0001104659-06-053652.txt : 20060810 0001104659-06-053652.hdr.sgml : 20060810 20060810165437 ACCESSION NUMBER: 0001104659-06-053652 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20060810 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060810 DATE AS OF CHANGE: 20060810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: THINK PARTNERSHIP INC CENTRAL INDEX KEY: 0000829323 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 870450450 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-32442 FILM NUMBER: 061021959 BUSINESS ADDRESS: STREET 1: 300 N MANNHEIM CITY: HILLSIDE STATE: IL ZIP: 60162 BUSINESS PHONE: 7083570900 MAIL ADDRESS: STREET 1: 300 N MANNHEIM CITY: HILLSIDE STATE: IL ZIP: 60162 FORMER COMPANY: FORMER CONFORMED NAME: CGI HOLDING CORP DATE OF NAME CHANGE: 19980501 FORMER COMPANY: FORMER CONFORMED NAME: GEMSTAR ENTERPRISES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: NORTH STAR PETROLEUM INC DATE OF NAME CHANGE: 19900530 8-K 1 a06-17850_18k.htm CURRENT REPORT OF MATERIAL EVENTS OR CORPORATE CHANGES

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: August 10, 2006
(Date of earliest event reported)

THINK PARTNERSHIP INC.

(Exact name of registrant as specified in its charter)

Nevada	001-32442	87-0450450
(State or other jurisdiction of	(Commission File No.)	(IRS Employer Identification No.)
incorporation)

28050 US 19 North

Suite 509
Clearwater, Florida 33761
(Address of Principal Executive Offices)

(727) 324-0046
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

PrimaryAds, Inc.

On August 10, 2006, Think Partnership Inc. (the “Company”) entered into an amendment of its April 22, 2005 acquisition agreement of PrimaryAds Inc. pursuant to which the parties agreed to restructure the earnout provisions contained in the original acquisition agreement. Under the terms of the original agreement, the former shareholders of PrimaryAds could have earned additional merger consideration of up to $16,000,000 based on the pre-tax earnings of PrimaryAds for the first twelve full calendar quarters following the closing of the acquisition; with the first $10,000,000 of the additional merger consideration, to the extent earned, being paid in shares of the Company’s common stock and the remainder, to the extent earned, being paid fifty percent (50%) in cash and fifty percent (50%) in shares of the Company’s common stock.

Under the amendment, the terms of the earnout were restructured such that the former shareholders of PrimaryAds may receive additional merger consideration of up to 4,857,301 shares of the Company’s common stock. The additional merger consideration becomes payable if certain thresholds of consolidated earnings from operations of the Company and its subsidiaries, other than Morex Marketing Group, LLC, before interest, taxes, depreciation and amortization (hereinafter referred to as “Consolidated EBITDA”) are achieved during the first three consecutive twelve month periods occurring after June 30, 2006. The amendment also provides for the acceleration of the payment of the additional merger consideration if there is a “change of control” of the Company defined therein as any of the following: (1) a merger, reorganization or other business combination if immediately following the transaction, a majority of the common stock of the Company is held by persons who were not shareholders of the Company immediately prior to the transaction; (2) the cumulative acquisition, either directly or indirectly through one transaction or a series of related transactions, of 50% or more of the then issued and outstanding common stock of the Company; or (3) a sale of all or substantially all of the assets of the Company.

Litmus Media, Inc.

On August 10, 2006, the Company entered into an amendment of its February 17, 2006 acquisition agreement of Litmus Media, Inc., as amended, pursuant to which the parties agreed to restructure the earnout provisions contained in the original acquisition agreement. Under the terms of the original agreement, the former shareholders of Litmus could have earned additional merger consideration of up to $19,950,000 based on the pre-tax earnings of Litmus during the first twelve full calendar quarters following the closing of the acquisition; with $10,500,000 of the additional merger consideration, to the extent earned, paid in shares of the Company’s common stock and $9,450,000 of the addition merger consideration, to the extent earned, paid in cash. In addition, under the original agreement, in the event the shareholders of Litmus were entitled to any earnout payments, the Company agreed to capitalize a bonus pool for the pre-acquisition employees of Litmus in an amount not to exceed $1,050,000.

Under the amendment, the terms of the earnout and bonus pool were restructured such that the former shareholders of Litmus may receive additional merger consideration of up to 7,182,000 shares of the Company’s common stock, and the Company may contribute additional

capital of up to $756,000 to Litmus for the bonus pool. The additional merger consideration and contribution to the bonus pool become payable if certain thresholds of Consolidated EBITDA are achieved during the first three consecutive twelve month periods occurring after June 30, 2006. The amendment also provides for the acceleration of the payment of additional merger consideration if there is a “change of control” of the Company.

iLead Media, Inc.

On August 10, 2006, the Company entered into an amendment of its April 27, 2006 acquisition agreement of Litmus Media, Inc. pursuant to which the parties agreed to restructure the earnout provisions contained in the original acquisition agreement. Under the terms of the original agreement, the former shareholders of iLead could have earned additional merger consideration of up to $17,100,000 based on the pre-tax earnings of iLead during the first twelve full calendar quarters following the closing of the acquisition; payable to the extent earned, 50% in cash and 50% in shares of the Company’s common stock. In addition, under the original agreement, in the event the shareholders of iLead were entitled to any earnout payments, the Company agreed to capitalize a bonus pool for the pre-acquisition employees of iLead in an amount not to exceed $900,000.

Under the amendment, the terms of the earnout and bonus pool were restructured such that the former shareholders of iLead may receive additional merger consideration of up to 6,158,566 shares of the Company’s common stock, and the Company may contribute additional capital of up to $648,270 to iLead for the bonus pool. The additional merger consideration and contribution to the bonus pool become payable if certain thresholds of Consolidated EBITDA are achieved during the first three consecutive twelve month periods occurring after June 30, 2006. The amendment also provides for the acceleration of the payment of additional merger consideration if there is a “change of control” of the Company.

Web Diversity Limited

On August 10, 2006, the Company entered into an amendment of its April 27, 2006 acquisition agreement of Web Diversity Limited pursuant to which the parties agreed to restructure the earnout provisions contained in the original acquisition agreement. Under the terms of the original agreement, the former shareholder of Web Diversity could have earned additional merger consideration of up to $2,000,000 based on the pre-tax earnings of Web Diversity during the first twelve full calendar quarters following the closing of the acquisition, plus $1,000 for each increment of $500,000 pre-tax earnings achieved over a threshold amount during such period. To the extent earned, all additional merger consideration was payable in cash.

Under the amendment, the terms of the earnout were restructured such that the former shareholder of Web Diversity may receive additional merger consideration of up to 528,004 shares of the Company’s common stock. The additional merger consideration and contribution to the bonus pool become payable if certain thresholds of Consolidated EBITDA are achieved during the first three consecutive twelve month periods occurring after June 30, 2006. The First

Amendment also provides for the acceleration of the payment of additional merger consideration if there is a “change of control” of the Company.

Item 7.01 Regulation FD Disclosure

On August 10, 2006, the Company issued a press release announcing its results of operations and financial condition for the three and six months ended June 30, 2006. A copy of the press release is attached hereto as Exhibit 99.1.

Item 8.01 Other Events

On August 10, 2006, the Company entered into an amendment of its February 21, 2005 acquisition agreement of Ozona Online Network, Inc. pursuant to which the former shareholder of Ozona Online agreed to waive his rights to any earnout consideration he may have earned in the future in consideration for a cash payment of $25,000.

Further, on August 10, 2006, the Company entered into an amendment of its March 11, 2005 acquisition agreement of KowaBunga! Marketing, Inc. pursuant to which the parties agreed restructure the earnout provisions contained in the original acquisition agreement. Under the terms of the original agreement, the former shareholder of KowaBunga! could have earned additional merger consideration of up to $4,950,000 based on the pre-tax earnings of KowaBunga! during the first twelve full calendar quarters following the closing of the acquisition, payable 45.5% in cash and 54.5% in shares of the Company’s common stock. Under the amendment, the former shareholder of KowaBunga! may receive earnout consideration of up to 150,000 shares of the Company’s common stock if certain thresholds of Consolidated EBITDA are achieved during the first three consecutive twelve month periods occurring after June 30, 2006. The amendment also provides for the acceleration of the payment of additional merger consideration if there is a “change of control” of the Company.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

10.1 First Amendment to Agreement by and among Think Partnership Inc., PrimaryAds, Inc., Kenneth M. Harlan, David J. Harlan, Steven M. Harlan and Matthew A. Sessanta

10.2 Second Amendment to Agreement by and among Think Partnership Inc., Litmus Media, Inc., and John Linden and Tobias Teeter.

