ITS SEC REPORTS AND ON ITS WEBSITE AND
FROM OTHER PUBLICLY-AVAILABLE SOURCES, THK IS NOT AN UNNAMED COMPETITOR (AS
DEFINED IN THE ADKNOWLEDGE RELEASE AGREEMENT) AND LINDEN AND TEETER CAN ENTER
INTO AND PERFORM THEIR OBLIGATIONS UNDER THIS AGREEMENT AND THE SHAREHOLDER
EMPLOYMENT AGREEMENTS AND OTHERWISE BE EMPLOYED BY LITMUS SURVIVING COMPANY
WITHOUT VIOLATING THE TERMS OF THE ADKNOWLEDGE RELEASE AGREEMENT.
THE
REPRESENTATIONS AND WARRANTIES IN THIS SECTION 4.27(B) SHALL NOT APPLY TO ANY
LINE OF BUSINESS THAT THK OR ANY OF ITS OTHER SUBSIDIARIES ENTERS INTO AFTER THE
DATE OF THIS AGREEMENT OR THAT WAS NOT PUBLICLY-DISCLOSED BY THK PRIOR TO THE
DATE OF THIS AGREEMENT.
4.23
RECEIVABLES.
THE RECEIVABLES OF LITMUS AND ITS SUBSIDIARIES AS
REFLECTED IN THE COMPANY FINANCIALS, CONSIST SOLELY OF BONA FIDE ACCOUNTS
RECEIVABLE GENERATED BY THE BUSINESS WHICH, TO THE KNOWLEDGE OF LITMUS AND THE
SHAREHOLDERS, CAN BE COLLECTED IN THE ORDINARY COURSE OF THE BUSINESS IN A
MANNER CONSISTENT WITH THE HISTORICAL COLLECTION RESULTS, EFFICIENCIES,
POLICIES, PROCEDURES AND PATTERNS OF THE BUSINESS.
4.24
RESIDENCY; INVESTMENT SOPHISTICATION; BACKGROUND.
EACH OF THE
SHAREHOLDERS (A) IS A RESIDENT OF THE STATE OF MISSOURI, (B) IS (X) AN
"ACCREDITED INVESTOR" AS DEFINED IN SECTION 501 OF REGULATION D PROMULGATED
UNDER THE SECURITIES ACT AND (Y) 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 AMENDED
ANNUAL REPORTS ON AMENDED FORMS 10-KSB FOR THE YEARS ENDED DECEMBER 31, 2003 AND
DECEMBER 31, 2004, INCLUDING THE AMENDED AND RESTATED FINANCIAL STATEMENTS AND
"RISK FACTORS" CONTAINED THEREIN, AND THK'S AMENDED QUARTERLY REPORTS ON AMENDED
FORMS 10-QSB FOR THE QUARTERS ENDED MARCH 31, 2005, JUNE 30, 2005 AND SEPTEMBER
30, 2005, CURRENT REPORTS ON FORM 8-K, THE REGISTRATION STATEMENT ON FORM SB-2,
AS AMENDED (SEC FILE NO. 333-121761), AND THE PROXY STATEMENT FOR ITS ANNUAL
MEETING SCHEDULED FOR MARCH 14, 2006 AND AMENDMENTS TO ANY OF THE FOREGOING
FILED WITH THE SEC, INCLUDING THE AMENDED AND RESTATED FINANCIAL STATEMENTS AND
OTHER DISCLOSURES CONTAINED THEREIN, (D) HAS BEEN AFFORDED A FULL OPPORTUNITY TO
CONDUCT SUCH ADDITIONAL "DUE DILIGENCE" INVESTIGATION OF THK, ITS SUBSIDIARIES
AND LITMUS ACQUISITION SUB, INCLUDING
28
THEIR RESPECTIVE BUSINESSES, MANAGEMENT, BALANCE SHEETS, FINANCIAL RESULTS,
PROSPECTS AND RISK FACTORS AS THE SHAREHOLDERS 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, (F) HAS NEVER BEEN CHARGED, INDICTED OR
CONVICTED OF ANY FELONY CRIMINAL OFFENSE, EXCEPTING ONLY TRAFFIC VIOLATIONS, AND
(G) IS ACQUIRING THE SHARES OF THK COMMON STOCK ISSUED AS PART OF THE MERGER
CONSIDERATION IN GOOD FAITH SOLELY FOR HIS OWN ACCOUNT WITH THE PRESENT
INTENTION OF HOLDING SUCH SHARES FOR PURPOSES OF INVESTMENT, AND IS NOT
ACQUIRING SUCH SHARES WITH A VIEW TO OR FOR SUBDIVISION, DISTRIBUTION,
FRACTIONALIZATION OR DISTRIBUTION THEREOF, IN WHOLE OR IN PART, OR AS AN