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