OF ILEAD 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, SUBJECT TO ANY RESERVE FOR
INVENTORY OF THE FACE OF THE COMPANY FINANCIALS AS ADJUSTED FOR THE PASSAGE OF
TIME THROUGH THE DATE OF THIS AGREEMENT.
4.23
RECEIVABLES.
THE RECEIVABLES OF ILEAD 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 MANNER CONSISTENT WITH THE HISTORICAL COLLECTION RESULTS,
EFFICIENCIES, POLICIES, PROCEDURES AND PATTERNS OF THE BUSINESS, SUBJECT TO ANY
RESERVE FOR BAD DEBTS ON THE FACE OF THE COMPANY FINANCIALS AS ADJUSTED FOR THE
PASSAGE OF TIME THROUGH THE DATE OF THIS AGREEMENT.
4.24
RESIDENCY; INVESTMENT SOPHISTICATION; BACKGROUND.
EACH OF THE
SHAREHOLDERS (A) IS A RESIDENT OF THE STATE OF UTAH, (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 AMENDED ANNUAL REPORTS ON
AMENDED FORMS 10-KSB FOR THE YEARS ENDED DECEMBER 31, 2003, DECEMBER 31, 2004
AND DECEMBER 31, 2005, 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 AND 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 CONTAINED THEREIN, (D) HAS BEEN AFFORDED A FULL OPPORTUNITY TO
CONDUCT SUCH ADDITIONAL "DUE DILIGENCE" INVESTIGATION OF THK, ITS SUBSIDIARIES
AND ILEAD ACQUISITION SUB, INCLUDING 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 CRIMINAL
OFFENSE, EXCEPTING ONLY MINOR 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 UNDERWRITER OR CONDUIT TO OTHER BENEFICIAL OWNERS
OR SUBSEQUENT PURCHASERS.
27
4.25
BROKERS.
EXCEPT AS