prevent the investments referred to in clause 3.2.
3.4
Use of investment funds
The proceeds of the investments made under clause 3.2 will be used by the
Company for the purpose of:
(A)
PAYING THE CONSIDERATION
DUE BY THE COMPANY UNDER THE ACQUISITION AGREEMENT;
(B)
PAYING THE FEES AND COSTS
DESCRIBED IN CLAUSE 12 TO THE EXTENT PAYABLE AT COMPLETION; AND
(C)
IN RESPECT OF THE
BALANCE, PROVIDING WORKING CAPITAL FOR THE GROUP COMPANIES OR OTHERWISE IN
ACCORDANCE WITH A BUDGET APPROVED BY THE BOARD.
3.5
Parties bound by the
Constitution
Each party acknowledges and agrees to observe the provisions of this Agreement
and the Constitution.
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3.6
Post-Completion
(A)
FOLLOWING COMPLETION, THE
COMPANY MUST:
(I)
IF REQUESTED BY THE
ANZ MEMBER, PROCURE THE APPOINTMENT OF KEVIN COONEY OR ANOTHER ANZ EMPLOYEE
AGREED BY THE INVESTORS (ACTING REASONABLY) AS A DIRECTOR OF THE COMPANY; AND
(II)
ENTER INTO AND DELIVER
TO EACH DIRECTOR A DEED OF ACCESS AND INDEMNITY IN FAVOUR OF THE DIRECTOR AND
EFFECTIVE FROM THE TIME OF HIS APPOINTMENT.
(B)
AS SOON AS PRACTICABLE
FOLLOWING COMPLETION, AND IN ANY EVENT WITHIN APPLICABLE TIME LIMITS, THE
COMPANY MUST LODGE WITH THE AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION AND
ANY OTHER APPROPRIATE REGULATORY AUTHORITIES ALL APPROPRIATE DOCUMENTS AND
FORMS.
4.
Warranties
4.1
Warranties
(A)
THE COMPANY REPRESENTS,
WARRANTS AND COVENANTS TO AND WITH THE INVESTORS THAT EACH OF THE STATEMENTS
CONTAINED IN ANNEXURE 2 (EACH A "WARRANTY") IS NOW AND WILL BE TRUE, ACCURATE
AND NOT MISLEADING AT COMPLETION (EXCEPT THAT WHERE ANY STATEMENT IS EXPRESSED
TO BE MADE ONLY AT A PARTICULAR DATE IT IS GIVEN ONLY AT THAT DATE).
(B)
EACH WARRANTY IS SEPARATE
AND INDEPENDENT AND UNLESS EXPRESSLY PROVIDED IS NOT LIMITED BY ANY OTHER
WARRANTY OR PROVISION OF THIS AGREEMENT.
(C)
EACH INVESTOR REPRESENTS
AND WARRANTS TO EACH OF THE OTHER PARTIES THAT EACH OF THE FOLLOWING STATEMENTS
IS TRUE AND ACCURATE AND NOT MISLEADING AT:
(I)
COMPLETION:
(A)
IT IS VALIDLY EXISTING
UNDER THE LAWS OF ITS PLACE OF INCORPORATION;
(B)
IT HAS THE POWER TO
ENTER INTO AND PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT AND TO CARRY OUT THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT; AND
(C)
IT HAS TAKEN ALL
NECESSARY ACTION TO AUTHORISE ITS ENTRY INTO AND PERFORMANCE OF THIS AGREEMENT
AND TO CARRY OUT THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT; AND
(II)
THE DATE OF THIS
AGREEMENT: IT IS UP TO DATE WITH ALL NASDAQ AND SEC CONTINUOUS DISCLOSURE
REQUIREMENTS.
15
(D)
CHANNELL REPRESENTS AND
WARRANTS TO ANZ THAT EACH OF THE FOLLOWING STATEMENTS IS TRUE AND ACCURATE AND
NOT MISLEADING AT:
(I)
COMPLETION:
(A)
IT IS NOT AWARE OF ANY
CURRENT, THREATENED OR POTENTIAL BREACH OF THE WARRANTIES BY THE VENDORS UNDER
THE ACQUISITION AGREEMENT; AND
(B)
IT IS NOT INSOLVENT OR
SUBJECT TO ANY CURRENT, THREATENED OR PENDING BANKRUPTCY PROCEEDINGS, WINDING UP
APPLICATIONS, ADMINISTRATION, RECEIVERSHIP OR LIQUIDATION;
(E)
THE DATE OF THIS
AGREEMENT: THERE IS NO CURRENT, THREATENED OR PENDING MATERIAL LITIGATION
INVOLVING CHANNELL WHICH MAY ADVERSELY IMPACT