Right as it
may deem appropriate.

    

    (c)           Restricted Stock and Restricted Stock
Units.

    

    
      (i)   Issuance.

    

    

    The Board
and the Committee are hereby authorized to grant Awards of Restricted Stock and
Restricted Stock Units.

    

    
      (ii)   Restrictions.

    

    

    Shares of
Restricted Stock and Restricted Stock Units shall be subject to such
restrictions as the Board or the Committee may impose (including, without
limitation, any limitation on the right to receive any dividend or other right
or property), which restrictions may lapse separately or in combination at such
time or times, in such installments or otherwise, as the Board or the Committee
may deem appropriate.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      (iii)   Registration.

    

    

    Any
Restricted Stock granted under the Plan may be evidenced in such manner as the
Board or the Committee may deem appropriate, including, without limitation,
book-entry registration or issuance of a stock certificate or certificates. In
the event any stock certificate is issued in respect of Shares of restricted
Stock granted under the Plan, such certificate shall be registered in the name
of the Participant and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock.

    

    
      (iv)   Forfeiture.

    

    

    Except as
otherwise determined by the Board or the Committee, upon termination of
employment (as determined under criteria established by the Board or the
Committee) for any reason, the Company may require that all Shares, securities
or other rights granted under this Plan shall be forfeited and reacquired by the
Company; provided,
however, that the Board or the Committee may, when it finds that a waiver
would be in the best interests of the Company, waive in whole or in part any or
all remaining restrictions with respect to any Option.

    

    
      (d)   Performance
Awards.

    

    

    The Board
and the Committee are hereby authorized to grant Performance Awards. Subject to
the terms of the Plan, a Performance Award granted under the Plan (1) may be
denominated or payable in cash, Shares (including, without limitation,
Restricted Stock), other securities, other Awards, or other property and (2)
shall confer on the holder thereof rights valued as determined by the Board or
the Committee and payable to, or exercisable by, the holder of the Performance
Award, in whole or in part, upon the achievement of such performance goals
during such performance periods as the Board or the Committee shall establish.
Subject to the terms of the Plan and any applicable Award Agreement, the
performance goals to be achieved during any performance period, the length of
any performance period, the amount of any Performance Award granted, and the
amount of any payment or transfer to be made pursuant to any Performance Award
shall be determined by the Board or the Committee. The goals established by the
Board or the Committee shall be based on any one, or combination of, earnings
per share, return on equity, return on assets, total shareholder return, net
operating income, cash flow, revenue, economic value added, increase in Share
price or cash flow return on investment, or any other measure the Board or the
Committee deems appropriate. Partial achievement of the goal(s) may result in a
payment or vesting corresponding to the degree of achievement.

    

    
      (e)   Dividend
Equivalents.

    

    

    The Board
and the Committee are hereby authorized to grant Awards under which the holders
thereof shall be entitled to receive payments equivalent to dividends or
interest with respect to a number of Shares determined by the Board or the
Committee, and the Board and the Committee may provide that such amounts (if
any) shall be deemed to have been reinvested in additional Shares or otherwise
reinvested. Subject to the terms of the Plan, such Awards may have such terms
and conditions as the Board or the Committee shall determine.

    

    
      (f)   Other Stock-Based
Awards.

    

    

    The Board
and the Committee are hereby authorized to grant such other Awards that are
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares (including, without limitation,
securities convertible into Shares), as are deemed by the Board or the Committee
to be consistent with the purposes of the Plan, provided, however, that such
grants must comply with applicable law. Subject to the terms of the Plan, the
Board or the Committee shall determine the terms and conditions of such
Awards.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      (g)   General.

    

    

    
      (i)   No Cash Consideration for
Awards.

    

    

    Awards
shall be granted for no cash consideration or for such minimal cash
consideration as may be required by applicable law.

    

    
      (ii)   Awards May Be Granted Separately or
Together.

    

    

    Awards
may, in the discretion of the Board or the Committee, be granted either alone or
in addition to, in tandem with, or in substitution for any other Award or any
award granted under any other plan of the Company or any Affiliate. Awards
granted in addition to or in tandem with other Awards, or in addition to or in
tandem with awards granted under any other plan of the Company or any Affiliate,
may be granted either at the same time or at a different time from the grant of
such other Awards.

