Document:

ex10d.htm

Exhibit 10-d

 

AT&T INC.

 

CHANGE IN CONTROL SEVERANCE PLAN

 

Amended and restated September 23, 2010

 

Article 1                      - Purpose

 

The purpose of the AT&T Inc. Change in Control Severance Plan (the “Plan”) is to foster the continuous employment of key management personnel of the Company and its Subsidiaries and to reinforce and encourage their continued attention and dedication to their duties in the face of potentially disturbing circumstances arising from the possibility of a Change in Control (as defined in Article 2) of the Company, although no such change is now apparent or contemplated.

 

Article 2                      - Definitions

 

As used in this Plan, the following terms shall have the respective meanings set forth below, and, when the meaning is intended, the initial letter of the word is capitalized:

 

“Base Salary” means the Participant’s annual rate of base salary in effect immediately prior to the occurrence of the circumstance giving rise to the Participant’s Termination of Employment, or, if greater, the Participant’s annual rate of base salary in effect immediately prior to the Change in Control.

 

“Board” means the Board of Directors of the Company and, after a Change in Control, the “board of directors” of the Ultimate Parent (as defined below under Change in Control).

 

“Bonus Amount” means a Participant’s target annual bonus for the fiscal year in which the Change in Control occurs or in which Participant’s Date of Termination occurs, whichever is greater; provided that, if a target annual bonus has not been established for the applicable fiscal year, then the target annual bonus established for the preceding fiscal year shall be substituted in lieu thereof.

 

“Cause” means (i) the willful and continued failure by a Participant to substantially perform his or her duties with the Company and its Subsidiaries (other than any such failure resulting from his or her incapacity due to physical or mental impairment, or any such actual or anticipated failure after the issuance of a notice of termination by him or her for Good Reason) after a written demand for substantial performance is delivered to the Participant by the Company which demand specifically identifies the manner in which the Company believes that he or she has not substantially performed his or her duties, or (ii) the willful engaging by a Participant in conduct which is demonstrably and materially injurious to the Company or any Subsidiary, monetarily or otherwise.  For purposes of this definition, no act, or failure to act, on a Participant’s part shall be deemed “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that his or her action or omission was in the best interest of the Company and its Subsidiaries.  Notwithstanding the foregoing, a Participant shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him or her a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice to the Participant and an opportunity for him or her, together with counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Participant was guilty of the conduct set forth above in clauses (i) or (ii) of the first sentence of this definition and specifying the particulars thereof in detail.

 

“Change in Control” shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the shareowners of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing twenty percent (20%) or more of the total voting power represented by the Company’s then outstanding voting securities, or (ii) during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board of Directors and any new Director whose election by the Board of Directors or nomination for election by the Company’s shareowners was approved by a vote of at least two-thirds (2/3) of the Directors then still in office who either were Directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iii) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation (such post-merger surviving entity the “Ultimate Parent”), or the shareowners of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all the Company’s assets.

 

“Committee” means the Human Resources Committee of the Board.

 

“Company” means AT&T Inc.

 

“Date of Termination” means the date of the Participant's Termination of Employment with the Company and its Subsidiaries as determined under Section 4.1 of the Plan.

 

“Disability” has the meaning ascribed under the relevant Employer’s long-term disability plan.

 

“Employee” means any person employed as an employee by an Employer and paid on an Employer’s employee payroll system, excluding persons hired for a fixed maximum term and excluding persons who are neither citizens nor permanent residents of the United States, all as determined by the Employer.  For purposes of this Plan, a person on a Leave of Absence who otherwise would be an Employee shall be deemed to be an Employee.

 

“Employer” means the Company or any of its Subsidiaries provided that, if an entity ceases to be a Subsidiary during the Termination Period, such entity shall continue to be an Employer and the Employee shall continue to be a Participant until the second anniversary of the Change in Control and, notwithstanding any other provision to the contrary, any benefits under the Plan shall be paid or provided by the Company.

 

“Exchange Act” means the Securities Exchange Act of 1934.

 

“Executive Officer” means a person who has been identified by the Company as an executive officer under Rule 3b-7 of the Securities Exchange Act of 1934 prior to a Change in Control.

 

“Good Reason” means, without the Participant’s express written consent, the occurrence of any of the following events after a Change in Control:  (i) the assignment to the Participant of any duties inconsistent with his or her title(s) or status immediately prior to the Change in Control, or a substantial adverse alteration in the nature or status of his or her responsibilities from those in effect immediately prior to the Change in Control; (ii) a reduction in the Participant’s annual base salary, target short-term or long term incentive award opportunity (including any current payments that may be made thereunder, such as the payment of dividend equivalents) as in effect immediately prior to the Change in Control, except for across-the-board salary reductions similarly affecting all officers of the Company and its Subsidiaries and all managers in equivalent positions of any person in control of the Company; (iii) the failure to pay to the Participant any portion of his or her current compensation or deferred compensation under any compensation or benefit program within seven (7) days of the date such payment is due; (iv)  the failure to continue to provide the Participant with benefits substantially similar to those enjoyed by him or her under the pension, life insurance, medical, health, accident and disability plans, or any fringe benefit material to the Participant that he or she was eligible for at the time of the Change in Control; the direct or indirect material reduction in any of such benefits; or the failure to provide the Participant with the number of paid vacation days to which he or she is entitled on the basis of his or her duration of service with the Company and its Subsidiaries, in accordance with the Employer's normal vacation policy in effect immediately prior to the Change in Control; (v) the failure to obtain a satisfactory agreement from any successor to assume and agree to perform this Plan, as contemplated in Article 7; or (vi) any purported termination of the Participant’s employment after a Change in Control which is not effected pursuant to a notice of termination satisfying the requirements of Sections 4.1 and 8.1 (for purposes of this Plan, no such purported termination shall be effective); provided, however, that a good faith determination within ninety (90) days of the occurrence of a Change in Control by a Participant who is the Chief Executive Officer of the Company (the “CEO”) that, as a result of such Change in Control, he or she is not able to discharge his or her duties effectively shall constitute Good Reason.

 

An isolated, insubstantial and inadvertent action taken in good faith implicating clauses (i), (iv), (v) or (vi) of this definition which is fully corrected by the Company prior to the Date of Termination specified in the notice of termination shall not constitute Good Reason.  A Participant’s right to terminate his or her employment for Good Reason shall not be affected by his or her incapacity due to physical or mental impairment.  A Participant’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reason hereunder.

 

“Leave of Absence” shall mean when a Participant is absent from employment with an Employer on a leave of absence, military leave, or sick leave, where the leave is given in order to prevent a break in the continuity of term of employment, and permission for such leave is granted (and not revoked) in conformity with the rules of the Employer that employs the individual, as adopted from time to time and the Employee is reasonably expected to return to service.  Except as set forth below, the leave shall not exceed six (6) months for purposes of this Plan, and the Employee shall incur a Termination of Employment upon cessation of such leave if the Employee does not return to work prior to that time, unless the individual retains a right to reemployment under law or by contract.  A twenty-nine (29) month limitation shall apply in lieu of such six (6) month limitation if the leave is due to the Employee being "disabled" (within the meaning of Treasury Regulation §1.409A-3(i)(4)), and the Employee shall incur a Termination of Employment upon cessation of such leave.  A Leave of Absence shall not commence or shall be deemed to cease under the Plan where the Employee has incurred a Termination of Employment.

 

“Officer Level Employee” means any Executive Officer and any Employee who is an “officer level” Employee for compensation purposes as shown on the records of the Company and its Subsidiaries.

 

“Participant” means the CEO, each Officer Level Employee who had in effect on September 28, 2006 a Severance Benefits – Change in Control Agreement with the Company, and each other Officer Level Employee (i) who is designated from time to time in writing by the CEO and (ii) whose designation is evidenced in writing by a notification of participation to the Employee signed by the CEO.  A person shall cease to be a Participant upon (a) the Participant’s Termination of Employment prior to a Potential Change in Control or (b) the Board, the Committee or the CEO determining, in their sole discretion, that the person shall cease to qualify for benefits under this Plan (but any such determination made in respect of a Participant shall be considered an amendment of the Plan adverse to the interests of the affected Participant and is subject to the provisions of Section 8.5).  Notwithstanding the foregoing, only the Committee shall have the authority to exclude from participation or take any other action with respect to Executive Officers.

 

“Potential Change in Control” shall be deemed to have occurred if (i) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control or (ii)  the Board adopts a resolution to the effect that, for purposes of this Plan, a Potential Change in Control of the Company has occurred.

 

“Qualifying Termination” means a Participant’s Termination of Employment during the Termination Period (i) by the Employer other than for Cause or (ii) by the Participant for Good Reason.  Termination of Employment on account of death, Disability or Retirement shall not be treated as a Qualifying Termination.

 

“Retirement” means the Participant’s mandatory retirement in accordance with the Employer’s mandatory retirement age policy, if any, for officers as in effecct immediately prior to a Change in Control or in accordance with any retirement arrangement established with the Participant’s consent with respect to him or her; provided, however, that a Participant's termination for Good Reason shall not constitute Retirement.

 

“Specified Employee” means any Participant who is a “Key Employee” (as defined in Code Section 416(i) without regard to paragraph (5) thereof), as determined by the Company in accordance with its uniform policy with respect to all arrangements subject to Code Section 409A, based upon the twelve (12) month period ending on each December 31st (such twelve (12) month period is referred to below as the “identification period”).  All Participants who are determined to be key employees under Code Section 416(i) (without regard to paragraph (5) thereof) during the identification period shall be treated as Specified Employees for purposes of the Plan during the twelve (12) month period that begins on the first day of the 4th month following the close of such identification period.

