Document:

ex101.htm

Anniston Capital, Inc.

PRIVATE MERCHANT BANKING

445 Park Avenue

New York  New York  10022

Telephone (212) 750-7755

Facsimile (212) 750-2548

August 1, 2007

Mr. Gerard Jacobs

Chairman and Chief Executive Officer

Acquired Sales Corp.

1029 East 380 North Circle

American Fork, UT  84003

Dear Mr. Jacobs:

This letter (the “Agreement”) will confirm the agreement between Acquired Sales Corp. (“AQSP”) and Anniston Capital, Inc. (“Anniston”) with respect to the services Anniston will be performing for AQSP in connection with strategic advice, one or more Transactions or Capital Introductions (as such terms are hereinafter defined) and the compensation to be paid to Anniston for such services.

1.           Services of Anniston.  During the Term (as hereinafter defined), Anniston will be, on an exclusive basis, (i) a strategic advisor to AQSP in its evaluation of operating alternatives, capital requirements, corporate structures, public relations strategies, investor relations strategies, choices of and access to trading exchanges, introductions to market-makers, and similar matters, (ii) a financial advisor to AQSP in evaluating and completing one or more Transactions and (iii) a “finder” for AQSP in connection with one or more introductions to investors (collectively, the “Capital Introductions”) for the purpose of completing one or more sales of equity and/or debt securities of AQSP to one or more third parties (an “Equity Investment” or a “Debt Investment,” respectively, and collectively, an “Investment”).  Anniston will, except as specifically provided for herein, assist AQSP, its attorneys, accountants and other advisors, in preparing for and negotiating one or more Transactions with any counterparties to a Transaction and their representatives.

2.           Compensation of Anniston.  In connection with Anniston’s services, AQSP will deliver to Anniston or its designees, upon the execution of this Agreement, (i) a warrant to acquire 175,000 shares of the common stock of AQSP at an exercise price of $0.10 per share (the “Retainer Warrants,” which will be in substantially the form of Exhibit A hereto) and (ii) a cash fee of $20,000 (the “Retainer Fee”).

 

 

  

  

  

 

 

        In addition, in the event of one or more completed Transactions or Investments during the Term, Anniston will be entitled to (i) an amount payable in cash equal to six percent (6%) of the gross proceeds to AQSP of an Equity Investment (the “Equity Investment Amount”) and three percent (3%) of a Debt Investment (the “Debt Investment Amount” and, collectively with the Equity Investment Amount, the “Investment Amount”) (the “Success Fee”), (ii) a warrant to acquire a number of shares of common stock of AQSP equal to three percent (3%) of the Investment Amount divided by the price per share of the Equity Investment, at an exercise price per share equal to the price per share of the Equity Investment (the “Success Warrant,” which will be in substantially the form of Exhibit A hereto), (iii) an amount payable in cash equal to two percent (2%) of the Consideration in a Transaction (the “M&A Fee”), which shall not be payable with respect to the proposed acquisition of Findology Interactive Media, Inc. (“Findology”).  In the event there are ongoing negotiations at the end of the Term, Anniston’s entitlement to the Success Fee, Success Warrant and M&A Fee will continue with respect to Transactions or Investments completed with counterparties to such negotiations. Notwithstanding any termination of this Agreement, Anniston will be entitled to the Success Fee, Success Warrant and M&A Fee in the event that, at any time within two years after the date of such termination, AQSP enters into an agreement that results in the consummation of a Transaction or Investment or consummates a Transaction or Investment with any counterparty (i) introduced to AQSP by Anniston or (ii) which AQSP had requested Anniston to contact.  In order to determine the counterparties to which the foregoing applies, (x) Anniston will, on a weekly basis, notify AQSP in writing of the name and contact information for each counterparty Anniston has contacted and (y) AQSP will make all requests for Anniston to contact a counterparty in writing, transmitted by email or facsimile.  The total list of counterparties identified under (x) and (y) in the preceding sentence shall be updated weekly and constitute the counterparties for which Anniston will be due the Success Fee, Success Warrant and M&A Fee in the event of one or more completed Transactions or Investments.

The Success Fee and M&A Fee will be payable via cashier’s check or wire transfer and will be payable by AQSP to Anniston or its designee(s) upon the closing of each Transaction or Investment (except as set forth in the following sentence). If the Consideration or Investment Amount is subject to increase by contingent payments related to future events or by the exercise of options, the portion of the Success Fee relating thereto shall be calculated and paid to Anniston or its designee(s) when, as and if such payments are made. The Success Warrant will be delivered by AQSP to Anniston or its designee(s) upon the first closing of any Transaction or Investment.

