Document:

EX-10.3

Exhibit 10.3

AMENDMENT NO. 1 TO MASTER LOAN AND SECURITY AGREEMENT

AMENDMENT NO. 1, dated as of November 18, 2005 (this “Amendment”), to that certain
Master Loan and Security Agreement, dated as of November 15, 2005 (as amended, supplemented or
otherwise modified prior to the date hereof, the “Existing Loan Agreement”, as modified
hereby and as further amended, restated, supplemented or otherwise modified and in effect from time
to time, the “Loan Agreement”), by and among NC CAPITAL CORPORATION, a California
corporation (“NC Capital”), NEW CENTURY MORTGAGE CORPORATION, a California corporation
(“New Century”), NC RESIDUAL II CORPORATION, a Delaware corporation (“NC
Residual”), NEW CENTURY CREDIT CORPORATION, a California corporation (“NC Credit”,
together with NC Capital, New Century and NC Residual, collectively, the “Borrowers”, each,
a “Borrower”), and MORGAN STANLEY MORTGAGE CAPITAL INC., a New York corporation, as a
Lender and agent for the Lender (in such capacity, the “Agent”). Capitalized terms used
but not otherwise defined herein shall have the meanings given to them in the Loan Agreement.

RECITALS

The Borrowers, the Lender and the Agent are parties to the Existing Loan Agreement, pursuant
to which the Lender has agreed to make revolving credit loans to the Borrowers in order to finance
certain residential mortgage loans owned by the Borrowers on the terms and subject to the
conditions of the Existing Loan Agreement.

The Borrowers, the Lender and the Agent have agreed, subject to the terms and conditions
hereof, that the Existing Loan Agreement shall be amended as set forth in this Amendment.

The parties hereto hereby agree, in consideration of the mutual premises and mutual
obligations set forth herein, as follows:

SECTION 1. Amendment.

(a) Section 1.01 of the Existing Loan Agreement is hereby amended by deleting the definition
of “Collateral Value” and inserting in lieu thereof the following:

“Collateral Value” shall mean, with respect to each Eligible Mortgage Loan,
the lesser of (x) the product of (i) the Market Value of such Eligible Mortgage Loan,
and (ii) the Applicable Collateral Percentage for such Eligible Mortgage Loan, and (y)
100% of the unpaid principal balance of such Eligible Mortgage Loan; provided,

(a) that the following additional limitations shall apply:

(i) the aggregate unpaid principal balance of Mortgage Loans secured by a first
mortgage lien on the Mortgaged Property that has a LTV greater than 85% shall not
exceed $450,000,000;

(ii) the aggregate unpaid principal balance of the Mortgage Loans that are
secured by Mortgaged Properties which are non-owner occupied shall at no time exceed
6% of the Maximum Credit;

(iii) the aggregate unpaid principal balance of the Second Lien Mortgage Loans
shall at no time exceed 8.5% of the Maximum Credit;

(iv) the aggregate unpaid principal balance of the Mortgage Loans that are
secured by Mortgaged Properties consisting of condominiums shall at no time exceed
6% of the Maximum Credit;

(v) the aggregate unpaid principal balance of the Mortgage Loans that are
secured by Mortgaged Properties consisting of Qualified Manufactured Housing (as
defined in Part III of Schedule 1 hereto) shall at no time exceed 2% of the
Maximum Credit;

(vi) the aggregate unpaid principal balance of Mortgage Loans secured by
Mortgaged Property located within a single zip code shall not exceed $150,000,000;

(vii) the aggregate unpaid principal balance of the 30+ Delinquent Mortgage
Loans shall at no time exceed 2% of the Maximum Credit;

(viii) the aggregate unpaid principal balance of the 60+ Delinquent Mortgage
Loans shall at no time exceed 1% of the Maximum Credit;

(ix) the aggregate unpaid principal balance of the Mortgage Loans with respect
to which the related Mortgagor has received a credit rating of “C” or “C-”, as
determined in accordance with New Century’s Underwriting Guidelines, shall not
exceed $100,000,000;

