Document:

Exhibit 10.1

Agreement

 

 

by and among

 

 

CGI HOLDING CORPORATION
d/b/a THINK PARTNERSHIP INC.

 

MOREX MERGER SUB, LLC

 

MOREX MARKETING GROUP, LLC.

 

LLOYD ECKER

 

ROBERT MOORE

 

TINA MACNICHOLL

 

and

 

WHAT IF HOLDINGS, LLC

 

 

DATED AS OF JANUARY 20,
2006

 

 

Table of Contents

 

	
   

  	
  Page

  
	
  ARTICLE I
  DEFINITIONS

  	
  2

  
	
   

  	
   

  
	
  ARTICLE II
  THE MERGER

  	
  11

  
	
  2.1

  	
  The Merger

  	
  11

  
	
  2.2

  	
  Effective Time

  	
  11

  
	
  2.3

  	
  Effect of the Merger

  	
  12

  
	
  2.4

  	
  Articles of Organization and Operating Agreement

  	
  12

  
	
  2.5

  	
  Managers and Officers

  	
  12

  
	
  2.6

  	
  Effect on Morex’s Capital Structure

  	
  12

  
	
  2.7

  	
  Stock Options; Warrants

  	
  14

  
	
  2.8

  	
  Capital Structure of Morex Merger Sub

  	
  14

  
	
  2.9

  	
  Adjustments to the Consideration

  	
  14

  
	
  2.10

  	
  Taking Necessary or Further Action

  	
  14

  
	
  2.11

  	
  Directors and Officers Liability; Indemnification and
  Insurance

  	
  15

  
	
   

  	
   

  
	
  ARTICLE III
  RESTRICTIONS ON TRANSFER: REGISTRATION 

  	
  15

  
	
  3.1

  	
  Restrictions on Transfer

  	
  15

  
	
  3.2

  	
  Registration

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV
  REPRESENTATIONS AND WARRANTIES OF THE MEMBERS AND MOREX

  	
  15

  
	
  4.1

  	
  Organization and Qualification

  	
  15

  
	
  4.2

  	
  Subsidiaries

  	
  16

  
	
  4.3

  	
  Charter, Operating Agreement and Corporate Records

  	
  16

  
	
  4.4

  	
  Authorization; Enforceability

  	
  16

  
	
  4.5

  	
  No Violation or Conflict

  	
  16

  
	
  4.6

  	
  Governmental Consents and Approvals

  	
  16

  
	
  4.7

  	
  Capital Structure

  	
  17

  
	
  4.8

  	
  Financial Statements

  	
  17

  
	
  4.9

  	
  Conduct in the Ordinary Course; Absence of Changes

  	
  17

  
	
  4.10

  	
  Property

  	
  17

  
	
  4.11

  	
  Personal Property

  	
  19

  
	
  4.12

  	
  Approval of Managers

  	
  19

  
	
  4.13

  	
  Insurance

  	
  20

  
	
  4.14

  	
  Permits

  	
  20

  
	
  4.15

  	
  Taxes

  	
  20

  
	
  4.16

  	
  Labor Matters

  	
  21

  
	
  4.17

  	
  Employees and Related Agreements; ERISA

  	
  22

  
	
  4.18

  	
  Environmental and Health/Safety Matters

  	
  24

  
	
  4.19

  	
  Certain Interests

  	
  26

  
	
  4.20

  	
  Litigation

  	
  26

  

 

i

 

	
  4.21

  	
  Intellectual Property

  	
  26

  
	
  4.22

  	
  Inventories

  	
  27

  
	
  4.23

  	
  Receivables

  	
  27

  
	
  4.24

  	
  Residency; Investment Sophistication; Backgrounds

  	
  27

  
	
  4.25

  	
  Brokers

  	
  27

  
	
  4.26

  	
  Cash on Hand/Banks and Brokerage Accounts

  	
  28

  
	
  4.27

  	
  Liabilities and Indebtedness

  	
  28

  
	
  4.28

  	
  Contracts

  	
  28

  
	
  4.29

  	
  Spyware/Adware

  	
  29

  
	
  4.30

  	
  Material Information

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE V
  REPRESENTATIONS AND WARRANTIES OF THK AND MOREX MERGER SUB

  	
  30

  
	
  5.1

  	
  Organization and Qualification

  	
  30

  
	
  5.2

  	
  Capital Structure

  	
  30

  
	
  5.3

  	
  Authorization; Enforceability

  	
  31

  
	
  5.4

  	
  No Violation or Conflict

  	
  31

  
	
  5.5

  	
  Governmental Consents and Approvals

  	
  31

  
	
  5.6

  	
  Litigation

  	
  32

  
	
  5.7

  	
  Interim Operations

  	
  32

  
	
  5.8

  	
  Brokers

  	
  32

  
	
  5.9

  	
  Material Information

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI
  CLOSING DELIVERIES

  	
  32

  
	
  6.1

  	
  Morex/Member Deliveries

  	
  32

  
	
  6.2

  	
  THK/Morex Merger Sub Deliveries

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII
  EMPLOYMENT MATTERS

  	
  34

  
	
  7.1

  	
  Current Employees

  	
  34

  
	
  7.2

  	
  Management of Surviving LLC

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII
  EARNOUT .

  	
  36

  
	
  8.1

  	
  Earnout

  	
  36

  
	
  8.2

  	
  Calculation of Earnout Payments

  	
  36

  
	
  8.3

  	
  Form of Earnout Payments

  	
  37

  
	
  8.4

  	
  THK Earnout Covenants

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX
  INDEMNIFICATION

  	
  38

  
	
  9.1

  	
  Survival of Representations and Warranties

  	
  38

  
	
  9.2

  	
  Indemnification

  	
  38

  
	
  9.3

  	
  Third Party Claim

  	
  39

  
	
  9.4

  	
  Set-Off

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE X
  TAX MATTERS

  	
  40

  
	
  10.1

  	
  Tax Returns

  	
  40

  
	
  10.2

  	
  Contest Provisions

  	
  41

  
	
  10.3

  	
  Assistance and Cooperation

  	
  42

  

 

ii

 

	
  ARTICLE XI
  MISCELLANEOUS

  	
  42

  
	
  11.1

  	
  Notices

  	
  42

  
	
  11.2

  	
  Entire Agreement

  	
  43

  
	
  11.3

  	
  Binding Effect

  	
  43

  
	
  11.4

  	
  Assignment

  	
  44

  
	
  11.5

  	
  Modifications and Amendments

  	
  44

  
	
  11.6

  	
  Waivers

  	
  44

  
	
  11.7

  	
  No Third Party Beneficiary

  	
  44

  
	
  11.8

  	
  Severability

  	
  44

  
	
  11.9

  	
  Publicity

  	
  44

  
	
  11.10

  	
  Governing Law

  	
  45

  
	
  11.11

  	
  Counterparts; Facsimile Signatures

  	
  45

  
	
  11.12

  	
  Headings

  	
  45

  
	
  11.13

  	
  Expenses

  	
  45

  
	
  11.14

  	
  Further Assurances

  	
  45

  
	
  11.15

  	
  Arbitration

  	
  45

  
	
  11.16

  	
  Incorporation by Reference

  	
  45

  

 

iii

 

EXHIBITS

 

	
  Exhibit A

  	
   

  	
  Form of Registration Rights Agreement

  
	
  Exhibit B

  	
   

  	
  Form of Warrant Agreement

  
	
  Exhibit C

  	
   

  	
  Form of Employment Agreement

  
	
  Exhibit D

  	
   

  	
  Irrevocable Letter of Instruction to Stock Transfer Agent

  

 

SCHEDULES

 

	
  Schedule 2.2

  	
  Certificate of Merger and Plan of Merger

  
	
  Schedule 4.1

  	
  Morex Organization & Qualification

  
	
  Schedule 4.8

  	
  Financial Statements

  
	
  Schedule 4.9

  	
  Ordinary Course Exceptions

  
	
  Schedule 4.10(a)

  	
  Owned Property

  
	
  Schedule 4.10(b)

  	
  Owned Property Leases

  
	
  Schedule 4.11

  	
  Tangible Personal Property

  
	
  Schedule 4.13

  	
  Insurance

  
	
  Schedule 4.14

  	
  Permits

  
	
  Schedule 4.15

  	
  Taxes

  
	
  Schedule 4.17

  	
  Employees

  
	
  Schedule 4.18(h)

  	
  Environmental and Health/Safety Matters

  
	
  Schedule 4.18(i)

  	
  Business Assets Containing PCBs/Asbestos

  
	
  Schedule 4.18(j)

  	
  Locations of Hazardous Substances

  
	
  Schedule 4.19(a)

  	
  Certain Interests

  
	
  Schedule 4.21

  	
  List of Domain Names

  
	
  Schedule 4.25

  	
  Brokers

  
	
  Schedule 4.26

  	
  Cash on hand/Banks and Brokerage Accounts

  
	
  Schedule 4.28

  	
  Contracts

  
	
  Schedule 5.1

  	
  THK/Morex Merger Sub Organization and Qualification

  
	
  Schedule 5.2(a)

  	
  Capital Structure

  
	
  Schedule 5.2(b)

  	
  Capital Contribution Obligations

  
	
  Schedule 5.5

  	
  Governmental Consents and Approvals

  
	
  Schedule 5.6

  	
  Litigation

  
	
  Schedule 5.9

  	
  Material Information

  
	
  Schedule 6.1(d)

  	
  Morex Employment Agreements

  
	
  Schedule 7.1

  	
  Employee Salary Letter

  

 

iv

 

AGREEMENT

 

This
Agreement (this “Agreement”) made and entered into as of this 20th
day of January, 2006, by and among CGI HOLDING CORPORATION, d/b/a THINK
PARTNERSHIP INC., a Nevada corporation (“THK”), MOREX MERGER SUB, LLC, a
New York limited liability company and wholly owned subsidiary of THK (“Morex
Merger Sub”), MOREX MARKETING GROUP, LLC., a New York limited liability
company (“Morex”), Lloyd Ecker (“LE”), Robert Moore (“RM”),
Tina MacNicholl (“TM”) and What if holdings, LLC (“WIH” and,
together with LE, RM and TM, the “Members”).  THK, Morex Merger Sub, Morex and the Members
are sometimes referred to herein each, individually, as a “Party” and,
collectively, as the “Parties.”

 

WITNESSETH:

 

WHEREAS,
Morex is an online marketing company specializing in gathering mother and father-to-be
names and presenting them with baby related offers (collectively, the “Business”);
and

 

WHEREAS,
the board of directors, shareholders and members (to the extent required) of
each of THK, Morex Merger Sub and Morex have each approved this Agreement and
the merger of Morex Merger Sub with and into Morex (the “Merger”) on the
terms and conditions set forth herein, in accordance with applicable laws.

 

NOW,
THEREFORE, in consideration of the promises and the mutual covenants,
representations and warranties herein contained, and for other good and
valuable consideration, the receipt, adequacy and legal sufficiency of which
are hereby mutually acknowledged, and intending to be legally bound, the
Parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

In
addition to terms defined elsewhere in this Agreement, the following terms when
used in this Agreement shall have the respective meanings set forth below:

 

“2006
Earnout Payment” is defined in Section 8.1.

 

“2007
Earnout Payment” is defined in Section 8.1.

 

“2008
Earnout Payment” is defined in Section 8.1.

 

“2009
Earnout Payment” is defined in Section 8.1.

 

“Accelerated Payment” means the difference
between (i) an amount equal to six (6) times the aggregate pre-tax
earnings of Morex and Catamount for the trailing twelve-month period ended on September 30,
2005, calculated in the manner provided for in Section 2.6(b) (the “9/30
Combined Pre-Tax Earnings”), minus (ii) the Closing Consideration
(which the Parties acknowledge to be equal to six times the aggregate pre-tax
earnings of Morex and Catamount for the trailing twelve-month period ended June 30,
2005, hereafter referred to as the “6/30

 

2

 

Combined Pre-Tax Earnings”).  The pre-tax earnings of
Morex for the trailing twelve-month period ended on June 30, 2005, which
the parties acknowledge to be equal to Two Million Eight Hundred Ninety Four
Thousand Eight Hundred Fourteen Dollars ($2,894,814), shall be referred to as
the “6/30 Morex Pre-Tax Earnings”. 
The pre-tax earnings of Catamount for the trailing twelve-month period
ended on June 30, 2005, which the parties acknowledge to be equal to Two
Hundred Fifty One Thousand One Hundred Twelve Dollars ($251,112), shall be
referred to as the “6/30 Catamount Pre-Tax Earnings”.

 

“Action”
means any claim, demand, action, cause of action, chose in action, right of
recovery, right of set-off, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.

 

“Affiliate”
means, with respect to a specified Person, any other Person that, directly or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with the Person, and without limiting the generality of
the foregoing, includes, with respect to the specified Person:  (a) any other Person which beneficially
owns or holds 10% or more of the outstanding voting securities or other
securities convertible into voting securities of the Person, (b) any other
Person of which the specified Person beneficially owns or holds 10% or more of
the outstanding voting securities or other securities convertible into voting
securities, or (c) any director, officer or employee of the Person.

 

“Aggregate
Earnings” means the aggregate pre-tax earnings of Morex Surviving LLC (or
of Catamount and Morex, as the case may be) during the applicable measurement
period that is provided for in Section 8.1 as certified, from time to
time, by independent registered public accountants selected by THK but
excluding (a) the amount of any compensation paid to the persons set forth
on Schedule 6.1(d) that exceeds the amount of compensation
provided under the employment agreements entered into with such persons at
Closing, and (b) the amount of any expense of THK which is allocated or otherwise
charged to Morex Surviving LLC other than (1) expenses incurred by THK but
allocated and charged to Morex Surviving LLC and directly related to preparing
the financial statements of Morex or Morex Surviving LLC or to determining or
certifying the Aggregate Earnings for any period, or (2) expenses or other
charges incurred by THK and arising from or related to any claim asserted by or
against Morex or Morex Surviving LLC.

 

“Business”
is defined in the recitals.

 

“Business
Assets” is defined in Section 4.18(a).

 

“Business
Day” means any day other than a Saturday, Sunday or other day on which
banks are required or authorized to be closed in the City of Chicago, Illinois.

 

“Cash
Consideration” is defined in Section 2.6.

 

“Catamount” means, collectively, The Catamount
Group LLC, Plan Bee, LLC, and Everest Management LLC, each a Connecticut
limited liability company.

 

3

 

“CERCLA”
means the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended through the date hereof and any regulations promulgated
thereunder.

 

“Claims
of Any Nature” mean Liens, obligations, claims and encumbrances, actual or
contingent, known or unforeseen, including but not limited to any loan, claims
for salary, bonuses or commissions, unpaid payroll or other Taxes, pension
obligations, claims alleging discrimination or harassment, claims alleging
breach of contract, credit card chargebacks in excess of $1,000, lawsuits,
stock options, stock warrants, phantom stock plans, stock appreciation rights
or plans, deferred compensation agreements, purchase agreements that cannot be
cancelled by Morex or Morex Surviving LLC, consulting agreements, employment
agreements other than the employment agreements referred to in Section 6(d)(i),
severance agreements or “change of control” agreements of any nature, and any
other liabilities of any nature whatsoever.

 

“Closing”
is defined in Section 2.1.

 

“Closing
Date” is defined in Section 2.1. 
The Closing shall be held at the Law Offices of Steven M. Gerber, 666
Fifth Avenue, 26th Floor, New York, NY 10103, unless another place
is agreed to in writing by the Parties.

 

“Closing
Date FMV” shall mean $2.18.

 

“Code”
shall mean the Internal Revenue Code of 1986, as amended.

 

“Company
Financials” is defined in Section 4.8.

 

“Contract”
means any contract, plan, undertaking, understanding, agreement, license,
lease, note, mortgage or other binding commitment, whether written or oral.

 

“Copyrights”
mean all copyrights (registered or otherwise) and registrations and
applications for registration thereof, and all rights therein provided by
multinational treaties or conventions.

 

“Court”
means any court or arbitration tribunal of the United States, any domestic
state, or any foreign country, and any political subdivision thereof.

 

“Database”
means all data and other information recorded, stored, transmitted and
retrieved in electronic form.

 

“Documents”
means this Agreement together with the Certificate of Merger and Plan of
Merger, the Schedules and Exhibits hereto and the other agreements, documents
and instruments required or contemplated to be executed in connection herewith.

 

“Earnout
Consideration” is defined in Section 2.6.

 

4

 

“Earnout
Payment” and “Earnout Payments” are defined in Section 8.1.

 

“Earnout
Shares” is defined in Section 8.3.

 

“Effective
Time” is defined in Section 2.2.

 

“Employee
Plans” means all employee benefit plans (as defined in Section 3(3) of
ERISA) and all bonus, stock or other security option, stock or other security
purchase, stock or other security appreciation rights, incentive, deferred
compensation, retirement or supplemental retirement, severance, golden
parachute, vacation, cafeteria, dependent care, medical care, employee
assistance program, education or tuition assistance programs, insurance and
other similar fringe or employee benefit plans, programs or arrangements, and
any current or former employment or executive compensation or severance
agreements, written or otherwise, which have ever been sponsored or maintained
or entered into for the benefit of, or relating to, any present or former
employee or director of Morex, or any trade or business (whether or not
incorporated) which is a member of a controlled group or which is under common
control with Morex, within the meaning of Section 414 of the Code (an “ERISA
Affiliate”), whether or not such plan is terminated.

 

“Employee
Salaries Letter” is defined in Section 4.16(a).

 

“Environmental
Law” means, as enacted and in effect on or prior to the Closing Date, all
federal, state, regional or local statutes, laws, rules, regulations, codes,
orders, plans, injunctions, decrees, rulings, and changes or ordinances or
judicial or administrative interpretations thereof, any of which govern (or
purport to govern) or relate to pollution, protection of the environment,
public health and safety, air emissions, water discharges, hazardous or toxic
substances, solid or hazardous waste or occupational health and safety, as any
of these terms are or may be defined in such statutes, laws, rules,
regulations, codes, orders, plans, injunctions, decrees, rulings and changes or
ordinances, or judicial or administrative interpretations thereof, including,
without limitation, the United States Department of Transportation Table (49
C.F.R. 172.101) or by the Environmental Protection Agency as hazardous
substances (40 C.F.R. Part 302) and any amendments thereto; the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended by the Superfund Amendment and Reauthorization Act of 1986 (“SARA”)
and by subsequent amendments, 42 U.S.C. §§9601 et seq.; the Solid Waste
Disposal Act, as amended by the Resource Conversation and Recovery Act of 1976
and subsequent Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§6901
et seq. (hereinafter, collectively “RCRA”); the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. §§1801 et seq.; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. §§1311 et seq.; the Clean Air Act,
as amended, 42 U.S.C. §§7401, 7642; the Toxic Substances Control Act, as
amended, 15 U.S.C. §§2601 et seq.; the Federal Insecticide, Fungicide, and
Rodenticide Act, as amended, 7 U.S.C. §§136, 136y; the Emergency Planning and Community
Right to Know Act of 1986, as amended, 42 U.S.C. §§11001 et seq. (Title III of
SARA); the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C.
§§651 et seq. (“OSHA”).

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.

 

5

 

“GAAP”
means United States generally accepted accounting principles and practices in
effect from time to time consistently applied.

 

“Governmental
Authority” means any governmental or legislative agency or authority (other
than a Court) of the United States, any domestic state, or any foreign country,
and any political subdivision or agency thereof, and includes any authority
having governmental or quasi-governmental powers, including any administrative
agency or commission.