The Fees do not include out-of-pocket expenses advanced on behalf of AQSP by Anniston, such as travel, courier services, printing, etc. Upon the execution of this Agreement, AQSP shall advance to Anniston $10,000 to be applied against expenses, which will be accounted for on a weekly basis by Anniston to AQSP in writing. Amounts in excess of the advance will be billed separately as incurred, with payment by AQSP due upon receipt.

 

 

  

  

  

 

3.           Term and Breach Provisions.  This Agreement and the exclusivity provisions herein shall have a term beginning on the date this letter is executed by you and ending on December 31, 2007 (the “Term”), provided that, in the event the acquisition of Findology is completed by AQSP, the Term shall extend to August 1, 2008. In the event of (i) any breach of Anniston’s rights of exclusivity hereunder and (ii) the completion of a Transaction or Investment resulting from such breach, with a closing before or after the end of the Term, AQSP shall pay to Anniston a “Breach Fee” consisting of (i) the Success Fee which would have been payable on such Investment, (ii) the Success Warrant which would have been payable on such Investment and (iii) the M&A Fee which would have been payable on such Transaction.

4.           Certain Definitions.

a.           AQSP.  The term “AQSP” as used in this Agreement will include AQSP and all businesses, partnerships, firms, corporations, or business entities controlled by AQSP.

b.           Consideration.  In the event of a Transaction, the term “Consideration” as used in this Agreement means the cash consideration paid to a counterparty or its shareholders, plus the face amount of indebtedness for borrowed money of a counterparty assumed by AQSP, plus any new indebtedness issued to a counterparty or its shareholders, plus the fair market value (upon the closing of the Transaction) of the equity securities of AQSP issued to such counterparty or its shareholders.

c.           Equity Investment.  An Equity Investment shall include funds used to purchase (i) common stock of AQSP, (ii) preferred stock of AQSP, (iii) debt instruments that are convertible into equity securities of AQSP, and (iv)any other AQSP obligations in which the holder has rights to acquire AQSP equity of any kind, even if in addition to a right of repayment of debt.

d.           Fee.  The term “Fee” as used in this Agreement will mean (i) the Retainer Warrant, (ii) the Retainer Fee, (iii) the Success Fee, (iv) the Success Warrant, (v) the M&A Fee, and (vi) the Breach Fee. No Fee payable to any other person, by AQSP or any other entity, in connection with any Transaction, Investment, or breach hereunder, shall reduce or otherwise affect any Fee payable hereunder. Once earned, all Fees shall not be refundable or subject to reduction. If requested by Anniston, AQSP shall provide to Anniston a bound copy of the closing documents for each Transaction or Investment at AQSP’s expense. AQSP shall consent to Anniston’s public announcement and/or advertisement of its role as strategic advisor to AQSP, financial advisor to AQSP with respect to any completed Transaction or “finder” for AQSP with respect to any Investment.

e.           Transaction.  The term “Transaction” as used in this Agreement will mean any method by which AQSP acquires, in one transaction or a series of transactions, an interest in the stock, assets or other equity or debt securities of a counterparty, including without limitation, merger, purchase of substantially all of the assets, recapitalization, the formation of a partnership, joint venture or other technique or device employed to accomplish a change in the capital structure, ownership, management or control of a counterparty or all or any material portion of its assets for the benefit of AQSP.

 

 

  

  

  

 

5.           Other matters.

a.           Indemnification.  AQSP will indemnify and hold Anniston, its officers, directors, employees and affiliates, including BAJA Advisors, LLC (each an “Indemnified Party”), harmless with respect to any liability, claim, damage and expense (including reasonable attorneys’ fees) related to any claims arising from any information furnished to Anniston by AQSP, or arising from any representation, warranty or covenant made in a definitive agreement to consummate the Transaction by AQSP to a counterparty provided, however, there shall be excluded from such indemnification any such claims, losses, damages, liabilities, costs or expenses that arise out of or are based upon any action or failure to act by any Indemnified Party, other than an action or failure to act undertaken at the request or with the consent of AQSP, that is found in a final judicial determination (or a settlement tantamount thereto) to constitute bad faith, willful misconduct or gross negligence on the part of any Indemnified Party.