(x) the aggregate unpaid principal balance of the HELOC Mortgage Loans shall at
no time exceed 7% of the Maximum Credit;

(xi) the aggregate unpaid principal balance of the Defaulted Mortgage Loans
shall not exceed $10,000,000;

(xii) the aggregate unpaid principal balance of the Discretionary Mortgage
Loans shall not exceed 10% of the Maximum Credit;

(xiii) the aggregate unpaid principal balance of the Wet-Ink Mortgage Loans
included shall not exceed $100,000,000;

(xiv) the aggregate unpaid principal balance of all Mortgage Loans secured by a
first mortgage lien on a Mortgaged Property that has an LTV greater than 95% and
equal to or less than 100% shall at no time exceed 3% of the Maximum Credit;

(xv) the aggregate unpaid principal balance of all Escrow Holdback Loans shall
not exceed $25,000,000; and

(xvi) the aggregate unpaid principal balance of the Mortgage Loans which are
interest-only loans shall at no time exceed 30% of the Maximum Credit; and

(b) that the Collateral Value shall be deemed to be zero with respect to each Mortgage
Loan:

(i) in respect of which there is a breach of any representation or warranty set
forth on Schedule 1 hereto (assuming each representation and warranty is
made as of the date the Collateral Value thereof is determined);

(ii) which ceases to be an Eligible Mortgage Loan for any reason;

(iii) which is a Nine-Day Aged Wet-Ink Mortgage Loan;

(iv) with respect to each Mortgage Loan, for so long as such Mortgage Loan is a
Wet-Ink Mortgage Loan, as to which the Agent or the Custodian shall have notified
the Borrowers that the Custodian shall have transferred an amount greater than
$1,000,000 to a single settlement location on a Funding Date, unless consented to by
the Agent;

(v) for which any Mortgage Loan Documents have been released from the
possession of the Custodian under the Custodial Agreement for a period in excess of
15 days;

(vi) which is secured by a first mortgage lien on a Mortgaged Property that has
an LTV greater than 95% and equal to or less than 100% and has a FICO score less
than 600;

(vii) which has been pledged to the Agent under the Loan Agreement in excess of
180 calendar days;

(viii) which exceeds any limitation set forth in clause (a) above.

(b) Section 1.01 of the Existing Loan Agreement is hereby amended by deleting the definition
of “Maximum Credit” in its entirety and inserting in lieu thereof the following:

““Maximum Credit” shall mean, at any time, an amount equal to $1,000,000,000,
as such amount may be reduced in accordance with Section 2.01 hereof.”

(c) Section 1.01 of the Existing Loan Agreement is hereby amended by deleting the definition
of “Termination Date” in its entirety and inserting in lieu thereof the following:

““Termination Date” shall mean February 28, 2007, as such date may be extended
in accordance with Section 2.08 hereof, or such earlier date on which this Loan Agreement
shall terminate in accordance with the provisions hereof or by operation of law.””

(d) Section 3.04 of the Existing Loan Agreement is hereby amended by deleting the reference to
“December 31, 2005” therein and substituting a reference to “February 28, 2006” in lieu thereof.

(e) Schedule 4 of the Existing Loan Agreement is hereby amended by deleting the reference to
“$400,000,000” therein and substituting a reference to “$1,000,000,000” in lieu thereof.

SECTION 2. Conditions Precedent. This Amendment shall become effective on the first
date (the “Effective Date”) on which all of the following conditions precedent shall have
been satisfied:

2.1 Delivered Documents. On the Effective Date, the Agent shall have received the
following documents, each of which shall be satisfactory to the Agent in form and substance:

(a) Amendment. This Amendment, executed and delivered by a duly authorized officer of
each of the Borrowers, the Lender and the Agent;

(b) Note. For the account of the Lender, the Amended and Restated Promissory Note,
substantially in the form of Exhibit A attached hereto, executed and delivered by a duly
authorized officer of each of the Borrowers;