 

“Hardware”
means all mainframes, midrange computers, personal computers, notebooks,
servers, switches, printers, modems, drives, peripherals and any component of
any of the foregoing.

 

“Hazardous
Substance” means any Hazardous Substance, as defined in CERCLA, and any
other chemical, compound, product, solid, gas, liquid, pollutant, contaminant
or material which is regulated under any Environmental Law, and includes
without limitation, asbestos or any substance containing asbestos,
polychlorinated biphenyls and petroleum (including crude oil or any fraction
thereof).

 

“Indebtedness”
means, with respect to any Person, (a) all indebtedness of the Person,
whether or not contingent, for borrowed money, (b) all obligations of the
Person for the deferred purchase price of property or services, (c) all
obligations of the Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by the Person (even though the rights and remedies of creditor or
lender under such an agreement in the event of default are limited to
repossession or sale of such property), (e) all obligations of the Person
as lessee under leases that have been or should be recorded as capital leases,
in accordance with GAAP, (f) all obligations, contingent or otherwise, of
the Person under acceptance, letter of credit or similar facilities, (g) all
obligations of the Person to purchase, redeem, retire, defease or otherwise
acquire for value any capital stock of the Person or any warrants, rights or
options to acquire the capital stock, valued, in the case of redeemable
preferred stock, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends, (h) all Indebtedness of
others referred to in clauses (a) through (g) above guaranteed
directly or indirectly in any manner by the Person, or in effect guaranteed
directly or indirectly by the Person through an agreement (1) to pay or
purchase the Indebtedness or to advance or supply funds for the payment or
purchase of the Indebtedness, (2) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to pay the Indebtedness or to assure the holder of such
Indebtedness against loss, (3) to supply funds to, or in any other manner
invest in, the debtor (including any agreement to pay for property or services
irrespective of whether the property is received or the services are rendered)
or (4) otherwise to assure a creditor against loss and all Indebtedness
referred to in clauses (a) through (g) above secured by (or for which
the holder of the Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on property (including, without limitation, accounts
and contract rights) owned by the Person, even though the Person has not
assumed or become liable for the payment of the Indebtedness.

 

6

 

“Information
System” means any combination of Hardware, Software or Database(s) employed
primarily for the creation, manipulation, storage, retrieval, display and use
of information in electronic form or media.

 

“Intellectual
Property” means (a) inventions, whether or not patentable, whether or
not reduced to practice or whether or not yet made the subject of a pending
Patent application or applications, (b) ideas and conceptions of
potentially patentable subject matter, including, without limitation, any
patent disclosures, whether or not reduced to practice and whether or not yet
made the subject of a pending Patent application or applications, (c) Patents,
(d) Trademarks,  (e) Copyrights,
(f) Software, (g) trade secrets and confidential, technical or
business information (including ideas, formulas, compositions, inventions, and
conceptions of inventions whether patentable or unpatentable and whether or not
reduced to practice), (h) confidential, technology (including know-how and
show-how), manufacturing and production processes and techniques, research and
development information, drawings, specifications, designs, plans, proposals,
technical data, copyrightable works, financial, marketing and business data, Databases,
Information Systems, pricing and cost information, business and marketing plans
and customer and supplier lists and information, (i) copies and tangible
embodiments of all the foregoing, in whatever form or medium, (j) all rights to
obtain and rights to apply for Patents, and to register Trademarks and
Copyrights, (k) all rights under any License Agreement and any license,
registered user agreement, technology or material, transfer agreement, and
other agreements or instruments with respect to items in (a) to (j) above;
and (l) all rights to sue and recover and retain damages and costs and
attorneys’ fees for present and past infringement of any of the Intellectual
Property rights hereinabove set out.

 

“Inventories”
means, without limitation, merchandise, raw materials, work-in-process,
finished goods, replacement parts, packaging, office supplies, maintenance
supplies, computer parts and supplies and Hardware related to the Business
maintained, held or stored by, or for, Morex at any location whatsoever and any
prepaid deposits for any of the same terms.

 

“IRS”
shall mean the United States Internal Revenue Service.

 

“Knowledge”
means (a) in the case an individual, knowledge of a particular fact or
other matter if the individual is actually aware of the fact or other matter,
and (b) in the case of a Person (other than an individual) the Person will
be deemed to have Knowledge of a particular fact or other matter if any
individual who is serving, or has at any time served, as a director, officer,
partner, shareholder, member, executor, or trustee of the Person (or in any
similar capacity) has, or at any time had, actual knowledge of the fact or
other matter.

 

“Law”
means all laws, statutes, ordinances and Regulations of any Governmental
Authority including all decisions of Courts having the effect of law in each
jurisdiction.

 

“Leased
Property” means any property leased by a Person as tenant, together with,
to the extent leased by a Person, all buildings and other structures,
facilities or improvements currently or hereafter located thereon, all
fixtures, systems, equipment and items of personal property of a Person
attached or appurtenant thereto, and all easements, licenses, rights and
appurtenances relating to the foregoing.

 

7

 

“Leases”
is defined in Section 4.10(d).

 

“Liabilities”
means any and all debts, liabilities and obligations, whether accrued or fixed,
absolute or contingent, matured or unmatured or determined or determinable,
including, without limitation, those arising under any Law (including, without
limitation, any Environmental Law), Action or Order, Liabilities for Taxes and
those Liabilities arising under any Contract.

 

“Liens”
means any mortgage, pledge, security interest, attachment, encumbrance, lien
(statutory or otherwise), option, conditional sale agreement, right of first
refusal, first offer, or charge of any kind (including any agreement to grant
any of the foregoing), provided, however, that the term “Lien” shall not
include: (a) liens for Taxes, assessments and charges any Governmental
Authority due for which adequate reserve for payment has been made and which
are being diligently contested in good faith; (b) servitudes, easements,
restrictions, rights-of-way and other similar rights in real property or any
interest therein granted to any third party; (c) liens for Taxes either
not due and payable or due but for which notice of assessments has not been
given; (d) undetermined or inchoate liens, charges and privileges
incidental to current construction or current operations and charges, adverse
claims, security interests or encumbrances of any nature whatsoever claimed or
held by any Governmental Authority which have not at the time been filed or
registered against the title to the asset or served upon Morex pursuant to Law
or which relate to obligations not due or delinquent; (e) assignments of
insurance provided to third party landlords (or their mortgagees) pursuant to
the terms of any lease, and liens or rights reserved in any lease for rent or
for compliance with the terms of the lease; (f) liens granted in the
ordinary course of the Business, as applicable, to any public utility,
municipality or Government Authority in connection with the operations of the
Business, as applicable, other than liens granted for borrowed money; (g) deposits
or pledges made in connection with, or to secure payment of, workers’
compensation, unemployment insurance, old age pension or other social security
programs mandated under applicable Laws; and (h) restrictions on transfer
of securities imposed by applicable state and federal securities Laws.

 

“List
Acquisition Expenses” means expenses incurred in connection with the
acquisition by Morex Surviving LLC of data intended for use in the Business,
including but not limited to expectant parent and other lists.

 

“List
Acquisition Expense Limit” means 75% of the previous month’s revenues of
Morex Surviving LLC.

 

“Litigation”
means any suit, action, arbitration, cause of action, claim, complaint,
criminal prosecution, investigation, inquiry, demand letter, governmental or
other administrative proceeding, whether at law or at equity, before or by any
Court, Governmental Authority, arbitrator or other tribunal.

 

“Loss”
and “Losses” are defined in Section 9.2(a).

 

“Material
Adverse Effect” means any circumstance, change in, or effect that,
individually or in the aggregate: (a) is, or could be, materially adverse
to the business, operations, assets or Liabilities (including, without
limitation, contingent Liabilities), employee relationships,

 

8

 

customer or supplier relationships, results of operations or the
condition (financial or otherwise) of the Person, or (b) could materially
adversely affect the ability of the Person to operate or conduct its business
in the manner in which it is currently operated or conducted, or contemplated
to be conducted or operated.

 

“Member”
shall mean any Person holding an equity interest in a limited liability
company.

 

“Merger
Consideration” is defined in Section 2.6.

 

“Morex
Certificates” is defined in Section 2.6.

 

“Morex
Membership Interest” shall mean each unit of equity ownership of Morex,
whether expressed as a percentage or as units.

 

“Morex
Surviving LLC” is defined in Section 2.1.

 

“New
York LLC Law” is defined in Section 2.2.

 

“Order”
shall mean any judgment, order, writ, injunction, ruling, stipulation,
determination, award or decree of or by, or any settlement under the
jurisdiction of, any Court or Governmental Authority.

 

“Owned
Property” means any property owned by a Person together with all buildings
and other structures, facilities or improvements currently or hereafter located
thereon, all fixtures, systems, equipment and items of personal property of a
Person attached or appurtenant thereto and all easements, licenses, rights and
appurtenances relating to the foregoing.

 

“Owned
Property Leases” is defined in Section 4.10(a).

 

“Patents”
mean all national (including the United States) and multinational statutory
invention registrations, patents, patent registrations and patent applications,
including all reissues, divisions, continuations, continuations-in-part,
extensions and reexaminations, and all rights therein provided by multinational
treaties or conventions and all improvements to the inventions disclosed in
each such registration, patent or application.

 

“Permits”
means any licenses, permits, pending applications, consents, certificates,
registrations, approvals and authorizations.

 

“Person”
means any natural person, corporation, limited liability company,
unincorporated organization, partnership, association, joint stock company,
joint venture, trust or any other entity.

 

“Property”
means the Leased Property and the Owned Property.

 

“Receivables”
means any and all accounts receivable, notes, book debts and other amounts due
or accruing due to a Person whether or not in the ordinary course of its
business, together with any unpaid financing charges accrued thereon.

 

9

 

“Regulation”
means any rule or regulation of any Governmental Authority.

 

“Release”
means any release, spill, emission, leak, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration (as such terms are used
or defined in the Environmental Laws) of a Hazardous Substance into the indoor
or outdoor environment or into or out of any Property, including the movement
of Hazardous Substances through or in the air, soil, surface water, groundwater
or property.

 

“SEC”
means the United States Securities and Exchange Commission.

 

“Securities
Act” means the Securities Act of 1933, as amended from time to time.

 

“Software”
means any and all (a) computer programs, including any and all software
implementations of algorithms, models and methodologies, whether in source code
or object code, (b) databases and compilations, including any and all data
and collections of data, whether machine readable or otherwise, (c) descriptions,
flow-charts and other work product used to design, plan, organize and develop
any of the foregoing, (d) the technology supporting any Internet site(s)
operated by or on behalf of the Person and (e) all documentation,
including user manuals and training materials, relating to any of the
foregoing.

 

“Stock
Consideration” is defined in Section 2.6.

 

“Straddle
Period” is defined in Section 10.1(b).

 

“Subsidiary”
or “Subsidiaries” of a Person means any other Person in which the Person
owns, directly or indirectly, more than 50% of the outstanding voting
securities or other securities convertible into voting securities, or which may
effectively be controlled, directly or indirectly, by the Person.

 

“Tangible
Personal Property” is defined in Section 4.11(a).

 

“Tax”
or “Taxes” means any and all federal, state, local, or foreign taxes, fees,
levies, duties, tariffs, imposts, and other charges of any kind (together with
any and all interest, penalties, additions to tax and additional amounts
imposed with respect thereto) imposed by any Governmental Authority or other
taxing authority, taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, disability, social security, workers’
compensation, unemployment compensation, or net worth; taxes or other charges
in the nature of excise, withholding, ad valorem, stamp, transfer, value added,
or gains taxes; license, registration and documentation fees; and customs’
duties, tariffs, and similar charges, whether computed on a separate or
consolidated, unitary or combined basis or in any other manner, whether
disputed or not and including any obligation to indemnify or otherwise assume
or succeed to the Tax liability of any other Person, together with any interest
or penalty, addition to tax or additional amount imposed by any Governmental
Authority.

 

“Tax
Returns” means returns, reports and information statements, including any schedule or
attachment thereto, with respect to Taxes required to be filed with the IRS or
any other

 

10

 

Governmental Authority or other taxing authority or agency, domestic or
foreign, including consolidated, combined and unitary tax returns.

 

“THK
Common Stock” means Common Stock, $.001 par value per share, of THK.

 

“THK
Preferred Stock” is defined in Section 5.2(b).

 

“Trademarks”
mean all trademarks, service marks, trade dress, logos, trade names and
corporate names, whether or not registered, including all common law rights,
and registrations and applications for registration thereof, including, but not
limited to, all marks registered in the United States Patent and Trademark
Office, the Trademark Offices of the States and Territories of the United
States of America, and the Trademark Offices of other nations throughout the world,
and all rights therein provided by multinational treaties or conventions.

 

“Waste”
means agricultural wastes, biomedical wastes, biological wastes, bulky wastes,
construction and demolition debris, garbage, household wastes, industrial solid
wastes, liquid wastes, sludge, solid wastes, special wastes, used oils, and
yard trash.

 

ARTICLE II

 

THE MERGER

 

2.1           The
Merger.   The closing of the Merger
(the “Closing”) shall take place on the date first written above or such
later date as the parties may agree upon in writing (the “Closing Date”).  At the Effective Time on the Closing Date, in
accordance with the laws of the State of New York and the terms and conditions
of the Documents, Morex Merger Sub shall be merged with and into Morex.  From and after the Effective Time, the
separate corporate existence of Morex Merger Sub shall cease and Morex, as the
surviving limited liability company in the Merger, shall continue its existence
under the laws of the State of New York as a wholly owned subsidiary of THK.  Morex, as the surviving corporation after the
Merger, is hereinafter referred to as the “Morex Surviving LLC.”  At the Closing, (a) THK and Morex Merger Sub
shall deliver to Morex and the Members the various documents referred to in
Article VI, Section 6.2 and (b) Morex and the Members shall deliver to THK and
Morex Merger Sub the various documents referred to in Article VI, Section 6.1.

 

2.2           Effective
Time.  Subject to the provisions of
this Agreement, on the Closing Date or as soon thereafter as is practicable the
Parties shall cause the Merger to become effective by executing and filing with
the Department of State, Division of Corporations of the State of New York in
accordance with New York law a Certificate of Merger, with a Plan of Merger
attached as an Exhibit thereto in the form required pursuant to Section 1003 of
the New York Limited Liability Company Law, as amended (the “New York LLC
Law”), and attached hereto as Schedule 2.2 and made a part hereof
(the “Certificate of Merger and Plan of Merger”), the date and time of
the filing, or such later date and time as may be agreed upon by the Parties
and specified therein, being hereinafter referred to as the “Effective Time.”  The Parties hereto shall have taken all
necessary steps to pre-clear the Merger with the Department of State, Division
of Corporations of the State of New York in order that on the Closing Date, the
Certificate of

 

11

 

Merger and Plan of Merger may
be filed with the Department of State, Division of Corporations of the State of
New York and become effective upon filing.

 

2.3           Effect
of the Merger.  At the Effective
Time, the Merger shall have the effect set forth in the New York LLC Law.

 

2.4           Articles
of Organization and Operating Agreement. 
From and after the Effective Time and without further action on the part
of the Parties, the Articles of Organization and Operating Agreement of Morex
Merger Sub immediately prior to the Effective Time shall be the Articles of
Organization and Operating Agreement of Morex Surviving LLC until amended in
accordance with the respective terms thereof.

 

2.5           Managers
and Officers.  The managers and
officers of Morex Surviving LLC immediately prior to the Effective Time shall
be the managers and officers immediately following the Effective Time and each
shall hold office in accordance with the Articles of Organization and Operating
Agreement of Morex Surviving LLC, in each case, until their respective
successors are duly elected or appointed and qualified or until their earlier
death, resignation or removal in accordance with Morex Surviving LLC’s Articles
of Organization and Operating Agreement. 
The initial board of managers of Morex Surviving LLC shall be Gerard Jacobs,
Scott Mitchell, George Douaire, Robert Moore and Lloyd Ecker.

 

2.6           Merger Consideration; Accelerated Payment; Effect on
Morex’s Capital Structure.

 

(a) At
the Effective Time, by virtue of the Merger and without any action on the part
of the Parties or the holders of the following securities: (i) the Morex
Membership Interests held by LE issued and outstanding immediately prior to the
Effective Time shall be converted automatically into the right to receive 49.5%
of an amount equal to six times the 6/30 Morex Pre-Tax Earnings; (ii) the
Morex Membership Interests held by RM issued and outstanding immediately prior
to the Effective Time shall be converted automatically into the right to
receive 49.5% of an amount equal to six times the 6/30 Morex Pre-Tax Earnings; (iii) the
Morex Membership Interests held by TM issued and outstanding immediately prior
to the Effective Time shall be converted automatically into the right to
receive 99% of an amount equal to six times the 6/30 Catamount Pre-Tax
Earnings; and (iv) the Morex Membership Interests held by WIH issued and
outstanding immediately prior to the Effective Time shall be converted
automatically into the right to receive 1% of an amount equal to six times the
6/30 Combined Pre-Tax Earnings.  Such
amounts shall be payable at Closing, one-half in cash (the “Cash
Consideration”), and one-half in shares of THK Common Stock, such stock to
be valued at the Closing Date FMV (the “Stock Consideration”).  In addition, each Morex Membership Interest
issued and outstanding immediately prior to the Effective Time shall be
converted automatically into the right to receive portions of the Earnout
Payments pursuant to Article VIII, if earned (the “Earnout
Consideration”).  The Cash
Consideration, the Stock Consideration, the Earnout Consideration and the Accelerated
Payment shall be referred to collectively as the “Merger Consideration”,
and shall be subject to adjustment as set forth in Section 2.9.  From and after the Effective Time, all of the
membership interests of Morex shall automatically be canceled and cease to
exist, and each holder of a certificate that previously represented any
membership interests of Morex (collectively, the “Morex Certificates”)
shall cease to have any rights with

 

12

 

respect thereto other than the right to receive, if any, their portion
of the Merger Consideration.  If after
the Effective Time, any Morex Certificates are presented to Morex Surviving LLC
for any reason, they shall be cancelled and exchanged as provided in this Section 2.6.  If any Morex Certificates representing
membership interests of Morex shall have been lost, stolen or destroyed, THK
shall issue in exchange for the lost, stolen or destroyed certificates, upon
the making of an affidavit of that fact by the holder thereof, the applicable
Merger Consideration; provided, however, that THK may, in its discretion and as
a condition precedent to the issuance and delivery thereof, require the owner
of the lost, stolen or destroyed certificates to deliver a bond in any sum as
THK may reasonably direct as indemnity against any claim that may be made
against THK or Morex Surviving LLC with respect to the certificates alleged to
have been lost, stolen or destroyed.

