Issuer of Securities not listed on NSX  |
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| Rule: | 2B 3.10 |
| Date Requested: | Thursday, January 24, 2002 |
| Requested By: | AWX |
| Date Approved: | Friday, January 25, 2002 |
| Approved By: | NSX Board |
| Issuer: | AWX |
| Securities: | All AWX Securities |
| Description of Rule: | “If the issuer is a company and its Shares are not listed on the Exchange, the issuer must have net assets of at least $2 million, and the nominal amount of each class of debt securities for which listing is sought must be at least $500,000 or such other amount as the Exchange may from time to time determine. Further issues of debt securities which are uniform in all respects with debt securities already listed are not subject to the limits” |
| Waiver Requested: | The ordinary shares of AWX Capital Limited will not be listed on the Exchange and AWX Capital Limited will not satisfy the net assets or the amount per class of debt security hurdles as set out in the rule. It is requested that NSX waive Section IIB Listing Rule 3.10, on the proviso that AWX Capital Limited can demonstrate the following to the satisfaction of the Exchange: (1) In the event of an insolvency of either AWX Capital Limited or Australian Wine Exchange Pty Ltd (or a significant service provider) the Constitution and Trust Deed of AWX Capital Limited will provide for an early redemption of the wine class shares – immediately merging beneficial interest and legal title in the wine for the protection of the investor. That is, the wine will become immediately deliverable to the investor. (2) Australian Wine Exchange Pty Ltd (the holding entity of the applicant) places sufficient monies, proposed to be $100,000, into an Early Redemption Trust Fund, immediately prior to the allotment of the first wine class shares, for the specific purpose of being used to administer an early redemption of all wine class shares required due to an insolvency event. For clarity, the processes to be administered would be to conduct an early redemption mail-out to investors, to collate that information returned by investors, to follow up those holders that fail to submit returns, to liaise with service providers and ensure that service providers deliver the wine to which holders have legal title. The funds would not be used for payment of the delivery itself – as these are an “add on” to the price at which investors subscribe to the wine class shares – nor would they be used for the purpose of winding up any of the entities in the AWX group. (3) The funds set aside in the Early Redemption Trust Fund are to be protected from any Controller, Liquidator or Administrator (ie: would not be available for application towards creditors) and may not be used by either AWX Capital Limited or Australian Wine Exchange Pty Ltd to administer day to day maturity processes. (4) In the event that the monies are required to administer an early redemption, Australian Wine Exchange Nominees Pty Ltd, as trustee for the Early Redemption Trust Fund, will be required to carry out nominated activities and to apply such funds only for that purpose under the Deed. Interest on the funds, and any balance on completion of the early redemption administration would be to the benefit of Australian Wine Exchange Pty Ltd. (5) Both Mr Clive Batrouney (given his position as Chairman of the trustee of NGF) and our Registry partner (ASX Perpetual) would be co-signatories to the Trust account and would be responsible for ensuring that Australian Wine Exchange Nominees Pty Ltd applied the funds in accordance with the Deed. (6) In the event that there is greater than 10,000 wine class shareholders on the AWX Capital Limited register, AWEPL will have an obligation to ensure that the AWX Trust maintains at least $10 per wine class shareholder for the above purposes. A review would be conducted each six months to maintain the funds at the appropriate level. A copy of a Deed Poll, which gives effect to items 2 to 6 of the above mechanism, is forwarded with this letter. |
| Effect of Waiver: | In agreeing to this waiver, NSX may be permitting the listing of a class of debt security in a an entity which does not have substantial asset backing. Ordinarily it would be prudent for the Exchange to require that the issuer have an appropriate level of net assets in order to provide a mechanism to protect investors. The provisions outlined above have been established in order to provide an alternate mechanism to achieve prudent investor protection. That is, the investor will receive its wine earlier. |