    

    
      (iii)   Forms of Payment under
Awards.

    

    

    Subject
to the terms of the Plan and of any applicable Award Agreement, payments or
transfers to be made by the Company or an Affiliate upon the grant, exercise, or
payment of an Award may be made in such form or forms as the Board or the
Committee shall determine, including, without limitation, cash, Shares, other
securities other Awards, or other property, or any combination thereof, and may
be made in a single payment or transfer, in installments, or on a deferred
basis, in each case in accordance with rules and procedures established by the
Board or the Committee. Such rules and procedures may include, without
limitation, provisions for the payment or crediting of reasonable interest on
installment or deferred payments or the grant or crediting of Dividend
Equivalents in respect of installment or deferred payments.

    

    
      (iv)   Limits on Transfer of
Awards.

    

    

    Unless
otherwise permitted by the Board or Committee, no Award (other than Released
Securities), and no right under any such Award, shall be assignable, alienable,
saleable, or transferable by a Participant otherwise than by will or by the laws
of descent and distribution; provided, however, that, if
so determined by the Board or the Committee, a Participant may, in the manner
established by the Board or the Committee, (1) designate a beneficiary or
beneficiaries to exercise the rights of the Participant, and to receive any
property distributable, with respect to any Award upon the death of the
Participant or (2) transfer any Award other than an Incentive Stock Option for
bona fide estate planning purposes. Each Award, and each right under any Award,
shall be exercisable, during the Participant's lifetime, only by the
Participant, a permitted transferee or, if permissible under applicable law, by
the Participant's guardian or legal representative. No Award (other than
Released Securities), and no right under any such Award, may be pledged,
alienated, attached, or otherwise encumbered, and any purported pledge,
alienation, attachment, or encumbrance thereof shall be void and unenforceable
against the Company or any Affiliate, unless otherwise permitted and approved by
the Board or Committee.

    
(v)   Term of Awards.

    

    The term
of each Award shall be for such   period as may be determined by
the Board or the Committee; provided, however, that in no event shall
the term of any Incentive Stock Option exceed a period of ten years from the
date of its grant.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      (vi)   Share
Certificates.

    

    

    All
certificates for Shares or other securities delivered under the Plan pursuant to
any Award or the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Board or the Committee may deem advisable under
the Plan or the rules, regulations, and other requirements of the Securities and
Exchange Commission, any stock exchange upon which such Shares or other
securities are then listed, and any applicable federal or state securities laws,
and the Board or the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such
restrictions.

    

    

    SECTION
VII

    

    AMENDMENT
& TERMINATION

    

    Except to the extent prohibited by
applicable law and unless otherwise expressly provided in an Award Agreement or
in the Plan:

    

    
      (a)   Amendments to the
Plan.

    

    

    The Board
of Directors of the Company may amend, alter, suspend, discontinue, or terminate
the Plan, including, without limitation, any amendment, alteration, suspension,
discontinuation, or termination that would impair the rights of any Participant,
or any other holder or beneficiary of any Award theretofore granted, without the
consent of any share owner, Participant, other holder or beneficiary of an
Award, or other Person.

    

    
      (b)   Amendments to
Awards.

    

    

    The Board
and the Committee may waive any conditions or rights under, amend any terms of,
or amend, alter, suspend, discontinue, or terminate, any Awards theretofore
granted, prospectively or retroactively, without the consent of any Participant,
other holder or beneficiary of an Award.

    

    
      (c)   Adjustments of Awards upon the
Occurrence of Certain Unusual or Nonrecurring
Events.

    

    

    Except as
provided in the following sentence, the Board and the Committee shall be
authorized to make adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring events (including,
without limitation, the events described in Section 4
(b) hereof) affecting the Company, any Affiliate, or the financial
statements of the Company or any Affiliate, or of changes in applicable laws,
regulations, or accounting principles, whenever the Board or the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits to be made
available   under the Plan.