(c) Officer’s Certificate of each Borrower. A certificate of a Responsible Officer of
each of the Borrowers, substantially in the form of Exhibit B hereto, dated as of the date
hereof, and:

i. attaching certificates dated as of a recent date from the Secretary of State or
other appropriate authority, evidencing the good standing of each Borrower in the
jurisdiction of its organization,

ii. attaching a copy of the resolutions, in form and substance satisfactory to the
Agent, of the Board of Directors of each Borrower authorizing (A) the execution, delivery
and performance of this Amendment, and (B) the borrowings contemplated under the Loan
Agreement,

iii. certifying that there have been no changes to any of the organizational documents
of any Borrower since such documents were last delivered to the Agent under the Existing
Loan Agreement, and

iv. certifying as to the incumbency and specimen signature of each officer executing
this Amendment certifying as to the authority, incumbency and specimen signature of each
officer executing this Amendment;

(d) Legal Opinions. Legal opinions of internal and outside counsel to the Borrowers;
and

(e) Other Documents. Such other documents as the Agent or counsel to the Agent may
reasonably request.

2.2 No Default. On the Effective Date, (i) each Borrower shall be in compliance in
all material respects with all of the terms and provisions set forth in the Loan Agreement and the
other Loan Documents on its part to be observed or performed, (ii) the representations and
warranties made and restated by such Borrower pursuant to Section 3 of this Amendment shall be true
and complete in all material respects on and as of such date with the same force and effect as if
made on and as of such date and (iii) no Default shall have occurred and be continuing on such
date.

SECTION 3. Representations and Warranties. Each Borrower hereby represents and
warrants to the Agent, as of the date hereof and as of the Effective Date, that it is in compliance
in all material respects with all of the terms and provisions set forth in the Loan Documents on
its part to be observed or performed and that no Default has occurred or is continuing, and each
Borrower hereby confirms and reaffirms in all material respects the representations and warranties
contained in Section 6 of the Loan Agreement.

SECTION 4. Limited Effect. Except as expressly modified hereby, the Existing Loan
Agreement shall continue to be, and shall remain, in full force and effect in accordance with its
terms; provided, however, that upon the Effective Date each reference therein to
the “Loan Agreement” shall be deemed to mean the Loan Agreement as defined in this Amendment, each
reference in this Amendment to the “Loan Documents” shall be deemed to include, in any event, this
Amendment and each reference to the Loan Agreement in any of the Loan Documents shall be deemed to
be a reference to the Loan Agreement as modified hereby.

SECTION 5. Counterparts. This Amendment may be executed by each of the parties hereto
on any number of separate counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same instrument. Delivery of an executed counterpart
signature page to this Amendment in Portable Document Format (PDF) or by facsimile transmission
shall be as effective as delivery of a manually executed original counterpart thereof.

SECTION 6. Reproduction of Documents. This Amendment and all documents relating
thereto, except with respect to the Collateral, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, and (b) certificates and other
information previously or hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, microcard, miniature photographic or other similar process. The parties agree that any
such reproduction shall be admissible in evidence as the original itself in any judicial or
administrative proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.

SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

[SIGNATURES FOLLOW]

1

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed
and delivered as of the day and year first above written.

	 	 	 	NC
CAPITAL CORPORATION, as a Borrower

	 	 	 	By:
/s/ Kevin Cloyd

Name: Kevin Cloyd

Title: President

	 	 	 	NEW
CENTURY MORTGAGE CORPORATION, as a Borrower

	 	 	 	By:
/s/ Kevin Cloyd

Name: Kevin Cloyd

Title: Executive Vice President

	 	 	 	NC
RESIDUAL II CORPORATION, as a Borrower

	 	 	 	By:
/s/ Kevin Cloyd

Name: Kevin Cloyd

Title: Executive Vice President

	 	 	 	NEW
CENTURY CREDIT CORPORATION, as a Borrower

	 	 	 	By:
/s/ Kevin Cloyd

Name: Kevin Cloyd

Title: Executive Vice President

	 	 	 	MORGAN STANLEY MORTGAGE CAPITAL INC., as Lender
and Agent

	 	 	 	By:
/s/ Paul J. Najarian

Name: Paul J. Najarian

Title: Vice President

2APPIQ, INC. 