 

“Subsidiary” means any corporation, partnership, venture or other entity in which the Company holds, directly or indirectly, a fifty percent (50%) or greater ownership interest.  The Committee may, at its sole discretion, designate, on such terms and conditions as the Committee shall determine, any other corporation, partnership, limited liability company, venture or other entity a Subsidiary for purposes of this Plan.

 

“Termination of Employment” means the event where the Participant has a "separation from service," as defined under Section 409A, with the Employer.

 

“Termination Period” means the period of time beginning with a Change in Control and ending on the second anniversary of such Change in Control.

 

Article 3                      - Effectiveness of the Plan

 

This Plan shall be effective as of January 1, 2007.  Nothing in this Plan shall be deemed to entitle any Participant to continued employment with any Employer, and if a Participant's employment with any Employer terminates prior to a Change in Control, the Participant shall have no rights under this Plan.

 

Article 4                      - Payments Upon a Qualifying Termination

 

4.1 Termination of Employment.

 

(a) Notice of Termination.  Any purported termination of a Participant’s employment during the Termination Period by an Employer or by a Participant shall be communicated by written notice of termination to the other party in accordance with this Section 4.1 and Section 8.1 (regarding notices).  For purposes of this Plan, a “notice of termination” shall mean a notice which shall indicate the specific termination provision in this Plan relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for the Participant’s Termination of Employment under the provision so indicated.  The failure by the Participant or the Employer to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Participant or the Employer hereunder or preclude the Participant or the Employer from asserting such fact or circumstance in enforcing the Participant’s or the Employer’s rights hereunder.

 

(b) Date of Termination.  If a Participant has a Qualifying Termination, the Date of Termination shall be the date specified in the notice of termination (which, in the case of a termination other than for Cause or a termination for Good Reason shall not be less than fifteen (15) nor more than sixty (60) days from the date such notice is given).  If a Participant's Termination of Employment is for Cause, the Date of Termination shall not be less than thirty (30) days from the date notice is given.  In the event of a dispute arising out of the Participant’s Termination of Employment, the Date of Termination will be determined in accordance with Section 4.1(c).

 

(c) Disputes Involving Termination.  If within fifteen (15) days after any notice of termination is given, or, if later, prior to the Date of Termination (as determined without regard to this provision), the party receiving such notice of termination notifies the other party that a dispute exists concerning whether the termination is a Qualifying Termination or for Cause, the Date of Termination for purposes of Section 4.2 hereof shall be the date on which the dispute is finally resolved either by mutual written agreement of the parties, or by a final judgment, order or decree of a court of competent jurisdiction (which is not appealable or with respect to which the time for appeal therefrom has expired and no appeal has been perfected); provided, however, that if the dispute is not resolved prior to the end of the Termination Period, the Termination Period shall be extended so as not to deprive the Participant of the benefits under Section 4.2 in respect of such termination; provided further, that the Date of Termination shall be extended by a notice of dispute only if such notice is given in good faith and the party giving such notice pursues the resolution of such dispute with reasonable diligence.  During the pendency of any such dispute (the “Dispute Period”), subject to Section 6.1, the Employer will (i) continue to pay the Participant his or her full Base Salary in accordance with the Company’s payroll practice in effect from time to time (provided that the amount paid in any calendar year shall be equal to the Participant’s annual rate of Base Salary or a proportionate fraction thereof with respect to portions of calendar years during the Dispute Period (other than amounts that are required to be paid in a subsequent calendar year pursuant to Section 6.1)), and (ii) continue the Participant as a participant in all Health Benefits as described in Section 4.2(c) of the Plan (subject to Section 6.2 of the Plan) on the same basis as provided under Section 4.2(c). Amounts paid under this provision are in addition to all other amounts due under this Plan and shall not be offset against or reduce any other amounts due under this Plan.

 

4.2 Severance Payments.

 

If the Participant has a Qualifying Termination, then subject to Schedule B to the Plan, the Company shall or shall cause the Employer to provide to the Participant:

 

(a) his or her full base salary through the Date of Termination at the rate in effect at the time notice of termination is given, plus all other amounts to which he or she is entitled under any compensation plan in effect immediately prior to the Change in Control, at the time such payments are due; provided that, subject to the Participant’s execution of a Release in the form attached to this Plan as Schedule A (the “Release”) within forty-five (45) days of the Participant’s Date of Termination (and thereafter not revoking such Release), for purposes of determining the amount to which a Participant is entitled under the Financial Counseling Program, he or she shall be regarded as having retired under the terms of the program; and

 

(b) subject to the Participant’s execution of a Release within forty-five (45) days of the Participant’s Date of Termination (and thereafter not revoking such Release), a lump sum cash payment equal to the result of multiplying (i) the sum of (A) the Participant’s Base Salary, plus (B) the Participant’s Bonus Amount by (ii) 2.99; provided, however, that if the amount of such payment cannot be finally determined on or before such day, the Participant shall be paid an estimate, as determined in good faith by the Company of the minimum amount of such payment and the remainder of such payment (together with interest at the rate provided in section 1274(b)(2)(B) of the Internal Revenue Code of 1986, as amended (the “Code”)) as soon as the amount thereof can be determined; provided further that, in the event that the amount of the estimated payment exceeds the amount subsequently determined to have been due, such excess shall be reimbursed by the Participant, payable on the fifth (5th) day after demand by the Company (together with interest at the rate provided in section 1274(b)(2)(B) of the Code); and

 

(c) subject to the Participant’s execution of a Release within forty-five (45) days of the Participant’s Date of Termination (and thereafter not revoking such Release), if the Participant is not otherwise entitled to such benefits at no cost to him or her pursuant to the terms of such plans, subject to Section 6.2 of the Plan, for a thirty six (36) month period from the Date of Termination or until December 31 of the year in which the Participant reaches age sixty-five (65), whichever is the shorter period (the “Benefit Period”), life, health and dental benefits (including spouse and dependent coverage) (“Health Benefits”) substantially similar to those that he or she was receiving immediately prior to the Date of Termination and such benefits shall be provided at no cost to the Participant (or spouse and dependents), provided that, notwithstanding the foregoing, the Participant shall not be provided any Health Benefit pursuant to this Section 4.2(c) if an equivalent benefit is actually received by the Participant during the Benefit Period from another Employer following his or her Date of Termination and any such Health Benefit actually received by the Participant shall be reported by the Participant to the Company

 

	
4.3  

	
No Duplication of Benefits.  Except as otherwise expressly provided pursuant to this Plan, this Plan shall be construed and administered in a manner which avoids duplication of compensation and benefits which may be provided under any other plan, program, policy, or other arrangement or individual contract.  In the event a Participant is covered by any other plan, program, policy, individually negotiated agreement or other arrangement, in effect as of his or her Date of Termination, that may duplicate the payments and benefits provided for in this Article 4, the Company may reduce or eliminate the duplicative benefits provided for under the Plan but solely to the extent such reduction or elimination  does not cause the Participant to be subject to penalty taxes under Section 409A.

 

	
4.4  

	
No Affect on Other Benefits.  This Plan does not abrogate any of the usual entitlements which a Participant has or will have, first, while a regular employee, and subsequently, after termination, and thus, subject to Section 4.3 of this Plan, a Participant shall be entitled to receive all benefits payable to him or her under each and every qualified plan, welfare plan and any other plan or program relating to benefits and deriving from his or her employment with the Company and it Subsidiaries, but solely in accordance with the terms and provisions thereof.

 

Article 5 – Withholding Taxes

 

The Company and its Subsidiaries may withhold from all payments due to the Participant (or his beneficiary or estate) hereunder all taxes which, by applicable federal, state, local or other law, are required to be withheld.

 

Article 6 - Certain Additional Agreements under Section 409A

 

6.1           Delay of Payment.  In the event that a payment to be made pursuant to Sections 4.1(c) or 4.2(b) or any other amounts under this Plan that constitutes non-qualified deferred compensation under Section 409A of the Code ("Section 409A") is to be made to a “Specified Employee,” such payment will be delayed for six (6) months after the Date of Termination if required in order to avoid additional tax under Section 409A and paid in a single lump sum on the first business day of the month following the end of such six (6) month period.  If a Participant who is a Specified Employee dies within six (6) months following such Termination of Employment, any such delayed payments shall not be further delayed, and shall be immediately payable within forty-five (45) days to his or her estate in accordance with the applicable provisions of this Plan.

 

6.2           Health Benefits.  Health Benefits shall be providedin such a manner that such benefits (and the costs and premiums thereof) are excluded from the Participant’s income for federal income tax purposes and, if the Company reasonably determines that providing continued coverage under one or more of its health care benefit plans contemplated herein could be taxable to the Participant, the Company shall provide such benefits at the level required hereby through the purchase of individual insurance coverage; provided, if the Company reasonably determines that any portion of the Health Benefits cannot be provided through the purchase of individual insurance coverage without penalty, such portion shall be made available on a taxable basis, but the Benefit Period shall be limited to the Participant’s maximum period of continuation coverage under section 4980B of the Code.