 

(b)  At the Effective Time, THK shall make the
Accelerated Payment to the Members.  The
Accelerated Payment shall be payable by THK to the Members in shares of THK
Common Stock, such stock to be valued at the Closing Date FMV (the “AP
Shares”).  The Accelerated Payment shall be calculated using the 9/30
Combined Pre-Tax Earnings as shown on Morex’s and Catamount’s internally
prepared results of operations for the period ended on September 30, 2005
(the “Morex and Catamount Internal Statements”).  Not later than March 1, 2006, THK’s
independent auditors shall review the Morex and Catamount Internal Statements
and determine whether the calculation of the 9/30 Pre-Tax Earnings shown
thereon was accurate and calculated in a manner consistent with the audited
financial statements of Morex and Catamount as of June 30, 2005.  If the auditors’ review discloses that the
actual amount of the 9/30 Combined Pre-Tax Earnings was lower or higher than as
shown on the Morex and Catamount Internal Statements, then AP Shares shall
either be returned to THK or additional shares of THK Common Stock shall be
issued to the Members, such that the actual number of AP Shares paid to the
Members, valued at the Closing Date FMV, shall be equal to the Accelerated
Payment as determined by THK’s independent auditors.  If the auditors’ review confirms that the
calculation of the 9/30 Combined Pre-Tax Earnings as shown on the Morex and
Catamount Internal Statements was accurate, then no adjustment to the number of
AP Shares paid at the Effective Time shall be made under this Section 2.6(b).  The Members shall have ten days following
receipt of such auditors’ review to raise any objection to such review, failing
which the review shall be final and binding on the parties.  THK and the Members shall endeavor to resolve
by written agreement (the “Agreed Adjustments”) any disputes so raised
regarding the auditors’ review and, in the event THK and the Members so resolve
any such disputes, the calculation of the 9/30 Combined Pre-Tax Earnings as
shown on the Morex and Catamount Internal Statements as adjusted by the Agreed
Adjustments shall be final and binding on the parties hereto.  In the event any disputes are not resolved by
Agreed Adjustments within a fifteen (15) day period, THK and the Members shall
then jointly retain an accountant mutually agreed to by the parties (the “Accountant”)
to conduct, as promptly as practicable, but in any event not later than
forty-five (45) days after such retention, such review and analysis of the 9/30
Combined Pre-Tax Earnings as shown on the Morex and Catamount Internal Statements
as the Accountant believes to be necessary to resolve the disputes, and to
deliver a notice (the “Accounting Report”) to each of THK and the
Members setting forth what adjustments, if any, to the 9/30 Combined Pre-Tax
Earnings as shown on the Morex and Catamount Internal Statements the Accountant
believes to be required under GAAP to resolve such objections, and the amount
of the 9/30 Combined Pre-Tax Earnings as shown on the Morex and Catamount
Internal Statements after giving effect to such adjustments.  In such

 

13

 

event,
the 9/30 Combined Pre-Tax Earnings as shown on the Morex and Catamount Internal
Statements as adjusted by the Accounting Report shall be final and binding on
the parties hereto.

 

(c)  The Accelerated Payment shall be allocated
among the Members as follows:  Each of LE
and RM shall be entitled to receive 45.5% of the Accelerated Payment; TM shall
be entitled to receive 8% of the Accelerated Payment; and WIH shall be entitled
to receive 1% of the Accelerated Payment.

 

(d)  As security for the Members’ obligation to
return AP Shares to THK to the extent required by Section 2.6(b) above,
at the Effective Time one-half of the AP Shares shall be issued and held back
by THK (the “Holdback Shares”). 
Not later than February 15, 2006, the Holdback Shares shall be
delivered by THK to the Members or returned to THK as treasury shares (as the
case may be) in accordance with the provisions of Section 2.6(b); provided,
however, that (i) in the event that the auditors’ review
contemplated by Section 2.6(b) is not completed before February 15,
2006, all of the Holdback Shares shall be released to the Members and no
adjustment to the number of AP Shares that was paid to the Members at the
Effective Time shall be made under Section 2.6(b); and (ii) if the
auditors determine that too many AP Shares were paid to the Members at the
Effective Time, then the excess number of AP Shares shall be returned to THK.

 

2.7           Stock
Options; Warrants.   At the Effective
Time, each option, warrant or other contractual or other right to purchase or
otherwise acquire or convert into membership interests of Morex granted prior
to the Effective Time shall be cancelled, extinguished and terminated without
the payment of any consideration therefor and shall not have any right to any
portion of the Merger Consideration.

 

2.8           Capital
Structure of Morex Merger Sub.  Each
membership interest of Morex Merger Sub issued and outstanding immediately
prior to the Effective Time shall be converted automatically into a 100%
ownership interest of the Morex Surviving LLC. 
From and after the Effective Time, each certificate of Morex Merger Sub
that previously represented a membership interest in Morex Merger Sub shall
evidence ownership of an equal membership interest of Morex Surviving LLC.

 

2.9           Adjustments
to the Consideration.  For the sixty
(60) day period commencing on the Closing Date, THK shall pay to the Members
(except for WIH) as additional Merger Consideration their portion (it being
agreed that the Members other than WIH shall send a joint written notice to THK
indicating their respective sharing percentages) of the following: the amount
by which cash collections by Morex Surviving LLC of Morex’s accounts receivable
balance on the Closing Date exceeds Morex’s accounts payable balance on the
Closing Date by more than $100,000, such amounts to be paid only as collected
by THK during such sixty (60) day period, and only after THK has collected the
first $100,000 of accounts receivable after the Closing that is to remain as
working capital for Morex Surviving LLC post-closing.

 

2.10         Taking
Necessary or Further Action.   If, at
any time and from time to time after the Effective Time, any further action is
necessary or desirable to carry out the purposes of this Agreement and to vest
in the Morex Surviving LLC full right, title and possession of all properties,
assets, rights, privileges, powers and franchises of Morex and Morex Merger
Sub, the

 

14

 

managers and officers of the
Morex Surviving LLC shall be and are fully authorized and directed, in the name
of and on behalf of Morex Surviving LLC, to take, or cause to be taken, all
such lawful and necessary action as is not inconsistent with this
Agreement.  THK shall cause Morex Merger
Sub to perform all of its obligations relating to this Agreement and the
transactions contemplated hereby.

 

2.11         Directors
and Officers Liability; Indemnification and Insurance.  After the Closing, THK shall use its
commercially-reasonable efforts to undertake to obtain directors and officers
liability insurance for LE, RM and TM in respect of all acts or omissions
occurring after the Closing Date in their respective capacities as directors
and officers of Morex Surviving LLC, on terms with respect to coverage and
amount that are no less favorable than directors and officers insurance
applicable to directors, managers or officers of THK’s other wholly-owned
subsidiaries.  In addition, the Operating
Agreement of Morex Surviving LLC shall provide for indemnification, exculpation
and advancement of expenses (only to the extent permitted by applicable law)
for LE, RM and TM in their respective capacities as directors and officers of
Morex Surviving LLC, to the fullest extent permitted by New York LLC law.

 

ARTICLE III

 

RESTRICTIONS
ON TRANSFER: REGISTRATION

 

3.1           Restrictions
on Transfer. All certificates representing THK Common Stock issued pursuant
to this Agreement shall bear a legend stating that the THK Common Stock has not
been registered under the Securities Act, and may not be transferred or sold
without such registration or an exemption therefrom.

 

3.2           Registration.
At the Closing, THK and the Members shall enter into a registration rights
agreement in the form attached hereto as Exhibit A hereto.

 

ARTICLE IV

 

REPRESENTATIONS
AND WARRANTIES OF

THE MEMBERS AND MOREX

 

In
order to induce THK and Morex Merger Sub to enter into this Agreement and to
consummate the transactions contemplated hereby, the Members and Morex each
hereby represent and warrant to each of THK and Morex Merger Sub as follows:

 

4.1           Organization
and Qualification.  Morex is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of New York, with full power and authority to own,
lease and operate its properties and to conduct its business as now conducted
except where failure to be so organized, existing and in good standing would
not reasonably be expected to have a Material Adverse Effect on Morex, and is
duly licensed or qualified to transact business as a foreign corporation and is
in good standing in each of the jurisdictions listed on Schedule 4.1,
which are the only jurisdictions in which the failure to be so licensed or
qualified could have a Material Adverse Effect on Morex.

 

15

 

4.2           Subsidiaries.  Morex does not have any Subsidiaries and does
not own, directly or indirectly, any equity or other ownership interests of any
Person.

 

4.3           Charter,
Operating Agreement and Corporate Records. 
True, correct and complete copies of each of (a) the Articles of
Organization of Morex as amended and in effect on the date hereof, (b) the
Operating Agreement of Morex as amended and in effect on the date hereof, and
(c) the minute books of Morex, have been previously made available to THK and
Morex Merger Sub.  The minute book
contains complete and accurate records of all meetings and other actions of the
managers, committees of the managers, organizers and members of Morex from the
date of its organization to the date hereof.

 

4.4           Authorization;
Enforceability.  Morex has the
limited liability company power and authority to execute, deliver and perform
its obligations under this Agreement and the other Documents to which it is a
party.  The execution, delivery and
performance of this Agreement and the other Documents to which it, he or she is
a party and the consummation of the transactions contemplated herein and
therein have been duly authorized and approved by the managers of Morex and the
Members, and no other action on the part of Morex or the Members is necessary
to consummate the transactions contemplated by this Agreement and the other
Documents.  This Agreement and each of
the other Documents to be executed and delivered by Morex and the Members have
been duly executed and delivered by, and constitute the legal, valid and
binding obligations of, Morex and the Members, respectively, are enforceable
against Morex and the Members in accordance with their terms, except as
enforcement may be limited by bankruptcy, insolvency reorganization, moratorium
and similar laws relating to or affecting creditor rights generally or by
general equity principles (regardless of whether enforcement is sought in a
proceeding in equity or at law).

 

4.5           No
Violation or Conflict.  None of (a)
the execution and delivery by Morex and the Members of this Agreement and the
other Documents to be executed and delivered by Morex and the Members, (b) the
consummation by Morex and the Members of the transactions contemplated by this
Agreement and the other Documents, or (c) the performance of this Agreement and
the other Documents required by this Agreement to be executed and delivered by
Morex and the Members at the Closing, will (1) conflict with or violate the
Articles of Organization or operating agreement of Morex, (2) conflict with or
violate any Law, Order or Permit applicable to Morex or the Members, or by
which Morex’ properties or the Morex Membership Interest are bound or affected,
or (3) result in any breach or violation of, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or impair Morex’s rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of any Lien on any of the properties
or assets of Morex pursuant to, any Contract, Permit or other instrument or
obligation to which Morex is a party or by which Morex or its properties are
bound or affected except, in the case of clause (2) or (3) above, for any
conflict, breach, violation, default or other occurrence that would not
individually or in the aggregate, have a Material Adverse Effect on Morex.

 

4.6           Governmental
Consents and Approvals.  The
execution, delivery and performance of this Agreement and the other Documents
by Morex and the Members does not and will not

 

16

 

require any consent, approval,
authorization, Permit or other order of, action by, filing with or notification
to, any Governmental Authority.

 

4.7           Capital
Structure.  The Members own 100% of
the outstanding Membership Interests of Morex. 
The Members are the record and beneficial owners and holders of the
Membership Interests of Morex free and clear of all Liens.  Except as described above, there will be no
equity interests or other securities of Morex authorized, issued, reserved for
issuance or otherwise outstanding at the Closing. All of the Membership
Interests of Morex are duly authorized, validly issued, fully paid and
non-assessable, and not subject to, or issued in violation of, any kind of
preemptive, subscription or any kind of similar rights. There are no bonds,
debentures, notes or other Indebtedness of Morex having the right to vote (or
convertible into securities having the right to vote) on any matters on which
the members of Morex are eligible or required to vote. There are no other
outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind (contingent or otherwise)
to which Morex is a party or bound obligating Morex to issue, deliver or sell,
or cause to be issued, delivered or sold, additional voting securities of Morex
or obligating Morex to issue, grant, extend or enter into any agreement to
issue, grant or extend any security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking that will survive the Closing.  There are no outstanding contractual
obligations of Morex to repurchase, redeem or otherwise acquire any membership
interests (or options to acquire any such membership interests) or other
security or equity interest of Morex which will survive the Closing.  All of the issued and outstanding membership
interests of Morex were issued in compliance in all material respects with all
applicable federal and state securities laws and are owned solely by the
Members.

 

4.8           Financial
Statements.  Schedule 4.8 sets
forth the audited consolidated balance sheets of Morex as of December 31, 2003,
and December 31, 2004, respectively, and the related audited consolidated
income statement and statement of cashflows for the period from inception to
December 31, 2003 and for the fiscal year ended December 31, 2004 accompanied
by the auditor’s report thereon, and the audited consolidated balance sheet as
of June 30, 2005 and the schedules thereto and the related audited consolidated
income statement and statement of cashflows for the six month period then ended
(the “Company Financials”).  The
Company Financials (i) have been prepared in accordance with the books and
records of the person to which they relate, (ii) are complete and correct in
all material respects and have been prepared in accordance with GAAP
consistently applied for the periods presented. 
The Company Financials present fairly the financial condition and
operating results of Morex as of the dates and during the periods indicated
therein, subject to normal year-end adjustments, which will not be material in
amount or significance in the aggregate.

 

4.9           Conduct
in the Ordinary Course; Absence of Changes. 
Except as set forth on Schedule 4.9, since June 30, 2005, Morex
has conducted the Business in the ordinary course, consistent with past
practice, and there has been no change in the Business which has had, or could
reasonably be anticipated to result in, a Material Adverse Effect on Morex.

 

4.10         Property.

 

(a)           Schedule
4.10(a) lists (1) the street address of each parcel of Owned Property of
Morex, and (2) any and all leases of all or any portion of any of Owned
Property of

 

17

 

Morex (“Owned Property
Leases”).  Any parcel of Owned
Property that is not subject to an Owned Property Lease is occupied by Morex
and is used solely for the conduct of the Business.  Schedule 4.10(b) lists for each Owned
Property Lease (i) the street address of each parcel subject to an Owned
Property Lease, (ii) the identity of the lessor, lessee and current occupant
(if different from lessee/lessor) under each Owned Property Lease, (iii) the
term, the security deposit, if any, and rental payment terms of the Owned
Property Leases (and any subleases) pertaining to each Owned Property Lease,
(iv) any commissions due now or in the future on any Owned Property Lease or in
connection with an option to extend or renew and (v) any amendments to the
Owned Property Leases.

 

(b)           Schedule
4.10(b) lists (1) the street address of each parcel of Leased Property, (2)
the identity of the lessor, lessee and current occupant (if different from
lessee) of each such parcel of Leased Property, and (3) the term and rental
payment terms of the leases (and any subleases) pertaining to each such parcel
of Leased Property.

 

(c)           Morex
has made available to THK and Morex Merger Sub, true and correct copies of each
deed for each parcel of Owned Property and, to the extent available, for each
parcel of Leased Property, and all title insurance policies, title reports,
surveys, certificates of occupancy, environmental reports and audits,
appraisals, other title documents and other documents relating to or otherwise
affecting the Owned Property, the Leased Property, or the operation of the
Business thereon or any other uses thereof.

 

(d)           Morex
has delivered, or made available to THK and Morex Merger Sub, true and correct
copies of all leases and subleases listed in Schedules 4.10(a) and (b)
and any and all ancillary documents pertaining thereto (including, but not
limited to, all amendments, consents for alterations and documents recording
variations and evidence of commencement dates and expiration dates) (the “Leases”).  With respect to each Lease:

 

(1)           each Lease is the legal, valid and binding,
obligation of the parties thereto, enforceable against each party, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditor rights generally
or by general equity principles (regardless of whether enforcement is sought in
a proceeding in equity or at law).

 

(2)           none of (a) the execution and delivery
by Morex and the Members of this Agreement and the other Documents, (b) the
consummation by Morex and the Members of the transactions contemplated by this
Agreement and the other Documents, (c) the performance by Morex and the
Members of this Agreement and the other Documents will (1) conflict with
or violate the terms of any Lease or (2) result in any breach or violation
of or constitute a default (or an event with notice or lapse of time or both
would become a default) under, or impair Morex rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any Lease.

 

(3)           neither Morex nor to the Knowledge of Morex,
any other party to any Lease, is in breach or default in any material respect,
and, to the Knowledge of Morex, no event has occurred that, with notice or
lapse of time would constitute a breach or default or permit termination, modification
or acceleration under the Lease; and

 

18

 

(4)           the rental set forth in each Lease is the
actual rental being paid, and there are no separate agreements or
understandings regarding the amount of rent.

 

4.11         Personal Property.

 

(a)           Schedule 4.11 lists each item or distinct group of
machinery, equipment, tools, supplies, furniture, fixtures, vehicles, rolling
stock and other tangible personal property with a cost in excess of $5,000 used
in the Business and owned or leased by Morex (the “Tangible Personal
Property”).

 

(b)           Morex has delivered or made available to THK
and Morex Merger Sub correct and complete copies of all leases for Tangible
Personal Property and any and all material ancillary documents pertaining
thereto.  With respect to each lease for
Tangible Personal Property:

 

(1)           each lease, together with all ancillary
documents delivered pursuant to the first sentence of this Section 4.11(b),
is the legal, valid and binding obligation of the parties thereto, enforceable
against each of the parties in accordance with the terms thereof except as
enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditor rights generally or by general equity
principles (regardless of whether enforcement is sought in a proceeding in
equity or at law);

 

(2)           neither Morex nor to the Knowledge of Morex,
any other party to any lease, is in breach or default in any material respect,
and no event has occurred that, with notice or lapse of time would constitute
such a breach or default or permit termination, modification or acceleration
under, any lease; and

 

(3)           none of (a) the execution and delivery
by Morex and the Members of this Agreement and the other Documents, (b) the
consummation by Morex and the Members of the transaction contemplated by this
Agreement and the other Documents, (c) the performance by Morex or the
Members of this Agreement and the other Documents required by this Agreement
will (1) conflict with or violate the terms of any lease or (2) result
in any breach or violation of or constitute a default (or an event with notice
or lapse of time or both would become a default) under, or impair Morex rights
or alter the rights or obligations of any third party under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
lease.

 

(c)           All Tangible Personal Property is adequate
and usable for the use and purposes for which it is currently used, is in good
operating condition, and has been maintained and repaired in accordance with
good business practice.

 

4.12         Approval
of Managers.  The managers of Morex
have, at a meeting duly called and held at which all managers of Morex were
present or by a unanimous written consent: 
(a) approved and declared advisable this Agreement; (b) determined that
the Merger and other transactions contemplated by this Agreement are advisable,
fair to and in the best interest of Morex and the Members; (c) recommended to
the Members of Morex (1) approval of the Merger and the other transactions
contemplated hereby, and (2) approval and adoption of this Agreement; and (d)
directed that this Agreement be submitted to the Members of Morex for their

 

19

 

approval and adoption.  The Members of Morex shall also have approved
the Merger and this Agreement.

 

4.13         Insurance.  Morex has furnished or made available to THK
and Morex Merger Sub, true and complete copies of all insurance policies and
fidelity bonds covering the assets, business, equipment, properties and
operations of Morex relating to the Business, a list of which (by type,
carrier, policy number, limits, premium and expiration date) is set forth in Schedule
4.13.  All such insurance policies
are in full force and effect and will remain in full force and effect with
respect to all events occurring prior to the Effective Time.

 

4.14         Permits.  Schedule 4.14 lists all Permits used
in or otherwise required to conduct the Business.  Each of the Permits is valid and in full
force and effect.