10.3 First Amendment to Agreement by and among Think Partnership Inc., THK, LLC, and Brady Whittingham, David Nelson, and Robert Seolas.

10.4 First Amendment to Agreement by and between Think Partnership Inc., and James Banks.

99.1 Press Release dated August 10, 2006, announcing results of operations and financial condition for the three and six months ended June 30, 2005.

99.2 Press Release dated August 10, 2006, announcing restructuring of earnouts.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: August 10, 2006

THINK PARTNERSHIP INC.


By:	/s/ Scott P. Mitchell
Name:		Scott P. Mitchell
Title:		Chief Executive Officer

EX-10.1 2 a06-17850_1ex10d1.htm EX-10.1

Exhibit 10.1

FIRST AMENDMENT TO AGREEMENT

This First Amendment to Agreement (this “First Amendment”) is made and entered into this 10th day of August, 2006, to be effective as of July 1, 2006, by and among THINK PARTNERSHIP, INC., f/k/a CGI HOLDING CORPORATION, a Nevada corporation (“THK”), PRIMARYADS, INC., a New Jersey corporation and wholly owned subsidiary of THK (“PrimaryAds” and sometimes referred to as “PrimaryAds Surviving Corporation”), Kenneth M. Harlan (“KMH”), David J. Harlan (“DJH”), Steven M. Harlan (“SMH”) and Matthew A. Sessanta (“MAS” and, together with KMH, DJH and SMH, the “Shareholders”). THK, PrimaryAds, and the Shareholders are also referred to herein each, individually, as a “Party” and, collectively, as the “Parties.”

WITNESSETH:

WHEREAS, the Parties previously entered into an Agreement, dated April 22, 2005, (the “Agreement”) whereby PrimaryAds Merger Sub, Inc., a wholly owned subsidiary of THK, merged into PrimaryAds (the “Merger”). PrimaryAds is the surviving corporation after the Merger and is now a wholly owned subsidiary of THK.

WHEREAS, by virtue of the Merger, each share of common stock of PrimaryAds owned by the Shareholders was converted into the right to receive, certain Cash Consideration and Additional Merger Consideration as defined in the Agreement.

WHEREAS, the Parties desire to enter into this First Amendment to modify the terms of the Agreement with respect to the Additional Merger Consideration.

NOW THEREFORE, for the reasons described above, in consideration of the promises and the mutual covenants and representations herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, the Parties hereby agree as follows:

AGREEMENT:

1. Capitalized Terms. All capitalized terms used, but not defined, in this First Amendment shall have the meanings set forth in the Agreement.

2 Additional Definitions. The following definition of “Consolidated EBITDA” is hereby added to the Definitions set forth in Article I of the Agreement and the following revised definition of “Change of Control of THK” hereby replaces the definition of “Change of Control of THK” set forth in Article I of the Agreement:

“Consolidated EBITDA” means with respect to any period, the consolidated earnings from operations of THK and its subsidiaries, other than Morex Marketing Group, LLC, before interest, taxes, depreciation and amortization. Except as expressly provided herein, EBITDA shall be applied consistently throughout the Measurement Periods and consistently with the twelve month period immediately preceding the Measurement Periods.

“Change of Control of THK” means (1) a merger, reorganization or other business combination in which THK is a party if immediately following the transaction, a majority of the common stock of THK (or any successor by merger to THK) is held by Persons who were not THK shareholders immediately prior to the transaction; (2) the cumulative acquisition, either directly or indirectly through one transaction or a series of related transactions, by any Person of fifty percent (50%) or more of the then issued and outstanding common stock of THK; or (3) a sale of all or substantially all of the assets of THK to a party that is not controlled by THK.

3. Amendment to Article VIII. Article VIII, Additional Merger Consideration, is hereby amended and superseded by the following:

8.1 Additional Merger Consideration. After the Closing Date, each Shareholder shall be eligible to receive, in the same proportion as the Cash Consideration paid pursuant to Section 2.6 hereof, Additional Merger Consideration in the form of THK Common Stock if Consolidated EBITDA exceeds certain thresholds for the first three consecutive twelve month periods occurring after June 30, 2006 with the first twelve month period commencing on July 1, 2006 (each such twelve month period being a “Measurement Period” and together, the “Measurement Periods”). Such Additional Merger Consideration, if any, shall be made by THK to the Shareholders in an amount based upon the Consolidated EBITDA target reached as set forth below. The Additional Merger Consideration shall be payable as follows:

(a) First Measurement Period. With respect to the first Measurement Period, which commences on July 1, 2006, the following Consolidated EBITDA thresholds and amounts of Additional Merger Consideration are applicable:

(1) If the Consolidated EBITDA is at least $12,570,000, but less than $14,070,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(a)(1) equal to $2,172,270. The number of shares to be issued will be equal to the quotient obtained by dividing $2,172,270 by the preset value per share of $2.00.

(2) If the Consolidated EBITDA is at least $14,070,000, but less than $17,070,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(a)(2) equal to $2,327,837. The number of shares to be issued will be equal to the quotient obtained by dividing $2,327,837 by the preset value per share of $2.00.

(3) If the Consolidated EBITDA is equal to or exceeds $17,070,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(a)(3) equal to $2,476,157. The number of shares to be issued will be equal to the quotient obtained by dividing $2,476,157 by the preset value per share of $2.00.

For purposes of this Section 8.1(a), the value per share of THK’s Common Stock shall remain at $2.00 per share even though such shares may then be trading at a higher or lower price.

(b) Second Measurement Period. With respect to the second Measurement Period, which commences on July 1, 2007, the following Consolidated EBITDA thresholds and amounts of Additional Merger Consideration are applicable:

(1) If the Consolidated EBITDA is at least $13,900,000, but less than $17,400,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(b)(1) equal to $2,402,112. The number of shares to be issued will be equal to the quotient obtained by dividing $2,402,112 by the preset value per share of $2.00.

(2) If the Consolidated EBITDA is at least $17,400,000, but less than $22,100,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(b)(2) equal to $2,878,774. The number of shares to be issued will be equal to the quotient obtained by dividing $2,878,774 by the preset value per share of $2.00.

(3) If the Consolidated EBITDA is equal to or exceeds $22,100,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(b)(3) equal to $3,205,804. The number of shares to be issued will be equal to the quotient obtained by dividing $3,205,804 by the preset value per share of $2.00.

For purposes of this Section 8.1(b), the value per share of THK’s common stock shall remain at $2.00 per share even though such shares may then be trading at a higher or lower price.

(c) Third Measurement Period. With respect to the third Measurement Period, which commences on July 1, 2008, the following Consolidated EBITDA thresholds and amounts of Additional Merger Consideration are applicable:

(1) If the Consolidated EBITDA is at least $15,200,000, but less than $20,700,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(c)(1) equal to $2,626,770. The number of shares to be issued will be equal to the quotient obtained by dividing $2,626,770 by the preset value per share of $2.00.

(2) If the Consolidated EBITDA is at least $20,700,000, but less than $27,800,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(c)(2) equal to $3,424,749. The number of shares to be issued will be equal to the quotient obtained by dividing $3,424,749 by the preset value per share of $2.00.

(3) If the Consolidated EBITDA is equal to or exceeds $27,800,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(c)(3) equal to $4,032,640. The number of shares to be issued will be equal to the quotient obtained by dividing $4,032,640 by the preset value per share of $2.00.

For purposes of this Section 8.1(c), the value per share of THK’s common stock shall remain at $2.00 per share even though such shares may then be trading at a higher or lower price.

8.2 Change of Subsidiaries. If there is a proposed change to THK’s subsidiaries after the execution date of this First Amendment, such as a proposed acquisition or disposition of a subsidiary by THK, and such change is expected to increase or decrease the projected amount of the Consolidated EBITDA for the then current Measurement Period by more than twenty percent (20%) of the mid-threshold amount of Consolidated EBITDA for such Measurement Period, the Parties hereby agree to amend the Agreement to adjust the Additional Merger Consideration provisions in a manner that will mitigate the effect of such expected change in Consolidated EBITDA on the amount of the Additional Merger Consideration. For this purpose, the mid-threshold amount of Consolidated EBITDA for the three Measurement Periods are as follows: First Measurement Period = $14,070,000; Second Measurement Period = $17,400,000; and Third Measurement Period = $20,700,000.

8.3 Payment. Any Additional Merger Consideration payable to the Shareholders under Section 8.1 hereof shall be paid no later than fifteen days after THK files with the Securities and Exchange Commission, its quarterly report on Form 10-Q or 10-QSB for the quarter in which the applicable Measurement Period ended.

