Ann: Notice of General Meeting/Proxy Form, page-84

"the way I have read Section 1.2, given the agreement Subscription Agreement, IMO was implemented on 11 November 2019 is AVZ cannot talk to any other party for 84 days (until end January when the Agreement must be executed or it lapses)."

Thanks for engaging Scarpa. I'm sure that anyone that inquires of the company will be satisfied that the Execution Date of the Subscription Agreement was 8 November 2019 and that as a result the exclusion and restriction clauses of 1.2 (c) are currently in effect.


I see no reason to read the English word 'procure' which appears uncapitalised (blue underlined below) as part of the plain text with 1.2(c) as having any special legal meaning. The document uses in-document definitions. There isn't one for 'procure' or Procure.



The above graphic is simply two and a half pages excerpted from the notice of agm announcement in which I've grouped some sets of things in colors for easy reference.

The stuff in the orange box is clause 1.2 The Subscription Agreement "key terms and conditions" simply grouped together.

The comment at the end about The Subscription Agreement otherwise contains terms and conditions considered standard for a agreement of its nature (including, without limitation, representations and warranties) is potentially quite significant.

The stuff in the green box are the 1.2 (c) Exclusivity and Restriction provisions (which as a set are currently in effect. I submit that that is a matter of fact not a matter of opinion.

Light green underlining highlights that Competing Transaction is a defined-in-the-document term. Where Competing Transaction appears elsewhere it would seem to be fair to read that as a reference to "any transaction for the raising of equity capital in the Company" (with AVZ), "with any other person" (than Yibin).

Because I've seen documents and legal wordings very like the clauses (i) to (v) in 1.2 (c) pretty recently in the WES KDR scheme or arrangement.I recognize them as being very much like what the Takeovers Panel would call lock-out devices.

Here's a link to Guidance Note 7 lock-out devices where people can read about "no look" "no shop" and "no due diligence" lock out devices for themselves if they want to.

https://www.takeovers.gov.au/content/DisplayDoc.aspx?doc=guidance_notes/current/007.htm&pageID=&Year=

Scarpa wrote -

"Clause 1.2 (c) (iv) specifically states: "the Company must not, and must procure that none of its authorised persons, directly or indirectly enter into, continue or participate in any communication, negotiations or discussions with any other person regarding Competing Transaction....

."The key word is "participate". If someone lodges an alternate proposal, AVZ is not allowed to participate in the discussions with those lodging the alternate proposal. In other words a competing "CR bid" would have to be communicated to the market only - that is AVZ by law would need to communicate it to the market but then cannot participate in the discussions btw - but do no more than that. "

The impediments to getting a Competing Transaction up are stronger than that because of the no due diligence lock-outs in (ii) and (iv). In (ii) it says on a plain reading that AVZ contracts to "request the return or destruction of all information .. including copies .. that was provided to other parties in connection with any Competing Transaction. "

So if another party had started doing due diligence and was passing info around to put a case together they couldn't continue as they'd be asked to return the info they were using as working documents. That impediment to doing due diligence is it appears necessarily in effect now.

Thanks for the links @Scarpa.

I can't make sense of any of Cominiere, Dathomir or AVZ (so three shareholders) becoming somehow less than three in the time frame of this transaction either.

I'm not sure what an "in due course" exit could mean in the context of the time frames of this Subscription Agreement.

If its known that there won't be three shareholders then why wouldn't that be stated or made clear in the agreement and if it is not known then it seems there is an inconsistency with the link you've found scarpa. I need to read more and think more but now I'm taking a break.