In case any proceeding shall be instituted in respect of which an Indemnified Party may seek indemnification, such Indemnified Party shall promptly notify AQSP, but the failure to so notify AQSP will not relieve it from any liability that it may have hereunder or otherwise, except to the extent such failure materially prejudices the rights of AQSP with respect to such proceeding. AQSP, upon the request of the Indemnified Party, shall retain counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party and any others AQSP may designate in such proceeding and shall pay as incurred the fees and expenses of such counsel related to such proceeding. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel at its own expense, except that AQSP shall pay as they are incurred the fees and expenses of one counsel retained by all of the Indemnified Parties in the event that (i) AQSP and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both AQSP and the Indemnified Party and representation of both parties by the same counsel would be inappropriate in the reasonable opinion of the Indemnified Party, due to actual or potential differing interests between them.

Each Indemnified Party also agrees, so long as AQSP has complied in full with its obligations under this Agreement, not to settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder without the prior written consent of AQSP (which consent shall not be unreasonably withheld).

 

  

  

  

 

 

b.           Confidentiality. 

 

           (i)            Any financial advice, written or oral, rendered by Anniston pursuant to this Agreement is intended solely for the benefit and use of AQSP in considering the matters to which this agreement relates, and AQSP agrees that such advice may not be disclosed publicly or made available to third parties except, (i) with the prior written consent of Anniston, which consent shall not be unreasonably withheld, (ii) such advice may be disclosed to the extent compelled by law, rule or regulation or judicial or administrative process or proceeding, or (iii) to the extent such advice is already publicly available other than in violation of this Agreement.

(ii)           This Agreement, the identity of any counterparty, the possibility of a Transaction or Investment, the fact that discussions or negotiations have taken or may take place, or any other facts with respect to a Transaction or Investment, including the status thereof will be kept confidential and shall not, without AQSP’s prior consent, be disclosed by Anniston to any third party and shall not be used by Anniston other than in connection with the possible Transaction or Investment, except (i) Anniston may disclose the information to its affiliates and each of their employees, shareholders, partners, members, affiliates, agents, representatives, accountants and attorneys on a need to know basis provided such other persons are informed by Anniston of the confidential nature of this Agreement, identity of any counterparty and a possible Transaction or Investment and agree in writing with Anniston not to disclose this Agreement, identity of any counterparty and a possible Transaction or Investment without AQSP’s prior written consent, or (ii) this Agreement, identity of any counterparty and a possible Transaction or Investment may be disclosed to the extent compelled by law, rule or regulation or judicial or administrative process or proceeding.

c.           Independent Contractor.  Anniston has been retained under this Agreement as an independent contractor, and it is understood and agreed that this Agreement does not create a fiduciary relationship between Anniston and AQSP.

d.           Representation.  Anniston hereby represents that it will be acting solely in the capacity of strategic advisor to AQSP, financial advisor for mergers and acquisitions and as a “finder” with respect to Capital Introductions, and will not sell or offer to sell any securities of AQSP. Anniston hereby agrees that its activities will be limited to those consistent with its role as a strategic advisor, financial advisor for mergers and acquisitions and as a “finder” with respect to Capital Introductions, and will not include any actions which would be considered by the NASD, SEC or any recognized securities exchange to be brokerage activities which would require its registration as a broker/dealer.

e.           Governing Law.  This Agreement and any claim related directly or indirectly to this Agreement (including any claim concerning advice provided pursuant to this agreement) shall be governed and construed in accordance with the laws of the State of New York (without regard to the conflicts of law provisions thereof).

f.           Jurisdiction.  No such claim shall be commenced, prosecuted or continued in any forum other than the courts of the State of New York located in the City and County of New York or in the United States District Court for the Southern District of New York, and each of the parties hereby submits to the jurisdiction of such courts. Each of Anniston and AQSP hereby waives on behalf of itself and its successors and assigns any and all right to argue that the choice of forum provision is or has become unreasonable in any legal proceeding. Each of Anniston and AQSP waives all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) related to or arising out of the engagement of Anniston pursuant to, or the performance by Anniston of the services contemplated by this agreement.