8.4 No Fractional Shares. Any fractional shares resulting from any of the calculations required by Section 8.1 above shall be rounded up to the nearest whole number.

8.5 Notwithstanding any provision to the contrary in this Agreement, THK, in its sole discretion, shall be permitted to pay to the Shareholders any portion of the Additional Merger Consideration that is required to be paid hereunder in cash in lieu of shares of THK Common Stock to the extent that such portion of the Additional Merger Consideration would cause the total Additional Merger Consideration to be paid by THK in 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. THK covenants and agrees that it will seek approval from its shareholders for the issuance of the Additional Merger Consideration in THK Common Stock at the next annual or special meeting of its shareholders held after the execution of this First Amendment. The rights set forth in the first sentence of this Section 8.5 shall terminate if such shareholder approval is obtained. However, if any portion of the Additional Merger Consideration is required to be paid hereunder in cash, the amount of such cash payment shall be calculated by multiplying the number of shares of THK Common Stock in the Additional Merger Consideration that would cause the total Additional Merger Consideration to be paid by THK in THK Common Stock to exceed 20% of the shares of THK Common Stock issued and outstanding immediately prior to the Effective Time by the average volume-weighted average price (“VWAP”) for the thirty (30) day period occurring immediately prior to the payment date for such cash payment.

8.6 If following the Closing but prior to the end of the third Measurement Period, there is a Change of Control of THK, then simultaneously with the closing of the transaction,

THK shall pay to the Shareholders (a) the Additional Merger Consideration described in Section 8.1 above for the then current Measurement Period based on the Consolidated EBITDA that would be attained at the end of such Measurement Period if the Consolidated EBITDA as of the closing of the transaction was annualized to the end of such Measurement Period, and (b) the Additional Merger Consideration described in Section 8.1 above for all Measurement Periods, if any, that begin after the closing of the transaction based on the highest threshold of Consolidated EBITDA being attained for such Measurement Periods.

8.7 No Shareholder shall have the right to demand payment of the Additional Merger Consideration other than in accordance with this Article VIII. In addition, no Shareholder shall be entitled to pledge, borrow or otherwise obtain the benefits of the Additional Merger Consideration until payment of the Additional Merger Consideration is required to be paid by THK pursuant to Section 8.3 hereof.

4. Construction. In the event of any conflict by and between the Agreement and this First Amendment, the terms of this First Amendment shall control. Except as amended by this First Amendment, the terms of the Agreement are hereby ratified and affirmed in all respects.

5. Authority. Each individual executing this First Amendment on behalf of an entity represents and warrants that (a) he or she is duly authorized to execute and deliver this First Amendment on behalf of the entity; (b) the entity has all requisite power and authority to execute, deliver and perform under this First Amendment; (c) the execution, delivery and performance by the entity has been duly authorized by all necessary action, corporate or otherwise, on the part of the entity; (d) the entity has obtained all consents, permits, approvals and authorizations required by applicable governmental authorities in connection with the performance of its obligations under this First Amendment; and (e) this First Amendment is binding upon the entity.

* * *

[Signatures begin on the following page]

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

	THINK PARTNERSHIP, INC., f/k/a
	CGI HOLDING CORPORATION

	By:
	Name:
	Title:


	PRIMARYADS, INC.

	By:
	Name:
	Title:



	KENNETH M. HARLAN



	DAVID J. HARLAN



	STEVEN M. HARLAN



	MATTHEW A. SESSANTA

EX-10.2 3 a06-17850_1ex10d2.htm EX-10.2

Exhibit 10.2

SECOND AMENDMENT TO AGREEMENT

This Second Amendment to Agreement (this “Second Amendment”) is made and entered into this 10th day of August, 2006, to be effective as of July 1, 2006, by and among THINK PARTNERSHIP, INC., f/k/a CGI HOLDING CORPORATION, a Nevada corporation (“THK”), LITMUS MEDIA, INC., a Missouri corporation and wholly owned subsidiary of THK (“Litmus” and sometimes referred to as “Litmus Surviving Company”), and JOHN LINDEN (“Linden”) and TOBIAS TEETER (“Teeter”), as two of the former shareholders of Litmus (Linden and Teeter, together, are referred to herein as the “Shareholders”, and individually, as a “Shareholder”). THK, Litmus, and the Shareholders are also referred to herein each, individually, as a “Party” and, collectively, as the “Parties.”

WITNESSETH:

WHEREAS, the Parties previously entered into an Agreement, dated February 17, 2006, (the “Agreement”) whereby Litmus Acquisition Sub, Inc., a wholly owned subsidiary of THK, merged into Litmus (the “Merger”). Litmus is the surviving corporation after the Merger and is now a wholly owned subsidiary of THK.

WHEREAS, by virtue of the Merger, each share of common stock of Litmus, issued and outstanding prior to the Effective Time, was converted into the right to receive certain Cash Consideration, which included Initial Cash Consideration and Deferred Cash Consideration, and Stock Consideration, which included Initial Stock Consideration and Deferred Stock Consideration, as defined in the Agreement.

WHEREAS, the Parties desire to enter into this Second Amendment to modify the terms of the Agreement with respect to the Deferred Cash Consideration and the Deferred Stock Consideration.

AGREEMENT:

1. Capitalized Terms. All capitalized terms used, but not defined, in this Second Amendment shall have the meanings set forth in the Agreement.

2 Additional Definitions. The following terms are hereby added to the Definitions set forth in Article I of the Agreement and shall have the meanings set forth below:

shall be applied consistently throughout the Measurement Periods and consistently with the twelve month period immediately preceding the Measurement Periods.

3. Amendment to Section 6.5. Section 6.5, Post Closing Bonus Pool, is hereby amended and superseded by the following:

6.5 Post Closing Bonus Pool. In the event the Shareholders are entitled to any Earnout Payments pursuant to Article VIII, THK shall cause additional capital to be contributed to Litmus Surviving Company to create a bonus pool (the “Bonus Pool”). The Bonus Pool shall be used to pay bonuses to the pre-merger employees of Litmus identified in Schedule 6.5 (the “Pre-Merger Employees”). The amount of additional capital to be contributed by THK to the Bonus Pool shall be an amount equal to five percent (5%) of the Earnout Payment (the “Bonus Pool Amount”), before taking into account deduction of the Bonus Pool Amount, it being understood and agreed that the amount of the Earnout Payment to be paid to the Shareholders through the issuance of THK Common Stock shall be decreased by an amount equal to the Bonus Pool Amount. Distribution of the Bonus Pool among the Pre-Merger Employees shall be determined by Linden and Teeter, if and when the Bonus Pool Payments are made. The obligations of THK under this Section shall survive the Closing.

4. Amendment to Article VIII. Article VIII, Earnout, is hereby amended and superseded by the following:

8.1 Earnout. After the Closing Date, each Shareholder and Non-Party Shareholder shall be eligible to receive, on a pro rata basis determined by their percentage of the total number of outstanding shares of Litmus Common Stock shown on Schedule 2.6, a contingent consideration payment in the form of THK Common Stock (the “Earnout Payment”) if Consolidated EBITDA exceeds certain thresholds for the first three consecutive twelve month periods occurring after June 30, 2006 with the first twelve month period commencing on July 1, 2006 (each such twelve month period being a “Measurement Period” and together, the “Measurement Periods”). Such Earnout Payment, if any, shall be made by THK to the Shareholders and Non-Party Shareholder in an amount based upon the Consolidated EBITDA target reached as set forth below, less five percent (5%) of which shall be the Bonus Pool Amount to be contributed in cash as set forth in Section 6.5. The Earnout Payment shall be payable as follows:

(a) First Measurement Period. With respect to the first Measurement Period, which commences on July 1, 2006, the following Consolidated EBITDA thresholds and Earnout Payments are applicable:

(1) If the Consolidated EBITDA is at least $12,570,000, but less than $14,070,000, then THK shall issue shares of THK Common Stock to the Shareholders and Non-Party Shareholder having a value for purposes of this Section 8.1(a)(1) equal to $1,954,556 (less the Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $1,954,556 (less the Bonus Pool Amount) by the preset value per share of $2.00.

(2) If the Consolidated EBITDA is at least $14,070,000, but less than $17,070,000, then THK shall issue shares of THK Common Stock to the Shareholders and Non-Party Shareholder having a value for purposes of this Section 8.1(a)(2) equal to $2,915,039 (less the Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $2,915,039 (less the Bonus Pool Amount) by the preset value per share of $2.00.