    

    In the
case of any Award that is intended to qualify as performance-based compensation
for purposes of Section 162(m) of the Code, neither the Board nor the Committee
shall have authority to adjust the Award in any manner that would cause the
Award to fail to meet the requirements of Section 162 (m).

    

    
      (d)   Correction of Defects, Omissions, and
Inconsistencies.

    

    

    The Board
and the Committee may correct any defect, supply any omission, or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable to carry the Plan into effect.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    SECTION
VIII

    

    GENERAL
PROVISIONS

    

    (a)           No Rights to
Awards.

    

    No
Employee, Participant or other Person shall have any claim or right to be
granted any Award under the Plan, and there is no obligation for uniformity of
treatment of Employees, Directors, Consultants, other holders or beneficiaries
of Awards under the Plan. The terms and conditions of Awards need not be the
same with respect to each recipient.

    

    (b)           Delegation.

    

    The Board
and the Committee may delegate to one or more officers or managers of the
Company or any Affiliate, or a committee of such officers or managers, the
authority, subject to such terms and limitations as the Board or Committee shall
determine, to grant Awards to, or to cancel, modify, waive rights with respect
to, alter, discontinue, suspend, or terminate Awards held by Employees,
Consultants, or other holders or beneficiaries of Awards under the Plan who are
not officers or directors of the Company for purposes of Section 16 of the
Securities Exchange Act of 1934, as amended, and who also are not “covered
employees” for purposes of Section 162(m) of the Code.

    

    (c)           Withholding.

    

    The
Company or any Affiliate shall be authorized to withhold from any Award granted
or any payment due or transfer made under any Award or under the Plan the amount
(in cash, Shares, other securities, other Awards, or other property) of
withholding taxes due in respect of an Award, its exercise, or any payment or
transfer under such Award or under the Plan and to take such other action as may
be necessary in the opinion of the Company or Affiliate to satisfy all
obligations for the payment of such taxes.

    

    (d)           No Limit on other Compensation
Arrangements.

    

    Nothing
contained in the Plan shall prevent the Company or any Affiliate from adopting
or continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.

    

    (e)           No Right to
Employment.

    

    The grant
of an Award to any Person shall not be construed as giving a Participant the
right to remain an employee, director or consultant of the Company or any
Affiliate. Further, the Company or an Affiliate may at any time terminate the
service of any employee, director or consultant, free from any liability, or any
claim under the Plan, unless otherwise expressly provided in the Plan or in any
Award Agreement.

    

    (f)           Governing Law.

    

    This
Agreement and all questions relating to its validity, interpretation,
performance and enforcement (including, without limitation, provisions
concerning limitations of actions), shall be governed by and construed in
accordance with the laws of the State of California, notwithstanding any
conflict-of-laws doctrines of such state or other jurisdiction to the contrary,
and without the aid of any canon, custom or rule of law requiring construction
against the draftsman, as well as applicable federal law.

    

    (g)           Severability.

    

    If any
provision of the Plan or any Award is or becomes or is deemed to be invalid,
illegal, or unenforceable in any jurisdiction, or as to any Person or Award, or
would disqualify the Plan or any Award under any law deemed applicable by the
Board or the Committee, such provision shall be construed or deemed amended to
conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Board or the Committee, materially altering
the intent of the Plan or the Award, such provision shall be stricken as to such
jurisdiction, Person, or Award, and the remainder of the Plan and any such Award
shall remain in full force and effect.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (h)           No Trust or Fund
Created.

    

    Neither
the Plan nor any Award shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Company or any
Affiliate and a Participant or any other Person. To the extent that any Person
acquires a right to receive payments from the Company or any Affiliate pursuant
to an Award, such right shall be no greater than the right of any unsecured
general creditor of the Company or any Affiliate.

    

    (i)           No Fractional
Shares.

    

    No
fractional Shares shall be issued or delivered pursuant to the Plan or any
Award, and the Board and the Committee shall determine whether cash, other
securities, or other property shall be paid or transferred in lieu of any
fractional Share, or whether such fractional Shares of any rights thereto shall
be canceled, terminated, or otherwise eliminated.

    

    (j)           Headings.

    

    Headings
are given to the Sections and subsections of the Plan solely as a convenience to
facilitate reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any provision
thereof.

