LARK DISTILLING CO. LTD — Capital/Financing Update 2014

Jan 29, 2014

Montec International Limited ABN: 62 104 600 544

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Level 3, 70 Pitt Street, Sydney NSW 2000 PO Box 991 Rozelle NSW 2039 Australia Telephone: 1300 134 875

ASX RELEASE 30 January 2014

Placement of Convertible Notes

Montec International Limited (ASX: MTI) is pleased to announce the raising of $2,020,000 via the placement of 202 convertible notes to sophisticated and professional investors. The Company proposes to issue 75 of these notes (having a value of $750,000) to Non-Executive Chairman, Mr Terry Cuthbertson. The issue of the notes to Mr Cuthbertson is subject to shareholders approving the issue at a General Meeting. The Company also intends to raise an additional $200,000 by the issue of convertible notes on the same terms.

The terms of the convertible notes are as follows:

• Each Note may be converted into ordinary shares in the capital of the Company at the election of the Noteholder.

• Each Noteholder has agreed to enter into a sub-underwriting agreement on standard commercial terms in respect of a capital raising that the Company may conduct in the future. As part of the sub-underwriting terms, each Noteholder has agreed to convert its Notes into shares upon completion of the associated capital raising. The conversion price of the Notes will be the same price as the issue price of the shares offered pursuant to the capital raising or if the Noteholder elects to convert all or any of its Notes prior to the capital raising, the conversion price shall be the lesser of $0.001 or 80% of the volume weighted average price of the Company’s shares over the 30 days immediately prior to the conversion date.

• The Company may, at any time prior to the maturity date:

  • elect to convert the Notes into ordinary shares. The conversion price shall be $0.001 or if the Company undertakes a consolidation of its issued capital, the lesser of $0.001 or 80% of the volume weighted price of the Company’s shares over the 30 days immediately prior to the conversion date; or

  • elect to redeem all of the Notes which have not been converted by repaying the Noteholder the issue price and all accrued interest.

• Each Noteholder is entitled to a commercial sub-underwriting fee of up to 2%, the payment of which will be satisfied by the issue of ordinary shares in the capital of the Company at a deemed issue price which is the same price as the issue price of the shares offered under the capital raising.

• Unless converted or redeemed earlier, the Notes will be redeemed by the Company on the six month anniversary of the date of the relevant convertible note agreement. The Company has a discretion to extend this date by a further three months.

• Noteholders are entitled to interest at 12% per annum (or 15% per annum if the maturity date is extended by three months) payable quarterly in arrears.

• If the Notes are converted into ordinary shares in the capital of the Company, the resulting ordinary shares will rank equally in all respects with the Company’s then existing fully paid ordinary shares.

The funds raised by the convertible note placement will generally be applied towards strengthening the Company’s distribution of food and beverages into the Asian markets including additional purchases of 100 litre barrels of premium whisky from Lark Distillery Pty Ltd (LARK).

The Company is also pleased to announce that it is currently negotiating the entry into a distribution agreement with LARK in respect of the distribution of LARK whisky and whisky products in China together with the acquisition of a minority shareholding in LARK. The Company will provide further details about the distribution agreement and the minority interest acquisition once the terms are finalised.

Nick Geddes Company Secretary Montec International Limited

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