 

4.15         Taxes.  Except as set forth in Schedule 4.15
hereto: (a) All Tax Returns and reports in respect of Taxes required to be
filed with respect to Morex or the Business have been timely filed, (b) all
Taxes required to be shown on such returns and reports or otherwise due have
been timely paid, (c) all such returns and reports are true, correct and
complete in all material respects, (d) no adjustment relating to such returns
has been proposed formally or informally by any Governmental Authority and, to
the Knowledge of Morex, no basis exists for any such adjustment, (e) there are
no pending or, to the Knowledge of Morex, threatened actions or proceedings for
the assessment or collection of Taxes against Morex or insofar as either relates
to the activities or income of Morex or the Business or could result in
Liability to Morex whether joint or several any corporation that was includible
in the filing of a return with Morex on a consolidated or combined basis, (f)
no consent under Section 341(f) of the Code has been filed with respect to
Morex, (g) there are no Tax Liens on any assets of Morex or of the Business,
(h) Morex has withheld and paid all Taxes required to have been withheld and
paid in connection with any amounts paid or owing to any employee, independent
contractor, creditor, member, or other third party, and all Forms W-2 and 1099
required with respect thereto have been properly completed and timely filed,
(i) Morex has not consented to extend the time in which any Taxes may be
assessed or collected by any taxing authority, (j) Morex has not requested or
been granted an extension of the time for filing any Tax Return to a date later
than the Closing Date, (k) there are no Liens for Taxes (other than for current
Taxes not yet due and payable) upon Morex’ assets, (l) Morex will not be
required (1) as a result of a change in method of accounting for a taxable
period ending on or prior to the Closing Date, to include any adjustment under
Section 481(c) of the Code (or any corresponding provision of state, local or
foreign law) in taxable income for any taxable period (or portion thereof)
beginning after the Closing Date or (2) as a result of any “closing agreement,”
as described in Section 7121 of the Code (or any corresponding provision of
state, local or foreign law), to include any item of income or exclude any item
of deduction from any taxable period (or portion thereof) beginning after the
Closing Date, (m) Morex is not a party to or bound by any tax allocation or tax
sharing agreement and does not have any current or potential contractual
obligation to indemnify any other Person with respect to Taxes, (n) to the
Knowledge of Morex, there is no basis for any assessment, deficiency notice,
30-day letter or similar notice with respect to any Tax to be issued to Morex
with respect to any period on or before the Closing Date, (o) Morex has not
made any payments, and is or will not become obligated (under any contract
entered into on or before the Closing Date) to make any payments, that will not
be deductible under Section 280G of the Code (or any corresponding provision of
state, local or foreign law), (p) Morex has not been a United States

 

20

 

real property holding
corporation within the meaning of Section 897(c)(2) of the Code (or
any corresponding provision of state, local or foreign law) during the
applicable period specified in Section 897(c)(1)(a)(ii) of the Code
(or any corresponding provision of state, local or foreign law), (q) no claim
has ever been made in writing by a taxing authority in a jurisdiction where
Morex does not file Tax Returns that Morex is or may be subject to Taxes
assessed by such jurisdiction, (r) Morex does not have any physical presence in
any foreign country, as defined in the relevant tax treaty between the United
States of America and such foreign country, (s) true, correct and complete
copies of all income and sales Tax Returns filed by or with respect to Morex
for the past two (2) years have been furnished or made available to THK,
and (t) Morex will not be subject to any Taxes pursuant to Section 1374 or
Section 1375 of the Code (or any corresponding provision of state, local
or foreign law) with respect to the transactions contemplated by this Agreement.

 

4.16         Labor Matters.

 

(a)           The name, place of employment, the current annual salary rates,
bonuses, deferred or contingent compensation, pension, accrued vacation, “golden
parachute” and other like benefits paid or payable (in cash or otherwise) in 2004
and 2005, the date of employment and a description of position and job function
of each current salaried employee, officer, director, consultant or agent of
Morex is accurately stated in that certain letter dated the date of this
Agreement from LE to Gerard M. Jacobs, the Chief Executive Officer of THK (the “Employee
Salaries Letter”).

 

(b)           No employment, consulting, severance pay, continuation pay, termination
or indemnification agreements or other similar agreements of any nature
(whether in writing or oral) exist between Morex and any current or former
stockholder, officer, director, employee or consultant.

 

(c)           Morex is not a party to any collective bargaining agreement or other
labor union contract applicable to persons employed by Morex and

 

(1)           there are no controversies, strikes,
slowdowns or work stoppages pending or, to the Knowledge of Morex,
threatened by any employee against Morex;

 

(2)           there are no unfair labor practice complaints
pending against Morex before the National Labor Relations Board or any other
Governmental Authority or involving any current or former employee of Morex;

 

(3)           Morex has complied with all applicable Laws
relating to the employment of labor, including those related to wages, hours,
collective bargaining and the payment and withholding of taxes and other sums
as required by any Governmental Authority and have withheld and paid to any
appropriate Governmental Authority, or are holding for payment not yet due to
such Governmental Authority, all amounts required to be withheld from employees
of Morex and are not liable for any arrears of wages, taxes, penalties or other
sums for failure to comply with any of the foregoing;

 

(4)           Morex has paid in full to all its employees,
or adequately accrued for in accordance with GAAP, all wages, salaries,
commissions, bonuses, benefits and other

 

21

 

compensation due to or on behalf of its
employees provided however that Morex’ employees have until the end of a
calendar year to use accrued vacation;

 

(5)           there is no claim with respect to payment of
wages, salary or overtime pay that has been asserted or is now pending or
threatened before any Governmental Authority with respect to any Persons
currently or formerly employed by Morex;

 

(6)           there is no charge or proceedings with
respect to a violation of any occupational safety or health standards that has
been asserted or is now pending or threatened with respect to Morex; and

 

(7)           there is no charge of discrimination in
employment or employment practices, for any reason, including, without
limitation, age, gender, race, religion or other legally protected category,
which has been asserted and not settled or is now pending or threatened before
the United States Equal Employment Opportunity Commission, or any other
Governmental Authority in any jurisdiction in which Morex has employed or
currently employs any Person.

 

4.17         Employees and Related Agreements; ERISA.

 

(a)           Schedule 4.17 contains a true and complete list of each
Employee Plan and each employee agreement of Morex.  Morex has no plan or commitment, whether
legally binding or not, to establish any new Employee Plan, to enter into any
employee agreement or to modify or to terminate any Employee Plan or employee
agreement (except to the extent required by law as previously disclosed to THK,
or as required by this Agreement), or has any intention to do any of the
foregoing been communicated to employees.

 

(b)           Morex has provided to THK (1) current, true and complete copies of
each Employee Plan and each employee agreement, including all amendments
thereto, and trust or funding agreements with respect thereto, (2) the two
most recent annual actuarial valuations, if any, prepared for each Employee
Plan, (3) the two most recent annual reports (Series 5500 and all
schedules thereto), if any, required under ERISA in connection with each
Employee Plan or related trust, (4) a statement of alternative form of
compliance pursuant to Department of Labor Regulation §2520.104-23, if any,
filed for each Employee Plan which is an “employee pension benefit plan” as
defined in Section 3(2) of ERISA for a select group of management or
highly compensated employees, (5) the most recent determination letter
received from the IRS, if any, for each Employee Plan and related trust which
is intended to satisfy the requirements of Section 401(a) of the
Code, (6) if the Employee Plan is funded, the most recent annual and
periodic accounting of Employee Plan assets, and (7) the most recent
summary plan description together with the most recent summary of material
modifications, if any, required under ERISA with respect to each Employee Plan.

 

(c)           Except to the extent any action does not have a Material Adverse Effect
on Morex (1) Morex has performed in all material respects all obligations
required to be performed by it under each Employee Plan and employee agreement
and is not in default under or in violation of any Employee Plan or employee
agreement, (2) each Employee Plan has been established and maintained in
all material respects in accordance with its terms and in

 

22

 

compliance with all requirements of Laws, (3) each
Employee Plan intended to qualify under Section 401 of the Code is so
qualified and a determination letter has been issued by the IRS to the effect
that each Employee Plan is so qualified and that each trust forming a part of
any Employee Plan is exempt from tax pursuant to Section 501(a) of
the Code and, to the knowledge of Morex, no circumstances, exist which could
reasonably be expected to adversely affect this qualification or exemption, (4) no
“prohibited transaction,” within the meaning of Section 4975 of the Code
or Section 406 of ERISA, has occurred with respect to any Employee Plan, (5) there
are no actions, proceedings, arbitrations, suits or claims pending or, to the
knowledge of Morex, threatened or anticipated (other than routine claims for
benefits), with respect to any Employee Plan or employee agreement, (6) no
event or transaction has occurred with respect to any Employee Plan that would
result in the imposition of any tax under Chapter 43 of Subtitle D of the Code,
(7) no Employee Plan is under audit or investigation by the IRS, the
Department of Labor or other Governmental Authority and, to the knowledge of
Morex, no audit or investigation is pending or threatened, (8) no
liability under any Employee Plan has been funded or has any obligation been
satisfied with the purchase of a contract from an insurance company as to which
Morex has received notice that insurance company is insolvent or is in
rehabilitation or any similar proceeding, (9) Morex has timely deposited
and transmitted, or accrued, all amounts withheld from employees for
contributions or premium payments for each Employee Plan into the appropriate
trusts or accounts, and (10) each Employee Plan that allows loans to plan
participants has been operated in all material respects in accordance with the
plan’s written loan policy; in addition, all outstanding loans from all
Employee Plans are current as of the Closing Date, and there are no loans in
default.

 

(d)           Morex is not the sponsor, and does not maintain, contribute to, or have
any liability in respect of, and has never sponsored, maintained, contributed
to, or had any liability in respect of, or been required to contribute to, an “employee
pension benefit plan” within the meaning of Section 3(2) of ERISA
that is subject to Title IV of ERISA, or a “multiple employer plan” (within the
meaning of Section 413 of the Code).

 

(e)           Morex (1) does not maintain or contribute to any Employee Plan
that provides, or has any liability to provide, life insurance, medical,
severance or other employee welfare benefits to any employee upon his or her
retirement or termination of employment, except as may be required by Section 4980B
of the Code or otherwise at the expense of the employee, and (2) does not
have any obligation or agreement (whether in oral or written form) to any
employee (either individually or to employees as a group) that such employee(s)
would be provided with life insurance, medical, severance or other employee
welfare benefits upon their retirement or termination of employment, except to
the extent required by Section 4980B of the Code or otherwise at the
expense of the employee.

 

(f)            The execution of, and performance of this
Agreement and the transactions contemplated hereby will not constitute an event
under any Employee Plan or employee agreement that will result in any payment
(whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any employee.

 

(g)           No Employee Plan or employee agreement is funded by a trust described
in Section 501(c)(9) of the Code.

 

23

 

(h)           Morex is not (1) a member of a “controlled group of corporations,”
or an “affiliated service group” within the meanings of Sections 414(b) or
(m) of the Code, (2) required to be aggregated with any Person under Section 414(o)
of the Code; or (3) under “common control,” with any Person within the
meaning of Section 4001(a)(14) of ERISA or Section 414(c) of the
Code.

 

(i)            Morex has complied in all material respects
with the requirements of the HIPAA Medical Privacy Regulations with respect to
each Employee Plan that is subject to such requirements and with respect to
Morex’ status as a “covered entity” as defined therein.

 

4.18         Environmental and Health/Safety Matters.

 

(a)           To
the Knowledge of Morex, it is
and has at all times been in material compliance with Environmental Laws
applicable to assets used in the Business (“Business Assets”), and the
Business and Morex is not currently liable for any penalties, fines or
forfeitures for failure to comply with Environmental Laws.

 

(b)           Morex has obtained, or caused to be obtained (except where such failure
to obtain has not resulted in a
Material Adverse Effect), and, to the Knowledge of Morex, is in material
compliance with, all applicable and material Permits required by Environmental
Laws and necessary for the operation of the Business.  Copies of such Permits have been provided to
THK.  There are no administrative or
judicial investigations, notices, claims or other proceedings pending or, to
the Knowledge of Morex, threatened by any Governmental Authority or third
parties against Morex or any of the Business Assets which question the validity
or entitlement of Morex to any Permit wherein an unfavorable decision, ruling
or finding could have a Material Adverse Effect on Morex.

 

(c)           Morex has neither received nor does it have Knowledge of any non
compliance order, warning letter, investigation, notice of violation, claim,
suit, action, judgment, or administrative or judicial proceeding pending or
threatened against or involving Morex, issued by any Governmental Authority or
third party with respect to any Environmental Laws, which has not been resolved
to the satisfaction of the issuing Governmental Authority or third party and which could have a Material Adverse Effect
on Morex.

 

(d)           To the Knowledge of Morex, it has not generated, manufactured, used,
recycled, transported, transferred, stored, handled, treated, discharged,
Released or disposed of, nor has
it allowed or arranged for any third parties to generate, manufacture, use,
recycle transport, transfer, store, handle, treat, discharge, Release or
dispose of, Hazardous Substances or other Waste (which, for purposes of this Section 4.18(d) only,
Waste shall include white goods and recyclable materials) to or at any
location, including property currently or previously owned by it, other than a
site lawfully allowed or permitted by the Environmental Laws or other
applicable requirements of Laws to receive such Hazardous Substances or other
Waste for such purposes, nor has it performed, arranged for or allowed by any
method or procedure such generation, manufacture, use, recycling,
transportation, transfer, storage, treatment, spillage, leakage, dumping,
discharge, Release or disposal in material contravention of any Environmental
Laws, except such as would not have a Material Adverse Effect on Morex.

 

24

 

(e)           To the Knowledge of Morex, it neither caused, nor allowed to be caused
or permitted, either by action or inaction, a Release or discharge, or
threatened Release or discharge, of any material quantity of Hazardous
Substance on, into or beneath the surface of any parcel owned or leased by
Morex or to any properties adjacent thereto which would have a Material Adverse
Effect on Morex.  To the Knowledge of
Morex, there has neither occurred, nor is there presently occurring, a Release
or discharge, or threatened Release or discharge, of any material quantity of
Hazardous Substances on, into or beneath the surface of any parcel owned or
leased by Morex or to any properties adjacent thereto which would have a
Material Adverse Effect on Morex.

 

(f)            To the Knowledge of Morex, it has neither
generated, handled, manufactured, treated, stored, used, recycled, shipped,
transported, transferred, or disposed of, nor has it allowed or arranged, by
contract, agreement or otherwise, for any third parties to generate, handle,
manufacture, treat, store, use, recycle, ship, transport, transfer or dispose
of, any Hazardous Substances or other Waste to or at a site which, pursuant to
Environmental Laws or any similar state law has been placed or been proposed
for placement on the National Priorities List or its state equivalent.  Neither Morex nor any Members has received
written notice, and neither Morex nor any Member has knowledge of any facts
which could give rise to any notice, that Morex is a potentially responsible
party for a federal or state environmental cleanup site or for corrective
action under Environmental Laws.  Morex
has not submitted nor was required to submit any notice pursuant to Section 103(c) of
CERCLA with respect to any parcel owned or leased by Morex.  Morex has not received any written request
for information in connection with any federal or state environmental cleanup
site, or in connection with any of real property or premises where Morex has
transported, transferred or disposed of Hazardous Materials or other
Wastes.  Morex has neither been required,
nor has it undertaken, any response or remedial actions or clean up actions of
any kind at the request of any Governmental Authorities or at the request of
any other third party.  To the Knowledge
of Morex it has no material liability under any Environmental Laws for personal
injury, property damage, natural resource damage, or clean up obligations.

 

(g)           To the Knowledge of Morex, there are no Aboveground Storage Tanks or
Underground Storage Tanks on any parcel owned or leased by Morex.  For purposes of this Agreement, the terms “Aboveground
Storage Tanks” and “Underground Storage Tanks” shall have the
meanings given them in Section 6901 et seq., as amended, of RCRA, or any
applicable state or local statute, law, ordinance, code, rule, Regulation,
order ruling, or decree governing Aboveground Storage Tanks or Underground
Storage Tanks.

 

(h)           Schedule 4.18(h) is a true and complete schedule of
(1) all material environmental audits, assessments, investigations or
occupational health studies, of which Morex has Knowledge, undertaken by, or on
behalf of, Morex, relating to or affecting Morex or any of the Real Properties,
and (2) all material citations issued under OSHA, or similar state or
local statutes, laws, ordinances, codes, rules, regulations, orders, rulings,
or decrees, relating to or affecting Morex or any of the Real Properties.

 

(i)            Schedule 4.18(i) contains a list of the Business Assets
which have been confirmed to contain PCBs or “asbestos” or “asbestos containing
material” (as such terms are identified under the Environmental Laws). Morex
has operated and continues to operate in

 

25

 

material
compliance with all Environmental Laws governing the handling, use and exposure
to and disposal of PCBs or asbestos or asbestos containing materials, except
where such noncompliance would not have a Material Adverse Effect on Morex
There are no claims, actions, suits, governmental investigations or proceedings
brought by any Governmental Authority or third party pending, or, to the
knowledge of Morex, threatened against or directly affecting Morex, the
Business Assets or the Business relating to the use, handling or exposure to
and disposal of PCBs or asbestos or asbestos containing materials in connection
with their assets and operations.

 

(j)            Schedule 4.18(j) is a true and complete schedule of
the operations and activities, and locations thereof, which have been conducted
and are being conducted by Morex on any of the Real Properties which have
involved the generation, accumulation, storage, treatment, transportation,
labeling, handling, manufacturing, use, recycling, spilling, leaking, dumping,
discharging, release or disposal of any material quantities of Hazardous
Substances.

 

4.19         Certain Interests.

 

(a)           No officer, director or stockholder of Morex,
and no relative or spouse (or relative of such spouse) who resides with, or is
a dependent of, any such officer or director:

 

(1)           except as set forth on Schedule 4.19(a), has any direct or
indirect financial interest in any competitor, supplier or customer of Morex,
provided, however, that the ownership of securities representing no more than
3% of the outstanding voting power of any competitor, supplier or customer, and
which are also listed on any national securities exchange or traded actively in
the national over-the-counter market, shall not be deemed to be a “financial
interest” so long as the Person owning the securities has no other connection
or relationship with the competitor, supplier or customer;

 

(2)           owns, directly or indirectly, in whole or in part, or has any other
interest in any tangible or intangible property which Morex uses or has used in
the conduct of the Business or otherwise; or

 

(3)           has outstanding any Indebtedness to Morex.

 

(b)           Morex has no Indebtedness, Liabilities, or any other obligation of any
nature whatsoever to, any officer, director or stockholder of Morex or to any
relative or spouse (or relative of such spouse) who resides with, or is a
dependent of, any such officer, director or stockholder.

 

4.20         Litigation.   There are no Actions pending, or to the Knowledge of
Morex, threatened, against, relating to or affecting Morex or the Business
before any Court, Governmental Agency or any arbitrator or mediator. Neither
Morex nor the Members are subject to any Order, including but not limited to
any Order which prohibits or restricts the consummation of the transactions
contemplated hereby or restricts in any way the ownership or operations of
Morex or the Business.

 

4.21         Intellectual Property.   Except as would not,
individually or in the aggregate, have a Material Adverse Effect on Morex (1) Morex
owns, or is licensed to use (in each case, free and

 

26

 

clear
of any Liens), all Intellectual Property used in or necessary for the conduct
of the Business as currently conducted, (2) to the Knowledge of Morex, the
use of any Intellectual Property by Morex does not infringe on or otherwise
violate the rights of any Person, (3) the use of the Intellectual Property
is in accordance with applicable licenses pursuant to which Morex acquired the
right to use any Intellectual Property, and (4) to the Knowledge of Morex,
no Person is challenging, infringing on or otherwise violating any right of
Morex with respect to any Intellectual Property owned by or licensed to
Morex.  As of the date of this Agreement,
except as would not, individually or in the aggregate, have a Material Adverse
Effect on Morex, neither Morex nor any of the Members has Knowledge of any
pending claim, order or proceeding with respect to any Intellectual Property
used by Morex and no Intellectual Property owned or licensed by Morex is being
used or enforced in a manner that would reasonably be expected to result in the
abandonment, cancellation or unenforceability of the Intellectual Property. Schedule 4.21
sets forth a true and complete list of all domain names owned by Morex or any
Member.