2001 STOCK OPTION AND INCENTIVE PLAN 

1.      Purpose and Eligibility. 

        The purpose of this 2001 Stock Option and Incentive Plan (the “Plan”) of AppIQ, Inc. (the “Company”) is to provide stock options and other equity interests in the Company (each an “Award”) to employees, officers, directors, consultants and advisors of the Company and its Subsidiaries, all of whom are eligible to receive Awards under the Plan. Any person to whom an Award has been granted under the Plan is called a “Participant”. Additional definitions are contained in Section 8. 

2.       Administration 

          a.        Administration by Board of Directors. The Plan will be administered by the Board of Directors of the Company (the “Board”). The Board, in its sole discretion, shall have the authority to grant and amend Awards, to adopt, amend and repeal rules relating to the Plan and to interpret and correct the provisions of the Plan and any Award. All decisions by the Board shall be final and binding on all interested persons. Neither the Company nor any member of the Board shall be liable for any action or determination relating to the Plan. 

          b.        Appointment of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board (a “Committee”). All references in the Plan to the “Board” shall mean such Committee or the Board. 

3.       Stock Available for Awards 

          a.        Number of Shares. Subject to adjustment under Section 3(c), the aggregate number of shares of Common Stock of the Company (the “Common Stock”) that may be issued pursuant to the Plan is 5,120,000 shares. If any Award expires, or is terminated, surrendered or forfeited, in whole or in part, the unissued Common Stock covered by such Award shall again be available for the grant of Awards under the Plan. If shares of Common Stock issued pursuant to the Plan are repurchased by, or are surrendered or forfeited to, the Company at no more than cost, such shares of Common Stock shall again be available for the grant of Awards under the Plan; provided, however, that the cumulative number of such shares that may be so reissued under the Plan will not exceed 5,120,000 shares. Shares issued under the Plan may consist in whole
or in part of authorized but unissued shares or treasury shares. 

          b.        Per-Participant Limit. Subject to adjustment under Section 3(c), no Participant may be granted Awards during any one fiscal year to purchase more than 1,000,000 shares of Common Stock. 

          c.        Adjustment to Common Stock. In the event of any stock split, stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off, split-up, or other similar change in capitalization or event, (i) the number and class of securities available for Awards under the Plan and the per-Participant share limit, (ii) the number and class of securities, vesting schedule and exercise price per share subject to each outstanding Option, (iii) the repurchase price per security subject to repurchase, and (iv) the terms of each other outstanding stock-based Award shall be adjusted by the Company (or substituted Awards may be made) to the extent the Board shall determine, in good faith, that such an adjustment (or substitution) is appropriate. If Section 7(e)(i) applies
for any event, this Section 3(c) shall not be applicable. 

4.       Stock Options 

          a.        General. The Board may grant options to purchase Common Stock (each, an “Option”) and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option and the Common Stock issued upon the exercise of each Option, including vesting provisions, repurchase provisions and restrictions relating to applicable federal or state securities laws, as it considers advisable. 

          b.        Incentive Stock Options. An Option that the Board intends to be an “incentive stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall be granted only to employees of the Company and shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code. The Board and the Company shall have no liability if an Option or any part thereof that is intended to be an Incentive Stock Option does not qualify as such. An Option or any part thereof that does not qualify as an Incentive Stock Option is referred to herein as a “Nonstatutory Stock Option”. 

          c.        Exercise Price. The Board shall establish the exercise price (or determine the method by which the exercise price shall be determined) at the time each Option is granted and specify it in the applicable option agreement. 

          d.        Duration of Options. Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable option agreement. 

