Assuming that from the point at which B last changed her course A was able to avoid a collision the above is correct: A was on port so should have done more to keep clear of B, as B had to avoid her then A has fouled and as such was correct to do a penalty turn.

If A was not able to avoid B (it doesn't sound like this was the case) then in my intepretation there should be no penalty and A should not have spun. 

I am having some dificulty in constructing the relative position of the two boats. If A is on port and B is on starboard and A is to leeward of B the boats have to be on divergent courses.
 

In general terms as this happened outside the zone then the right of way rules and their limitations would apply. Under rule 10 A was obliged to Keep Clear of B. The definition of Keep Clear means that B must be able to sail her course (that is any course of her choosing and not her proper course) without having to take avoiding action. As B had to gybe to avoid contact with A then A clearly was not keeping clear and broke rule 10. Bear in mind that A's obligation to Keep Clear started as soon as the boats were on opposite tacks and not just when they got close together.
 

B would be subject to the relevant limitation rules which in this case are rules 14-16. If B had only just acquired her right of way by gybing onto Starboard and from the time she became right of way she did not give A room to keep clear then B would have broken rule 15 and A would be exonerated under rule 64.1(a). There is no suggestion in your question that B had only recently acquired a right of way.
 

If B as right of way boat changed course in such a way as to make it impossible for A to keep clear then B broke rule 16.1 and A would be exonerated under 64.1(a). There is no suggestion in your question that B altered course as she approached A
 

Rule 14 required B to avoid contact but 14(a) says that she can delay taking avoiding action until it is clear that A is not going to keep clear. B complies with this rule when she gybes to avoid contact.
 

It would sem that A was clearly in breach of rule 10 and was quite right to take an appropriate penalty

I agree with the first two sentences of the comment by Mr. Handley.  A diagram would be most helpful.  Thank you.

Is this what you are describing George?

Yes, Paul. Only yellow boat was slightly more behind at the time they gybed (position 3). They would have hit us in port side  quarter area if they had not gybed. Blue sailed by the lee for a moment as it turned down/away to give room, but never gybed. How do you make the diagrams?  GLM

Thanks for the TSS Paul, so A was to windward of B and not leeward, that explains the confusion. This confirms my above remarks, a slam dunk breach of rule 10 by blue.
 

In position 1 blue has to keep clear of yellow under rule 10 and has plenty of time and space to do so. In position 2 blue is making no attempt to keep clear. In position 3 blue has failed to keep clear as yellow has had to take avoiding action despite blue's belated attempt to keep clear - see definition of keep clear. Blue didn't act early enough when she had the chance. Penalise blue.

To Paul Zupan - the most important question of the forum remains unanswered  :-).  How do you make those nice diagrams?  Can you share?  On a new forum if needed?

It is TSS.  I beleive there is one called Boats for Apple.