(3) If the Consolidated EBITDA is equal to or exceeds $17,070,000, then THK shall issue shares of THK Common Stock to the Shareholders and Non-Party Shareholder having a value for purposes of this Section 8.1(a)(3) equal to $3,853,940 (less the Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $3,853,940 (less the Bonus Pool Amount) by the preset value per share of $2.00.

For purposes of this Section 8.1(a), the value per share of THK’s Common Stock shall remain at $2.00 per share even though such shares may then be trading at a higher or lower price.

(b) Second Measurement Period. With respect to the second Measurement Period, which commences on July 1, 2007, the following Consolidated EBITDA thresholds and Earnout Payments are applicable:

(1) If the Consolidated EBITDA is at least $13,900,000, but less than $17,400,000, then THK shall issue shares of THK Common Stock to the Shareholders and Non-Party Shareholder having a value for purposes of this Section 8.1(b)(1) equal to $2,161,363 (less the Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $2,161,363 (less the Bonus Pool Amount) by the preset value per share of $2.00.

(2) If the Consolidated EBITDA is at least $17,400,000, but less than $22,100,000, then THK shall issue shares of THK Common Stock to the Shareholders and Non-Party Shareholder having a value for purposes of this Section 8.1(b)(2) equal to $3,604,952 (less the Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $3,604,952 (less the Bonus Pool Amount) by the preset value per share of $2.00.

(3) If the Consolidated EBITDA is equal to or exceeds $22,100,000, then THK shall issue shares of THK Common Stock to the Shareholders and Non-Party Shareholder having a value for purposes of this Section 8.1(b)(3) equal to $4,989,578 (less the

Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $4,989,578 (less the Bonus Pool Amount) by the preset value per share of $2.00.

For purposes of this Section 8.1(b), the value per share of THK’s common stock shall remain at $2.00 per share even though such shares may then be trading at a higher or lower price.

(c) Third Measurement Period. With respect to the third Measurement Period, which commences on July 1, 2008, the following Consolidated EBITDA thresholds and Earnout Payments are applicable:

(1) If the Consolidated EBITDA is at least $15,200,000, but less than $20,700,000, then THK shall issue shares of THK Common Stock to the Shareholders and Non-Party Shareholder having a value for purposes of this Section 8.1(c)(1) equal to $2,363,505 (less the Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $2,363,505 (less the Bonus Pool Amount) by the preset value per share of $2.00.

(2) If the Consolidated EBITDA is at least $20,700,000, but less than $27,800,000, then THK shall issue shares of THK Common Stock to the Shareholders and Non-Party Shareholder having a value for purposes of this Section 8.1(c)(2) equal to $4,288,649 (less the Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $4,288,649 (less the Bonus Pool Amount) by the preset value per share of $2.00.

(3) If the Consolidated EBITDA is equal to or exceeds $27,800,000, then THK shall issue shares of THK Common Stock to the Shareholders and Non-Party Shareholder having a value for purposes of this Section 8.1(c)(3) equal to $6,276,482 (less the Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $6,276,482 (less the Bonus Pool Amount) by the preset value per share of $2.00.

For purposes of this Section 8.1(c), the value per share of THK’s common stock shall remain at $2.00 per share even though such shares may then be trading at a higher or lower price.

8.2 Change of Subsidiaries. If there is a proposed change to THK’s subsidiaries after the execution date of this Second Amendment, such as a proposed acquisition or disposition of a subsidiary by THK, and such change is expected to increase or decrease the projected amount of the Consolidated EBITDA for the then current Measurement Period by more than twenty percent (20%) of the mid-threshold amount of Consolidated EBITDA for such Mersurement Period, the Parties hereby agree to amend the Agreement to adjust the Earnout Payment provisions in a manner that will mitigate the effect of such expected change in Consolidated EBITDA on the amount of the Earnout Payment. For this purpose, the mid-threshold amount of Consolidated EBITDA for the three Measurement Periods are as follows: First Measurement Period = $14,070,000; Second Measurement Period = $17,400,000; and Third Measurement Period = $20,700,000.

8.3 Payment. Any Earnout Payment payable to the Shareholders and Non-Party Shareholder under Section 8.1 hereof shall be paid no later than fifteen days after THK files with the Securities and Exchange Commission, its quarterly report on Form 10-Q or 10-QSB for the quarter in which the applicable Measurement Period ended.

8.4 No Fractional Shares. Any fractional shares resulting from any of the calculations required by Section 8.1 above shall be rounded up to the nearest whole number.

8.5 Notwithstanding any provision to the contrary in this Agreement, THK, in its sole discretion, shall be permitted to pay to the Shareholders and the Non-Party Shareholders any portion of the Earnout Payment that is required to be paid hereunder in cash in lieu of shares of THK Common Stock to the extent that such portion of the Stock Consideration would cause the total Stock Consideration to be paid by THK pursuant to this Agreement to exceed 20% of the shares of THK Common Stock issued and outstanding immediately prior to the Effective Time. THK covenants and agrees that it will seek approval from its shareholders for the issuance of the Earnout Payment in THK Common Stock at the next annual or special meeting of its shareholders held after the execution of this Second Amendment. The rights set forth in the first sentence of this Section 8.5 shall terminate if such shareholder approval is obtained. However, if any portion of the Earnout Payment is required to be paid hereunder in cash, the amount of such cash payment shall be calculated by multiplying the number of shares of THK Common Stock in the Stock Consideration that would cause the total Stock Consideration to exceed 20% of the shares of THK Common Stock issued and outstanding immediately prior to the Effective Time by the average volume-weighted average price (“VWAP”) for the thirty (30) day period occurring immediately prior to the payment date for such cash payment.

8.6 If following the Closing but prior to the end of the third Measurement Period, there is a Change of Control of THK, then simultaneously with the closing of the transaction, THK shall pay to the Shareholders (a) the Earnout Payment described in Section 8.1 above for the then current Measurement Period based on the Consolidated EBITDA that would be attained at the end of such Measurement Period if the Consolidated EBITDA as of the closing of the transaction was annualized to the end of such Measurement Period, and (b) the Earnout Payment described in Section 8.1 above for all Measurement Periods, if any, that begin after the closing of the transaction based on the highest threshold of Consolidated EBITDA being attained for such Measurement Periods.

8.7 No Shareholder or Non-Party Shareholder shall have the right to demand payment of the Earnout Payment other than in accordance with this Article VIII. In addition, no Shareholder or Non-Party Shareholder shall be entitled to pledge, borrow or otherwise obtain the benefits of the Earnout Payment until payment of the Earnout Payment is required to be paid by THK pursuant to Section 8.3 hereof.

5. Construction. In the event of any conflict by and between the Agreement and this Second Amendment, the terms of this Second Amendment shall control. Except as amended by this Second Amendment, the terms of the Agreement are hereby ratified and affirmed in all respects.

6. Authority. Each individual executing this Second Amendment on behalf of an entity represents and warrants that (a) he or she is duly authorized to execute and deliver this Second Amendment on behalf of the entity; (b) the entity has all requisite power and authority to execute, deliver and perform under this Second Amendment; (c) the execution, delivery and performance by the entity has been duly authorized by all necessary action, corporate or otherwise, on the part of the entity; (d) the entity has obtained all consents, permits, approvals and authorizations required by applicable governmental authorities in connection with the performance of its obligations under this Second Amendment; and (e) this Second Amendment is binding upon the entity.

* * *

[Signatures begin on the following page]

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

	THINK PARTNERSHIP, INC., f/k/a
	CGI HOLDING CORPORATION

	By:
	Name:
	Title:


	LITMUS MEDIA, INC.

	By:
	Name:
	Title:



	JOHN LINDEN



	TOBIAS TEETER

EX-10.3 4 a06-17850_1ex10d3.htm EX-10.3

Exhibit 10.3

FIRST AMENDMENT TO AGREEMENT

This First Amendment to Agreement (this “First Amendment”) is made and entered into this 10th day of August, 2006, to be effective as of July 1, 2006, by and among THINK PARTNERSHIP, INC., f/k/a CGI HOLDING CORPORATION, a Nevada corporation (“THK”), THK, LLC, a Delaware limited liability company and wholly owned subsidiary of THK (“THK LLC”), and BRADY WHITTINGHAM (“Whittingham”), DAVID NELSON (“Nelson”), and ROBERT SEOLAS (“Seolas” and, together with Whittingham and Nelson, the “Shareholders”). THK, THK LLC, and the Shareholders are also referred to herein each, individually, as a “Party” and, collectively, as the “Parties.”

