React Group Regulatory News (REAT)

For immediate release: 4 October 2013

Verdes Management PLC

New Convertible Loan Agreement

4 October 2013



Verdes Management PLC

New Convertible Loan Agreement

("Verdes" or the "Company")

The Board of Verdes Management PLC (AIM: VMP) is pleased to confirm it has signed a new Convertible Loan Agreement to provide up to £500,000 of loan capital (the "Loan") to the Company to allow it to develop its new strategy.

The Loan is being provided by Newick Developments Limited ("Newick" or "the "Lender"), a company associated with an associate of a party who has been a substantial shareholder (Ypsilon Cross Border Holdings Limited) within the preceding 12 months. Newick is a British Virgin Islands-based company.

Terms of the Loan

The Loan has the following principal terms:

Amount: £500,000

Draw down: the Loan can be drawn down in four tranches of £125,000 at intervals of not less than two months at the Company's option. However in the event that the Company effects an equity fundraising, the outstanding amount available under the Loan Agreement shall become available for immediate drawdown, and the Company shall be obliged to draw down this balance.

Term and Repayment: 30 months from the date of the first draw down. The outstanding amount of the Loan which has not been converted into ordinary shares in the Company, is repayable in full 30 months after the date of first draw down (subject to earlier demand by the Lender in the event of insolvency or a change of control affecting Verdes);

Security: the Loan is unsecured;

Utilisation fee: a fee of 6% of the amount advanced is payable to the Lender on the date of each draw down;

Conversion: The amount outstanding of the Loan is convertible by notice from the Lender at any time into ordinary shares of 0.1p each in the Company ("Ordinary Shares") at a conversion price ("Conversion Price") of 0.055p per Ordinary Share (or an equivalent price following the capital reorganisation ("Capital Reorganisation") which will be required to allow the Company to issue shares at this price given that the nominal value of the Ordinary Shares is currently 0.1p and shares may not be issued at less than their nominal value).

The Conversion Price is the closing price at which the Ordinary Shares were suspended on 1 August 2013 and also the price at which the Convertible Loan, announced in March 2013, is convertible into Ordinary Shares.

In the event that the prevailing share price is less than 0.055p at the time of conversion, the Conversion Price will be reduced to be the average of the closing mid-market share price for the 10 business days preceding the date of conversion, but in no event shall the Conversion Price be lower than 0.05p per new ordinary share.

Conversion can be requested by the Lender at any time in a minimum amount of £100,000 per conversion.

Shareholders' approvals: The Company is required to call a General Meeting of the Company to put resolutions to shareholders to effect the capital reorganisation necessary to allow conversion of the Loan into Ordinary Shares at the Conversion Price, and to allow the allotment of the Ordinary Shares upon conversion.

In the event that the resolutions referred to above are not passed at General Meeting, the Loan (and all outstanding interest) will become repayable on 15 days' notice by the Lender.

Interest rate: 0%. However, this rate will increase to 5% from the date of draw down in the event that the approval of shareholders to conversion of the Loan (see above) is not obtained the first time it is sought.

Resultant Shareholding: In the event that the maximum of £500,000 available under the Loan is drawn down by the Company and that it is ultimately converted into Ordinary Shares at 0.055p per Ordinary Share, this will result in the issue of 909,090,909 new Ordinary Shares constituting approximately 137% of the current issued Ordinary Share capital - assuming no other new Ordinary Shares are issued in the intervening period (approximately 152% of the voting Ordinary Share capital when the 64,000,000 forfeited Ordinary Shares, which, while they remain held by the Company are non-voting, as set out in previous RNS announcements, are excluded from the calculation).

In the event that the Company's average share price for the 10 days prior to the date of Conversion is less than 0.055p, the Conversion Price shall be reduced to such average share price (subject to a minimum of 0.05p). In this scenario the shares issued would amount to 1,000,000,000 constituting approximately 152 % of the current issued Ordinary Share capital - assuming no other new Ordinary Shares are issued in the intervening period (approximately 168% of the voting Ordinary Share capital when the 64,000,000 forfeited Ordinary Shares are excluded)

Whitewash resolution: The size of the shareholding that the Lender would have on conversion of the Loan (either in full, or even in certain circumstances if partially drawn down and converted) would potentially result in the Lender being required under Rule 9 of The City Code on Takeovers and Mergers to make an offer for all the Ordinary Shares in the Company it does not own at a price no less than the highest price paid by the Lender for Ordinary Shares in the previous 12 months (a "Rule 9 Offer"). The Company and the Lender have agreed with the Panel on Takeovers and Mergers that a "whitewash" resolution will be put to the Company's shareholders as soon as practicable, in which shareholders will be asked to consent to such a large number of Ordinary Shares being issued without the need for a Rule 9 Offer. The Company expects to issue a circular to shareholders in the near future to convene a General Meeting of the Company at which such a resolution will be put to shareholders.

Since the Lender is associated with a party who has been a substantial shareholder in the last 12 months, the transaction is classified under the AIM Rules as a related party transaction. Daan van den Noort, the Company's Chairman is not considered independent, and therefore Sarah Bertolotti and Joep van den Aker ("the Independent Directors") have negotiated and considered the terms of the Loan, together with the Company's Nominated Adviser, SPARK Advisory Partners Limited.

The Independent Directors, having consulted with the Company's Nominated Adviser, consider the Loan and the terms of the Loan to be fair and reasonable insofar as the Company's shareholders are concerned.

Capital Reorganisation: The Company will take the opportunity at the General Meeting to be held for the purposes of the whitewash to propose resolutions to effect the Capital Reorganisation referred to above, to enable the Company to issue the Ordinary Shares which it will be required to do on conversion of the Loan,and to enable the Company to offer shareholders the opportunity to subscribe shares in the Company as described below. The Capital Reorganisation will involve a reduction in the nominal value of the Ordinary Shares to allow conversion to take place, a share consolidation and the cancellation of the outstanding deferred shares in the Company.

Open Offer: The Company also proposes, subject to shareholders' approval, to offer existing shareholders the opportunity to participate in an offer to subscribe for new Ordinary Shares at an equivalent price of 0.055p per existing Ordinary Share. (Note: this subscription will be for new ordinary shares once the Capital Reorganisation has taken place). The intention is that this offer will be limited to a maximum of €100,000 (approximately £82,000) so that the circular containing the offer will fall within the exemption from the requirement to produce a prospectus. The expectation is that shareholders will be entitled to subscribe for one share for every four held at the record date (which is expected to be in October). It is the intention that excess applications will be permitted.

Use of Funds: The Loan, together with any funds received under the proposed open offer, will enable the introduction of further working capital to Verdes in order to facilitate the development of a new business model which is being prepared with a view to providing increased shareholder value.

For further information, please contact:

Verdes Management PLC (Independent Directors)

Joep van Den Aker - Non Executive Director +31 6222 476 975

Sarah Bertolott - Finance Director 07932 569404

SPARK Advisory Partners Limited

Neil Baldwin 0113 370 8974

Mark Brady 0113 379 8971

Cadogan PR

Alex Walters 0207 839 9360

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