DOR Doriemus

 
TIDMTEX 
 
3 September 2012 
 
                            TEP Exchange Group PLC 
 
                           ("TEP" or "the Company") 
 
                         Further re: licence agreement 
 
Further to the announcement made on 30 July 2012, the Company announces that it 
has agreed with SL Investment Management Limited ("SL") to extend the licence 
agreement, as announced on 12 November 2010, to 31 October 2012 ("the initial 
period"). Following the initial period, the terms of the agreement have been 
amended such that the quarterly fee payable to TEP for the exclusive rights to 
develop and modify the electronic platform ("the Licence Agreement") will be GBP 
30,000. There will be no change to the existing arrangements between TEP and SL 
in the licence of the Company's electronic platform and all technology to SL 
for a quarterly fee payable to TEP of GBP20,000. The non-exclusive licence 
between TEP Limited (the trading subsidiary of TEP) and SL ("the Sub-Licence") 
will continue at a quarterly fee of GBP25,000 payable by TEP Limited to SL. 
 
In addition, SL will now have the right to terminate the Licence Agreement upon 
giving 30 days' prior written notice to TEP. In the event that SL terminates 
the Licence Agreement, the Sub-Licence between TEP Limited and SL will also 
terminate. 
 
The income that is now expected to be generated from the licensing arrangements 
for 2011 and 2012 is forecasted to be GBP1,866,666. Under the terms of the 
warrants that were issued as part of the equity subscription announced by the 
Company on 3 October 2011 the warrant holders could exercise the warrants in 
full in the event of the Company achieving consolidated revenue of at least GBP 
900,000 in each of the financial years ending 31 December 2011 and 31 December 
2012. The warrants holders, being SL, Close Horizons Limited and Preferred 
Asset Management (together "the Concert Party") have now agreed to waive 
3,870,000,000 of the 4,500,000,000 warrants held by them in recognition of the 
reduction in the ongoing recurring income stream of TEP. The warrants are 
exercisable at 0.002p per ordinary share and under the new arrangements between 
TEP and the Concert Party the warrants can be exercised for 12 months 
commencing from 1 October 2012 provided the Company has declared, made and paid 
a dividend of at least GBP250,000 to all shareholders prior to the exercise of 
the warrants. 
 
Following the cancellation of part of the warrants, the current Concert Party 
shareholding and the Concert Party shareholding following the exercise of the 
warrants (assuming the warrants are exercised and assuming that no other 
ordinary shares have been issued by the Company) would be as follows: 
 
                             Current shareholding    Maximum holding following 
                                                      exercise of the warrants 
 
                              Number of   Percentage     Number of   Percentage 
                               Ordinary  of enlarged      Ordinary  of enlarged 
                                 Shares       issued        Shares       issued 
                                                                       ordinary 
                                               share 
                                             capital                      share 
                                                                        capital 
 
SL Investment Management    408,032,798        48.00  ,708,032,798        47.84 
Limited 
 
Close Horizons Limited      186,833,333        21.98   386,833,333        26.14 
 
Preferred Asset Management   85,000,000        10.00   215,000,000        14.53 
Limited 
 
Totals                      679,866,131        79.98 1,309,866,131        88.51 
 
The amendment to the Licence Agreement and the Sub-Licence are related party 
transactions 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. 
 
For further information please contact: 
 
TEP Exchange Group plc 
 
David Roxburgh                                                00 353 1 260 7746 
 
Merchant Securities Limited 
 
Simon Clements/Virginia Bull                                      020 7628 2200 
 
7 
 
 
 
END 
 

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