 

6.3           Cash Payments.  Subject to the Participant’s execution of a Release within forty-five (45) days of the Participant’s Date of Termination (and thereafter not revoking such Release), the Company shall use its best efforts to pay, or shall use its best efforts to cause the Employer to pay, to the Participant the cash lump sum described in  Section 4.2(b) to be made, subject to Section 6.1 on the sixtieth (60th) day following the Participant’s Date of Termination.

 

6.4           No Adverse Action.  No Employer will take any action that would expose any payment or benefit to a Participant under this Plan to the additional tax imposed under Section 409A unless (i) the Employer is obligated to take the action under an agreement, plan or arrangement, (ii) a Participant requests the action, (iii) the Employer advises such Participant in writing that the action may result in the imposition of the additional tax and (iv) such Participant subsequently requests the action in a writing that acknowledges that he or she will be responsible for any effect of the action under Section 409A.

 

Article 7 - Successors; Binding Agreement

 

7.1           The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to unconditionally assume all of the obligations of the Employer hereunder.  Failure of the Company to obtain such assumption prior to the effectiveness of any such succession shall constitute Good Reason hereunder and shall entitle the Participants to compensation and other benefits in the same amount and on the same terms as the Participants would be entitled hereunder if they had a Qualifying Termination, except that for purposes of implementing the foregoing, the date on which any succession becomes effective shall be deemed the Date of Termination.

 

7.2           The benefits provided under this Plan shall inure to the benefit of and be enforceable by the Participant’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  If the Participant shall die while any amounts would be payable to the Participant hereunder had the Participant continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to such person or persons appointed in writing by the Participant to receive such amounts or, if no person is so appointed, to the Participant’s estate.

 

Article 8 – Miscellaneous

 

8.1           Election and Notices.  Notwithstanding anything to the contrary contained in this Plan, all elections and notices of every kind under this Plan shall be made on forms prepared by the Company or its General Counsel, Secretary or Assistant Secretary, or their respective delegates or shall be made in such other manner as permitted or required by the Company or its General Counsel, Secretary or Assistant Secretary, or their respective delegates, including through electronic means, over the Internet or otherwise.  An election shall be deemed made when received by the Company (or its designated agent, but only in cases where the designated agent has been appointed for the purpose of receiving such election), which may waive any defects in form.

 

If not otherwise specified by this Plan or the Company, any notice or filing required or permitted to be given to the Company under the Plan shall be delivered to the principal office of the Company, directed to the attention of the Senior Executive Vice President in charge of Human Resources for the Company or his or her successor.  Such notice shall be deemed given on the date of delivery.

 

Notice to the Participant shall be deemed given when mailed (or sent by telecopy) to the Participant’s work or home address as shown on the records of the Employer or, at the option of the Company, to the Participant’s e-mail address as shown on the records of the Employer.  It is the Participant’s responsibility to ensure that the Participant’s addresses are kept up to date on the records of the Employer.  In the case of notices affecting multiple Participants, the notices may be given by general distribution at the Participants’ work locations.

 

	
8.2  

	
      No Mitigation; Resolution of Disputes and Costs.

 

	
(a)             

	
In no event shall the Participant be obligated to seek other employment or take other action by way of mitigation of the amounts payable to the Participant under any of the provisions of this Plan and, except as provided in Section 4.2(c), such amounts shall not be reduced whether or not the Participant obtains other employment.

 

	
(b)             

	
Participants may submit claims for benefits by giving notice to the Company pursuant to Section 8.1.  If a Participant believes that he or she has not received coverage or benefits to which he or she is entitled under the Plan, the Participant may notify the Company in writing of a claim for coverage or benefits.  If the claim for coverage or benefits is denied in whole or in part, the Company shall notify the applicant in writing of such denial within thirty (30) days (which may be extended to sixty (60) days under special circumstances), with such notice setting forth: (i) the specific reasons for the denial; (ii) the Plan provisions upon which the denial is based; (iii) any additional material or information necessary for the applicant to perfect his or her claim; and (iv) the procedures for requesting a review of the denial.  Upon a denial of a claim by the Company, the Participant may:  (i) request a review of the denial by the Board or, where review authority has been so delegated, by such other person or entity as may be designated by the Board for this purpose; (ii) review any Plan documents relevant to his or her claim; and (iii) submit issues and comments to the Board or its delegate that are relevant to the review.  Any request for review must be made in writing and received by the Board or its delegate within sixty (60) days of the date the applicant received notice of the initial denial, unless special circumstances require an extension of time for processing.  The Board or its delegate will make a written ruling on the applicant’s request for review setting forth the reasons for the decision and the Plan provisions upon which the denial, if appropriate, is based.  This written ruling shall be made within thirty (30) days of the date the Board or its delegate receives the applicant’s request for review unless special circumstances require an extension of time for processing, in which case a decision will be rendered as soon as possible, but not later than sixty (60) days after receipt of the request for review.  All extensions of time permitted by this Section 8.2 will be permitted at the sole discretion of the Board or its delegate.  If the Board does not provide the Participant with written notice of the denial of his or her appeal, the Participant’s claim shall be deemed denied.

 

	
(c)             

	
Notwithstanding anything in this Plan to the contrary, any court, tribunal or arbitration panel that adjudicates any dispute, controversy or claim arising between a Participant and any Employer, or any of their delegates or successors, in respect of a Participant’s Qualifying Termination, will apply a de novo standard of review to any determinations made by such person. Such de novo standard shall apply notwithstanding the grant of full discretion hereunder to any such person or characterization of any such decision by such person as final, binding or conclusive on any party.

 

	
(d)             

	
If any contest or dispute shall arise under this Plan involving a Participant’s Termination of Employment or involving the failure or refusal of any Employer to perform fully in accordance with the terms hereof, the Company shall or shall cause the Employer to reimburse the Participant on a current basis for all reasonable legal fees and related expenses, if any, incurred by the Participant at any time from the Effective Date of this Plan through the Participant’s remaining lifetime (or, if longer, through the 20th anniversary of the Change in Control) in connection with such contest or dispute (regardless of the result thereof), together with interest at the rate provided in section 1274(b)(2)(B) of the Code, such interest to accrue thirty (30) days from the date the Company receives the Participant’s statement for such fees and expenses through the date of payment thereof, regardless of whether or not the Participant’s claim is upheld by a court of competent jurisdiction or an arbitration panel; provided, however, that the Participant shall be required to repay immediately any such amounts to the Employer to the extent that a court or an arbitration panel issues a final and non-appealable order setting forth the determination that the position taken by the Participant was frivolous or advanced by the Participant in bad faith. To comply with Section 409A, in no event shall the payments by the Employer under this Section 8.2(d) be made later than the end of the calendar year next following the calendar year in which such fees and expenses were incurred, provided, that the Participant shall have submitted an invoice for such fees and expenses at least ten (10) days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred.  The amount of such legal fees and expenses that the Employer is obligated to pay in any given calendar year shall not affect the legal fees and expenses that the Employer is obligated to pay in any other calendar year, and the Participant’s right to have the Employer pay such legal fees and expenses may not be liquidated or exchanged for any other benefit.

 

8.3 Survival.  The respective obligations and benefits afforded to the Company and the Participant as provided in Articles 4 (to the extent that payments or benefits are owed as a result of a Qualifying Termination that occurs during the term of this Plan), 5, 6, 7 and 8 shall survive the termination of this Plan.

 

8.4 Governing Law; Validity. To the extent not preempted by Federal law, the Plan, and all benefits and agreements hereunder, and any and all disputes in connection therewith, shall be governed by and construed in accordance with the substantive laws of the State of Delaware, without regard to conflict or choice of law principles which might otherwise refer the construction, interpretation or enforceability of this Plan to the substantive law of another jurisdiction.

 

8.5 Amendment and Termination.  The Board or the Committee may amend (and, by amendment, terminate) this Plan at any time; provided, however, that (i) no amendment that reduces or eliminates any benefit or other entitlement of any Participant or that is otherwise adverse to the interests of a Participant (an “Adverse Amendment”) may take effect prior to the beginning of any calendar year, and any such amendment shall be void and of no effect, unless the Participant was notified of such amendment by September 30 of the prior year, (ii) no Adverse Amendment may be adopted during the period of time beginning on a Potential Change in Control and ending on the earlier of (a) the termination of the agreement that constituted the Potential Change in Control and (b) the second anniversary of the resulting Change in Control, without the Participant’s written consent, and (iii) no Adverse Amendment may be adopted during the period commencing on a Change in Control and ending on the second anniversary of the Change in Control without the Participant’s written consent. The restrictions on amendments set forth in the prior sentence shall not apply to any amendment adopted within the period specified in clauses (ii) or (iii), above, if the following three conditions are satisfied: (1) the amendments do not take effect until the expiration of the periods, as applicable, set forth in such clauses, (2) each adversely affected Participant receives written notice of the adoption of such amendments within ten (10) days of such adoption and (3) such written notice is provided at least ninety (90) days prior to such amendments taking effect.

 

8.6 Interpretation and Administration.  The Plan shall be administered by the Board.  The Board may delegate any of its powers under the Plan to a committee thereof or prior to a Change in Control, to the CEO.  Unless otherwise provided in this Plan, actions of the Board or such committee shall be taken by a majority vote of its members.  All references to the “Board” herein shall be deemed to be references to such delegate, as appropriate.  The Board shall have the authority (i) to exercise all of the powers granted to it under the Plan, (ii) to construe, interpret and implement the Plan, (iii) to prescribe, amend and rescind rules and regulations relating to the Plan, (iv) to make all determinations necessary or advisable in administration of the Plan and (v) to correct any defect, supply any omission and reconcile any inconsistency in the Plan.