 

4.22         Inventories.   The Inventory of Morex as reflected in the Company
Financials are in proper working order and of merchantable quality, which can
be sold in the ordinary course of the Business in a fashion consistent with the
historical sales results, efficiencies, terms, conditions, pricing, and inventory
turnover patterns of the Business.  Morex
has previously delivered an accurate, correct and complete inventory of a list
of names by e-mail to Morex’s counsel.

 

4.23         Receivables.   The Receivables of Morex as reflected in the Company
Financials, consist solely of bona fide
accounts receivable generated by the Business in the ordinary course, which can
be collected in the ordinary course of the Business in a fashion consistent
with the historical collection results, efficiencies, policies, procedures and
patterns of the Business.  The
Receivables as reflected in the Company Financials for the period ended June 30,
2005 exceed the Liabilities reflected on such Company Financials by at least
$1.00; provided that on the Closing Date, Morex shall not have any Liability
for amounts owing any advisor or agent retained by Morex or the Members in
connection with the transactions contemplated by this Agreement.

 

4.24         Residency; Investment Sophistication;
Backgrounds.   Each
Member (a) is a resident of New York or Connecticut, (b) is an “accredited
investor” as defined in Section 501 of Regulation D promulgated under the
Securities Act and capable of evaluating the potential risks of an investment
in THK Common Stock, (c) has received, read and understands the public
filings of THK with the SEC, including but not limited to THK’s Annual Report
on Form 10-KSB for the year ended December 31, 2004, including the
financial statements and “Risk Factors” contained therein, (d) has been
afforded a full opportunity to conduct such additional “due diligence”
investigation of THK, its Subsidiaries and Morex Merger Sub, including their
respective businesses, management, balance sheets, financial results, prospects
and Risk Factors as the Members have deemed appropriate, (e) has retained
and has been advised by his own competent lawyers and accountants in regard to
the preparation, negotiation and execution of this Agreement and the
transactions contemplated herein, and (f) has never been charged, indicted
or convicted of any criminal offense, excepting only minor traffic violations.

 

4.25         Brokers.   Except as set forth on Schedule 4.25,
neither Morex nor the Members have employed any financial advisor, broker,
finder, consultant or advisor, and neither Morex

 

27

 

nor
the Members have incurred nor will incur any broker’s, finder’s, investment
banking, consultant, advisory or similar fees, commissions or expenses in
connection with the transactions contemplated by this Agreement.

 

4.26         Cash on Hand/Banks and Brokerage Accounts.   On the Closing Date, the
cash on deposit in unrestricted accounts maintained by Morex equals at least
$150,000. Schedule 4.26 sets forth (1) a true and complete
list of the names and locations of all banks, trust companies, securities
brokers and other financial institutions at which Morex has an account or
safety deposit box or maintains a banking, custodial, trading or other similar
relationship, (2) a true and complete list and description of each
account, safety deposit box and relationship, indicating in each case the
account number, the names of the respective officers, employees, agents or
other similar representatives of Morex having signatory power with respect
thereto and the current balances in the accounts or safety deposit boxes, and (3) a
list of each debenture, note, and other evidence of indebtedness, stock,
security (including rights to purchase and derivative securities or rights),
interests in joint ventures and general and limited partnerships, mortgage
loans and other investment or portfolio assets owned of record or beneficially
by Morex, the legal name of the record and beneficial owner thereof, the
location of the certificates, if any, therefor, the maturity date, if any, and
any stock or bond powers or other authority for transfer granted with respect
thereto.

 

4.27         Liabilities and Indebtedness.   On the Closing Date, Morex
shall have no Indebtedness or Liabilities, including but not limited to Claims
of Any Nature, except for Indebtedness or Liabilities incurred in the ordinary
course of business consistent with past practice and reflected on the Company
Financials or incurred in the ordinary course of business between June 30,
2005 and the Closing Date.

 

4.28         Contracts.   Schedule 4.28 sets forth a list of
all material contracts to which Morex is a party including:

 

(a)           any agreement (or group of related agreements) for the purchase or sale
of raw materials, commodities, supplies, products, or other personal property,
or for the furnishing or receipt of services, not entered into in the ordinary
course of business;

 

(b)           any agreement concerning a partnership, joint venture or limited
liability company venture;

 

(c)           any agreement (or group of related agreements) under which it has
created, incurred, assumed, or guaranteed any Indebtedness for borrowed money,
in excess of $10,000 or pursuant to which a Lien has been placed on any of its
assets, tangible or intangible, in excess of $10,000;

 

(d)           any agreement concerning confidentiality or non-competition;

 

(e)           any agreement between any Member or their Affiliates and Morex;

 

(f)            any agreement under which Morex has advanced
or loaned monies to any director, officer, or employee;

 

28

 

(g)           any agreement which restricts Morex from engaging in the Business
anywhere in the world;

 

(h)           any settlement or similar agreement, the performance of which will
require Morex to pay, or entitles Morex to receive, after the Closing Date
consideration in excess of $10,000;

 

(i)            any agreement relating to any acquisition,
divestiture, merger or similar transaction involving consideration in excess of
$10,000, which contains representations, warranties, covenants, indemnities or
other obligations which are still in effect;

 

(j)            any powers of attorney (other than a power of
attorney given in the ordinary course of business for routine Tax matters);

 

(k)           any contract relating to pending capital expenditures of Morex in
excess of $10,000;

 

(l)            any agreement under which Morex has advanced
or loaned any other Person amounts in the aggregate exceeding $10,000; and

 

(m)          any other agreement (or group of related agreements) the performance of
which involves consideration in excess of $50,000.

 

Morex has delivered, or made available, to THK, a
correct and complete copy of each written agreement listed in Schedule 4.28
(as amended to date) and a written summary setting forth the material terms and
conditions of each oral agreement, if any, referred to in Schedule 4.28.
Each agreement is the legal, valid, binding obligation of the parties thereto,
enforceable against each party except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or affecting creditor rights generally or by general equity principles
(regardless of whether enforcement is sought in a proceeding in equity or at
law).  No party to any agreement is in
material breach or default, and no event has occurred that with notice or lapse
of time would constitute a material breach or default, or permit termination,
modification, or acceleration, under the agreement.

 

4.29         Spyware/Adware.   To the Knowledge of Morex,
it is not aware of any complaints of “adware,” “spyware” or “cookie stuffing”
arising from or related to services performed by Morex.  Morex has a “zero tolerance” policy regarding
“adware,” “spyware” and “cookie stuffing” and takes commercially reasonable
steps to investigate the practices regarding these activities by each of its
Affiliates.

 

4.30         Material Information.   All material information
concerning Morex has been provided by Morex and the Members to THK and Morex
Merger Sub.

 

29

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES OF

THK AND MOREX MERGER SUB

 

The representations, warranties and covenants made
by THK and Morex Merger Sub are made solely for the benefit of the Members and
Morex, and should not be relied on by any other party as accurately describing
or reflecting the current state of THK’s business.  In order to induce the Members and Morex to
enter into this Agreement and to consummate the transactions contemplated
hereby, THK and Morex Merger Sub represent and warrant to the Members and Morex
as follows:

 

5.1           Organization and Qualification.   Each of THK and Morex
Merger Sub is a corporation or limited liability company, as applicable, duly
organized, validly existing and in good standing under the laws of its
respective state of incorporation or organization with full power and authority
to own, lease and operate its properties and to conduct its business as now
conducted except where failure to be so organized, existing and in good
standing would not reasonably be expected to have a Material Adverse Effect on
THK or Morex Merger Sub.  Each of THK and
Morex Merger Sub is duly qualified or licensed as a foreign corporation in each
of the jurisdictions listed on Schedule 5.1 which are the only
jurisdictions in which the failure to be so licensed or qualified could have a
Material Adverse Effect on THK or Morex Merger Sub.  Each of THK and Morex Merger Sub has made
available to the Members and Morex true, complete and correct copies of its
charter documents, as amended to date. 
All of the issued and outstanding membership interests of Morex Merger
Sub, or other equity interests in, Morex Merger Sub are (a) duly
authorized, validly issued, fully paid, non-assessable, (b) owned,
directly or indirectly, by THK free and clear of all Liens, and (c) free
of any restriction, including, without limitation, any restriction which
prevents the payment of dividends to THK, or otherwise restricts the right to
vote, sell or otherwise dispose of such ownership interest other than
restrictions under the Securities Act and state securities laws.

 

5.2           Capital Structure.   The authorized capital
stock of THK consists of (a) 100,000,000 shares of THK Common Stock and (b) 5,000,000
shares of “blank check” Preferred Stock, 500,000 shares of which have been
designated “Series One Preferred Stock” (“THK Preferred Stock”).  As of the date of this Agreement: (1) 38,371,528
shares of THK Common Stock were issued and outstanding, (2) no shares of
THK Preferred Stock were issued or outstanding, (3) 2,500,000 shares of
THK Common Stock were held in the treasury of THK, and (4) 12,208,000 shares
of THK Common Stock were duly reserved for future issuance pursuant to warrants
or options issued or granted by THK.  All
outstanding shares of THK Common Stock are, and all shares of THK Common Stock
to be issued in connection with the consummation of the transactions
contemplated by this Agreement will be, when issued in accordance with the
terms hereof, duly authorized, validly issued, fully paid and non-assessable,
and not subject to, or issued in violation of, any kind of preemptive,
subscription or any kind of similar rights. 
There are no bonds, debentures, notes or other indebtedness of THK
having the right to vote (or convert into securities having the right to vote)
on any matters on which stockholders of THK may vote. Except as described on Schedule 5.2(a) hereof,
there are no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind (contingent
or otherwise) to which THK is a party or bound obligating THK to issue, deliver
or

 

30

 

sell,
or cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of THK or obligating THK to issue, grant, extend or
enter into any agreement to issue, grant or extend any security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking.  Except as set forth on Schedule 5.2(b) neither
THK nor Morex Merger Sub is subject to any obligation or requirement to provide
funds for, or to make any investment (in the form of a loan or capital
contribution) to, or in, any Person. All of the issued and outstanding shares
of THK Common Stock were issued in compliance in all material respects with all
applicable federal and state securities laws.

 

5.3           Authorization; Enforceability.   Each of THK and Morex
Merger Sub has the corporate or limited liability company power and authority
to execute, deliver and perform their respective obligations under this
Agreement and the other Documents to which it is or they are a party. The
execution, delivery and performance of this Agreement and the other Documents
to which it is or they are a party and the consummation of the transactions
contemplated herein and therein have been duly authorized and approved by the board
of directors of THK and the managers and members of Morex Merger Sub, and no
other action by either entity or its equity holders is necessary to consummate
the transactions contemplated by this Agreement and the other Documents.  This Agreement and each of the other
Documents to be executed and delivered by each of THK and Morex Merger Sub have
been duly executed and delivered by, and constitute the legal, valid and
binding obligations of, each of them, enforceable against each of them, in
accordance with their terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditor rights generally or by general equity
principles (regardless of whether enforcement is sought in a proceeding in
equity or at law).

 

5.4           No Violation or Conflict.   None of (a) the
execution and delivery by THK and Morex Merger Sub of this Agreement and the
other Documents to be executed and delivered by each of THK and Morex Merger
Sub, (b) consummation by each of THK and Morex Merger Sub of the
transactions contemplated by this Agreement and the other Documents, or (c) the
performance of this Agreement and the other Documents required by this
Agreement to be executed and delivered by each of THK and Morex Merger Sub at
the Closing, will (1) conflict with or violate the charter documents of
any of them, (2) conflict with or violate any Law, Order or Permit
applicable to any of them or by which their properties are bound or affected,
or (3) result in any breach or violation of or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or impair the rights of THK or Morex Merger Sub or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of any Lien on any of the properties or assets of either THK or Morex
Merger Sub pursuant to, any Contract, Permit or other instrument or obligation to
which THK or Morex Merger Sub is a party or by which THK or Morex Merger Sub or
its properties are bound or affected except, in the case of clause (2) or (3) above,
for any control, breach, violation, default or other occurrence that would not
individually or the aggregate, have a Material Adverse Effect on THK or Morex
Merger Sub.

 

5.5           Governmental Consents and Approvals.   Except as set forth on Schedule 5.5,
the execution, delivery and performance of this Agreement and the other
Documents by each of THK and Morex Merger Sub do not and will not require any
consent, approval, authorization, Permit or other order of, action by, filing
with or notification to, any Governmental Authority.

 

31

 

5.6           Litigation.   Except as set forth on Schedule 5.6,
there is no suit, action, arbitration, claim, governmental or other proceeding
before any Governmental Authority pending or, to the knowledge of THK,
threatened, against THK or Morex Merger Sub.

 

5.7           Interim Operations.   Morex Merger Sub was
formed solely for the purpose of engaging in the transactions contemplated by
this Agreement, and has engaged in no other business activities and have
conducted their operations only as contemplated in this Agreement.

 

5.8           Brokers.   Neither THK nor Morex Merger Sub has employed any
financial advisor, broker or finder, and neither THK nor Morex Merger Sub has
incurred and will not incur any broker’s, finder’s, investment banking or
similar fees, commissions or expenses in connection with the transactions
contemplated by this Agreement.

 

5.9           Material Information.   All material information
concerning THK and Morex Merger Sub has been made available to the Members and
Morex (including, without limitation, pursuant to a letter to the Members dated
January 13, 2006).  THK has complied
with all SEC rules and regulations regarding the public disclosure of
material information, all SEC reports made by THK are true and complete in all
material respects as of the date of such reports and none of the SEC reports
made by THK contain any omission of a material fact as of the date of such
reports, except, in each case, to the extent that an SEC report has been
amended, revised or superseded by a subsequent filing with the SEC made prior
to the date hereof.

 

ARTICLE VI

 

CLOSING DELIVERIES

 

6.1           Morex/Member Deliveries.  At the Closing, Morex and the
Members, to the extent applicable, shall take the following actions:

 

(a)           Morex shall deliver to THK, in a form reasonably satisfactory to THK,
an affidavit of Morex, issued pursuant to and in compliance with Treasury
Regulations Sections 1.897-2(h) and 1.1445-2(c)(3) and dated as of
the Closing Date, certifying that an interest in Morex is not a U.S. real
property interest within the meaning of Section 897 of the Code;

 

(b)           The Members shall convey, give, grant, assign and transfer to Morex
Surviving LLC, any and all rights, titles and interests of any nature
whatsoever that the Members may have in, or to, the ownership or use of any and
all Intellectual Property used in or associated with Morex or the Business and
not otherwise transferred to Morex prior to the Closing;

 

(c)           Except for RM’s interest in Vendare Media, the Members shall convey,
give, grant, assign and transfer to Morex Surviving LLC, any and all rights,
titles and interests of any nature whatsoever, legal or beneficial, active or
passive, that the Members may have in, or to any other Person, business or “website”
involving the sale or provision of information, goods or services over the
Internet, it being expressly acknowledged and agreed by the Members that it is
the intent of the Parties and of this Agreement that following the Merger the
Members’ only businesses of any nature whatsoever involving the Internet, will
be their respective interest in THK and Morex Surviving LLC;

 

32

 

(d)           Each of LE, RM and TM shall execute and deliver the employment
agreements set forth in Exhibit C hereto;

 

(e)           Each Member shall execute and deliver the registration rights agreement
in the form set forth in Exhibit A hereto;

 

(f)            The Members shall deliver Morex Certificates
evidencing all of the Membership Interests of Morex to THK;

 

(g)           Morex shall deliver to THK, the Company Financials prepared in
accordance with GAAP, and accompanied by a signed, unqualified opinion of
Blackman Kallick Bartelstein LLP, acceptable to THK in its sole, absolute
discretion;

 

(h)           Morex shall deliver to THK a complete copy of all of the acquisition
agreements and documents executed in connection with Morex’s acquisition of
Catamount, acceptable to THK in its sole, absolute discretion;

 

(i)            Morex shall deliver a certificate, with
supporting bank statements, stating the amount of cash on deposit on the
Closing Date in unrestricted accounts maintained by Morex;

 

(j)            Morex shall deliver all minute books and
membership interest records to THK; and

 

(k)           Morex shall deliver a copy of the resolutions duly, validly and
unanimously adopted by the managers and Members of Morex, certified by the corporate
secretary, authorizing and approving the execution, delivery and performance of
this Agreement and the other Documents and the transactions contemplated hereby
and thereby.

 

6.2           THK/Morex Merger Sub Deliveries.  At the Closing, THK and the
Morex Merger Sub, to the extent applicable shall take the following action:

 

(a)           THK shall deliver the aggregate Cash Consideration, Stock Consideration
and the Accelerated Payment described in Section 2.6 subject to the
adjustment described in Section 2.9;

 

(b)           THK shall deliver to the Shareholders an irrevocable letter of
instructions addressed to Colonial Stock Transfer Co. Inc. in regard to the
issuance and delivery to the Shareholders of the Stock Consideration in the
form set forth as Exhibit D hereto;

 

(c)           THK shall execute and
deliver warrant agreements substantially in the form set forth in Exhibit B
hereto (the “Warrant Agreement”) evidencing the issuance of warrants to
LE, RM and TM;

 

(d)           THK shall cause Morex Surviving LLC to execute and deliver the employment
agreements set forth on Schedule 6.1(d) hereto;

 

33

 

(e)           THK shall execute and deliver the registration rights agreement in the
form set forth in Exhibit A hereto; and

 

(f)            THK and Morex Merger Sub shall deliver a copy
of the resolutions duly, validly and unanimously adopted by the board of
directors of THK and the managers of Morex Merger Sub and by the members of
Morex Merger Sub certified by their respective officer authorizing and
approving the execution, delivery and performance of this Agreement and the
other Documents and the transactions contemplated hereby and thereby.

 

ARTICLE VII

 

EMPLOYMENT MATTERS

 

7.1           Current Employees.   The aggregate annual base
salary of each person employed by Morex Surviving LLC shall initially be as set
forth in the Employee Salary Letter attached hereto as Schedule 7.1;
and

 

7.2           Management of Surviving LLC.   From and after the
Effective Time, until their respective successor is duly elected and qualified,
each of LE and RM shall serve as Co-Chief Executive Officer and TM shall serve
as Chief Operating Officer of Morex Surviving LLC with authority and
responsibility to manage and control the day-to-day operations of Morex
Surviving LLC subject to the overall control of the board of directors of Morex
Surviving LLC and THK.  Specifically:

 

(a)           LE, RM and TM shall have the authority to (1) establish all
employee personnel policies involving Morex, (2) make all decisions
regarding persons employed by Morex, (3) establish marketing and service
strategies for Morex, and (4) to establish and change, from time to time,
all policies and practices relating to the pricing of Morex products and
services.