          e.        Exercise of Option. Options may be exercised only by delivery to the Company of a written notice of exercise signed by the proper person together with payment in full as specified in Section 4(f) for the number of shares for which the Option is exercised. 

          f.        Payment Upon Exercise. Common Stock purchased upon the exercise of an Option shall be paid for by one or any combination of the following forms of payment: 

                  (i)        by check payable to the order of the Company; 

                 (ii)        except as otherwise explicitly provided in the applicable option agreement, and only if the Common Stock is then publicly traded, delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price, or delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price; or 

                (iii)        to the extent explicitly provided in the applicable option agreement, by (x) delivery of shares of Common Stock owned by the Participant valued at fair market value (as determined by the Board or as determined pursuant to the applicable option agreement), (y) delivery of a promissory note of the Participant to the Company (and delivery to the Company by the Participant of a check in an amount equal to the par value of the shares purchased), or (z) payment of such other lawful consideration as the Board may determine. 

5.       Restricted Stock 

          a.        Grants. The Board may grant Awards entitling recipients to acquire shares of Common Stock, subject to (i) delivery to the Company by the Participant of a check in an amount at least equal to the par value of the shares purchased, and (ii) the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price from the Participant in the event that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Board for such Award (each, a “Restricted Stock Award”). 

          b.        Terms and Conditions. The Board shall determine the terms and conditions of any such Restricted Stock Award. Any stock certificates issued in respect of a Restricted Stock Award shall be registered in the name of the Participant and, unless otherwise determined by the Board, deposited by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). After the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or, if the Participant has died, to the beneficiary designated by a Participant, in a manner determined by the Board, to receive amounts due or exercise rights of the Participant in the event of the Participant’s death (the “Designated Beneficiary”). In the
absence of an effective designation by a Participant, Designated Beneficiary shall mean the Participant’s estate. 

6.       Other Stock-Based Awards 

        The Board shall have the right to grant other Awards based upon the Common Stock having such terms and conditions as the Board may determine, including, without limitation, the grant of shares based upon certain conditions, the grant of securities convertible into Common Stock and the grant of stock appreciation rights, phantom stock awards or stock units. 

7.       General Provisions Applicable to Awards 

          a.        Transferability of Awards. Except as the Board may otherwise determine or provide in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the life of the Participant, shall be exercisable only by the Participant. References to a Participant, to the extent relevant in the context, shall include references to authorized transferees. 

          b.        Documentation. Each Award under the Plan shall be evidenced by a written instrument in such form as the Board shall determine or as executed by an officer of the Company pursuant to authority delegated by the Board. Each Award may contain terms and conditions in addition to those set forth in the Plan provided that such terms and conditions do not contravene the provisions of the Plan. 

          c.        Board Discretion. The terms of each type of Award need not be identical, and the Board need not treat Participants uniformly. 

          d.        Termination of Status. The Board shall determine the effect on an Award of the disability, death, retirement, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, or the Participant’s legal representative, conservator, guardian or Designated Beneficiary, may exercise rights under the Award. 

          e.        Acquisition of the Company 

                (i)        Consequences of an Acquisition. Upon the consummation of an Acquisition, the Board or the board of directors of the surviving or acquiring entity (as used in this Section 7(e)(i), also the “Board”), shall, as to outstanding Awards (on the same basis or on different bases as the Board shall specify), make appropriate provision for the continuation of such Awards by the Company or the assumption of such Awards by the surviving or acquiring entity and by substituting on an equitable basis for the shares then subject to such Awards either (a) the consideration payable with respect to the outstanding shares of Common Stock in connection with the Acquisition, (b) shares of stock of the surviving or acquiring corporation or (c) such other securities or other consideration
as the Board deems appropriate, the fair market value of which (as determined by the Board in its sole discretion) shall not materially differ from the fair market value of the shares of Common Stock subject to such Awards immediately preceding the Acquisition. In addition to or in lieu of the foregoing, with respect to outstanding Options, the Board may, on the same basis or on different bases as the Board shall specify, upon written notice to the affected optionees, provide that one or more Options then outstanding must be exercised, in whole or in part, within a specified number of days of the date of such notice, at the end of which period such Options shall terminate, or provide that one or more Options then outstanding, in whole or in part, shall be terminated in exchange for a cash payment equal to the excess of the fair market value (as determined by the Board in its sole discretion) for the shares subject to such Options over the exercise price thereof; provided, however, that before
terminating any portion of an Option that is not vested or exercisable (other than in exchange for a cash payment), the Board must first accelerate in full the exercisability of the portion that is to be terminated. Unless otherwise determined by the Board (on the same basis or on different bases as the Board shall specify), any repurchase rights or other rights of the Company that relate to an Option or other Award shall continue to apply to consideration, including cash, that has been substituted, assumed or amended for an Option or other Award pursuant to this paragraph. The Company may hold in escrow all or any portion of any such consideration in order to effectuate any continuing restrictions. 