 

8.7 Type of Plan.  This Plan is intended to be, and shall be interpreted (a) as an unfunded employee welfare plan under Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and Section 2520.104-24 of the Department of Labor Regulations, maintained primarily for the purpose of providing employee welfare benefits, to the extent that it provides welfare benefits, and under Sections 201, 301 and 401 of ERISA, as a plan that is unfunded and maintained primarily for the purpose of providing deferred compensation, to the extent that it provides such compensation, in each case for a select group of management or highly compensated employees and (b) to comply with the requirements of Section 409A of the Code.

 

8.8 Nonassignability.  Benefits under the Plan may not be sold, assigned, transferred, pledged, anticipated, mortgaged, or otherwise encumbered, transferred, hypothecated, or conveyed in advance of actual receipt of the amounts, if any, payable hereunder, or any part thereof by the Participant.

 

  

  

  

Schedule A

 

RELEASE AND WAIVER

 

I, ________________, hereby fully waive and forever release and discharge Company, AT&T, any and all other subsidiaries of Company and of AT&T, their officers, directors, agents, servants, employees, successors and assigns and any and all employee benefit plans maintained by AT&T or any subsidiary thereof and/or any and all fiduciaries of any such plan from any and all common law and/or statutory claims, causes of action or suits of any kind whatsoever arising from or in connection with my past employment by Company (and any AT&T subsidiary to the extent applicable) and/or my separation therefrom, including but not limited to claims, actions, causes of action or suits of any kind allegedly arising under the Employee Retirement Income Security Act (ERISA), as amended, 29 USC §§ 1001 et seq.; the Rehabilitation Act of 1973, as amended, 29 USC §§ 701 et seq.; the Civil Rights Acts of 1866 and 1870, as amended, 42 USC §§ 1981, 1982 and 1988; the Civil Rights Act of 1871, as amended, 42 USC §§ 1983 and 1985; the Civil Rights Act of 1964, as amended, 42 USC § 2000d et seq.; the Americans With Disabilities Act, as amended, 42 USC §§ 12101 et seq., and the Age Discrimination in Employment Act of 1967 (ADEA), as amended, 29 USC §§ 621 et seq., known and unknown. In addition, I, ___________, agree not to file any lawsuit or other claim seeking monetary damage or other relief in any state or federal court or with any administrative agency against any of the aforementioned parties in connection with or relating to any of the aforementioned matters. Provided, however, by executing this Release and Waiver, I, ________________, do not waive rights or claims that may arise after the date of execution; provided further, however, this Release and Waiver shall not affect my right to receive or enforce through litigation, any indemnification rights to which I am entitled as a result of my past employment by the Company or contract rights pursuant to the Agreement and Release and Waiver of Claims entered into contemporaneously herewith and, if applicable, any subsidiary of AT&T; and, provided further, this Release and Waiver shall not affect the ordinary distribution of benefits/entitlements, if any, to which I am entitled upon termination from Company; it being understood by me that said benefits/entitlements, if any, will be subject to and provided in accordance with the terms and conditions of their respective governing plan and this Agreement.

 

 

  

  

  

Schedule B

 

 

 

 

 

Limitation on Payments Under Certain Circumstances

(a)           The following terms shall have the meanings set forth below for purposes of this Schedule B to the Plan:

“Accounting Firm” shall mean a nationally recognized certified public accounting firm that is selected by the Company for purposes of making the applicable determinations hereunder and is reasonably acceptable to the Participant, which firm shall not, without the Participant’s consent, be a firm serving as accountant or auditor for the individual entity or group effecting the Change in Control.

“Excise Tax” means the excise tax imposed by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax.

“Net After-Tax Receipt” shall mean the present value (as determined in accordance with Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the Code) of a Payment net of all taxes imposed on the Participant with respect thereto under Sections 1 and 4999 of the Code and under applicable state and local laws, determined by applying the highest marginal rate under Section 1 of the Code and under state and local laws which applied to the Participant’s taxable income for the immediately preceding taxable year, or such other rate(s) as the Accounting Firm determined to be likely to apply to the Participant in the relevant tax year(s).

“Parachute Value” of a Payment means the present value as of the date of the change in control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Accounting Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.

“Payment” means any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of the Participant, whether paid or payable pursuant to this Plan or otherwise.

“Plan Payment” has the meaning set forth in Paragraph (b) of this Schedule B.

“Safe Harbor Amount” means (x) 3.0 times the Participant’s “base amount,” within the meaning of Section 280G(b)(3) of the Code, minus (y) $1.00.

“Underpayment” has the meaning set forth in Paragraph (d) of this Schedule B,

(b)           Notwithstanding any provision of the Plan to the contrary, in the event an Accounting Firm shall determine that receipt of all Payments would subject the Participant to the excise tax under Section 4999 of the Code, the Accounting Firm shall determine whether to reduce any of the Payments paid or payable pursuant to this Plan (the “Plan Payments”) so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount. The Plan Payments shall be so reduced only if the Accounting Firm determines that the Participant would have a greater “Net After-Tax Receipt” of aggregate Payments if the Plan Payments were so reduced.  If the Accounting Firm determines that the Participant would not have a greater “Net After-Tax Receipt” of aggregate Payments if the Plan Payments were so reduced, the Participant shall receive all Plan Payments to which the Participant is entitled hereunder.

(c)           If the Accounting Firm determines in accordance with Paragraph (b) of this Schedule B that the aggregate Plan Payments should be reduced so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount, the Company shall promptly give the Participant notice to that effect and a copy of the detailed calculation thereof. All determinations made by the Accounting Firm under this Schedule B shall be binding upon the Company and the Participant and shall be made as soon as reasonably practicable and in no event later than fifteen (15) days following the Date of Termination. For purposes of reducing the Plan Payments so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount, only amounts payable under this Plan (and no other Payments) shall be reduced.  The reduction of the Plan Payments, if applicable, shall be made by reducing the payments and benefits under the following sections in the following order: (1) any Plan Payments under Section 4.1(c), (2) any Plan Payments under Section 4.2(b), and (3) any Plan Payments under Section 6.2.  All fees and expenses of the Accounting Firm shall be borne solely by the Company.

(d)           As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will have been paid or distributed by the Company to or for the benefit of the Participant pursuant to this Plan which should have not been so paid or distributed (“Overpayment”) or that additional amounts which will have not been paid or distributed by the Company to or for the benefit of the Participant pursuant to this Plan could have been so paid or distributed (“Underpayment”), in each case, consistent with the calculation of the Safe Harbor Amount hereunder.  In the event that the Accounting Firm, based upon the assertion of the deficiency by the Internal Revenue Service against either the Company or the Participant which the Accounting Firm believes has a high probability of success, determines that an Overpayment has been made, the Participant shall pay promptly (and in no event later than sixty (60) days following the date on which the Overpayment is determined) pay any such Overpayment to the Company together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code; provided, however, that no amount shall be payable by the Participant to the Company if and to the extent such payment would not either reduce the amount on which the Participant is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the Accounting Firm, based upon controlling precedent or substantial authority, determines that the Underpayment has occurred, any such Underpayment shall be paid promptly (and in no event later than sixty (60) days following the date on which the Underpayment is determined) by the Company to or for the benefit of the Participant together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code.

(e)           To the extent requested by the Participant, the Company shall cooperate with the Participant in good faith in valuing, and the Accounting Firm shall take into account the value of, services provided or to be provided by the Participant (including without limitation, the Participant’s agreeing to refrain from performing services pursuant to a covenant not to compete or similar covenant) before, on or after the date of a change in ownership or control of the Company (within the meaning of Q&A-2(b) of the final regulations under Section 280G of the Code), such Payments in respect of such services may be considered reasonable compensation within the meaning of Q&A-9 and Q&A-40 to Q&A-44 of the final regulations under Section 280G of the Code and/or exempt from the definition of the term “parachute payment” within the meaning of Q&A-2(a) of the final regulations under Section 280G of the Code in accordance with Q&A-5(a) of the final regulations under Section 280G of the Code.acquiredsales_exh101-1142010.htm

 

AGREEMENT

This Agreement (this “Agreement”) is made and entered into by and among

Deborah Sue Ghourdjian Separate Trust (“DSGST”), Matthew Ghourdjian (“Ghourdjian”), and Cogility Software Corporation, a California corporation (“Cogility”),

Gerard M. Jacobs ("Jacobs"), Joshua A. Bloom ("Bloom"), Roger S. Greene ("Greene"), James S. Jacobs, Michael D. McCaffrey ("McCaffrey"), Vincent J. Mesolella ("Mesolella"), Richard E. Morrissy ("Morrissy") and Acquired Sales Corp., a Nevada corporation ("AQSP").

DSGST, Ghourdjian, Cogility, Jacobs, Bloom, Greene, James S. Jacobs, McCaffrey, Mesolella, Morrissy and AQSP are sometimes referred to individually as a "Party" and collectively as the "Parties". DSGST, Ghourdjian and Jacobs are sometimes referred to individually as a “Stockholder” and collectively as the “Stockholders”.

R E C I T A L S

 

A.  Cogility is a California corporation. Ghourdjian is the President and Chief Executive Officer ("CEO") and sole director of Cogility (the "Cogility Board"). Cogility’s issued and outstanding capital stock consists of 11,460,344 shares of common stock (“Cogility Stock”), and options to purchase an aggregate of 2,650,00 shares of Cogility Stock at exercise prices ranging from $0.20 per share up to $1.40 per share ("Cogility Options").