 

 

  

  

  

 

g.           Authority.  The execution of this letter agreement will constitute a representation by AQSP that the execution and delivery of this letter agreement and the performance by AQSP of its obligations hereunder have been duly authorized.

h.           No Definitive Agreement.  AQSP shall have the right to reject or accept any possible Transaction, Investment or proposal for any reason whatsoever, at any time, in its sole discretion, and to terminate negotiations with any counterparty concerning a possible Transaction or Investment at any time for any reason whatsoever.

i.           Entire Agreement; Amendment.  This Agreement constitutes the full, complete and final expression of the parties’ understanding with respect to the subject matter hereof and can only be amended by a writing signed by the parties hereto.

If this Agreement correctly sets forth our agreement on the matters covered herein, please so indicate by signing and returning the enclosed copy of this letter, and upon such execution this Agreement will constitute a legally binding agreement between us, enforceable in accordance with its terms.

Very truly yours,

Anniston Capital, Inc.

By:     /s/ Michael A. Asch

Michael A. Asch

President

Accepted and agreed to

On August 1, 2007

Acquired Sales Corp.

By:           /s/ Gerard M. Jacobs

Its:           CEOex102.htm

NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

ACQUIRED SALES CORP.

WARRANT

Warrant No. 1 Date of Original Issuance: August 1, 2007

Acquired Sales Corp., a Nevada corporation (the “Company”), hereby certifies that, for value received, Anniston Capital, Inc. or its registered assigns (the “Holder”), is entitled to purchase from the Company up to a total of 87,500 shares of common stock, $0.001 par value per share (the “Common Stock”), of the Company (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise price equal to $0.10 per share (as adjusted from time to time as provided in Section 8, the “Exercise Price”), at any time and from time to time from and after the date hereof and through and including December 31, 2010 (the “Expiration Date”), and subject to the following terms and conditions:

1.           Registration of Warrant.  The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company nay deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

2.           Registration of Transfers.  The Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address specified herein. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant (any such new Warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant.

 

 

  

  

  

 

3.           Exercise and Duration of Warrants.  This Warrant shall be exercisable by the registered Holder at any time and from time to time on or after the date hereof to an including the Expiration Date. At 5:30 p.m., New York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value.

 

4.           Delivery of Warrant Shares.

 

(a)           To effect exercises hereunder, the Holder shall not be required to physically surrender this Warrant unless the aggregate Warrant Shares represented by this Warrant is being exercised. Upon delivery of the attached Exercise Notice to the Company (with the attached Warrant Shares Exercise Log) at its address for notice set forth herein and upon payment of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder, the Company shall promptly (but in no event later than three Trading Days after the Date of Exercise (as defined herein)) issue and deliver to the Holder, a certificate for the Warrant Shares issuable upon such exercise, which, unless otherwise required by law, shall be free of restrictive legends. The Company shall, upon request of the Holder and subsequent to the date on which a registration statement covering the resale of the Warrant Shares has been declared effective by the Securities and Exchange Commission, use commercially reasonable efforts to deliver Warrant Shares hereunder electronically through the Depository Trust Corporation or another established clearing corporation performing similar functions, if available, provided, that, the Company may, but will not be required to change its transfer agent if its current transfer agent cannot deliver Warrant Shares electronically through the Depository Trust Corporation. A “Date of Exercise” means the date on which the Holder shall have delivered to the Company: (i) the Exercise Notice (with the Warrant Exercise Log attached to it), appropriately completed and duly signed and (ii) if such Holder is not utilizing the cashless exercise provisions set forth in this Warrant, payment of the Exercise Price for the number of Warrant Shares so indicated by the Holder to be purchased.

(b)           The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

 

  

  

  

 

5.           Charges, Taxes and Expenses.  Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

6.           Replacement of Warrant.  If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity (which shall not include a surety bond), if requested. Applicants for a New Warrant such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.

7.           Reservation of Warrant Shares.  The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 8). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable.

8.           Certain Adjustments.  The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 8.

(a)           Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.

 

 

  

  

  

 

(b)           Fundamental Transactions.  If, at any time while this Warrant is outstanding, (1) the Company effects any merger or consolidation of the Company with or into another Person, (2) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (3) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (4) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant (the “Alternate Consideration”). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. At the Holder’s option and request, any successor to the Company or surviving entity in such Fundamental Transaction shall, either (1) issue to the Holder a new warrant substantially in the form of this Warrant and consistent with the foregoing provisions and evidencing the Holder’s right to purchase the Alternate Consideration for the aggregate Exercise Price upon exercise thereof, or (2) purchase the Warrant from the Holder for a purchase price, payable in cash within five Trading Days after such request (or, if later, on the effective date of the Fundamental Transaction), equal to the Black Scholes value of the remaining unexercised portion of this Warrant on the date of such request. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph (b) and insuring that the Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

(c)           Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this Section, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.