                (ii)        Acquisition Defined. An “Acquisition” shall mean: (x) the sale of the Company by merger in which the shareholders of the Company in their capacity as such no longer own a majority of the outstanding equity securities of the Company (or its successor); or (y) any sale of all or substantially all of the assets or capital stock of the Company (other than in a spin-off or similar transaction) or (z) any other acquisition of the business of the Company, as determined by the Board. 

                (iii)        Assumption of Options Upon Certain Events. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Board may grant Awards under the Plan in substitution for stock and stock-based awards issued by such entity or an affiliate thereof. The substitute Awards shall be granted on such terms and conditions as the Board considers appropriate in the circumstances. 

          f.        Withholding. Each Participant shall pay to the Company, or make provisions satisfactory to the Company for payment of, any taxes required by law to be withheld in connection with Awards to such Participant no later than the date of the event creating the tax liability. The Board may allow Participants to satisfy such tax obligations in whole or in part by transferring shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their fair market value (as determined by the Board or as determined pursuant to the applicable option agreement). The Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to a Participant. 

          g.        Amendment of Awards. The Board may amend, modify or terminate any outstanding Award including, but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option, provided that, except as otherwise provided in Section 7(e)(iv), the Participant’s consent to such action shall be required unless the Board determines that the action, taking into account any related action, would not materially and adversely affect the Participant. 

          h.        Conditions on Delivery of Stock. The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations. 

          i.        Acceleration. The Board may at any time provide that any Options shall become immediately exercisable in full or in part, that any Restricted Stock Awards shall be free of some or all restrictions, or that any other stock-based Awards may become exercisable in full or in part or free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be, despite the fact that the foregoing actions may (i) cause the application of Sections 280G and 4999 of the Code if a change in control of the Company occurs, or (ii) disqualify all or part of the Option as an Incentive Stock Option. 

8.       Miscellaneous 

          a.        Definitions. 

                (i)        “Company,” for purposes of eligibility under the Plan, shall include any present or future subsidiary corporations of AppIQ, Inc., as defined in Section 424(f) of the Code (a “Subsidiary”), and any present or future parent corporation of AppIQ, Inc., as defined in Section 424(e) of the Code. For purposes of Awards other than Incentive Stock Options, the term “Company” shall include any other business venture in which the Company has a direct or indirect significant interest, as determined by the Board in its sole discretion. 

                (ii)        “Code” means the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder. 

                (iii)        “employee” for purposes of eligibility under the Plan (but not for purposes of Section 4(b)) shall include a person to whom an offer of employment has been extended by the Company. 

          b.        No Right To Employment or Other Status. No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan. 

          c.        No Rights As Stockholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming the record holder thereof. 

          d.        Effective Date and Term of Plan. The Plan shall become effective on the date on which it is adopted by the Board. No Awards shall be granted under the Plan after the completion of ten years from the date on which the Plan was adopted by the Board, but Awards previously granted may extend beyond that date. 

          e.        Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time. 

          f.        Governing Law. The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of Delaware, without regard to any applicable conflicts of law.

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