Trading Emissions PLC Regulatory News (TRE)

RNS Number: 0438S

Trading Emissions plc(the "Company")

Appointment of Investment Adviser

The Company is pleased to announce that it has reached agreement with its existing investment adviser, EEA Fund Management Limited ("EEA") whereby EEA will continue to act as investment adviser to the Company beyond 31 December 2012 when the existing arrangements with EEA end.

Under the terms of the new proposed investment advisory agreement (the "Advisory Agreement") which will be entered into after the Annual General Meeting (the "AGM") of the Company to be held on 19 December (and subject to the resolution proposing that the Company continue with an amended investment policy being passed at the AGM) and will become effective on 1 January 2013, the Company will appoint EEA as investment adviser in respect of all the private equity and carbon investments of the Company's group. The appointment is for an initial period of 12 months.

The appendix to this Announcement contains a non-exhaustive summary of the salient terms of the Advisory Agreement.

Enquiries:

APPENDIX

The following is a summary of the key terms, which is not exhaustive, of the Advisory Agreement:

1. APPOINTMENT AND DURATION

The Investment Adviser shall act as investment adviser of the Company's private equity portfolio of assets (the "Private Equity Portfolio") and the Company's assets, rights or interests relating to the Company's emissions reduction purchase agreements (the "Carbon Portfolio") in accordance with the terms of the Company's investment policy.

The Advisory Agreement will automatically terminate on 31 December 2013 if the Company has not extended the term of the Advisory Agreement by written notice served on the Investment Adviser prior to 1 October 2013. In the event that the Company serves such notice on the Investment Adviser, the Advisory Agreement thereafter is terminable by the Company on no less than three months' prior written notice and by the Investment Adviser on no less than six months' prior written notice.

In respect of the Private Equity Portfolio, the obligation of the Investment Adviser to provide the services under the Advisory Agreement shall cease and determine upon the disposal of the entire Private Equity Portfolio. The obligation of the Investment Adviser to provide the services in respect of the Carbon Portfolio shall cease and determine upon the earlier of the Carbon Portfolio disposal and 30 June 2013.

2. FEES AND EXPENSES

2.1 Advisory Fees

2.1.1 Private Equity Portfolio

The Investment Adviser shall receive a monthly advisory fee for services provided in respect of the Private Equity Portfolio of £100,000 (the "Monthly Private Equity Advisory Fee"). The Monthly Private Equity Advisory Fee reduces upon the disposal of certain of the Company's investments.

2.1.2 Carbon Portfolio

The Investment Adviser shall receive a monthly advisory fee for services provided in respect of the Carbon Portfolio of £10,000.

2.2 Equity Transaction Fee

Upon the disposal of any of TEP (Solar Holdings) Ltd, TEP (Renewables Holding) Limited, Asia Biogas Singapore Pte Limited, Bionasa Combustivel Natural SA, Element Markets LLC and Carbon Capital Markets Limited (the "Listed Investments") during the term of the Advisory Agreement or, in certain circumstances, during the six months following termination of the Advisory Agreement, the Investment Adviser will be paid a fee equal to 2.7 per cent. of the net aggregate consideration received by the Company's or any of its subsidiaries (the "Group") on any disposal of an investment (the "Equity Transaction Fee"). 25 per cent. of the Equity Transaction Fee will be retained by the Group, and paid upon the earlier of the full disposal of the Listed Investments or, in certain circumstances, the termination of the Advisory Agreement.

2.3 Librandello Refinancing Fee

The Investment Adviser will be paid 1 per cent. of the amount of any refinancing or other debt fundraising originated, procured and/or negotiated by the Investment Adviser relating to Solar Energy Italia 6 S.r.l ("Librandello") (the "Librandello Refinancing Fee"), upon completion of the refinancing during the term of the Advisory Agreement or, in certain circumstances, during the six months following termination of the Advisory Agreement.

2.4 Offset of Monthly Private Equity Advisory Fees

The aggregate amount of any Monthly Private Equity Advisory Fees paid prior to the payment of any Equity Transaction Fee and/or Librandello Refinancing Fee shall be deducted from any such Equity Transaction Fee and/or Librandello Refinancing Fee.

3. LIABILITY AND INDEMNITY

The Company will indemnify the Investment Adviser against all claims by third parties in connection with, inter alia, the provision of services under the Advisory Agreement. The total aggregate liability (including, without limitation, all costs, losses, liabilities and expenses) of the Investment Adviser shall not exceed £10,000,000.

4. TERMINATION

The Company may terminate the Advisory Agreement with immediate effect by giving notice in writing, inter alia, if:

·; an order is made for the winding up of the Investment Adviser;

·; the Investment Adviser becomes insolvent;

·; a receiver or administrator is appointed over the assets of the Investment Adviser;

·; the Investment Adviser commits a material breach of duty, negligence, wilful default, fraud or a material breach of the applicable laws and regulations in connection with the performance of the services, or a material breach of the Advisory Agreement, which is either irremediable or not remedied within 30 days;

·; Simon Shaw ceases to be the ultimate beneficial owner of 50 per cent or more of the Investment Adviser other than as a result of his death;

·; the Investment Adviser is required to obtain or hold a regulatory authorisation, approval or consent in any jurisdiction in order to carry on dealing and/or advising and/or arranging activities with regard to the investments and fails to hold or obtain such regulatory authorisation within any required time period; or

·; having obtained such regulatory authorisations, approvals, licences or consents, subsequently has the same withdrawn for whatever reason.

The Investment Adviser may terminate the Advisory Agreement with immediate effect by giving notice in writing, if:

·; the Company commits a material breach of its obligations under the Advisory Agreement and fails to remedy such breach within 30 days; or

·; at any time by giving notice in writing if the Company enters into involuntary liquidation.

The Investment Adviser may terminate the Advisory Agreement by giving not less than three months' prior written notice if there is a change of control of the Company, such notice to be given within one month of such change of control.