 

(b)           Notwithstanding the provisions of clause (a) above, neither Morex
Surviving LLC, nor any of its Subsidiaries may take or agree to take, and LE,
RM and TM shall not cause, assist or participate in any fashion in Morex
Surviving LLC, or any of its subsidiaries taking or agreeing to take, any of
the following actions, without the prior express approving vote of the board of
directors of Morex Surviving LLC and THK respectively:

 

(1)           amend the Articles of Organization or operating agreement of Morex
Surviving LLC;

 

(2)           wind-up, liquidate, dissolve or reorganize Morex Surviving LLC, or
adopt a plan or proposal contemplating any of the foregoing;

 

(3)           approve the annual budget of Morex Surviving LLC for any fiscal year,
or approve any course of action which is likely to cause Morex Surviving LLC to
incur expenses or to make capital expenditures in amounts materially different
from the comments set forth in the relevant budget;

 

(4)           elect or remove corporate officers of Morex Surviving LLC;

 

34

 

(5)           change the base or bonus compensation structure of any of the senior
management level employees of Morex Surviving LLC including the persons named
on Schedule 7.1;

 

(6)           enter into, modify or terminate any employment agreements, severance
agreements, profit sharing plans, pension plans, or similar agreements with any
employee of, or consultant to, Morex Surviving LLC;

 

(7)           issue securities of Morex Surviving LLC, including debt or equity
securities, options, rights or warrants, or any other securities which are
convertible into or exchangeable for ownership interests of Morex Surviving
LLC;

 

(8)           register any securities of Morex Surviving LLC;

 

(9)           merge, consolidate or combine Morex Surviving LLC with any other
corporation, partnership or other entity;

 

(10)         sell assets of Morex Surviving LLC, other than in the ordinary course
of business;

 

(11)         purchase, sell, lease, acquire or dispose of stock or assets valued at
$25,000 or more, including acquiring another company, division or line of
business (other than as provided for in Morex Surviving LLC’s annual budget
approved in accordance with this Section 7.2);

 

(12)         declare or pay any dividends or any other distribution in respect of
any securities of Morex Surviving LLC, or redeem, acquire or retire any
securities;

 

(13)         make, or commit to make, during any fiscal year capital expenditures or
enter into capital leases (other than capital expenditures and capital leases
provided for in Morex Surviving LLC’s annual budget approved in accordance with
this Section 7.2) which, in the aggregate, exceed $25,000;

 

(14)         enter into any contract, commitment or arrangement of any nature with
any corporation, partnership or other entity directly or indirectly owned or
controlled by, or an Affiliate of, any employee of Morex Surviving LLC, or by
any relative of any employee of Morex Surviving LLC, provided that LE’s
children may remain in the employ of Morex Surviving LLC;

 

(15)         borrow, issue bonds or notes, or otherwise incur debt or guarantee any
debt (other than accounts payable incurred in the ordinary course of business,
and any borrowing, issuance of bonds or notes, or other debt or guarantees of
any debt provided for in Morex Surviving LLC’s annual budget approved in
accordance with this Section 7.2);

 

(16)         mortgage, pledge, grant a security interest, or otherwise encumber the
assets of Morex Surviving LLC (other than any mortgage, pledge, grant of
security interest, or other encumbrance provided for in Morex Surviving LLC’s
annual budget approved in accordance with this Section 7.2);

 

35

 

(17)         initiate or settle any lawsuit or arbitration proceeding involving
Morex Surviving LLC, other than actions to collect debts owed to Morex
Surviving LLC;

 

(18)         retain independent certified public accountants to audit the books and financial
records of Morex Surviving LLC;

 

(19)         issue any press release of any type without the prior written approval
of the chief executive officer of THK; or

 

(20)         take any action referred to in clauses (1) through (19) above,
inclusive, relating to any subsidiary of Morex Surviving LLC.

 

(c)           Notwithstanding the restrictions set forth in Section 7.2(b),
Morex Surviving LLC may incur, without the prior approval of the boards of
directors of Morex Surviving LLC and THK, List Acquisition Expenses not to exceed,
in any given month, an amount equal to the List Acquisition Expense Limit.

 

ARTICLE VIII

 

EARNOUT

 

8.1           Earnout.   The Earnout Consideration shall consist of the right
to receive four payments (each an “Earnout Payment” and together the “Earnout
Payments”).  Each Earnout Payment
shall be in an amount determined according to the terms of Section 8.2 and
shall be paid as described in Section 8.3. 
The first Earnout Payment shall be payable on or before March 30,
2006 (the “2006 Earnout Payment”), the second Earnout Payment shall be
payable on or before March 30, 2007 (the “2007 Earnout Payment”),
the third Earnout Payment shall be payable on or before March 30, 2008
(the “2008 Earnout Payment”) and the final Earnout Payment shall be
payable on or before March 30, 2009 (the “2009 Earnout Payment”).

 

8.2           Calculation of Earnout Payments.   The amount of each Earnout
Payment shall be calculated as follows:

 

(a)           The 2006 Earnout Payment shall be an amount equal to four (4) times
the Aggregate Earnings of Catamount and Morex for the period beginning on January 1,
2005 and ending December 31, 2005, less the aggregate amount of Merger
Consideration previously paid (including any and all Earnout Payments
previously paid under this Article VIII and any payments under Section 2.9(b)).

 

(b)           The 2007 Earnout Payment shall be an amount equal to four (4) times
the Aggregate Earnings of Morex Surviving LLC for the period beginning on January 1,
2006 and ending December 31, 2006 (provided that, for the period
commencing on January 1, 2006 and continuing through the Effective Time,
such calculation shall be based on the Aggregate Earnings of Catamount and
Morex), less the aggregate amount of Merger Consideration previously paid
(including any and all Earnout Payments previously paid under this Article VIII
and any payments under Section 2.9(b)).

 

36

 

(c)           The 2008 Earnout Payment shall be an amount equal to four (4) times
the Aggregate Earnings of Morex Surviving LLC for the period beginning on January 1,
2007 and ending December 31, 2007, less the aggregate amount of Merger
Consideration previously paid (including any and all Earnout Payments
previously paid under this Article VIII and any payments under Section 2.9(b)).

 

(d)           The 2009 Earnout Payment shall be an amount equal to four (4) times
the Aggregate Earnings of Morex Surviving LLC for the period beginning on January 1,
2008 and ending December 31, 2008, less the aggregate amount of Merger
Consideration previously paid (including any and all Earnout Payments
previously paid under this Article VIII and any payments under Section 2.9(b)).

 

For
purposes of this Article VIII, the Aggregate Earnings of Morex Surviving
LLC shall be determined by THK’s independent certified public accountants.  There is no guarantee that any amounts will
become payable under this Article VIII. 
Notwithstanding anything to the contrary contained herein, the aggregate
Merger Consideration (including all Earnout Payments) payable to the Members
shall not exceed $50 million.

 

8.3           Form of Earnout Payments.   One-half (1/2) of the
total amount of each Earnout Payment shall be paid in United States Dollars and
one-half (1/2) of the total amount of each Earnout Payment shall be paid in the
form of THK Common Stock (“Earnout Shares”). The number of Earnout
Shares to be issued as part of a given Earnout Payment, if any, shall be equal
to one-half (1/2) of the Earnout Payment divided by the average of the closing
prices for shares of THK Common Stock on the last day on which such shares were
traded for each quarter of the calendar year on which the particular Earnout
Payment is based.  Any fractional shares
shall be rounded up to the nearest whole number.  Notwithstanding any provision to the contrary
contained in this Agreement, THK, in its sole and absolute discretion, shall be
permitted to pay to the Members in cash any payment that is otherwise required
hereunder to be paid by the delivery of Earnout Shares if the delivery of the
Earnout Shares would cause the total Merger Consideration paid by
THK in the form of shares of THK Common Stock pursuant to this Agreement
to exceed 20% of the shares of THK Common Stock issued and
outstanding immediately prior to the Effective Time.

 

8.4           THK Earnout Covenants.   From the Closing Date
until December 31, 2008, THK hereby agrees (a) not to merge,
consolidate or otherwise combine Morex Surviving LLC with and into any other
Person (including but not limited to any Affiliate), not to transfer all or
substantially all of the assets of Morex Surviving LLC to any other Person
(including but not limited to any Affiliate), and not to solicit (directly or
through any Affiliate other than Morex Surviving LLC) or divert to any such
Affiliate the business of any customer of Morex Surviving LLC as of the Closing
Date,  including but not limited to
former customers of The Catamount Group LLC, or to solicit and/or divert
directly or through any Affiliate other than Morex Surviving, LLC, the business
of any customer of Morex Surviving, LLC acquired after the Closing Date
provided other business of such customers may be solicited and/or diverted but
only to the extent such other business does not compete directly with the
business then conducted by Morex Surviving, LLC, and (b) to maintain a minimum
amount of working capital in Morex Surviving LLC to fund current operations and
growth opportunities equal to 50% of the pre-tax earnings of Morex Surviving
LLC for the prior quarterly period, but in no event less

 

37

 

than
$250,000 (the “Working Capital Floor”). 
For the avoidance of doubt, if Morex Surviving LLC has $1 million of
pre-tax earnings for the first quarter of 2006, THK shall leave a minimum of
$500,000 in Morex Surviving LLC for second quarter 2006 working capital
purposes.  If in the second quarter of
2006 Morex Surviving LLC has an additional $1 million of pre-tax earnings and
$200,000 of working capital at June 30, 2006, THK shall be required to
leave $300,000 of working capital in Morex Surviving LLC (the difference in
this example of the Working Capital Floor and $200,000), not an additional
$500,000 of working capital.  If in the
third quarter of 2006 Morex Surviving LLC has an additional $200,000 of pre-tax
earnings and $100,000 of working capital at September 30, 2006, THK shall
be required to leave $150,000 of working capital in Morex Surviving LLC (rather
than $100,000 (half of the $200,000) because of the floor).

 

ARTICLE IX

 

INDEMNIFICATION

 

9.1           Survival of Representations and Warranties.   The representations and
warranties contained in this Agreement shall survive until the expiration of
the applicable statute of limitation (with extensions).

 

9.2           Indemnification.

 

(a)           Subject to (c) below, LE and RM agree to jointly and severally,
and TM agrees to severally, indemnify and hold harmless THK and Morex Surviving
LLC, and each of their respective successors and assigns, together with all of
their officers, directors, employees or agents from and against any and all
losses, damages, liabilities, obligations, costs or expenses (any one such item
being herein called a “Loss” and all such items being herein
collectively called “Losses”) which are caused by or arise out of (1) any
default in the performance by Morex or any Member of any obligation contained
in or contemplated by this Agreement, or (2) any material breach by Morex
or any Member of a representation or warranty contained in this Agreement,
including any schedule delivered to THK or Morex Merger Sub pursuant
hereto or in any certificate or other instrument delivered by or on behalf of
the Members or Morex pursuant hereto. 
For the avoidance of doubt, WIH shall not be required to indemnify THK
or Morex Surviving LLC for any Losses under this Agreement.

 

(b)           Subject to (c) below, THK agrees to indemnify and hold harmless
the Members and their respective successors and assigns, from and against any
and all Losses which are caused by or arise out of (1) any default in the
performance by THK or Morex Merger Sub of any obligation of THK contained in,
or contemplated by, this Agreement, or (2) any material breach of a
representation and warranty made by THK or Morex Merger Sub.

 

(c)           No amount of Loss or Losses shall be payable by any indemnifying party
pursuant to Section 9.2(a), in the case of Morex or the Members, or Section 9.2(b),
in the case of THK, unless the aggregate amount of the Loss or Losses that are
indemnifiable exceeds $50,000.  Except in
the case of fraud (including intentional misrepresentation), the amount of Loss
or Losses payable by an indemnifying party pursuant to this Section 9
shall not exceed an amount equal to the aggregate value of the Merger
Consideration actually paid or received, as the case

 

38

 

may
be, by such indemnifying party, provided that LE and RM shall be jointly and
severally liable for any amount up to and including the total aggregate Merger
Consideration actually paid to both LE and RM.

 

(d)           If an indemnified party recovers a Loss or Losses from an indemnifying
party hereunder, the indemnifying party shall be subrogated, to the extent of
the recovery, to the indemnified party’s rights against any third party, other
than a third party with whom the indemnified party has a material business
agreement or arrangement, with respect to the Loss or Losses subject to the
subrogation rights of any insurer providing insurance coverage under one of the
indemnified party’s policies and except to the extent that the grant of
subrogation rights to the indemnifying party is prohibited by the terms of the
applicable insurance policy.

 

(e)           The amount of any loss or losses owed to any indemnified party
hereunder shall be net of any insurance, indemnity, contribution or other
payments or recoveries of a like nature with respect thereto actually recovered
(it being agreed that, promptly after the realization of any such reductions in
the Loss or Losses pursuant hereto, such party shall reimburse the indemnifying
party for the reduction for which the party was indemnified prior to the
realization of the reduction).

 

(f)            Each party hereby acknowledges and agrees
that, from and after the Closing and except for claims seeking equitable
relief, its sole remedy relating to the Merger, or the other transactions
contemplated by this Agreement shall be pursuant to the indemnification
provisions of this Article IX.  In
furtherance of the foregoing, each party hereby waives, to the fullest extent
permitted by applicable law, any and all other rights, claims, and causes of
action it may have against the other parties or their respective
representatives and affiliates relating to the Merger or the other transactions
contemplated by this Agreement, other than claims seeking equitable relief or
for or in the nature of fraud.

 

(g)           Any indemnified party seeking indemnification hereunder shall give to
the indemnifying party, a notice describing in reasonable detail the facts
giving rise to the claim for indemnity, an estimate of the Loss including
reasonable detail on the assumptions used to calculate the Loss and a summary
of the relevant provisions of any agreement, document or instrument executed
pursuant hereto or in connection herewith upon which the claim is based.  After the giving of any notice pursuant
hereto, the amount of indemnification to which an indemnified party shall be
entitled under this Article IX shall be determined by the written
agreement between the indemnified party and the indemnifying party or by a
final judgment or decree of any Court of competent jurisdiction.

 

9.3           Third Party Claim.   If any third person
asserts a claim against an indemnified party hereunder that, if successful,
might result in a claim for indemnification against any indemnifying party
hereunder, the indemnifying party shall be given prompt written notice thereof
and shall have the right (a) to participate in the defense thereof and be
represented, at this or its own expense, by advisory counsel selected by it,
and (b) to approve any settlement if the indemnifying party is, or will
be, required to pay any amounts in connection therewith.  Notwithstanding the foregoing, if within ten
Business Days after delivery of the indemnified party’s notice described above,
the indemnifying party indicates in writing to the indemnified party that, as
between the parties, the claims shall be fully indemnified for by the
indemnifying

 

39

 

party
as provided herein, then the indemnifying party shall have the right to control
the defense of the claim, provided that the indemnified party shall have the
right (1) to participate in the defense thereof and be represented, at
his, her or its own expenses, by advisory counsel selected by it, and (2) to
approve any settlement if the indemnified party’s interests are, or would be,
affected thereby, which approval shall not be unreasonably withheld,
conditioned or delayed.

 

9.4           Set-Off.   THK shall have the right to set-off the amount of
any of THK’s Losses which are indemnifiable by the Members pursuant to this Article IX
against any Earnout Payment that is or may be due and owing to the Members
pursuant to Article VIII of this Agreement (the “Set-Off”).  The Members shall remain liable for the
amount of all THK Losses in excess of the Set-Off.

 

ARTICLE X

 

TAX MATTERS

 

10.1         Tax Returns.

 

(a)           Subject to Section 10.1(c), the Members
shall prepare and file or cause to be filed when due (taking into account all
extensions properly obtained) all Tax Returns that are required to be filed by
or with respect to Morex for taxable years or periods ending on or before the
Closing Date, and the Members shall remit or cause to be remitted any Taxes due
in respect of such Tax Returns, and THK shall prepare and file or cause to be
filed when due (taking into account all extensions properly obtained) all Tax
Returns that are required to be filed by or with respect to the Morex Surviving
LLC for taxable years or periods ending after the Closing Date and THK shall
remit or cause to be remitted any Taxes due in respect of such Tax Returns.

 

(b)           From and after the Closing, the Members shall indemnify THK, pursuant
to, but not subject to the limitations set forth in, Article IX, for all (1) Taxes
imposed on Morex for any taxable year or period, or portion thereof, that ends
on or before the Closing Date and (2) Taxes of any Person (other than
Morex) imposed on Morex as a transferee or successor, by contract or pursuant
to any requirement of laws, which Taxes relate to an event or transaction
occurring before the Closing Date.  In
the case of any taxable period that includes (but does not end on) the Closing
Date (a “Straddle Period”), the Taxes of Morex (or Taxes for which Morex
is liable) for the portion of the period ending on the Closing Date (for which
the Members are liable) shall be determined based on an interim closing of the
books as of the close of business on the Closing Date (and for such purpose,
the taxable period of any partnership or other pass-through entity in which
Morex holds a beneficial interest shall be deemed to terminate at such time),
except that the amount of any such Taxes that are imposed on a periodic basis
and are not based on or measured by income or receipts shall be determined by
reference to the percentage that the number of days in the portion of such
period ending on the Closing Date bears to the total number of days in such
period beginning after the Closing Date. 
The limitations on indemnity contained in Section 9.1(c) shall
not apply to the obligations set forth herein.

 

(c)           Notwithstanding anything herein to the contrary, the Members shall be
liable for and shall pay, and pursuant to Article IX shall indemnify THK
and the Morex

 

40

 

Surviving
LLC against, any real property transfer or gains Tax, sales Tax, use Tax, stamp
Tax, stock transfer Tax, or other similar Tax imposed on the transactions
contemplated by this Agreement.  The
limitations on indemnity contained in Section 9.1(c) shall not apply
to the obligations set forth herein.

 

(d)           THK shall promptly cause the Morex Surviving LLC to prepare and provide
to the Members a package of Tax information materials, including, without
limitation, schedules and work papers (the “Tax Package”) required by
the Members to enable the Members to prepare and file all Tax Returns required
to be prepared and filed by the Members pursuant to Section 10.1(a).  The Tax Package shall be completed in
accordance with past practice, including past practice as to providing such
information and as to the method of computation of separate taxable income or
other relevant measure of income of Morex. 
THK and the Morex Surviving LLC shall cause the Tax Package to be
delivered to the Members within 60 days after the Closing Date.

 

10.2         Contest Provisions.

 

(a)           THK shall promptly notify the Members in
writing upon receipt by THK, the Morex Surviving LLC or any of their respective
Affiliates of notice of any pending or threatened federal, state, local or
foreign Tax audits, examinations or assessments which might affect the Tax
liabilities for which the Members may be liable pursuant to Section 10.1
and Article IX.

 

(b)           The Members shall have the right to represent Morex’ interests in any
Tax audit or administrative or Court proceeding relating to taxable periods
ending on or before the Closing Date, and to employ counsel of its choice at
its expense; provided, however, that the Members shall have no
right to represent Morex’ interests in any Tax audit or administrative or Court
proceeding unless the Members shall have first notified THK in writing of the
Members’ intention to do so and shall have agreed with THK in writing that, as
between THK and the Members, the Members shall be liable for any Taxes that
result from any audit or proceeding.  The
Morex Surviving LLC and its representatives shall have the right to fully
participate at their expense in any audit or proceeding and to consent to any
settlement which affects a Tax period or Straddle Period ending after the
Closing Date.  THK shall have the sole
right to defend Morex with respect to any issue arising with respect to any Tax
audit or administrative or court proceeding relating to taxable periods ending
on or before the Closing Date to the extent THK shall have agreed in writing to
forego any indemnification under this Agreement with respect to the issue.  Notwithstanding the foregoing, the Members
shall not be entitled to settle, either administratively or after the
commencement of Litigation, any claim for Taxes which could adversely affect
the liability for Taxes of THK, Morex or any Affiliate thereof for any period
after the Closing Date to any extent (including, but not limited to, the
imposition of income Tax deficiencies, the reduction of asset basis or cost
adjustments, the lengthening of any amortization or depreciation periods, the
denial of amortization or depreciation deductions, or the reduction of loss or
credit carryforwards) without the prior written consent of THK, which consent
may be withheld in the sole discretion of THK unless the Members have
indemnified THK in a manner acceptable to THK against the effects of any such
settlement.