    

    

    SECTION
IX

    

    EFFECTIVE
DATE OF THE PLAN

    

    Subject to the approval of the
shareholders of the Company, the Plan shall be effective April 7, 2009 (the
“Effective Date”); provided,
however, that to the extent that Awards are granted under the Plan before
its approval by shareholders, the Awards will be contingent on approval of the
Plan by the shareholders of the Company at an annual meeting, special meeting,
or by written consent.

    

    

    SECTION
X

    

    TERM
OF THE PLAN

    

    No Award shall be granted under the
Plan more than 10 years after the Effective Date.

    

    However,
unless otherwise expressly provided in an applicable Award Agreement, any Award
theretofore granted may extend beyond such date, and the authority of the Board
and the Committee to amend, alter, adjust, suspend, discontinue, or terminate
any such Award, or to waive any conditions or rights under any such Award, and
the authority of the Board of Directors of the Company to amend the Plan, shall
extend beyond such date.

    

    The foregoing 2009 Equity Incentive
Plan was duly adopted and approved by the Board of Directors on April 7,
2009.Exhibit
10.35

    

    AMENDMENT
NO. 1 TO

    REGISTRATION
RIGHTS AGREEMENT

     

    THIS AMENDMENT
NO. 1, dated as of April 2, 2009 (this “Amendment No. 1”), to the
Registration Rights Agreement, made as of November 19, 2008 (the “Registration Rights
Agreement”), by and among Manhattan
Pharmaceuticals, Inc., a Delaware corporation (the “Company”), each of the
Investors (as defined therein) and National Securities Corporation, a Washington
Corporation (the “Placement
Agent”).  Capitalized terms not otherwise defined herein have
the meaning set forth in the Registration Rights Agreement.

     

    RECITALS

     

    WHEREAS, the undersigned
holders constitute the holders of a majority of the Registrable Securities
issued and outstanding or issuable upon exercise of the Warrants;
and

     

    WHEREAS, pursuant to Section 15(a) of the
Registration Rights Agreement, the undersigned parties desire to amend the
Registration Rights Agreement as set forth herein.

     

    NOW, THEREFORE, the parties
hereby agree as follows:

     

    1.           Section
1 of the Registration Rights Agreement is hereby amended to replace the
definition of “Registrable Securities” with the following
definition:

     

    ““Registrable Securities” shall
mean the Warrant Shares and the Placement Agent Warrant Shares.”

     

    2.           Section
1 of the Registration Rights Agreement is hereby amended to add the following
definition:

     

    ““Placement Agent Warrant
Shares” shall mean the shares of Common Stock issued or issuable upon
exercise of the Placement Agent Warrants.”

     

    3.           The
first sentence of Section 3(c) of the Registration Rights Agreement is hereby
amended and restated to read as follows:

     

    “Notwithstanding
any other provision of this Agreement, if any SEC Guidance sets forth a
limitation on the number of Registrable Securities to be registered in the
Initial Registration Statement (and the Company has made a commercially
reasonable effort to advocate with the SEC for the registration of all or a
greater number of Registrable Securities), the number of Registrable Securities
to be registered on such Registration Statement will be allocated first, on a
pro rata basis to the Investors based on the total number of unregistered
Warrant Shares held by such Investors on a fully diluted basis, and second, on a
pro rata basis to the holders of Placement Agent Warrant Shares based on the
total number of unregistered Placement Agent Shares held by such holders on a
fully diluted basis.”

     

    4.           The
second sentence of Section 4(a) of the Registration Rights Agreement is hereby
amended and restated to read as follows:

     

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

    “In the
event that the underwriters determine that less than all of the Registrable
Securities required to be registered can be included in such offering, then the
Registrable Securities that are included shall be allocated, first, to the
Investors on a pro rata basis based on the total number of unregistered Warrant
Shares held by such Investors and requested to be included in the Registration
Statement on a fully diluted basis, and second, to the holders of Placement
Agent Warrant Shares on a pro rata basis based on the total number of
unregistered Placement Agent Warrant Shares held by such holders and requested
to be included in the Registration Statement on a fully diluted basis
..”

