2nd Apr 2012 11:25
2 April 2012 TEP Exchange Group PLC ("TEP" or "the Company") Extension of termination notice period under licence agreement
On 12 November 2010 the Company entered into a non-exclusive licence agreement with SL Investment Management Limited ("SL"), a 48.26 per cent. shareholder in the Company, to licence its electronic platform and all technology to SL. In consideration for this arrangement, the Company is receiving a quarterly fee of £20,000 plus VAT. In addition, SL was granted exclusive rights to develop and modify the electronic platform for a quarterly fee payable to the Company of £ 230,000 plus VAT ("the Licence Agreement") to enable SL to put additional financial products on to the platform.
As set out in the announcement dated 12 November 2010, the Licence Agreement is for a period of 10 years; however, SL may terminate the agreement on 30 April 2012 and every subsequent 30 April during the life of the contract on giving 30 days' prior written notice to the Company, in the event that the income generated by SL from the licence in the preceding 12 months is less than £ 250,000.
SL has informed the Company that the income generated during the 12 month period ending 30 April 2012 is unlikely to be £250,000 or more and, therefore, it may terminate the Licence Agreement in accordance with its terms. The Company has agreed with SL that it will provide a 61 day extension to the termination notice period to allow SL to further assess the benefits of the Licence Agreement. The agreement can now be terminated on 30 June 2012 by SL giving 30 days' prior written notice to the Company.
The amendment to the Licence Agreement is a related party transaction in accordance with AIM Rule 13. The Independent Directors, being George Kynoch, Moses Kraus and Abraham Weitz, consider, having consulted with the Company's nominated adviser, Merchant Securities Limited, that the terms of the transactions are fair and reasonable insofar as its shareholders are concerned.
A further announcement will be made in due course.
For further information please contact:
TEP Exchange Group plc David Roxburgh 00 353 1 260 7746 Merchant Securities Limited John East/Simon Clements 020 7628 2200
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