WITNESSETH:

WHEREAS, the Parties previously entered into an Agreement and Plan of Merger and Reorganization, dated April 27, 2006, (the “Agreement”) whereby iLead Acquisition Sub, Inc., a wholly owned subsidiary of THK, merged into iLead Media, Inc. (“iLead”), a Utah corporation owned by the Shareholders (the “Merger”). Thereafter, iLead, as the surviving corporation after the Merger, merged into THK LLC (the “Final Merger”) with THK LLC being the surviving corporation after the Final Merger.

WHEREAS, by virtue of the Merger, each share of common stock of iLead owned by the Shareholders was converted into the right to receive certain Cash Consideration, Stock Consideration, an Earnout Payment (if any), and an Addition Cash Payment (if any) as defined in the Agreement.

WHEREAS, the Parties desire to enter into this First Amendment to modify the terms of the Agreement with respect to the Earnout Payment and the Additional Cash Payment.

AGREEMENT:

1. Capitalized Terms. All capitalized terms used, but not defined, in this First Amendment shall have the meanings set forth in the Agreement.

2 Additional Definitions. The following terms are hereby added to the Definitions set forth in Article I of the Agreement and shall have the meanings set forth below:

3. Amendment to Section 6.6. Section 6.6, Post Closing Bonus Pool, is hereby amended and superseded by the following:

6.6 Post Closing Bonus Pool. In the event the Shareholders are entitled to any Earnout Payments pursuant to Article VIII, THK shall cause additional capital to be contributed to THK LLC to create a bonus pool (the “Bonus Pool”). The Bonus Pool shall be used to pay bonuses to the pre-merger employees of iLead identified in Schedule 6.6 (the “Pre-Merger Employees”). The amount of additional capital to be contributed by THK to the Bonus Pool shall be an amount equal to five percent (5%) of the Earnout Payment (the “Bonus Pool Amount”), before taking into account deduction of the Bonus Pool Amount, it being understood and agreed that the amount of the Earnout Payment to be paid to the Shareholders through the issuance of THK Common Stock shall be decreased by an amount equal to the Bonus Pool Amount. Distribution of the Bonus Pool among the Pre-Merger Employees shall be determined by Whittingham if and when the Bonus Pool Payments are made. The obligations of THK under this Section shall survive the Closing.

4. Amendment to Article VIII. Article VIII, Post-Closing Payments to Shareholders, is hereby amended and superseded by the following:

8.1 Earnout. After the Closing Date, each Shareholder shall be eligible to receive, on a pro rata basis determined by their percentage of the total number of outstanding shares of iLead Common Stock shown on Schedule 4.7, a contingent consideration payment in the form of THK Common Stock (the “Earnout Payment”) if Consolidated EBITDA exceeds certain thresholds for the first three consecutive twelve month periods occurring after June 30, 2006 with the first twelve month period commencing on July 1, 2006 (each such twelve month period being a “Measurement Period” and together, the “Measurement Periods”). Such Earnout Payment, if any, shall be made by THK to the Shareholders in an amount based upon the Consolidated EBITDA target reached as set forth below, less five percent (5%) of which shall be the Bonus Pool Amount to be contributed in cash as set forth in Section 6.6. The Earnout Payment shall be payable as follows:

(a) First Measurement Period. With respect to the first Measurement Period, which commences on July 1, 2006, the following Consolidated EBITDA thresholds and Earnout Payments are applicable:

The number of shares to be issued will be equal to the quotient obtained by dividing $1,954,556 (less the Bonus Pool Amount) by the preset value per share of $2.00.

(2) If the Consolidated EBITDA is at least $14,070,000, but less than $17,070,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(a)(2) equal to $1,747,625 (less the Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $1,747,625 (less the Bonus Pool Amount) by the preset value per share of $2.00.

(3) If the Consolidated EBITDA is equal to or exceeds $17,070,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(a)(3) equal to $3,304.754 (less the Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $3,304,754 (less the Bonus Pool Amount) by the preset value per share of $2.00.

For purposes of this Section 8.1(a), the value per share of THK’s Common Stock shall remain at $2.00 per share even though such shares may then be trading at a higher or lower price.

(b) Second Measurement Period. With respect to the second Measurement Period, which commences on July 1, 2007, the following Consolidated EBITDA thresholds and Earnout Payments are applicable:

(1) If the Consolidated EBITDA is at least $13,900,000, but less than $17,400,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(b)(1) equal to $2,161,363 (less the Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $2,161,363 (less the Bonus Pool Amount) by the preset value per share of $2.00.

(2) If the Consolidated EBITDA is at least $17,400,000, but less than $22,100,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(b)(2) equal to $2,161,242 (less the Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $2,161,242 (less the Bonus Pool Amount) by the preset value per share of $2.00.

(3) If the Consolidated EBITDA is equal to or exceeds $22,100,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(b)(3) equal to $4,278,563 (less the Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $4,278,563 (less the Bonus Pool Amount) by the preset value per share of $2.00.

For purposes of this Section 8.1(b), the value per share of THK’s common stock shall remain at $2.00 per share even though such shares may then be trading at a higher or lower price.

(c) Third Measurement Period. With respect to the third Measurement Period, which commences on July 1, 2008, the following Consolidated EBITDA thresholds and Earnout Payments are applicable:

(1) If the Consolidated EBITDA is at least $15,200,000, but less than $20,700,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(c)(1) equal to $2,363,505 (less the Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $2,363,505 (less the Bonus Pool Amount) by the preset value per share of $2.00.

(2) If the Consolidated EBITDA is at least $20,700,000, but less than $27,800,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(c)(2) equal to $2,571,133 (less the Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $2,571,133 (less the Bonus Pool Amount) by the preset value per share of $2.00.

(3) If the Consolidated EBITDA is equal to or exceeds $27,800,000, then THK shall issue shares of THK Common Stock to the Shareholders having a value for purposes of this Section 8.1(c)(3) equal to $5,382,083 (less the Bonus Pool Amount). The number of shares to be issued will be equal to the quotient obtained by dividing $5,382,083 (less the Bonus Pool Amount) by the preset value per share of $2.00.

For purposes of this Section 8.1(c), the value per share of THK’s common stock shall remain at $2.00 per share even though such shares may then be trading at a higher or lower price.

8.2 Change of Subsidiaries. If there is a proposed change to THK’s subsidiaries after the execution date of this First Amendment, such as a proposed acquisition or disposition of a subsidiary by THK, and such change is expected to increase or decrease the projected amount of the Consolidated EBITDA for the then current Measurement Period by more than twenty percent (20%) of the mid-threshold amount of Consolidated EBITDA for such Measurement Period, the Parties hereby agree to amend the Agreement to adjust the Earnout Payment provisions in a manner that will mitigate the effect of such expected change in Consolidated EBITDA on the amount of the Earnout Payment. For this purpose, the mid-threshold amount of Consolidated EBITDA for the three Measurement Periods are as follows: First Measurement Period = $14,070,000; Second Measurement Period = $17,400,000; and Third Measurement Period = $20,700,000.

8.3 Payment. Any Earnout Payment payable to the Shareholders under Section 8.1 hereof shall be paid no later than fifteen days after THK files with the Securities and Exchange Commission, its quarterly report on Form 10-Q or 10-QSB for the quarter in which the applicable Measurement Period ended.

8.4 No Fractional Shares. Any fractional shares resulting from any of the calculations required by Section 8.1 above shall be rounded up to the nearest whole number.

8.5 Notwithstanding any provision to the contrary in this Agreement, THK, in its sole discretion, shall be permitted to pay to the Shareholders any portion of the Earnout Payment that is required to be paid hereunder in cash in lieu of shares of THK Common Stock to the extent that such portion of the Merger Consideration would cause the total Merger Consideration to be paid by THK in 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. THK covenants and agrees that it will seek approval from its shareholders for the issuance of the Earnout Payment in THK Common Stock at the next annual or special meeting of its shareholders held after the execution of this First Amendment. The rights set forth in the first sentence of this Section 8.5 shall terminate if such shareholder approval is obtained. However, if any portion of the Earnout Payment is required to be paid hereunder in cash, the amount of such cash payment shall be calculated by multiplying the number of shares of THK Common Stock in the Merger Consideration that would cause the total Merger Consideration to be paid by THK in THK Common Stock to exceed 20% of the shares of THK Common Stock issued and outstanding immediately prior to the Effective Time by the average volume-weighted average price (“VWAP”) for the thirty (30) day period occurring immediately prior to the payment date for such cash payment.

8.7 No Shareholder shall have the right to demand payment of the Earnout Payment other than in accordance with this Article VIII. In addition, no Shareholder shall be entitled to pledge, borrow or otherwise obtain the benefits of the Earnout Payment until payment of the Earnout Payment is required to be paid by THK pursuant to Section 8.3 hereof.