 

41

 

10.3         Assistance and Cooperation.   After the Closing Date,
each of the Members and THK shall (and cause their respective Affiliates to):

 

(a)           assist the other party in preparing any Tax Returns which such other
party is responsible for preparing and filing in accordance with Section 10.1;

 

(b)           cooperate fully in preparing for any audits of, or disputes with taxing
authorities regarding, any Tax Returns of Morex;

 

(c)           make available to the other and to any taxing authority as reasonably
requested all information, records, and documents relating to Taxes of Morex;

 

(d)           provide timely notice to the other in writing of any pending or
threatened Tax audits or assessments of Morex for taxable periods for which the
other may have a liability under this Article X;

 

(e)           furnish the other with copies of all correspondence received from any
taxing authority in connection with any Tax audit or information request with
respect to any such taxable period;

 

(f)            timely sign and deliver such certificates or
forms as may be necessary or appropriate to establish an exemption from (or
otherwise reduce), or file Tax Returns or other reports with respect to, Taxes
relating to sales, transfer and similar Taxes;

 

(g)           timely provide to the other powers of attorney or similar
authorizations necessary to carry out the purposes of this Article X;

 

(h)           retain all books and records with respect to Tax matters pertinent to
Morex relating to any taxable period beginning before the Closing Date until
the expiration of the statute of limitations (and, to the extent notified by
the other party, any extensions thereof) of the respective taxable periods, and
to abide by all record retention agreements entered into with any taxing
authority; and

 

(i)            give the other party reasonable written
notice prior to transferring, destroying or discarding any such books and
records and, if the other party so requests, allow the other party to take
possession of such books and records or obtain copies of same.

 

ARTICLE XI

 

MISCELLANEOUS

 

11.1         Notices.   All notes or other communications required or
permitted hereunder shall be in writing and shall be deemed given or delivered (i) when
delivered personally or be commercial messenger, (ii) one Business Day
following deposit with a recognized overnight courier service, provided deposit
occurs prior to the deadline imposed by the service for overnight deliver, (iii) when
transmitted, if sent by facsimile copy, provided confirmation of receipt is
received by sender and notice is sent by an additional method provided
hereunder, in

 

42

 

each
case above provided the communication is addressed to the intended recipient
thereof as set forth below:

 

	
  If to THK or Morex Merger
  Sub to:

  	
   

  
	
   

  	
   

  
	
   

  	
  CGI Holding Corporation d/b/a

  
	
   

  	
  Think Partnership Inc.

  
	
   

  	
  5 Revere Drive

  
	
   

  	
  Suite 510

  
	
   

  	
  Northbrook, IL 60062

  
	
   

  	
  Attn:

  	
  Gerard M. Jacobs

  
	
   

  	
  Fax: 847-562-0178

  
	
   

  	
  email: gerry.jacobs@thinkpartnership.com

  

 

	
  With a copy to:

  	
  Reed Smith LLP

  
	
   

  	
  435 Sixth Avenue

  
	
   

  	
  Pittsburgh, Pennsylvania 15219

  
	
   

  	
  Attn:

  	
  Jeffrey Bresch

  
	
   

  	
  Fax: 412-288-3063

  
	
   

  	
  email: jbresch@reedsmith.com

  

 

	
  If to the Members or
  Morex:

  	
   

  
	
   

  	
   

  
	
   

  	
  Morex Marketing Group, LLC.

  
	
   

  	
  15 Woodfield Road

  
	
   

  	
  Pomona, New York 10970

  
	
   

  	
  Attn:

  	
  Lloyd Ecker

  
	
   

  	
  Fax:

  
	
   

  	
  email: EcksEight@aol.com

  

 

	
  With a copy to:

  	
  Steven M. Gerber, Esq.

  
	
   

  	
  666 Fifth Avenue, 26th Floor

  
	
   

  	
  New York, New York 10103

  
	
   

  	
  Fax: 212-245-2255

  
	
   

  	
  email: sgerber@gerblaw.com

  

 

11.2         Entire Agreement.   This Agreement and the
other Documents embody the entire agreement and understanding between the
Parties with respect to the subject matter hereof and supersede all prior oral
or written agreements and understandings relating to the subject matter hereof.  No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in the Documents
shall affect, or be used to interpret, change or restrict, the express terms
and provisions of this Agreement.

 

11.3         Binding Effect.   This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors,
heirs, personal representatives, legal representatives, and permitted assigns.

 

43

 

11.4         Assignment.   Neither this Agreement, nor any right hereunder, may
be assigned by any of the Parties without the prior written consent of the
other Parties.

 

11.5         Modifications and Amendments.   The terms and provisions
of this Agreement may be modified or amended only by written agreement executed
by all Parties hereto.

 

11.6         Waivers.   The terms and provisions of this Agreement may be
waived, or consent for the departure therefrom granted, only by written
document executed by the Party entitled to the benefits of such terms or
provisions.  No waiver or consent shall
be deemed to be or shall constitute a waiver or consent with respect to any
other terms or provisions of this Agreement, whether or not similar.  Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.  No failure or delay by a Party in exercising
any right, power or remedy under this Agreement, and no course of dealing
between the Parties hereto, shall operate as a waiver of any the right, power
or remedy of the Party.  No single or
partial exercise of any right, power or remedy under this Agreement by a Party,
nor any abandonment or discontinuance of steps to enforce any right, power or
remedy, shall preclude any Party from any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder.  The election of any remedy by a Party shall
not constitute a waiver of the right of the Party to pursue other available
remedies.  No notice to or demand on a
Party not expressly required under this Agreement shall entitle the party
receiving notice or demand to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the Party giving
notice or demand to any other or further action in any circumstances without
notice or demand.

 

11.7         No Third Party Beneficiary.   Except as otherwise
provided herein, nothing expressed or implied in this Agreement is intended, or
shall be construed, to confer upon or give any Person other than the Parties
and their respective heirs, personal representatives, legal representatives,
successors and permitted assigns, any rights or remedies under or by reason of
this Agreement.  Notwithstanding the
foregoing, the indemnified entities and persons referred to in Article IX
are expressly acknowledged to be third party beneficiaries of this Agreement.

 

11.8         Severability.   If any term or other
provision of this Agreement is invalid, illegal or incapable of being enforced
by any rule of law, or public policy, all other conditions and provisions
of this Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated hereby is not
affected in any manner adverse to any party. 
Upon determination that any term or other provision is invalid, illegal
or incapable of being enforced, the Parties shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the Parties as closely
as possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.

 

11.9         Publicity.   Neither Morex nor the Members shall make, or cause
to be made, any press release or public announcement in respect of this
Agreement or the transactions contemplated hereby or otherwise communicate with
any news media without the prior written consent of THK, except as may be
required by Law in the opinion of THK’s securities counsel. Neither THK nor
Morex Surviving Corporation shall make, or cause to be made, any press release
or public announcement in respect of this Agreement or the transactions
contemplated hereby or otherwise communicate with any news media without the
prior written consent of the

 

44

 

Members,
except as required by Law in the opinion of THK’s securities counsel or the rules and
regulations of the American Stock Exchange.

 

11.10       Governing Law.   This
Agreement and the rights and obligations of the parties hereunder shall be
construed in accordance with and governed by the internal laws of the State of
New York without giving effect to the conflict of law principles thereof.

 

11.11       Counterparts; Facsimile Signatures.   This Agreement may be executed in any number of
counterparts, either manually or via facsimile or electronic transmission of
signatures, each of which shall be deemed an original but all of which together
shall constitute one and the same agreement.

 

11.12       Headings.   The
descriptive headings contained in this Agreement are for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.

 

11.13       Expenses.   Except
as otherwise specified in this Agreement, all costs and expenses, including,
without limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the Party incurring the costs and
expenses, whether or not the Closing shall have occurred.

 

11.14       Further Assurances.   At
any time and from time to time after the Closing Date each Party shall execute
and deliver such other instruments of sale, transfer, conveyance, assignment
and confirmation as may be reasonably requested in order to more effectively
carry forth the terms and conditions of this Agreement and the Documents.

 

11.15       Arbitration.   Any
controversy, dispute or claim arising out of or in connection with this
Agreement shall be settled by final and binding arbitration to be conducted by
an arbitration tribunal in New York, New York, pursuant to the rules of
the American Arbitration Association. 
The arbitration tribunal shall consist of one arbitrator.  If the parties cannot agree on the
arbitrator, the office of the American Arbitration Association in New York, New
York shall make the necessary appointment. 
The decision or award of the arbitrator shall be final, and judgment
upon such decision or award may be entered in any competent court or application
may be made to any competent court for judicial acceptance of such decision or
award and an order of enforcement.  In
the event of any procedural matter not covered by the aforesaid rules, the
procedural law of the State of New York shall govern. Notwithstanding the
agreement to arbitrate contained in this Section 11.15, any party may
apply to any court having jurisdiction to enforce this Agreement to seek
provisional injunctive relief so as to maintain the status quo until the
arbitration award is rendered or the dispute is otherwise resolved.

 

11.16       Incorporation by Reference.   Each Exhibit and Schedule to this
Agreement is hereby incorporated into this Agreement by reference thereto, with
the same legally binding force and effect as if such Exhibit or Schedule were
fully set forth herein.

 

[remainder of page intentionally left blank]

 

45

 

IN WITNESS WHEREOF, the parties hereto have each
executed and delivered this Agreement as of the day and year first above
written.

 

	
   

  	
  CGI HOLDING CORPORATION, d/b/a THINK

  PARTNERSHIP INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Scott P. Mitchell

  
	
   

  	
  Name:

  	
       Scott P. Mitchell

  
	
   

  	
  Title:

  	
       President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MOREX MERGER SUB, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott P. Mitchell

  
	
   

  	
  Name:

  	
    Scott P. Mitchell

  
	
   

  	
  Title:

  	
    President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MOREX MARKETING GROUP, LLC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lloyd Ecker

  
	
   

  	
  Name:

  	
       Lloyd Ecker

  
	
   

  	
  Title:

  	
       Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Lloyd Ecker

  
	
   

  	
  LLOYD ECKER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Robert Moore

  
	
   

  	
  ROBERT MOORE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Tina MacNicholl

  
	
   

  	
  TINA MACNICHOLL

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WHAT IF HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Josh Gillon

  
	
   

  	
  Name:

  	
       Josh Gillon

  
	
   

  	
  Title:

  	
       President

  

 

46Exhibit 10.2

 

EXECUTION COPY

 

LOAN
AGREEMENT

 

Wachovia
Bank, National Association

301
South Tryon Street

Charlotte,
North Carolina 28202

(Hereinafter referred to as “Bank”)

 

CGI
Holding Corporation

5
Revere Drive

Suite 510

Northbrook,
Illinois 60062

(Hereinafter referred to as “Borrower”)

 

This
Loan Agreement (“Agreement”) is entered into January 19, 2006, by and
between Bank and Borrower.

 

This Agreement applies to
the loan or loans (individually and collectively, the “Loan”) evidenced by one
or more promissory notes of even date herewith or other notes subject hereto,
as modified from time to time (whether one or more, the “Note”), the standby
letters of credit issued hereunder (each, a “Letter of Credit” and
collectively, the “Letters of Credit”) and all Loan Documents.  The terms “Loan Documents” and “Obligations,”
as used in this Agreement, are defined in the Note.

 

Relying upon the covenants,
agreements, representations and warranties contained in this Agreement, Bank is
willing to extend credit to Borrower upon the terms and subject to the
conditions set forth herein, and Bank and Borrower agree as follows:

 

LETTERS OF CREDIT.  Upon the request of Borrower, Bank shall
issue standby Letters of Credit; provided, that Bank shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, the aggregate principal balance outstanding under
the Note, plus the aggregate
undrawn and unexpired amount of the then outstanding Letters of Credit, plus
the aggregate amount of unreimbursed drawings under all Letters of Credit at
any one time exceeds the principal amount stated on the face of this Note, and further provided, no standby Letter of Credit
shall have an expiration date beyond January 19, 2008.  Bank’s obligation to issue Letters of Credit
shall terminate if Borrower is in default (however denominated) under the Note
or the other Loan Documents, or in any case, if not sooner terminated, on January 19,
2008.

 

LETTER OF CREDIT FEES.  Borrower shall pay to Bank, at such times as
Bank shall require, Bank’s standard fees in connection with Letters of Credit,
as in effect from time to time, 
including an additional fee equal to the Interest Rate (as defined in
the Note) per annum on the face amount of each standby Letter of Credit, payable
annually, in advance, for so long as such Letter of Credit is outstanding.

 

REPRESENTATIONS.  Borrower represents on the date hereof and on
the date of any Advance (as defined in the Note) that:  Accurate Information.  All information furnished to Bank was, at the
time furnished, complete and correct in all material respects.  Any such

 

 

information relating to
Borrower’s financial condition accurately reflects Borrower’s financial
condition as of the date(s) thereof, (including all contingent liabilities of
every type), and Borrower further represents that its financial condition has
not changed materially or adversely since the date(s) of such documents.  Authorization;
Non-Contravention.  The
execution, delivery and performance by Borrower of this Agreement and other
Loan Documents to which it is a party are within its power, have been duly
authorized as may be required and, if necessary, by making appropriate filings
with any governmental agency or unit and are the legal, binding, valid and
enforceable obligations of Borrower; and do not (i) contravene, or
constitute (with or without the giving of notice or lapse of time or both) a
violation of any provision of applicable law, a violation of the organizational
documents of Borrower, or a default under any agreement, judgment, injunction,
order, decree or other instrument binding upon or affecting Borrower, (ii) result
in the creation or imposition of any lien (other than the lien(s) created by
the Loan Documents) on any of Borrower’s assets, or (iii) give cause for
the acceleration of any obligations of Borrower to any other creditor.  Asset Ownership.  Borrower has good and marketable title to all
of the properties and assets reflected on the balance sheets and financial
statements supplied to Bank by Borrower, and all such properties and assets are
free and clear of mortgages, security deeds, pledges, liens, charges, and all
other encumbrances, except: (a) liens for taxes, assessments and other
governmental charges or levies (excluding any lien imposed pursuant to any of
the provisions of ERISA) not yet due or as to which the period of grace (not to
exceed thirty (30) days), if any, related thereto has not expired or which are
being contested in good faith and by appropriate proceedings if adequate reserves
are maintained to the extent required by GAAP, (b) liens existing on any
property or asset prior to the acquisition thereof by Borrower or any Guarantor
(as defined in the guaranty agreement of even date herewith by and among the
domestic subsidiaries of Borrower and Bank, the “Guaranty Agreement”) or
existing on any property or asset of any entity that becomes a Guarantor after
the date of consummation of such acquisition prior to the time such entity
becomes a Guarantor, (c) liens in favor of Bank and (d) as otherwise
disclosed to Bank by Borrower in writing and approved by Bank (collectively, “Permitted
Liens”).  Discharge of
Liens and Taxes.  Borrower has
duly filed, paid and/or discharged all taxes or other claims that may become a
lien on any of its property or assets, except to the extent that such items are
being appropriately contested in good faith and an adequate reserve for the
payment thereof is being maintained.  Sufficiency of Capital. 
On and as of the Closing Date and after giving effect to all
indebtedness being incurred or assumed and liens created by the Loan Agreement
in connection therewith and on and as of the date of each Advance and after
giving effect thereto (a) the sum of the assets, at a fair valuation on a
going concern basis, of CGI Holding Corporation and its subsidiaries taken as a
whole will exceed its debts; (b) CGI Holding Corporation and its
subsidiaries taken as a whole has not incurred and does not intend to incur,
and does not believe it will incur, debts beyond its ability to pay as these
debts mature; (c) CGI Holding Corporation and its subsidiaries taken as a
whole will have sufficient capital with which to conduct its business.  Compliance with Laws.  Borrower is in compliance in all material
respects with all federal, state and local laws, rules and regulations
applicable to its properties, operations and business, except to the extent
that failure to comply would materially adversely effect the business,
financial position, results of operations, properties or prospects of
Borrower.  Organization
and Authority.  Each
corporation, partnership or limited liability company of Borrower, as
applicable, is duly created, validly existing and in good standing under the
laws of the state of its organization, and has all powers, governmental
licenses, authorizations, consents and approvals required to operate its
business as

 

2

 

now conducted.  Each corporation, partnership or limited
liability company Borrower, as applicable, is duly qualified, licensed and in
good standing in each jurisdiction where qualification or licensing is required
by the nature of its business or the character and location of its property,
business or customers, except to the extent that failure to qualify or be
licensed, as the case may be, in the aggregate, would have a material adverse
effect on the business, financial position, results of operations, properties
or prospects of Borrower.  No Litigation.  Except as set forth on Schedule 1
hereto, there are no pending or threatened suits, claims or demands against
Borrower that have not been disclosed to Bank by Borrower in writing, and
approved by Bank.  Financial
Condition of Borrower.  The
financial statements which Borrower has submitted to Bank to induce it to make
the Loan are correct and complete, and fairly present the financial condition
of the Borrower on the dates thereof and the results of its operations for the
periods then ended.  No Default.  Borrower is not in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party, except for
defaults that would not normally be expected to have a material adverse effect
on Borrower’s financial condition or results of operations.  To Borrower’s knowledge, no default has
occurred under any Permitted Liens.   ERISA.  Each employee
pension benefit plan, as defined in ERISA, maintained by Borrower meets, as of
the date hereof, the minimum funding standards of ERISA and all applicable
regulations thereto and requirements thereof, and of the Internal Revenue Code
of 1986, as amended.  No “Prohibited
Transaction” or “Reportable Event” (as both terms are defined by ERISA) has
occurred with respect to any such plan.