     

    5.           Section
5(a) of the Registration Rights Agreement is hereby amended and restated to read
as follows:

     

    “(a)
  If: (i) the Initial Registration Statement and any other
Registration Statement other than a Nordic Registration Statement is not filed
on or prior to the Filing Date, or (ii) the Company fails to file with the
SEC a request for acceleration in accordance with Rule 461 promulgated
under the Securities Act, within five (5) Trading Days of the date that the
Company is notified (orally or in writing, whichever is earlier) by the SEC that
the Initial Registration Statement or any other Registration Statement will not
be “reviewed” or not be subject to further review and the Company has obtained
any required clearance from the Financial Industry Regulatory Authority, Inc.
(“FINRA”),
or (iii) prior to the Effectiveness of the Initial Registration Statement
or any other Registration Statement, the Company fails to file a pre-effective
amendment and otherwise respond in writing to comments made by the SEC in
respect of such Initial Registration Statement or any other Registration
Statement within twenty (20) Business Days after the receipt of comments by
or notice for the SEC that such amendment is required in order for such Initial
Registration Statement or any other Registration Statement to be declared
effective; provided, however, that if the
Company is required by the SEC or applicable law to include in such Initial
Registration Statement or any other Registration Statement updated financial
statements and/or financial information, such twenty (20) Business Day period
shall be extended through the date that is five Business Days after the date the
applicable Exchange Act report containing such updated financial statements
and/or financial information is filed with the SEC, or (iv) subject to the
tolling provisions contained herein, as to, in the aggregate among all Holders
on a pro rata basis based on the amount of Registrable Securities held by each
of them, respectively, the lesser of (A) all of the Registrable Securities and
(B) the maximum number of Registrable Securities permitted by SEC Guidance
(collectively, the “Initial
Shares”), a Registration Statement registering for resale all of the
Initial Shares is not declared effective by the SEC by the Effectiveness Date,
or (v) after the Effectiveness Date of the Initial Registration Statement
or any other Registration Statement, subject to the tolling provisions contained
herein, such Initial Registration Statement or other Registration Statement
ceases for any reason to remain continuously effective as to all Registrable
Securities included in such Initial Registration Statement or other Registration
Statement, as applicable, or the Holders are otherwise not permitted to utilize
the Prospectus therein to resell such Registrable Securities, for more than ten
(10) consecutive Business Days or more than an aggregate of twenty (20) Business
Days during any twelve (12) month period (which need not be consecutive Business
Days), provided, however, that no such
payments shall be required in connection with a Suspension Period (as
hereinafter defined) (any such failure or breach being referred to as an “Event,”
and for purposes of clause (i), (iv) or (v) the date on which such
Event occurs, or for purposes of clause (ii) the date on which such five
(5) Trading Day period is exceeded, or for purposes of clause (iii) the
date which such ten (10) Business Day period is exceeded, or for purposes of
clause (v) the date on which such ten (10) or twenty (20) Business Day
period, as applicable, is exceeded being referred to as “Event
Date”), then, in addition to any other rights the Investors may have
hereunder or under applicable law, on each such Event Date and on each monthly
anniversary of each such Event Date (if the applicable Event shall not have been
cured by such date) until the applicable Event is cured, the Company shall,
subject to Section
3(c), pay to each Investor on a monthly basis within three (3) Business
Days of the end of the month an amount in cash, as partial liquidated damages
and not as a penalty, equal to one and one-half (1.5%) percent of the aggregate
purchase price paid by such Investor pursuant to the Securities Purchase
Agreement for any Registrable Securities then held by such Investor (as
applicable under clause (iv)) that are not then eligible for resale pursuant to
the Initial Registration Statement or other Registration Statement. The parties
agree that the maximum aggregate liquidated damages payable to an Investor under
this Agreement shall be ten (10%) percent of the aggregate amount paid by such
Investor for its respective Registrable Securities pursuant to the Securities
Purchase Agreement. If the Company fails to pay any partial liquidated damages
pursuant to this Section 5(a) in full
within ten (10) calendar days after the date payable, the Company will be
required to pay such liquidation damages in cash only and shall pay interest
thereon at a rate of eighteen (18%) percent per annum (or such lesser maximum
amount that is required to be paid by applicable law) to the Investor, accruing
daily from the date such partial liquidated damages are due until such amounts,
plus all such interest thereon, are paid in full; provided, however, that if the
tenth calendar day after the date payable is not a Business Day then the payment
shall be due on the next Business Day. The partial liquidated damages pursuant
to the terms hereof shall apply on a daily pro-rata basis for any portion of a
month prior to the cure of an Event.  For purposes of clarity, it is
acknowledged and agreed that no payment of liquidated damages shall be made to a
Holder of Placement Agent Warrants or Placement Agent Warrant Shares, as
such.”