B.  AQSP is a Nevada corporation. AQSP is a publicly traded shell corporation, whose common stock symbol is AQSP.PK. Jacobs is the President and CEO of AQSP, and the Chairman of the board of directors of AQSP (the "AQSP Board"). AQSP's issued and outstanding capital stock consists of 5,832,482 shares of common stock ("AQSP Stock"), and options to purchase an aggregate of 175,000 shares of AQSP Stock at an exercise price of $0.10 per share ("AQSP Options"). The most recent public trading price of AQSP Stock is $0.10 per share.

C.  Cogility and AQSP desire to provide for a merger of Cogility into a newly formed wholly-owned subsidiary of AQSP (the "Merger"), with the Merger consideration consisting of certain unregistered shares of AQSP Stock and certain options to purchase unregistered shares of AQSP Stock ("AQSP Options").

D.  The Parties desire to provide for management of Cogility and AQSP both prior to and following the consummation of the Merger.

E.  The Stockholders desire to provide for the manner in which they will vote their shares of Cogility Stock and of AQSP Stock.

Now, Therefore, in consideration of the mutual covenants and provisions herein set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is hereby agreed as follows, intending to be legally bound hereby:

  

  

  

1.  AQSP Board Resolutions. The members of the AQSP Board hereby consent in writing, pursuant to Nevada law, to the adoption of the following resolutions:

A. Grant of AQSP Options with vesting conditioned upon completion of Merger.

Whereas, Acquired Sales Corp. ("AQSP") is a shell corporation that has attempted to identify and consummate an acquisition of an attractive business with the assistance of its sole officer and the members of its board of directors (the "AQSP Board");

Whereas, AQSP has now identified Cogility Software Corporation ("Cogility") as an attractive potential acquisition candidate; and

Whereas, AQSP desires to provide for a merger of Cogility into a newly formed wholly-owned subsidiary of AQSP (the "Merger"), with the Merger consideration consisting of certain unregistered shares of common stock of AQSP ("AQSP Stock") and certain options to purchase unregistered shares of AQSP Stock ("AQSP Options");

Now, therefore, be it resolved, that Gerard M. Jacobs, President and Chief Executive Officer of AQSP, is hereby authorized and directed to cause AQSP to take all such actions and to execute all such documents and agreements as shall be required to immediately grant, issue and deliver to the following officer of AQSP and to the members of the AQSP Board AQSP Options to purchase the following number of shares of AQSP Stock, respectively, each of such AQSP Options to be exercisable at any time on or prior to the tenth anniversary of the closing date of the Merger, at an exercise price of $0.10 per share (such exercise price to be appropriately adjusted in the case of a reverse stock split, stock split, stock dividend or other extraordinary corporate event), provided, notwithstanding the foregoing, that such AQSP Options shall not vest and shall not be exercisable unless and until the Merger has been successfully completed:

 

	 	 Number of
	 Grantee	 AQSP Options
	 Joshua A. Bloom	 100,000
	 Roger S. Greene 	 100,000
	 Gerard M. Jacobs   	 12,100,000
	 Michael D. McCaffrey	 100,000
	 Vincent J. Mesolella  	 100,000
	 Richard E. Morrissy	 100,000
	 	 
	 Total 	 12,600,000

  

  

  

B.  1-for-20 reverse stock split.

Whereas, Acquired Sales Corp. ("AQSP"), a shell corporation, has been attempting to identify and consummate an acquisition of an attractive business; and

Whereas, AQSP has now identified Cogility Software Corporation ("Cogility") as an attractive potential acquisition candidate; and

Whereas, AQSP desires to provide for a merger of Cogility into a newly formed wholly- owned subsidiary of AQSP (the "Merger"), with the Merger consideration consisting of certain unregistered, restricted shares of common stock of AQSP ("AQSP Stock") andcertain options to purchase unregistered shares of AQSP Stock ("AQSP Options"); and

Whereas, Cogility is unwilling to proceed forward with the Merger unless the currently issued and outstanding AQSP Stock and the currently issued and outstanding AQSP Options are the subject of a 1-for-20 reverse stock split (the "Reverse Stock Split");

 

 

Now, therefore, be it resolved, that, Gerard M. Jacobs, the President and Chief Executive Officer of AQSP, is hereby authorized and directed to cause AQSP to take all such actions and to execute all such documents and agreements as shall be required to effect the Reverse Stock Split, subject only to approval of the Reverse Stock Split by the holders of a majority of the outstanding shares of AQSP Stock, so that immediately following the Reverse Stock Split:

(1) the currently issued and outstanding 5,832,482 shares of AQSP Stock shall be reduced to an aggregate of 291,624 shares of issued and outstanding AQSP Stock;

(2) the currently issued and outstanding 175,000 AQSP Options dated August 1, 2007, each with an exercise price of $0.10 per share, shall be reduced to an aggregate of 8,750 AQSP Options each with an exercise price of $2.00 per share of AQSP Stock; and

(3) the 12,600,000 AQSP Options granted by resolution of the AQSP Board of even date herewith, each with an exercise price of $0.10 per share of AQSP Stock, shall be reduced to an aggregate of 630,000 AQSP Options, each with an exercise price of $2.00 per share of AQSP Stock.

C.  Merger and Private Placement.

Whereas, Acquired Sales Corp. ("AQSP") desires to provide for a merger of Cogility Software Corporation ("Cogility") into a newly formed wholly-owned subsidiary of AQSP (the "Merger"), with the Merger consideration consisting of certain unregistered shares of common stock of AQSP ("AQSP Stock") and certain options to purchase unregistered shares of AQSP Stock ("AQSP Options"); and

  

  

  

Whereas, Cogility and AQSP desire to provide for a private placement of common stock, preferred stock, convertible preferred stock, debt, or convertible debt by Cogility or by AQSP prior to, simultaneously with, or after the closing of the Merger, in the amount of $500,000 or more (the "Private Placement"); and

Whereas, AQSP desires to provide its President and Chief Executive Officer maximum authority and flexibility in regard to the structuring, negotiation and closing of the Merger and the Private Placement;

Now, therefore, be it resolved, that Gerard M. Jacobs, the President and Chief Executive Officer of AQSP, is hereby authorized and directed to cause AQSP to take all such actions and to execute all such documents and agreements as shall be deemed necessary or desirable by him to effect the Merger and the Private Placement as promptly as practicable, on such terms and conditions and he may negotiate in his discretion, subject only to approval of the definitive documents regarding the Merger and the Private Placement by the AQSP Board and, if required by law, by the holders of a majority of the shares of AQSP Stock.

2.  Cogility Board Resolutions.  The sole member of the Cogility Board hereby consents in writing, pursuant to California law, to the adoption of the following resolution:

A. Cogility Board.

Whereas, Cogility desires to increase the size of its board of directors ("Cogility Board") in contemplation of a merger (the "Merger") into a newly formed wholly-owned subsidiaryof Acquired Sales Corp., a Nevada corporation ("AQSP"), with the Merger consideration consisting of certain unregistered shares of common stock of AQSP ("AQSP Stock") and certain options to purchase unregistered shares of AQSP Stock ("AQSP Options"), and in contemplation of a private placement of common stock, preferred stock, convertible preferred stock, debt, or convertible debt by Cogility prior to the closing of the Merger, or by AQSP, by Cogility, or by AQSP and Cogility acting jointly, simultaneously with or after the closing of the Merger, in the amount of $500,000 or more (the "Private Placement");

Now, therefore, be it resolved, that the By-Laws of Cogility are hereby amended to provide that the Cogility Board prior to the closing of the Merger will consist of three persons; and

Now, therefore, be it further resolved, that Gerard M. Jacobs and Roger S. Greene are hereby elected to serve as additional members of the Cogility Board, to serve until the earlier of the closing of the Merger or the abandonment of the Merger by Cogility and AQSP; and

Now, therefore, be it further resolved, that Matthew Ghourdjian and Gerard M. Jacobs are hereby elected to serve as Co-Chairmen of the Cogility Board, to serve until the earlier of the closing of the Merger or the abandonment of the Merger by Cogility and AQSP.