5. Construction. In the event of any conflict by and between the Agreement and this First Amendment, the terms of this First Amendment shall control. Except as amended by this First Amendment, the terms of the Agreement are hereby ratified and affirmed in all respects.

6. Authority. Each individual executing this First Amendment on behalf of an entity represents and warrants that (a) he or she is duly authorized to execute and deliver this First Amendment on behalf of the entity; (b) the entity has all requisite power and authority to execute, deliver and perform under this First Amendment; (c) the execution, delivery and performance by the entity has been duly authorized by all necessary action, corporate or otherwise, on the part of the entity; (d) the entity has obtained all consents, permits, approvals and authorizations required by applicable governmental authorities in connection with the performance of its obligations under this First Amendment; and (e) this First Amendment is binding upon the entity.

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

	THINK PARTNERSHIP, INC., f/k/a
	CGI HOLDING CORPORATION

	By:
	Name:
	Title:


	THK, LLC

	By:
	Name:
	Title:



	BRADY WHITTINGHAM



	DAVID NELSON



	ROBERT SEOLAS

EX-10.4 5 a06-17850_1ex10d4.htm EX-10.4

Exhibit 10.4

FIRST AMENDMENT TO AGREEMENT

This First Amendment to Agreement (this “First Amendment”) is made and entered into this 10th day of August, 2006, to be effective as of July 1, 2006, by and between THINK PARTNERSHIP, INC., f/k/a CGI HOLDING CORPORATION, a Nevada corporation (“THK or “Buyer”) and JAMES BANKS, a British National (“Seller”). THK and Seller are also referred to herein each, individually, as a “Party” and, collectively, as the “Parties.”

WITNESSETH:

WHEREAS, the Parties previously entered into a Share Purchase Agreement, dated April 27, 2006, (the “Agreement”) whereby THK purchased all of the legal and beneficial title to the issued share capital of Web Diversity Limited, a private limited company incorporated and registered in England and Wales (the “Company”), which was owned by the Seller.

WHEREAS, as consideration for such shares, Seller has the right to receive certain Cash Consideration, Shares Consideration, and an Earnout Payment (if any) as defined in the Agreement.

WHEREAS, the Parties desire to enter into this First Amendment to modify the terms of the Agreement with respect to the Earnout Payment.

AGREEMENT:

1. Capitalized Terms. All capitalized terms used, but not defined, in this First Amendment shall have the meanings set forth in the Agreement.

2 Additional Definitions. The following definitions of “Consolidated EBITDA” and “Change of Control of THK” are hereby added to the Definitions set forth in Article I of the Agreement and the following revised definition of “Shares Consideration” hereby replaces the definition of “Shares Consideration” set forth in Article I of the Agreement:

THK shareholders immediately prior to the transaction; (2) the cumulative acquisition, either directly or indirectly through one transaction or a series of related transactions, by any Person of fifty percent (50%) or more of the then issued and outstanding common stock of THK; or (3) a sale of all or substantially all of the assets of THK to a party that is not controlled by THK.

“Shares Consideration” has the meaning set forth in Section 2.2(a), except as used to define “Consideration” in Article I and as used in Section 4.23, “Share Consideration” shall also include any THK Common Stock issued to Seller pursuant to Article VII.

3. Amendment to Article VII. Article VII, Earnout, is hereby amended and superseded by the following:

7.1 Earnout. After the Closing Date, the Consideration may be increased by a contingent consideration payment in the form of THK Common Stock (the “Earnout Payment”) if Consolidated EBITDA exceeds certain thresholds for the first three consecutive twelve month periods occurring after June 30, 2006 with the first twelve month period commencing on July 1, 2006 (each such twelve month period being a “Measurement Period” and together, the “Measurement Periods”). Such Earnout Payment, if any, shall be made by THK to Seller in an amount based upon the Consolidated EBITDA target reached as set forth below. The Earnout Payment shall be payable as follows:

(a) First Measurement Period. With respect to the first Measurement Period, which commences on July 1, 2006, the following Consolidated EBITDA thresholds and Earnout Payments are applicable:

(1) If the Consolidated EBITDA is at least $12,570,000, but less than $14,070,000, then THK shall issue shares of THK Common Stock to Seller having a value for purposes of this Section 7.1(a)(1) equal to $105,580. The number of shares to be issued will be equal to the quotient obtained by dividing $105,580 by the preset value per share of $2.00.

(2) If the Consolidated EBITDA is at least $14,070,000, but less than $17,070,000, then THK shall issue shares of THK Common Stock to Seller having a value for purposes of this Section 7.1(a)(2) equal to $116,750. The number of shares to be issued will be equal to the quotient obtained by dividing $116,750 by the preset value per share of $2.00.

(3) If the Consolidated EBITDA is equal to or exceeds $17,070,000, then THK shall issue shares of THK Common Stock to Seller having a value for purposes of this Section 7.1(a)(3) equal to $127,670. The number of shares to be issued will be equal to the quotient obtained by dividing $127,670 by the preset value per share of $2.00.

For purposes of this Section 7.1(a), the value per share of THK’s Common Stock shall remain at $2.00 per share even though such shares may then be trading at a higher or lower price.

(b) Second Measurement Period. With respect to the second Measurement Period, which commences on July 1, 2007, the following Consolidated EBITDA thresholds and Earnout Payments are applicable:

(1) If the Consolidated EBITDA is at least $13,900,000, but less than $17,400,000, then THK shall issue shares of THK Common Stock to Seller having a value for purposes of this Section 7.1(b)(1) equal to $235,983. The number of shares to be issued will be equal to the quotient obtained by dividing $235,983 by the preset value per share of $2.00.

(2) If the Consolidated EBITDA is at least $17,400,000, but less than $22,100,000, then THK shall issue shares of THK Common Stock to Seller having a value for purposes of this Section 7.1(b)(2) equal to $291,834. The number of shares to be issued will be equal to the quotient obtained by dividing $291,834 by the preset value per share of $2.00.

(3) If the Consolidated EBITDA is equal to or exceeds $22,100,000, then THK shall issue shares of THK Common Stock to Seller having a value for purposes of this Section 7.1(b)(3) equal to $347,182. The number of shares to be issued will be equal to the quotient obtained by dividing $347,182 by the preset value per share of $2.00.

For purposes of this Section 7.1(b), the value per share of THK’s common stock shall remain at $2.00 per share even though such shares may then be trading at a higher or lower price.

(c) Third Measurement Period. With respect to the third Measurement Period, which commences on July 1, 2008, the following Consolidated EBITDA thresholds and Earnout Payments are applicable:

(1) If the Consolidated EBITDA is at least $15,200,000, but less than $20,700,000, then THK shall issue shares of THK Common Stock to Seller having a value for purposes of this Section 7.1(c)(1) equal to $356,846. The number of shares to be issued will be equal to the quotient obtained by dividing $356,846 by the preset value per share of $2.00.

(2) If the Consolidated EBITDA is at least $20,700,000, but less than $27,800,000, then THK shall issue shares of THK Common Stock to Seller having a value for purposes of this Section 7.1(c)(2) equal to $461,998. The number of shares to be issued will be equal to the quotient obtained by dividing $461,998 by the preset value per share of $2.00.

(3) If the Consolidated EBITDA is equal to or exceeds $27,800,000, then THK shall issue shares of THK Common Stock to Seller having a value for purposes of this Section 7.1(c)(3) equal to $581,156. The number of shares to be issued will be equal to the quotient obtained by dividing $581,156 by the preset value per share of $2.00.

For purposes of this Section 7.1(c), the value per share of THK’s common stock shall remain at $2.00 per share even though such shares may then be trading at a higher or lower price.

7.2 Change of Subsidiaries. If there is a proposed change to THK’s subsidiaries after the execution date of this First Amendment, such as a proposed acquisition or disposition of a subsidiary by THK, and such change is expected to increase or decrease the projected amount of the Consolidated EBITDA for the then current Measurement Period by more than twenty percent

(20%) of the mid-threshold amount of Consolidated EBITDA for such Measurement Period, the Parties hereby agree to amend the Agreement to adjust the Earnout Payment provisions in a manner that will mitigate the effect of such expected change in Consolidated EBITDA on the amount of the Earnout Payment. For this purpose, the mid-threshold amount of Consolidated EBITDA for the three Measurement Periods are as follows: First Measurement Period = $14,070,000; Second Measurement Period = $17,400,000; and Third Measurement Period = $20,700,000.