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    6.           The
first sentence of Section 5(b) of the Registration Rights Agreement is hereby
amended and restated in its entirety to read as follows:

     

    “The
Company shall notify each Holder and the Placement Agent by facsimile or e-mail
as promptly as practicable, and in any event, within two (2) Trading Days, after
a Registration Statement is declared effective and shall simultaneously provide
the Holders with a copy of any related prospectus to be used in connection with
the sale or other disposition of the Registrable Securities covered
thereby.”

     

    7.           Section
7 of the Registration Rights Agreement is herby amended to add the following
Section 7(f):

     

    “(f)           In
order to obtain the benefits of this Agreement, each holder of Placement Agent
Warrants or Placement Agent Warrant Shares shall execute a counterpart signature
page to this Agreement, as amended from time to time, and agree to be bound by
all of the terms and conditions set forth herein.”

     

    

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    8.           Section
15(d)(ii) of the Registration Rights Agreement is hereby amended and restated in
its entirety to read as follows:

     

    “(ii)           All
correspondence to any Investor shall be sent to such Investor at the address set
forth in the Investor Counterpart Signature Page to the Securities Purchase
Agreement.  All correspondence to any holder of Placement Agent
Warrants or Placement Agent Warrant Shares shall be sent to such holder at the
address set forth in its Counterpart Signature Page to the Registration Rights
Agreement.”

     

    9.           The
parties hereto acknowledge and agree that the failure to include the Placement
Agent Warrant Shares in the initial filing of the Initial Registration Statement
filed with SEC on February 23, 2009 (Registration No. 333-157470) shall not be
deemed an Event or otherwise be deemed a violation or breach of the Registration
Rights Agreement.

     

    10.           Except
as amended by this Amendment No. 1, the Registration Rights Agreement shall
remain in full force and effect without amendment or modification.

     

    11.           This
Amendment No. 1 shall be governed by and construed and enforced solely and
exclusively in accordance with the internal laws of the State of New York and
without regard to any conflicts of laws principles thereof, and shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
personal representatives, permitted transferees, successors or
assigns.

     

    12.           This
Amendment No. 1 may be executed in a number of counterparts, any of which
together shall for all purposes constitute one Agreement, binding on all the
parties hereto notwithstanding that all such parties have not signed the same
counterpart.  This Amendment No. 1 may also be executed and delivered
by facsimile or PDF signature and in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.  This Amendment No. 1 will be effective and
binding on all parties to the Registration Rights Agreement upon the execution
by the holders of a majority of the Registrable Securities issued and
outstanding or issuable upon exercise of the Warrants.

     

    

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the parties have executed this Amendment No. 1 as of the date
first written above.

     

    

     

    
      	 	 
      
              MANHATTAN
      PHARMACEUTICALS, INC.

               

               

              By:
      /s/ Michael
      McGuinness

              Name:
      Michael McGuinness

              Title:  Chief
      Operating and Financial
Officer

            

    

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

     

    COUNTERPART
SIGNATURE PAGE TO

    AMENDMENT
NO. 1 TO REGISTRATION RIGHTS AGREEMENT

    OF
MANHATTAN PHARMACEUTICALS, INC.

    

    

     

    
      	 	 
      
              HOLDER:

              

              (For
      a Holder that is a corporation, partnership, trust or other
      entity)

              

              ______________________________

              (Print
      name of Holder)

              

              By:
      ___________________________

              Name:

              Title:

              

              

              

              (For
      a Holder that is a natural person)

              

              

              _______________________________

              Print
      name:

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