 

AFFIRMATIVE COVENANTS.  Borrower
agrees that from the date hereof and until final payment in full of the
Obligations, unless Bank shall otherwise consent in writing, Borrower will, and
will cause each Guarantor to:  Access to Books and Records.  Allow Bank, or its agents, during normal
business hours, access to the books, records and such other documents of
Borrower and the Guarantors as Bank shall reasonably require, and allow Bank to
inspect, audit and examine the same and to make extracts therefrom and to make
copies.  Such access and inspection after
the occurrence and during the continuance of a Default (as defined in the Note)
at Borrower’s own reasonable cost and expense.  
Business Continuity.  Conduct its business in substantially the same
manner as such business is now and has previously been conducted, subject to
the provisions set forth in the Negative Covenants subparagraph entitled “Permitted
Acquisitions”.  Certificate
of Full Compliance.  Deliver
to Bank, with the financial statements required herein, a certification by
Borrower’s Chief Financial Officer that Borrower is in full compliance with the
Loan Documents.  Compliance
with Other Agreements.  Comply
with all terms and conditions contained in this Agreement, and any other Loan
Documents, and swap agreements, if applicable, as defined in the 11 U.S.C. § 101,
as in effect from time to time.  Estoppel Certificate. 
Furnish, within 15 days after request by Bank, a written statement duly
acknowledged of the amount due under the Loan and identifying each outstanding
Letter of Credit, if any, and whether offsets or defenses exist against the
Obligations.  Insurance.  Maintain adequate insurance coverage with
respect to its properties and business against loss or damage of the kinds and
in the amounts customarily insured against by companies of established
reputation engaged in the same or similar businesses including, without
limitation, commercial general liability insurance, workers compensation
insurance, and business interruption insurance. 
Maintain Properties.  Maintain, preserve and keep its property in
good repair, working order and condition, making all replacements, additions
and improvements thereto necessary for the

 

3

 

proper conduct of its
business, unless prohibited by the Loan Documents.  Notice of Default and
Other Notices.  (a) Notice of Default. 
Furnish to Bank immediately upon becoming aware of the existence of any
condition or event which constitutes a Default (as defined in the Loan
Documents) or any event which, upon the giving of notice or lapse of time or
both, may become a Default, written notice specifying the nature and period of
existence thereof and the actions which Borrower and the Guarantors are taking
or propose to take with respect thereto. 
(b) Other Notices.  Promptly notify Bank in writing of (i) any
material adverse change in Borrower’s or any of the Guarantors’ financial
condition or its business; (ii) any default under any material agreement,
contract or other instrument to which it is a party or by which any of its
properties are bound, or any acceleration of the maturity of any indebtedness
owing by Borrower or any of the Guarantors; (iii) any material adverse
claim against or affecting Borrower or any of the Guarantors or any part of
their respective properties; (iv) the commencement of, and any material
determination in, any litigation with any third party or any proceeding before
any governmental agency or unit affecting Borrower or any of the Guarantors; (v) at
least 30 days prior thereto, any change in Borrower’s or any of the Guarantors’
names or address as shown above; and (vi) any change in Borrower’s or any
of the Guarantors’ structure.  Other Financial Information. 
Deliver promptly such other information regarding the operation,
business affairs, and financial condition of Borrower and the Guarantors which
Bank may reasonably request.  Payment of Debts.  Pay
and discharge when due, and before subject to penalty or further charge, and
otherwise satisfy before maturity or delinquency, all obligations, debts,
taxes, and liabilities of whatever nature or amount, except those which
Borrower or the Guarantors in good faith dispute.  Reports and Proxies.  Deliver to Bank, promptly, a copy of all financial
statements, reports, notices, and proxy statements, sent by Borrower to
stockholders, and all regular or periodic reports required to be filed by
Borrower with any governmental agency or authority.  Additional Subsidiaries.  Within forty-five (45) days after the
creation or acquisition of any domestic subsidiary (any such subsidiary, a “New
Subsidiary”) of Borrower or Guarantor (including in connection with any
Permitted Acquisition), cause to be executed and delivered to Bank (A) a
duly executed joinder agreement in form and substance reasonably satisfactory
to Bank joining such New Subsidiary to the Guaranty Agreement and the Security
Agreement (together with updated schedules thereto), (B) favorable legal
opinions covering such matters consistent with opinions for this Agreement and
addressed to Bank in form and substance reasonably satisfactory to Bank with
respect to such joinder agreement, (C) original stock or other
certificates and stock or other transfer powers evidencing the ownership
interests of Borrower or such Guarantor, as applicable, in such New Subsidiary,
and (D) any other documents and certificates as may be reasonably
requested by Bank.

 

NEGATIVE COVENANTS.  Borrower agrees
that from the date hereof and until final payment in full of the Obligations,
unless Bank shall otherwise consent in writing, Borrower will not, and will not permit any Guarantor to:   Change in Fiscal Year.  Change its fiscal year.  Change of Control.  Make or suffer a change in the Borrower’s or
any Guarantor’s board of directors, such that the members of the Borrower’s or
the applicable Guarantor’s board of directors as of the date of this Agreement
fail to constitute a majority of the members of the boad; provided that
any individual becoming a member of the applicable board of directors who is
nominated by the applicable board of directors shall be treated as if he or she
were a member of the board as of the date of this Agreement.  Encumbrances.  Create,
assume, or permit to exist any mortgage, security deed, deed of trust, pledge,
lien, charge or other encumbrance on any of its assets,

 

4

 

whether now owned or hereafter acquired, other than: (i) security
interests required by the Loan Documents; (ii) liens for taxes contested
in good faith; (iii) liens accruing by law for employee benefits; (iv) Permitted
Liens or (v) acquired indebtedness to the extent permitted in the Financial Covenants subparagraph
entitled “Limitation on Debt”.  Guarantees.  Guarantee or otherwise become responsible for
obligations of any other person or entity.  Permitted
Acquisitions.  Purchase,
own, invest in or otherwise acquire, directly or indirectly, any capital stock,
interests in any partnership or joint venture except for investments by
Borrower or any Guarantor in the form of acquisitions of all or substantially
all of the business or a line of business (whether by the acquisition of
capital stock, assets or any combination thereof) of any other person if each
such acquisition meets all of the following requirements (such acquisitions
being, “Permitted Acquisitions”):  (a) the
person to be acquired shall be in an electronic commerce line of business; (b) evidence
of approval of the acquisition by the acquiree’s board of directors or equivalent
governing body or a copy of the opinion of counsel delivered by legal counsel
to the acquiree in connection with the acquisition which evidences such
approval shall be delivered to Bank at the time the documents referred to in
the Affirmative Covenants subparagraph entitled “Additional Subsidiaires” are
required to be delivered; (c) a description of the acquisition shall have
been delivered to Bank prior to the consummation of the acquisition; (d) Borrower
or such Guarantor, as applicable, shall be the surviving person and no change
of control under this Agreement shall have been effected thereby; (e) Borrower
shall have demonstrated to Bank pro  forma compliance (as of
the date of the proposed acquisition and after giving effect thereto and any
Advances made or to be made in connection therewith) with each covenant
contained in this Agreement; provided
that each of the financial covenants set forth below shall be recomputed as of
the last day of the most recently ended fiscal quarter of Borrower as if such
acquisition had occurred on the first day of such Calculation Period (as
defined below); (f) Borrower shall have delivered to
Bank such documents set forth in the Affirmative Covenants subparagraph
entitled “Additional Subsidiaires” within the period of time set forth therein;
(g) Borrower shall have delivered to Bank an updated Schedule 1
to the Security Agreement prior to the consummation of the acquisition; (h) the
person to be acquired shall: (A) demonstrate positive EBITDA for the most
recent twelve (12) month period then ended, both prior to the acquisition and
after giving effect thereto, by providing Bank copies of the most recent
financial statements and projections, all in form and substance reasonably
satisfactory to Bank or (B) be approved by Bank prior to the consummation
of such acquisition; and (i) Borrower shall provide such other documents
and other information as may be reasonably requested by Bank in connection with
the proposed acquisition.  Other Investments.  Purchase any stock, securities, or evidence
of indebtedness of any other person or entity except: (a) investments in
direct obligations of the United States Government and certificates of deposit
of United States commercial banks having a tier 1 capital ratio of not less
than 6%, and, then in an amount not exceeding 10% of the issuing bank’s
unimpaired capital and surplus; (b) investments by Borrower or any
Guarantor in: (A) its subsidiaries in existence on the date hereof
or (B) any of its subsidiaries that are formed or acquired after the date
hereof, so long as Borrower complies with the Affirmative Covenants
subparagraph entitled “Additional Subsidiaires”; (c) Permitted Acquisitions and (d) accounts receivable
of Borrower or its subsidiaries arising in the ordinary course of business in
connection with the compromise or collection thereof.  Default on
Other Contracts or Obligations. 
Default on any material contract with or obligation when due to a third
party or default in the performance of any obligation to a third party incurred
for money borrowed.  Judgment
Entered.  Other than as
permitted under the definition of “Permitted

 

5

 

Liens,” permit the entry of any monetary judgment or the
assessment against, the filing of any tax lien against, or the issuance of any
writ of garnishment or attachment against any property of or debts due Borrower
and its subsidiaries.  Prepayment of Other Debt. 
Retire any long-term debt entered into prior to the date of this
Agreement at a date in advance of its legal obligation to do so; provided
that (i) Borrower may retire the existing line of credit between Bank and
Borrower dated as of February 4,
2005 in the principal amount of $3,000,000.00 (as modified on December 1,
2005 to increase the current principal amount of such existing line of credit
to $7,500,000.00) and (ii) Borrower
and any Guarantor may make earn-out and deferred payments in connection
with Permitted Acquisitions.

 

ANNUAL FINANCIAL STATEMENTS.  Borrower shall deliver to Bank, as soon as
available, but in any event within the period within which the Borrower is
required to deliver its annual report on Form 10-K under the Securities
Exchange Act of 1934 and the regulations promulgated by the U.S. Securities and
Exchange Commission thereunder for each fiscal year, audited financial
statements reflecting its operations during such fiscal year, including,
without limitation, its audited consolidated and unaudited consolidating
balance sheets and related statements of operations, stockholders’ equity and
cash flows as of the end of and for the fiscal year then ended and prepared in
accordance with GAAP, all such consolidated financial statements being
certified by Borrower’s independent registered public accountants (without a “going concern” or like
qualification or exception and without any qualification or exception as to the
scope of such audit) and certified by Borrower’s Chief Financial Officer as
presenting fairly in all material respects the financial condition and results
of operations of Borrower in accordance with generally accepted accounting
principles consistently applied.

 

PERIODIC FINANCIAL STATEMENTS.  As soon as available, but in any event within the
period within which the Borrower is required to deliver its quarterly report on
Form 10-Q under the Securities Exchange Act of 1934 and the regulations
promulgated by the U.S. Securities and Exchange Commission thereunder for each
of the first three fiscal quarters of Borrower, its consolidated and
consolidating balance sheets of Borrower and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year, setting forth in each
case in comparative form the figures for the corresponding date or period or
periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, all certified by its Chief Financial Officer as
presenting fairly in all material respects the financial condition and results
of operations of Borrower in accordance with generally accepted accounting principles consistently applied,
subject to normal year-end audit adjustments and the absence of footnotes.

 

FINANCIAL COVENANTS.  Borrower agrees
to the following provisions from the date hereof until final payment in full of
the Obligations, unless Bank shall otherwise consent in writing, using the
financial information for Borrower (for purposes of this paragraph, the term “Borrower”
shall be deemed to mean “the Borrower and its subsidiaries on a consolidated
basis”): Total Debt to EBITDA Ratio.   Borrower shall, at all times, maintain
a Total Debt to EBITDA Ratio of not more than 2.00 to 1.00.  This covenant shall be calculated quarterly,
on a rolling four quarters basis (the “Calculation Period”), and with respect
to any subsidiary that was not a subsidiary of Borrower during the entirety of
the Calculation Period (each, a “Partial Term Subsidiary”), shall include
EBITDA generated by the Partial Term Subsidiary, including its

 

6

 

predecessor entity (if any), during the entirety of the
Calculation Period; provided that (i) Bank shall have received: (a) audited
financial statements for such Partial Term Subsidiary for each fiscal quarter
during the applicable Calculation Period, (b) audited financial statements
as of the end of a prior
fiscal year that include such Partial Term
Subsidiary’s operations for the applicable Calculation Period or (c) unaudited
financial statements reflecting such Partial Term Subsidiary’s operations for
the applicable Calculation Period that: (i) are certified as true
and accurate by the Borrower and (ii) have
been reviewed and approved by Bank in its reasonable discretion.  “Total
Debt to EBITDA Ratio” shall mean the sum of all Total Debt divided by the sum
of earnings before interest, taxes, depreciation and amortization (including
amortization of goodwill and other intangibles). “Total Debt” shall mean, as
applied to any person or entity, the sum of all indebtedness for borrowed
money, (including, without limitation, capital lease obligations, subordinated
debt (including debt subordinated to the Bank), and unreimbursed drawings under
letters of credit), or any other monetary obligation evidenced by a note, bond,
debenture or other agreement or similar instrument of that person or
entity.  Deposit Relationship.
 Borrower shall maintain its primary depository account and cash
management account with Bank.  Capital Expenditures.
 Borrower shall not, during any fiscal year, expend on gross fixed assets
(excluding the pro forma impact of Permitted Acquisitions consummated during
such fiscal year, but including gross leases to be capitalized under generally
accepted accounting principles and leasehold improvements) an amount exceeding
$2,000,000.00 in the aggregate.  Net Worth.
 Borrower shall, at all times, maintain a Net Worth of not less
than an amount equal to the sum of (i) $36,900,000 plus (ii) fifty
percent (50%) of Borrower’s net income for each fiscal quarter after the
Closing Date (the “Minimum Net Worth Amount”); provided that the Minimum
Net Worth Amount for any fiscal quarter following the Closing Date shall exceed
the Minimum Net Worth for the immediately preceeding fiscal quarter by an
amount equal to or greater than $1.00. “Net
Worth” shall mean total assets minus Total Liabilities. “Total Liabilities”
shall mean all liabilities of Borrower, including capitalized leases and all
reserves for deferred taxes, debt fully subordinated to Bank on terms and
conditions acceptable to Bank, and other deferred sums appearing on the
liabilities side of a balance sheet and all obligations as lessee under
off-balance sheet synthetic leases of Borrower, all in accordance with
generally accepted accounting principles applied on a consistent basis.  Fixed Charge Coverage Ratio.  Borrower shall, at all
times, maintain a Fixed Charge Coverage Ratio of not less than 2.50 to
1.00.  This covenant shall be calculated
quarterly for the preceding Calculation Period, and with respect to any Partial
Term Subsidiary, shall include EBITDA generated by the Partial Term Subsidiary,
including its predecessor entity (if any), during the entirety of the
Calculation Period; provided
that (i) Bank shall have received: (a) audited financial statements for
such Partial Term Subsidiary for each fiscal quarter during the applicable
Calculation Period, (b) audited financial statements as of the end of a
prior fiscal year that include such Partial Term Subsidiary’s operations for
the applicable Calculation Period or (c) unaudited financial statements
reflecting such Partial Term Subsidiary’s operations for the applicable
Calculation Period that: (i) are certified as true and accurate by the
Borrower and (ii) have been reviewed and approved by Bank in its reasonable
discretion.
“Fixed Charge Coverage Ratio” shall mean the sum of net income from operations
calculated in accordance with GAAP, depreciation and amortization minus all
dividends, withdrawals and non-cash income divided by the sum of all current
maturities of long-term debt, capital lease obligations and un-financed capital
expenditures.  Limitation on Debt.
 Borrower shall not, directly or indirectly, create, incur, assume or
become liable for any additional indebtedness, whether contingent or direct: (A)

 

7

 

if, giving effect to such additional debt on a pro forma
basis causes the aggregate amount of Borrower’s debt, excluding obligations to
Bank, to exceed $5,000,000.00 or (B) unless approved by Bank prior to the creation, incurrence, assumption or becoming
liable for any additional indebtedness. 
Additional debt shall be on substantially the same or more favorable
terms as the Loan Documents and be unsecured debt unless Bank shall otherwise
consent in writing.  Dividends.
 Borrower shall not, during any fiscal year, declare or pay dividends or
make other distributions to its shareholders in an amount in excess of 50.00%
of its net income.  Said amount may be
paid only after providing for the prior satisfaction of all accrued taxes and
debt service.  In no event shall Borrower
declare or pay a dividend or make any other distribution if there shall exist a
Default or a condition which, upon the giving of notice or lapse of time or
both, would become a Default under the Loan Documents.   Calculation of
EBITDA.  For
the purposes of determining EBITDA for any Calculation Period during which a
Permitted Acquisition is consummated, EBITDA shall be adjusted in a manner
reasonably satisfactory to Bank to give effect to the consummation of such
Permitted Acquisition on a pro  forma basis in accordance with
GAAP, as if such Permitted Acquisition occurred on the first day of such
Calculation Period.

 

CONDITIONS TO CLOSING.  The obligations of Bank to close this
Agreement, make the loan and any advances and to issue any Letters of Credit pursuant
to this Agreement on the date hereof are subject to the following conditions
precedent:  Letter of
Credit  Documents.  Receipt by Bank of  all documents
required by Bank in connection with Letters of Credit, including without
limitation, applications therefor, all in form satisfactory to Bank.  Operating Documents.  Receipt by Bank of a copy of
Borrower’s by-laws, partnership agreement, or operating agreement, certified as
to completeness and accuracy by an appropriate officer, manager or partner of
Borrower.  Charter
Documents.  Receipt by Bank of
a copy of Borrower’s Articles of Incorporation or Organization, as appropriate
for the legal entity and all other charter documents of Borrower, all certified
by the Secretary of State of the state of Borrower’s incorporation or
organization, as appropriate. Certificate of Good
Standing.  Receipt by Bank of
a certificate of the Secretary of State of the state of Borrower’s
incorporation or organization, as applicable, as to the good standing of
Borrower.  Certificate
of Incumbency.  Receipt by
Bank from Borrower of a certificate of an appropriate officer of Borrower as to
the incumbency an signatures of the officers of Borrower executing the Loan
Documents.  Borrowing
Authorization.  Receipt by Bank of a borrowing resolution from Borrower or other
proof of authority to enter into the transactions contemplated herein.  Deposit Account.  Establishment by Borrower of a demand deposit
account at Bank into which advance of the loan may be credited and from which
monthly payments shall be automatically deducted in connection with the
Loan.  Additional Documents.  Receipt by Bank of such additional supporting
documents as Bank or its counsel may reasonably request.  Opinion of Counsel.  Receipt by Bank of a written opinion of the
counsel of Borrower acceptable to Bank that includes confirmation of the
following:  (a) The accuracy of the
representations set forth in this Agreement in the Representations
subparagraphs entitled “Authorization; Non-Contravention”; “Compliance with
Laws”, and “Organization and Authority”. 
(b) The Agreement and other Loan Documents have been duly executed
and delivered by Borrower and constitute the legal, valid and binding
obligations of Borrower, enforceable in accordance with their terms.  (c) No registration with, consent of,
approval of, or other action by, any federal, state or other governmental
authority or regulatory body is required by law in connection with the execution

 

8

 

and delivery of this
Agreement and the other Loan Documents, or the extension of credit under this
Agreement or the other Loan Documents, or, if so required, such registration
has been made, and such consent or approval given or such other appropriate
action taken.  (d) The loan and the
interest rate applicable to Letter of Credit reimbursement obligations are not
usurious.  (e) The Loan Documents
create the priority of lien on or security interest in the Collateral (as
defined in the Loan Documents) that is contemplated by the Loan Documents.  Commitment Fee.  Receipt by Bank of a commitment fee equal to
0.30% times the face amount of the Note.

 

CONDITIONS
TO ALL ADVANCES.  The
obligations of Bank to make any loan and any advances and to issue any Letters
of Credit pursuant to this Agreement are subject to the satisfaction of the
following conditions precedent on the relevant advance or issuance date: (a) The
representations and warranties contained in this Agreement and in the other
Loan Documents shall be true and correct on and as of such advance or issuance
date with the same effect as if made on and as of such date; except for any
representation and warranty made as of an earlier date, which representation
and warranty shall remain true and correct as of such earlier date and (b) no
Default shall have occurred and be continuing: (i) on the advance date
with respect to such Loan or after giving effect to the Loans to be made on
such date or (ii) on the issuance date with respect to such Letter of
Credit or after giving effect to the issuance of such Letter of Credit on such
date.

 

COUNTERPARTS.  This
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and shall be binding upon all parties, their
successors and assigns, and all of which taken together shall constitute one
and the same agreement.

 

 

[Signature Pages Follow]

 

9

 

IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above, have
caused this Agreement to be executed under seal.

 

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
  CGI HOLDING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerard M. Jacobs

  
	
   

  	
   

  	
  Name:

  	
  Gerard M. Jacobs

  
	
   

  	
   

  	
  Title:

  	
  CEO

  

 

 

[Signature Pages Continue]

 

 

[Loan Agreement – CGI Holding Corporation]

 

 

	
   

  	
  BANK:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ C. Douglass Riddle

  
	
   

  	
   

  	
  Name:

  	
  C. Douglass Riddle

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice
  President

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