TKO 4.1.3 Guidance

1. The DFSA may waive or modify the application of the Rules if it is satisfied that circumstances are appropriate. See TKO Chapter 16 of these Rules.
2. When the issue of new Shares as consideration for an acquisition or a cash subscription would otherwise result in an obligation to make a Mandatory Bid under the Rules in this TKO Chapter 4, the DFSA will normally dispense with such obligation if there is a waiver thereof by a majority of independent votes at a meeting of the shareholders. The requirement for a Mandatory Bid will also be dispensed with, provided there has been a majority of independent votes at a properly constituted meeting of shareholders, in cases involving the underwriting of an issue of Shares. The DFSA may in its discretion grant a dispensation in cases where an underwriter incurs an obligation under these Rules unexpectedly, for example as a result of an inability to obtain sub-underwriters for all or part of his liability. Where a waiver or modification is granted as per this Guidance, consideration should also be given as to whether the definition of "voting rights" in TKO Section 1.4 will require consequential modification.
3. Notwithstanding the fact that, at a general meeting of the Reporting Entity, the issue of new Shares is made conditional upon the prior approval of a majority of votes of shareholders independent of the transaction:
a. the DFSA will not normally dispense with an obligation under this Section if the Person to whom the new Shares are to be issued or any Persons acting in concert with him have acquired relevant Shares in the Target in the 12 months prior to the posting of the Bid Document but subsequent to negotiations, discussions or the reaching of understandings or agreements with the Directors of the Target in relation to the proposed issue of new Shares;
b. a waiver by independent votes shall be invalidated if any acquisitions are made in the period between the posting of the Bid Document to the shareholders and the meeting.
4. The DFSA may dispense with the requirement of a Mandatory Bid where the approval of independent votes to the transfer of existing Shares from one holder to another is obtained.

Derived from DFSA RM23/2005 (Made 26th September 2005). [VER1/09-05]