  

  

  

B.  Grant of Cogility Options with vesting conditioned upon completion of Private Placement.

Whereas, Cogility Software Corporation ("Cogility") has identified Acquired Sales Corp., a Nevada corporation ("AQSP), as an attractive potential acquiror; and

Whereas, Cogility desires to provide for a merger of Cogility into a newly formed wholly-owned subsidiary of AQSP (the "Merger"), with the Merger consideration consisting of certain unregistered shares of common stock of AQSP ("AQSP Stock") and certain options to purchase unregistered shares of AQSP Stock ("AQSP Options"); and

Whereas, Cogility desires to incentivize Gerard M. Jacobs to initially serve as a Co-Chairman of the board of directors of Cogility and later as the Chief Executive Officer of Cogility, and to use commercially reasonable efforts to close a private placement of common stock, preferred stock, convertible preferred stock, debt, or convertible debt by Cogility or AQSP either prior to, simultaneously with, or after the closing of the Merger, in the amount of $500,000 or more (the "Private Placement"); and

Whereas, Roger S. Greene has served as the General Counsel of Cogility, and Cogility desires to incentivize Roger S. Greene to also serve as a member of the board of directors of Cogility, and to generally assist Cogility as an advisor and consultant in regard to introductions with persons and companies with which he is familiar; and

Whereas, Cogility desires to incentivize Vincent J. Mesolella to serve as a member of a committee that will allocate certain AQSP Options that will replace Cogility's existing bonus plan, and to generally assist Cogility as an advisor and consultant in regard to introductions with persons and companies with which he is familiar;

Now, therefore, be it resolved, that Matthew Ghourdjian, President and Chief Executive Officer of Cogility, is hereby authorized and directed to cause Cogility to take all such actions and to execute all such documents and agreements as shall be required to immediately grant, issue and deliver to Gerard M. Jacobs, Roger S. Greene and Vincent J. Mesolella, or their respective designee(s), options ("Cogility Options") to purchase an aggregate of 3,295,000 shares of common stock of Cogility ("Cogility Stock"), each of such Cogility Options to be exercisable at any time on or prior to the tenth anniversary of the issuance date of such Cogility Options, at the following respective exercise prices per share (such respective exercise prices to be appropriately adjusted in the case of a reverse stock split, stock split, stock dividend or other extraordinary corporate event), provided, notwithstanding the foregoing, that such Cogility Options shall not vest and shall not be exercisable unless and until the Private Placement has been successfully completed:

 

	 	 Number of	 	 	 Exercise Price
	 Grantee 	 Cogility Options 	 	 	 Per Share
	 Gerard M. Jacobs	 2,500,000	 	$ 	 0.377358
	 Gerard M. Jacobs	 530,000	 	$ 	 0.000001
	 Roger S. Greene	 132,500	 	$ 	 0.000001
	 Vincent J. Mesolella 	 132,500	 	$ 	 0.000001
	 	 	 	 	 
	 Total 	 3,295,000	 	 	 

 

                               

  

  

  

C.  Merger and Private Placement.

Whereas, Cogility Software Corporation ("Cogility") has identified Acquired Sales Corp., a Nevada corporation ("AQSP), as an attractive potential acquiror; and

Whereas, Cogility desires to provide for a merger of Cogility into a newly formed wholly-owned subsidiary of AQSP (the "Merger"), with the Merger consideration consisting of  certain unregistered shares of common stock of AQSP ("AQSP Stock") and certain options to purchase unregistered shares of AQSP Stock ("AQSP Options"); and

Whereas, Cogility and AQSP desire to provide for a private placement of common stock, preferred stock, convertible preferred stock, debt, or convertible debt by Cogility or AQSP either prior to, simultaneously with, or after the closing of the Merger, in the amount of $500,000 or more (the "Private Placement"); and

Whereas, Cogility desires to provide its Co-Chairmen maximum authority and flexibility in regard to the structuring, negotiation and closing of the Merger and the Private Placement;

Now, therefore, be it resolved, that Matthew Ghourdjian and Gerard M. Jacobs, the Co-Chairmen of Cogility, are hereby authorized and directed to cause Cogility to take all such actions and to execute all such documents and agreements as shall be deemed necessary or desirable by them to effect the Merger and the Private Placement as promptly as practicable, on such terms and conditions and they may negotiate in their discretion, subject only to approval of the definitive documents regarding the Merger and the Private Placement by the Cogility Board and, if required by law, by the holders of a majority of the shares of Cogility Stock.

4.  Letter of Intent regarding the Merger.  AQSP and Cogility hereby enter into the following legally binding letter of intent ("Letter of Intent") regarding the Merger:

This Letter of Intent is intended to set forth the general terms and conditions upon which AQSP will acquire Cogility.

A. Reverse Stock Split. Prior to the closing date of the Merger, the currently issued and outstanding AQSP Stock and the currently issued and outstanding AQSP Options shall be the subject of a 1-for-20 reverse stock split (the "Reverse Stock Split").

B.  Private Placement.  Jacobs will use commercially reasonable efforts to complete a private placement of common stock, preferred stock, convertible preferred stock, debt, or convertible debt by Cogility or AQSP either prior to, simultaneously with, or after the closing of the Merger, in the amount of $500,000 or more (the "Private Placement"); provided that no guarantee or assurance can be made by Jacobs that the Private Placement can be successfully completed on acceptable terms and conditions, if at all. If the Private Placement involves the issuance of a convertible security by Cogility, then the conversion terms shall be mutually acceptable to AQSP, Cogility and the investor(s) in the Private Placement. If the Private Placement is in the form of debt or convertible debt issued by Cogility, then such debt shall be secured by a perfected first lien security interest on all of the assets of a newly created trust (the "IP Trust"), which IP Trust shall own all of the intellectual property rights to all of Cogility's patents, patents pending, unpatented software and code, appliances, and other intellectual property. The trustee of such IP Trust shall be Greene or another person or entity mutually acceptable to AQSP, Cogility and the investor(s) in the Private Placement.

  

  

  

C. Reverse Merger. The acquisition of Cogility by AQSP will be structured as a so-called "reverse merger", pursuant to which Cogility will be merged with and into a wholly-owned single purpose merger subsidiary of AQSP incorporated in California, with Cogility being the survivor of such Merger and a wholly-owned subsidiary of AQSP.

D. Merger Consideration.

(1)  In the Merger, the holders of the currently outstanding 11,460,344 shares of Cogility Stock will receive, on a pro rata basis, an aggregate of 2,162,329 shares of AQSP Stock, and the holders of the currently outstanding 2,650,000 Cogility Options with exercise prices between $0.20 - $1.40 per share of Cogility Stock, will receive, on a pro rata basis, an aggregate of 500,000 AQSP Options, with exercise prices that are 5.3 times higher than their respective exercise prices prior to the closing of the Merger (for example, 100,000 Cogility Options with an exercise price of $0.20 per share of Cogility Stock, will convert into 18,868 AQSP Options with an exercise price of $1.06 per share of AQSP Stock), provided, notwithstanding the foregoing, that the exercise price of each of such 500,000 AQSP Options shall in no event exceed $5.00 per share of AQSP Stock;

(2)  In the Merger, the holders of the 2,500,000 Cogility Options  with an exercise price of $0.377358 per share of Cogility Stock granted by resolution of the Cogility Board of even date herewith will receive, on a pro rata basis, an aggregate of 471,698 AQSP Options, each with an exercise price of $2.00 per share of AQSP Stock.; and

(3)  In the Merger, the holders of the 795,000 Cogility Options  with an exercise price of $0.000001 per share of Cogility Stock granted by resolution of the Cogility Board of even date herewith will receive, on a pro rata basis, an aggregate of 150,000 AQSP Options, each with an exercise price of $0.0000053 per share of AQSP Stock..

E. Bonus Plan. At the closing date of the Merger, Cogility's existing bonus plan will be eliminated, replaced as follows:

(1) 1,500,000 AQSP Options with an exercise price of $5.00 per share of AQSP Stock will be granted and issued. Half of these 1,500,000 AQSP Options will be allocated as of the closing date of the Merger among a group consisting of certain current employees of Cogility, Greene, and a newly hired (or to-be-hired) Chief Financial Officer of AQSP and Cogility (the "CFO"), such allocation to be determined by majority vote of a committee consisting of Ghourdjian, Greene, Jacobs and Martin Artiano ("Artiano"), acting in their sole discretion, and provided to AQSP in writing on the closing date of the Merger. The other half of these 1,500,000 AQSP Options will be allocated after the closing date of the Merger among current or future employees, directors or consultants of or to Cogility, such allocation to be determined by majority vote of a committee consisting of Ghourdjian, Greene, Jacobs, Artiano and Mesolella, acting in their sole discretion, and provided to AQSP in writing prior to the end of the twelfth full calendar quarter following the closing date of the Merger.

  

  

  

(2) Any portion of these 1,500,000 AQSP Options that are allocated to any particular grantee shall vest only if each of the following tests are met:

(a) Such grantee serves continuously as an employee, director or consultant of or to Cogility from the closing date of the Merger (or from his or her date of hire, if such date is after the closing date of the Merger) until the end of the twelfth full calendar quarter following the closing date of the Merger; and

(b) Cogility, operating as a wholly-owned subsidiary of AQSP, has an EBITDA of $1 million or more in each of four consecutive full calendar quarters during the first twelve full calendar quarters following the closing date of the Merger as calculated and certified in writing by AQSP's independent firm of certified public accountants (the "CPA's"), such EBITDA to be calculated by the CPA's without any allocation to Cogility of AQSP's corporate overhead excepting however that such EBITDA shall reflect dollar-for-dollar reductions for:

(i) the interest on any loans, ninety-five percent or more of the net proceeds of which are directly or indirectly made available to Cogility for use in Cogility's business; and

(ii) the portion of the fees and expenses of the CPA's that is attributable to the auditing and review of Cogility's annual and quarterly financial statements, as calculated and certified in writing by the CPA's; and

(c) Such grantee on or prior to the closing date of the Merger (or on his or her date of hire, in the case of the CFO) signs and delivers to AQSP and Cogility a comprehensive written waiver and settlement, in form and substance acceptable to AQSP in its sole discretion, of all claims of any nature whatsoever against AQSP, Cogility, and their respective directors, officers, shareholders, agents and representatives, including but not limited to any and all asserted or unasserted claims for Cogility Stock, Cogility Options, warrants to purchase Cogility Stock, unpaid salaries, unpaid bonuses, unpaid commissions, other back pay, royalty claims, and any other equity or compensation claims of any nature whatsoever.

(3) If and in the event that any portion of these 1,500,000 options become vested as set forth above, then such vested options will be exercisable at any time during the period beginning on their vesting date and ending on the second anniversary of such vesting date.