7.3 Payment. Any Earnout Payment payable to Seller under Section 7.1 hereof shall be paid no later than fifteen days after THK files with the Securities and Exchange Commission, its quarterly report on Form 10-Q or 10-QSB for the quarter in which the applicable Measurement Period ended.

7.4 No Fractional Shares. Any fractional shares resulting from any of the calculations required by Section 7.1 above shall be rounded up to the nearest whole number.

7.5 Notwithstanding any provision to the contrary in this Agreement, THK, in its sole discretion, shall be permitted to pay to Seller any portion of the Earnout Payment that is required to be paid hereunder in cash in lieu of shares of THK Common Stock to the extent that such portion of the Consideration would cause the total Consideration to be paid by THK in THK Common Stock pursuant to this Agreement to exceed 20% of the shares of THK Common Stock issued and outstanding immediately prior to the Closing Date. THK covenants and agrees that it will seek approval from its shareholders for the issuance of the Earnout Payment in THK Common Stock at the next annual or special meeting of its shareholders held after the execution of this First Amendment. The rights set forth in the first sentence of this Section 7.5 shall terminate if such shareholder approval is obtained. However, if any portion of the Earnout Payment is required to be paid hereunder in cash, the amount of such cash payment shall be calculated by multiplying the number of shares of THK Common Stock in the Consideration that would cause the total Consideration to be paid by THK in THK Common Stock to exceed 20% of the shares of THK Common Stock issued and outstanding immediately prior to the Closing by the average volume-weighted average price (“VWAP”) for the thirty (30) day period occurring immediately prior to the payment date for such cash payment.

7.6 If following the Closing but prior to the end of the third Measurement Period, there is a Change of Control of THK, then simultaneously with the closing of the transaction, THK shall pay to Seller (a) the Earnout Payment described in Section 7.1 above for the then current Measurement Period based on the Consolidated EBITDA that would be attained at the end of such Measurement Period if the Consolidated EBITDA as of the closing of the transaction was annualized to the end of such Measurement Period, and (b) the Earnout Payment described in Section 7.1 above for all Measurement Periods, if any, that begin after the closing of the transaction based on the highest threshold of Consolidated EBITDA being attained for such Measurement Periods.

7.7 Seller shall not have the right to demand payment of the Earnout Payment other than in accordance with this Article VII. In addition, Seller shall not be entitled to pledge, borrow or otherwise obtain the benefits of the Earnout Payment until payment of the Earnout Payment is required to be paid by THK pursuant to Section 7.3 hereof.

7.8 Travel Costs. In the event that:

(a) THK or any of its Affiliates requests Jim Banks or any other senior employee of the Company to travel overseas; and

(b) the purpose of that travel does not in any way relate to promoting or furthering the interests of the Company or its Affiliates,

then the parties agree that the cost of such travel shall be for THK’s account or for the account of its nominee and shall not be borne by the Company, unless the parties otherwise agree.

* * *

[Signatures begin on the following page]

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

	THINK PARTNERSHIP, INC., f/k/a
	CGI HOLDING CORPORATION

	By:
	Name:
	Title:



	JAMES BANKS

EX-99.1 6 a06-17850_1ex99d1.htm EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Think Partnership Second Quarter 2006 Financial Results

Record Revenues - up 87%; Record EBITDA - up 122%

CLEARWATER, Fla. — August 10, 2006 — Think Partnership. (AMEX:THK), an international leader in interactive performance-based marketing and related Internet technologies, reported financial results for the second quarter ending June 30, 2006.

As compared to the previous quarter and same period a year ago:

· Revenues were $19.3 million, up 60% from $12.1 million in the previous quarter and up 87% from $10.3 million a year ago.

· Net Income was $72.9 thousand, up from a loss of $0.7 million in the previous quarter, and down from $0.2 million a year ago.

· Fully diluted earnings per common share were a loss of $(0.03), a decrease compared to a loss of ($0.02) in the previous quarter, and $0.01 per share in the same period a year ago. The loss is primarily due to a preferred dividend payment of $0.6 million and accretion of preferred redeemable stock of $0.9 million.

· Earnings before interest, taxes, depreciation and amortization expenses (“EBITDA”) were $2.0 million, up 555% from $0.3 million reported in the previous quarter, and up 122% from $0.9 million reported a year ago. A reconciliation of EBITDA to income from operations is included at the end of this release.

Other Q2 2006 Highlights

· Acquired Litmus Media, Inc., which adds unique click fraud prevention and abandoned shopping cart re-marketing technologies for the performance-based advertising, search marketing, and e-retailing industries.

· Acquired iLead Media, an industry leader in online sales lead generation, and recognized by the Internet’s affiliate advertising industry for its “Best Practices.”

· Acquired Web Diversity Limited, a leading paid search management and organic search company, which expanded the company’s paid search management and organic search business to Europe and Asia.

· Closed equity financing of $26.5 million to fund acquisition of Litmus Media and general corporate purposes.

· President Scott P. Mitchell, an accomplished senior manager and noted for helping launch HSN.com, Rollingstone.com, and Tunes.com, assumed the role of chief executive officer and was appointed to the board of directors.

· Added legendary entrepreneur Bob Geras, respected investor George Mellon, and technology innovator Josh Metnick to the board of directors.

· Opened new offices in Hong Kong to serve business throughout the Asia-Pacific region, including China, Japan, and Australia.

· Engaged Liolios Group, Inc. to lead investor relations and financial communications efforts, and help build long-term relationships with leading analysts, money managers and institutions.

“Think Partnership continued to expand its industry leadership position this quarter while also undergoing a significant transformation,” said Think Partnership’s CEO and president, Scott Mitchell. “This included transitions to new senior management, new corporate governance, new acquisitions, and a revolutionary integration of our subsidiaries and divisions.

“While some of these changes will take a few quarters to become fully realized, initial benefits can be seen in better product and cross-divisional integration, product roadmap, and particularly record revenue and EBITDA.”

Continued Mitchell, “Our consumer services division experienced some decline. However George Douaire, the new president of that division, has been installed to direct change and correct these issues. His exceptional track record within Think Partnership has already been demonstrated and some of his recent changes have had a significant impact. We expect to see accelerated growth and profitability across the board as we continue to integrate our recent acquisitions, as well as drive new operational efficiencies and strategic business relationships throughout the organization.

“Our focus continues to be on developing and expanding our products, services, technology, and talent — all of which makes Think Partnership a world-class, performance-based interactive marketing company. We are now managing tremendous worldwide opportunities that have set us on an excellent course for the balance of 2006 and beyond.”

About Think Partnership, Inc.

Think Partnership Inc. is an international leader in interactive performance-based marketing and related Internet technologies. Think provides a comprehensive and integrated set of scalable and cost-effective marketing solutions for both advertisers and publishers. These solutions increase customer retention and revenues through a diverse set of related marketing channels, including affiliate marketing, click-fraud protected pay-per-click advertising, lead generation, interactive direct marketing, integrated offline advertising, campaign management, public relations, and branding. Think also operates several direct-to-consumer services including online dating, online education, and home business opportunities. High-profile brands include ValidClick, PrimaryAds, iLeadMedia, Kowabunga, BabyToBee, and MarketSmart. Visit www.thinkpartnership.com for more information.

Regarding Forward Looking Statements

Statements made in this press release that express the company’s or management’s intentions, plans, beliefs, expectations or predictions of future events, are forward-looking statements. Those statements are based on many assumptions and are subject to many known and unknown risks, uncertainties and other factors that could cause the company’s actual activities, results or performance to differ materially from those anticipated or projected in such forward-looking statements. For a discussion of these risks, see the company’s report, as filed with the Securities and Exchange Commission on Form 8-K, filed June 7, 2006, under the section headed “Risk Factors,” as well as Form 10-QSB for the quarter ended June 30, 2006, under the section headed “Management Discussion and Analysis or Plan of Operation - Risk Factors.” The company cannot guarantee future financial results, levels of activity, performance or achievements; and investors should not place undue reliance on the company’s forward-looking statements.