 

 

  

  

  

 

(d)           Calculations.  All calculations under this Section 8 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

(e)           Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 8, the Company at its expense will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s Transfer Agent.

(f)           Notice of Corporate Events.  If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction, at least 10 calendar days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to insure that the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.

9.           Payment of Exercise Price.  The Holder may pay the Exercise Price in one of the following manners:

(a)           Cash Exercise. The Holder may deliver immediately available funds; or

(b)           Cashless Exercise.  The Holder may notify the Company in an Exercise Notice of its election to utilize cashless exercise, in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows:

X = Y [(A-B)/A]

where:

X = the number of Warrant Shares to be issued to the Holder.

Y = the number of Warrant Shares with respect to which this Warrantis being exercised.

A = the average of the closing prices for the five Trading Daysimmediately prior to (but not including) the Exercise Date.

B = the Exercise Price.

For purposes of Rule 144 promulgated under the Securities Act, it  is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued.

 

 

  

  

  

 

10.           No Rights as Stockholder. Until the exercise of this Warrant, the Holder shall not have or exercise any rights by virtue hereof as a stockholder of the Company.

11.           No Fractional Shares.  No fractional shares of Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares which would, otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the closing price of one Warrant Share as reported by the applicable Trading Market on the date of exercise.

12.           Notices. Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 5:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: (i) if to the Company, to Acquired Sales Corp., 31 N. Suffolk, Lake Forest, IL, Attention: Chairman, or such other address as the Company shall so notify the Holder, or (ii) if to the Holder, to the address or facsimile number appearing on the Warrant Register or such other address or facsimile number as the Holder may provide to the Company in accordance with this Section.

 

 

  

  

  

 

13.           Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon 10 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

	
       14.  

	
Miscellaneous.

(a)           This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder and their successors and assigns.

(b)           All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of this Warrant and the transactions herein contemplated (“Proceedings”) (whether brought against a party hereto or its respective Affiliates, employees or agents) may be commenced non-exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Warrant or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of this Warrant, then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

 

 

  

  

  

 

 

(c)           The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

(d)           In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefore, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

ACQUIRED SALES CORP.

By:  /s/ Gerard M. Jacobs

Name:  Gerard M Jacobs

Title:  CEO

  

  

  

 

ACQUIRED SALES CORP.

WARRANT ORIGINALLY ISSUED AUGUST 1, 2007 WARRANT NO. 1

EXERCISE NOTICE

To Acquired Sales Corp.:

The undersigned hereby irrevocably elects to purchase _______________ shares of Common Stock pursuant to the above captioned Warrant, and, if such Holder is not utilizing the cashless exercise provisions set forth in the Warrant, encloses herewith $____________ in cash, certified or official bank check or checks or other immediately available funds, which sum represents the aggregate Exercise Price (as defined in the Warrant) for the number of shares of Common Stock to which this Exercise Notice relates, together with any applicable taxes payable by the undersigned pursuant to the Warrant.

By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving effect to the exercise evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock (determined in accordance with Section 13(d) of the Securities Exchange Act of 1934) permitted to be owned under Section 10 of this Warrant to which this notice relates.

The undersigned requests that certificates for the shares of Common Stock issuable upon this exercise be issued in the name of

PLEASE INSERT SOCIAL SECURITY OR

TAX IDENTIFICATION NUMBER

 

                      (Please print name and address)

 

 

  

  

  

 

Warrant Shares Exercise Log

Date        Number of Warrant Shares                                        Number of Warrant                           Number of Warrant Shares

Available to be Exercised                                           Shares Exercised                                Remaining to be Exercised

 

 

  

  

  

 

ACQUIRED SALES CORP.

WARRANT ORIGINALLY ISSUED AUGUST 1, 2007 WARRANT NO. 1

FORM OF ASSIGNMENT

[To be completed and signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ____________________________________________ the right represented by the above-captioned Warrant to purchase _________________ shares of Common Stock to which such Warrant relates and appoints ________________ attorney to transfer said right on the books of the Company with full power of substitution in the premises.

Dated: ______________________, _________

____________________________________

(Signature must conform in all respects to

name of holder as specified on the face of the

Warrant)

____________________________________

Address of Transferee

____________________________________

____________________________________

In the presence of:

________________________________

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