F. Boards of Directors.

(1) The board of directors of Cogility (the "Cogility Board") prior to the closing of the Merger or the abandonment of the Merger by Cogility and AQSP will consist of Ghourdjian and Jacobs, Co-Chairmen, and Greene. At the closing of the Merger, the Cogility Board will vote to amend the By-Laws of Cogility to provide that the Cogility Board will consist of ten people, and will vote to elect as seven additional members of the Cogility Board Bloom, James S. Jacobs, McCaffrey, Mesolella, Morrissy. General Robert Mixon (if he agrees to so serve, and if he does not, then another person designated by Ghourdjian and acceptable to Jacobs), and one other person designated by Ghourdjian and acceptable to Jacobs.

 

  

  

  

(2) Prior to the closing of the Merger, the AQSP Board shall continue to consist of Jacobs, Chairman, Bloom, Greene, James S. Jacobs, McCaffrey, Mesolella, and Morrissy. At the closing of the Merger, the AQSP Board will vote to amend the By-Laws of AQSP to provide that the AQSP Board will consist of ten people, and to elect as three additional members of the AQSP Board Ghourdjian, General Robert Mixon (if he agrees to so serve, and if he does not, then another person designated by Ghourdjian and acceptable to Jacobs), and one other person designated by Ghourdjian and acceptable to Jacobs. Following the closing of the Merger: Ghourdjian and Jacobs will serve as the Co-Chairmen of the AQSP Board; Mesolella will continue to serve as the Chairman of the Audit Committee of the AQSP Board; Greene will continue to serve as the Chairman of the Compensation Committee of the AQSP Board; and McCaffrey will continue to serve as the Chairman of the Nominating Committee of the AQSP Board.

G.  Officers.

(1) Prior to the closing of the Merger, Ghourdjian shall continue to serve as the President and Chief Executive Officer ("CEO") of Cogility. After the closing of the Merger, Ghourdjian shall continue to serve as the President and CEO of Cogility until Jacobs has received all of the security clearances necessary for him to serve as the President and CEO of Cogility without disrupting Cogility's business in any material respect, at which point in time Jacobs shall serve as the President, CEO and Secretary of Cogility. For his service as the Co-Chairman and later as the Co-Chairman, President, CEO and Secretary of Cogility, Jacobs will receive at minimum: an initial base salary of $250,000 per year payable every two weeks; prompt dollar-for-dollar reimbursement of all legitimate expenses incurred or paid by Jacobs in the performance of his duties as a director and officer of Cogility (including but not limited to airfare, lodging, food, entertainment, gasoline, parking, car rental, other auto expenses, tolls, mobile phone charges, and internet charges), and such benefits as are generally provided to employees of Cogility.

 

 

(2) Both before and after the closing of the Merger, Jacobs will continue to serve as the President, CEO and Secretary of AQSP.

(3) Following the closing of the Merger, any increases in the base salaries of Ghourdjian and Jacobs, and the annual bonuses of Ghourdjian and Jacobs, will be determined by the Compensation Committee of the AQSP Board, subject to the approval of the entire AQSP Board.

(4) Nothing in this Agreement is intended to prevent Jacobs from receiving his salary, bonuses, expense reimbursements, or benefits, from AQSP rather than from Cogility, following the closing of the Merger.

(5) Jacobs is authorized and directed to cause Cogility to hire the CFO, on terms and conditions to be approved by Ghourdjian, by the Cogility Options Committee, and by the AQSP Board and its Compensation Committee.

  

  

  

H. Audit.  Cogility will engage the firm of Hansen Barnett & Maxwell ("HB&M") to prepare audited financial statements for Cogiity for the twelve month periods ended December 31, 2007, 2008 and 2009, including appropriate quarterly cutoff work, and for the quarterly periods ended March 31 and June 30, 2010 (the “Audited Financials”), all in accordance with GAAP and applicable U.S. Securities and Exchange Commission ("SEC") rules and regulations and consistent with the advice of the CPAs and AQSP's securities counsel. Cogility will bear all of HB&M's fees and expenses incurred in the preparation of the Audited Financials.

I.  Operations. During the period between the signing of this Letter of Intent and the closing of the Merger, Ghourdjian will operate Cogility solely in the ordinary course of its business consistent with past practices. During the period from the signing of this Letter of Intent and the closing of the Merger, there shall not be any material increases or decreases in compensation, capital expenditures, asset sales or affiliate transactions involving Cogility, except as contemplated by this Letter of Intent, nor shall there be any unusual cash withdrawals, unusual payments, unusual contracts or contract provisions, or other unusual transactions or business practices involving Cogility. Notwithstanding the foregoing, Cogility will be entitled to make such employee hires as Ghourdjian may deem appropriate in his discretion, provided that all such employees are “at will” employees or the employment or engagement of such persons are terminable upon sixty (60) days written notice by Cogility.

J. Conditions to Closing the Merger. Ghourdjian, Cogility, Jacobs and AQSP will each use commercially reasonable efforts to close the Merger as soon as practicable. The closing of the Merger will be subject to each of the following conditions:

(1)  Reverse Stock Split.  The 1-for-20 Reverse Stock Split of AQSP Stock shall have been completed.

(2)  Mutual Due Diligence. Cogility and AQSP each shall have completed its "due diligence" investigation of the other (including without limitation an examination of corporate books and records, financials, historical operations, management, business practices, computer systems, prospects, legal, tax, ERISA and other matters), and the results of such investigation shall be satisfactory to each of them, in its sole discretion. Without limiting the generality of the foregoing:

(a) in accordance with applicable law, Cogility shall retain a competent outside firm to conduct a criminal background check of each of its employees, and shall furnish the results of those criminal background checks to AQSP within twenty-one days following the signing of this Agreement; and

(b) each of the Parties will promptly respond to and cooperate with the reasonable requests for information and access of each of the other Parties in connection with such Party’s "due diligence” investigation of the others.

  

  

  

Subject to the immediately preceding sentence: (i) Cogility and AQSP each shall use good faith efforts to conclude its "due diligence" investigation of the other within thirty days following the date of the Section 14 filing with the SEC announcing the signing of this Agreement (the "Section 14 Filing"); and (ii) Cogility and AQSP each shall notify the other if it elects not to close the Merger due to the results of its "due diligence" investigation of the other within thirty-five days following the date of the Section 14 Filing.

(3) Auditing. HB&M shall have completed and delivered to AQSP the Audited Financials, prepared in accordance with GAAP and accompanied by an unqualified opinion of HB&M, and such Audited Financials shall be acceptable to AQSP in its sole discretion.

(4) Definitive Documents. Cogility and AQSP shall have negotiated, executed, and delivered mutually agreeable definitive transaction documentation, including a merger agreement, containing representations, warranties, covenants, conditions, and indemnifications customary to transactions like the Merger and consistent with this Letter of Intent (collectively the "Definitive Documents").

(5) Approvals. All material third party approvals shall have been obtained, including but not limited to the approval of the Definitive Documents by the Cogility Board, the AQSP Board, and the shareholders of each of Cogility and AQSP.

(6) Filings. All necessary securities filings, including but not limited to the Section 14 Filing, shall have been made with the SEC and other governmental agencies, as required by applicable laws, rules and regulations, in regard to the Merger and related matters (collectively the "Filings").

(7) Litigation.  Neither the SEC, nor any other governmental agency, nor any shareholder of either Cogility or AQSP, shall have initiated or issued, nor threatened to initiate or issue, any investigations, actions, orders, lawsuits or other proceedings in regard to the Filings, the Merger or related matters.

K. Exclusivity Period. The term the “Exclusivity Period” means the period commencing on the date of signing of this Letter of Intent and ending sixty days after the Parties receive the completed Audited Financials from HB&M. In consideration of AQSP's time, effort and expense in attempting to close the Merger, Ghourdjian and Cogility agree that during the Exclusivity Period Ghourdjian and Cogility shall refrain from entering into, soliciting or participating in any negotiations, extensive discussions, contracts, letters of intent, or other arrangements of any nature with any third party or parties (other than Jacobs and AQSP) regarding a merger, consolidation, sale, purchase, acquisition, liquidation,  licensing,or other disposition of any of Cogility's businesses, software, appliances, patents, patents pending, other assets or capital stock, except only dispositions and other actions that are normal, customary or otherwise in the ordinary course of the businesses of Cogility.

  

  

  

L.  Expenses. Each Party shall bear its own costs and expenses in connection with the proposed Merger. Without limiting the generality of the foregoing, each Party shall be solely responsible for the fees and expenses owed to any accountants, lawyers, financial advisors, investment bankers or brokers employed by such party.

M. Disclosure. AQSP shall be permitted to publicly disclose the existence, terms and conditions of this Letter of Intent. Ghourdjian and Cogility acknowledge that AQSP is a public company, and that any unauthorized disclosure of any material facts regarding the Merger or Cogility could give rise to liability under applicable securities laws and regulations.

5. Stockholder Agreements.

A. In the event that all of the conditions to the closing of the Merger set forth in Section 4J above are met, then Ghourdjian and Jacobs each agrees and covenants to support and vote in favor of the Merger in his capacity as a director of Cogility, AQSP, or both, and each of the Stockholders agrees and covenants to support and vote in favor of the Merger all shares of Cogility Stock and AQSP Stock legally or beneficially owned by such Stockholder.