THINK PARTNERSHIP INC

CONSOLIDATED STATEMENT OF OPERATIONS

Six and Three Months Ended June 30, 2006 and 2005

	Six Months Ended						Three Months Ended
	2006			2005			2006			2005
Net Revenue	$	31,352,031		$	19,487,285		$	19,301,638		$	10,314,806

Cost of Revenue	11,760,411			6,765,676			8,406,531			3,539,602
Gross Profit	19,591,620			12,721,609			10,895,107			6,775,204
Operating Expenses
Selling, General and Administrative	18,758,399			11,288,834			9,701,831			6,020,587
Amortization of Purchased Intangibles	1,424,432			563,550			868,933			385,204
(Loss)Income from Operations	(591,211		)	869,224			324,343			369,413
Other Income(Expenses)
Interest Income	4,274			77,242			3,414			22,592
Interest Expense	(435,951		)	(34,495		)	(193,570		)	(23,407		)
Other Income, Net	(7,150		)	4,500			(9,092		)	4,500
(Loss)Income before Income Tax (Benefit) Expense	(1,030,038		)	916,471			125,095			373,098
Income Tax (Benefit) Expense	(394,298		)	352,969			52,195			148,154
Net (Loss) Income	(635,740		)	563,502			72,900			224,944
Other Comprehensive Income
Unrealized Gain on Securities	63,944			88,315			19,354			88,315
Foreign Currency Adjustment	246,507			0			296,077			0
Comprehensive (Loss)Income	($325,289		)	$	651,816		$	388,331		$	313,259

Net (Loss)Income Per Share
Basic	($0.05		)	$	0.02		($0.03		)	$	0.01
Fully Diluted	($0.05		)	$	0.01		($0.03		)	$	0.01

Weighted Average Shares (Basic)	43,423,722			32,999,634			46,776,865			33,323,369
Weighted Average Shares (Fully Diluted)				39,005,859						39,068,603

The accompanying notes to the condensed consolidated financial statements available in the company quarterly statement for the period ended June 30, 2006, as filed with the Securities and Exchange Commission, are an integral part of these statements.

THINK PARTNERSHIP INC

CONSOLIDATED BALANCE SHEET

June 30, 2006 and December 31, 2005

	June 30, 2006			December 31, 2005
Assets
Current Assets
Cash and Cash Equivalents	$	3,333,015		$	2,609,114
Restricted Cash	326,160			828,804
Accounts Receivable Net of Allowance for Doubtful Accounts of $125,320 and $33,280	11,424,344			4,223,599
Notes Receivable — Related Party	280,175			280,175
Refundable Corporate Income Taxes	647,613			1,526,968
Deferred Tax Asset	0			205,361
Prepaid Expenses and Other Current Assets	659,905			734,544
Total Current Assets	16,671,212			10,408,565
Property and Equipment, net	3,790,337			3,253,078
Other Assets
Goodwill	78,183,223			32,959,252
Intangible Assets	22,077,117			10,300,248
Other Assets	568,190			573,176
Total Other Assets	100,828,530			43,832,676
Total Assets	$	121,290,079		$	57,494,319

Liabilities and Shareholders’ Equity
Current Liabilities
Notes Payable —Current Portion	$	1,464,696		$	5,262
Note Payable — Related Party	135,197			429,761
Accounts Payable	7,969,911			3,443,603
Deferred Revenue	2,671,438			2,831,656
Client Prepaid Media Buys	155,509			774,877
Deferred Tax Liability	410,638			0
Derivative Financial Instruments	1,206,070			0
Accrued Expenses and Other Current Liabilities	1,126,651			1,309,301
Total Current Liabilities	15,140,110			8,794,460

Long-Term Liabilities	15,817,986			10,052,329

Redeemable Preferred Stock	18,444,896			—

Shareholders’ Equity
Preferred Stock, $.001 par value:
Authorized Shares — 5,000,000 — none issued or outstanding	—			—
Common Stock, $.001 par value:
Authorized Shares — 200,000,000
Issued Shares —52,413,695 as of June 30 and 38,222,030 as of December 31
Outstanding Shares —49,913,695 as of June 30 and 35,722,030 as of December 31	52,413			38,222
Additional Paid in Capital	77,482,182			42,375,320
Accumulated Deficit	(5,511,963		)	(3,320,016		)
Accumulated Other Comprehensive Income	404,455			94,004
Treasury Stock	(540,000		)	(540,000		)
Total Shareholders’ Equity	71,887,087			38,647,530
Total Liabilities and Shareholders’ Equity	$	121,290,079		$	57,494,319

Reconciliation of Pre-Tax Income to EBIDTA

	Three Months Ended		Three Months Ended			Three Months Ended		Three Months Ended
	June 30, 2006		March 31, 2006			June 30, 2005		March 31, 2005
Pre Tax income	$	125,094	($1,155,133		)	$	373,098	$	543,373

Amortization	1,382,284		944,168			385,204		178,346
Depreciation	297,272		278,007			148,801		114,354
Net Interest Expense	190,156		241,521			815		(43,562		)
Derivative adjustment	24,940		—			—		—
EBIDTA	$	2,019,746	$	308,563		$	907,918	$	792,511

Reconciliation of Net Income to Net Income Attributable to Common Shareholders

	Six Months Ended		Three Months Ended
Net (Loss) Income	($635,740	)	$	72,900
Dividend
Paid	(625,694	)	(625,694		)
Accretion	(930,513	)	(930,513		)
Net Loss Attributable to Common Shareholders	($2,191,947	)	($1,483,307		)

Weighted Average Shares
Basic and Fully Diluted	43,423,722		46,776,865

Earnigs Per Share	($0.05	)	($0.03		)

Notes:

The addition of Stock Options and the Preferred Stock conversion feature are Antidilutive to the EPS and therefore are not included when calculating fully dilued earnings per share, the fully diluted are therefore equal to the basic.

Contact:

Jody Brown, CFO

Think Partnership, Inc.

Tel 727.324.0046, ext. 123

Email: jody.brown@thinkpartnership.com

Scott Liolios

The Liolios Group, Inc.

949.574.3860

Email: scott@liolios.com

###

EX-99.2 7 a06-17850_1ex99d2.htm EX-99.2

Exhibit 99.2

FOR IMMEDIATE RELEASE

Think Partnership Adopts New Performance-Based Earn Out Structure

Targets minimum annual EBITDA of $12.6 million, up to $27.8 million,
without including contributions from most profitable subsidiary

CLEARWATER, Fla. — August 10, 2006 — Think Partnership. (AMEX:THK) an international leader in interactive performance-based marketing and related Internet technologies, reported today that it has amended prior acquisition and merger agreements with the former owners and now current management of six of its subsidiaries, making their earn-outs based on the performance of Think Partnership as a whole, rather than their respective units, and paid 100% in company stock, rather than approximately half in cash.

Management believes this represents an important step toward driving organic growth and fostering better integration of its subsidiaries, and better aligns the interest of its operating managers with Think Partnership shareholders.

The new terms, which extend over the next three years, involve meeting a minimum annual EBITDA goal of $12.6 million in the first year and increasing to a maximum target of $27.8 million in the third year. This EBITDA goal includes all of the operations of Think Partnership except for its Morex Marketing subsidiary, which has posted $1.3 million in EBITDA in the second quarter 2006 and has shown a 33% quarter over quarter growth rate.

“The key aspect to these new terms is that once these milestones have been achieved it will be more than accretive to earnings,” notes Scott Mitchell, president and CEO of Think Partnership. “It would represent a four to eight fold increase in EBITDA, as compared to our most recently reported EBITDA for the trailing twelve months.

“As importantly, it brings us all onto the same page with the goal of building Think Partnership into the most outstanding world-wide provider of interactive performance based marketing. We have already realized considerable opportunities for revenue growth and margin expansion in our integration efforts currently underway, as demonstrated in our Q2 2006 financial performance.”

Added Mitchell, “The fact that the operating executives of our companies have enthusiastically accepted this new plan — and are willing to bet $61 million of their earn-out potential — reflects a strong vote of confidence in the synergies and market leverage our newly integrated company will command. Although their total maximum earn-out payment is considerably lower, as shareholders they realize this realignment should have long term positive impact on our earnings and growth potential, and therefore greater return for all THK investors.”

About Think Partnership, Inc.

Regarding Forward Looking Statements

Contact:	Scott Liolios
	The Liolios Group, Inc. (949) 574-3860
	Email: scott@liolios.com

###

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Exhibit 10.1

FIRST AMENDMENT TO AGREEMENT

Exhibit 10.2

SECOND AMENDMENT TO AGREEMENT

Exhibit 10.3

FIRST AMENDMENT TO AGREEMENT

Exhibit 10.4

FIRST AMENDMENT TO AGREEMENT

Think Partnership Second Quarter 2006 Financial Results

Record Revenues - up 87%; Record EBITDA - up 122%

Think Partnership Adopts New Performance-Based Earn Out Structure

Targets minimum annual EBITDA of $12.6 million, up to $27.8 million, without including contributions from most profitable subsidiary

Targets minimum annual EBITDA of $12.6 million, up to $27.8 million,
without including contributions from most profitable subsidiary