B.  Each of the Stockholders irrevocably agrees and covenants that at all annual or special meetings (and in all written actions and consents in lieu of meetings) of stockholders of AQSP at which members of the AQSP Board are to be elected, such Stockholder shall vote all shares of AQSP Stock legally or beneficially owned by such Stockholder as follows:

(1) At the closing of the Merger and prior to the first anniversary of the closing date of the Merger, such Stockholder shall vote all shares of AQSP Stock legally or beneficially owned by such Stockholder in favor of the election as directors of AQSP Ghourdjian, Jacobs, Bloom, Greene, James S. Jacobs, McCaffrey, Mesolella, Morrissy, General Robert Mixon (if he agrees to so serve, and if he does not, then another person designated by Ghourdjian and acceptable to Jacobs), and one other person designated by Ghourdjian and acceptable to Jacobs; and

(2) Following the first anniversary of the closing date of the Merger, such Stockholder shall vote all shares of AQSP Stock legally or beneficially owned by such Stockholder in favor of the election as directors of AQSP of slates of nominees for AQSP Board consisting of Ghourdjian or his nominee, Jacobs or his nominee, and such additional persons as shall be mutually acceptable to Ghourdjian and Jacobs as may be designated by them in writing from time to time, provided that it is understood and agreed by Ghourdjian and Jacobs that, at all times, a majority of the AQSP Board must be deemed to be “independent” of Ghourdjian and Jacobs within the meaning of the applicable rules and regulations of the U.S. Securities and Exchange Commission ("SEC").

  

  

  

C.  Each of the Stockholders irrevocably agrees and covenants that such Stockholder shall fully cooperate and take any and all actions as shall be necessary or desirable to cause any vacancy on the board of directors of AQSP caused by the death, disability, resignation or removal for cause of any member of the AQSP Board to be filled, until the next annual or special meeting (or the next written action or consent in lieu of meeting) of stockholders of AQSP, by a person who is mutually acceptable to Ghourdjian and Jacobs and who is jointly designated by them in writing.

D.  Each of the Stockholders irrevocably agrees and covenants that such Stockholder shall not take any action, nor fail to take any action, nor assist or participate in any voting arrangement, consent, approval, scheme, plan, course of action, agreement, contract, transaction or series of transactions, or other arrangement of any nature whatsoever, that could, might or would, directly or indirectly, result in any person or persons being elected, designated, named or installed as the members of the board of directors of AQSP other than the persons contemplated by Sections 5A, 5B and 5C above.

E.  Each of the Stockholders irrevocably agrees and covenants that at all annual or special meetings (and in all written actions and consents in lieu of meetings) of stockholders of AQSP at which mergers and other acquisitions are to be voted upon, such Stockholder shall vote all shares of AQSP Stock legally or beneficially owned by such Stockholder in favor of the approval of all mergers and acquisitions which have been duly approved in accordance with applicable law by the AQSP Board, and in favor of all actions contemplated by the definitive documentation in regard to such mergers and acquisitions such as, for example and without limitation, the issuance of AQSP Stock, AQSP Options, or warrants to purchase shares of AQSP Stock, and/or the borrowing of funds by AQSP, in connection with the closings of such mergers and acquisitions or the financings thereof.

F.  Each of the Stockholders irrevocably agrees and covenants that such Stockholder shall vote all shares of AQSP Stock and of Cogility Stock legally or beneficially owned by such Stockholder, and shall execute and deliver such further documents and take such further action, as may be necessary or desirable to carry out the purposes and intent of this Agreement, including, without limitation, to approve any amendments to the Certificate of Incorporation or By-Laws of Cogility or AQSP which are required by law or prudent business practices in order to make the terms of this Agreement effective and legally binding on Cogility, AQSP and their respective stockholders, board of directors and officers, or otherwise to effectuate any of the terms, conditions, provisions or purposes of this Agreement.

G. The agreements set forth in this Section 5 will be legally binding upon each of the Stockholders until the earlier to occur of Jacobs' death or the refusal of Jacobs to serve as the CEO of AQSP, unless sooner terminated by the unanimous consent of the Stockholders.

6.  Specific Performance. Each of the Parties to this Agreement acknowledges that the rights and obligations of the Stockholders, Cogility and AQSP concerning the management and affairs of Cogility and AQSP are unique, and that any failure of any Stockholder, Cogility or AQSP to perform any of such Stockholder’s, Cogility’s or AQSP's obligations under this Agreement will cause irreparable harm for which any remedies at law would be inadequate. Accordingly, each of the Stockholders, Cogility and AQSP agrees that, in the event of any actual or threatened or attempted failure of any Stockholder, Cogility or AQSP to perform any of such Stockholder’s, Cogility’s or AQSP's obligations hereunder, each of the other Parties to this Agreement shall, in addition to all other remedies, be entitled to a decree for specific performance of the provisions of this Agreement and to temporary and permanent injunctions restraining such failure or commanding performance of such obligations, without being required to show actual damage or to furnish any bond or other security.

  

  

  

7.  Notices. All notices required or permitted hereunder shall be in writing, signed by the Party giving notice or an officer thereof, and shall be deemed to have been given when actually delivered by personal delivery or by Federal Express or similar overnight courier service, or five (5) days after deposit in the United States mail, registered, with postage prepaid, addressed as follows:

If to DSGST, Ghourdjian or Cogility:

Matthew Ghourdjian

Cogility Software Corporation

111 S. Patrick Street

Alexandria, VA  22314

If to Jacobs, Bloom, Greene, James S. Jacobs, McCaffrey, Mesolella, Morrissy or AQSP:

Gerard M. Jacobs

31 N. Suffolk Lane

Lake Forest, IL  60045

8. Attorney's Fees. In the event that any action is filed to enforce any of the terms, agreements, covenants or provisions of this Agreement, the prevailing Party in such action shall be entitled to payment from the losing Party all costs and expenses, including reasonable attorney fees, court costs and ancillary expenses incurred by such prevailing Party in connection with such action.

9.  Miscellaneous.

A.  This Agreement shall inure to the benefit of and be binding upon the Parties hereto and their respective heirs, executors, personal representatives, successors and assigns.

B. This Agreement may be executed in original, via facsimile transmission, or via electronic transmission. This Agreement may be executed in any one or more counterparts, each of which shall constitute an original, no other counterpart needing to be produced and all of which, when taken together, shall constitute but one and the same instrument.

C.  This Agreement contains the entire understanding among the Parties with respect to the subject matter of this Agreement, and supersedes all prior oral or written discussions, drafts, proposals, agreements, contracts and understandings of any nature whatsoever.

D.  Any modification, amendment or waiver hereof may be made only by an instrument in writing signed by all of the Parties hereto. No delay on the part of any Party in the exercise of any right or remedy shall operate as a waiver thereof, and no single or partial exercise by any Party or any remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy.

  

  

  

E.  This Agreement shall be controlled, construed and enforced in accordance with the substantive laws of the United States and the State of Nevada, notwithstanding any conflict of law principles.

F.  Whenever possible, each provision of this Agreement shall be construed and interpreted in such a manner as to be effective and valid under applicable law. If any provision of this Agreement or the application thereof to any Party or circumstance shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition without invalidating the remainder of such provision or any other provision of this Agreement or the application of such provision to other parties or circumstances.

In Witness Whereof, the Parties have executed this Agreement, which shall be legally binding as of the first date that all of the Parties have signed this Agreement, as conclusively evidenced by the dates accompanying their respective signatures below.

 

	Deborah Sue Ghourdjian Separate Trust
	 	 
	
By: 

	/s/ Deborah Sue Ghourdjian
	 	Trustee
	 	Date: 10/14/10

 

	
By: 

	/s/ Matthew Ghourdjian
	 	Matthew Ghourdjian, in his individual capacity
	 	Date: 10/15/10

	Cogility Software Corporation
	 	 
	
By: 

	/s/ Matthew Ghourdjian
	 	
Matthew Ghourdjian, in his capacity as 

Chief Executive Officer and sole director

	 	Date: 10/15/10

	
By: 

	/s/ Gerard M. Jacobs
	 	Gerard M. Jacobs, in his individual capacity
	 	Date: 11/4/10

	Acquired Sales Corp.
	 	 
	
By: 

	/s/ Gerard M. Jacobs
	 	
Gerard M. Jacobs, in his capacity as 

Chief Executive Officer and director

	 	Date: 11/4/10

	
By: 

	/s/ Joshua A. Bloom
	 	
Joshua A. Bloom, in his capacity as 

director of Acquired Sales Corp.

	 	Date: 10/28/10

 

	
By: 

	/s/ Roger S. Greene
	 	
Roger S. Greene, in his capacity as 

director of Acquired Sales Corp.

	 	Date: 11/4/2010

 

	
By: 

	/s/ James S. Jacobs
	 	
James S. Jacobs, in his capacity as 

director of Acquired Sales Corp.

	 	Date: 10/27/10

 

	
By: 

	/s/ Michael D. McCaffrey
	 	
Michael D. McCaffrey, in his capacity as 

director of Acquired Sales Corp.

	 	Date: 10/28/10

 

	
By: 

	/s/ Vincent J. Mesolella
	 	
Vincent J. Mesolella, in his capacity as 

director of Acquired Sales Corp.

	 	Date: 10/28/10

 

	
By: 

	/s/ Richard E. Morrissy
	 	
Richard E. Morrissy, in his capacity as 

director of Acquired Sales Corp.

	 	Date: 10/28/10

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