Receipt of Takeover Notice

23 October 2018 NZX Limited Level 1, NZX Centre 11 Cable Street Wellington 6011 By: MAP With a copy to: The Takeovers Panel Wellington 6011 By email: takeovers.panel@takeovers.govt.nz Takeover notice received from ESW Holdings Inc: The directors of SLI Systems Limited (NZX: SLI) (SLI) advise that SLI has received on Monday 22 October a Takeover Notice for a full takeover under the Takeovers Code from ESW Holdings Inc (ESW) to acquire all of the: o issued shares in SLI at a minimum price of $0.63 per ordinary share; and o unlisted options in SLI for a minimum price of between $0.03 and $0.34 per option (with the price per option depending on the exercise price and expiry date of the relevant option). The offer price per share and option will be increased (in accordance with ESW's proposed offer document) if SLI's cash and cash equivalents exceeds prescribed levels at 31 October 2018. A copy of the Takeover Notice is attached. The draft offer terms accompanying the Takeover Notice contains a range of usual conditions typical of offers of this nature and include ESW receiving acceptances under the offer that would, when taken together with any shares already held or controlled by ESW, confer on ESW more than 90% of the voting rights in SLI. ESW has filed a substantial product holder notice in relation to sale agreements committing various parties, together holding more than 51% of SLI's ordinary shares, to accept the offer when made by ESW in respect of all of their shares, and requiring ESW to make the formal offer within 30 days. www.sli-systems.com Level 1, EPIC 78 - 106 Manchester Street Christchurch New Zealand Phone: 0800 754 797 Fax: 03 961 3262 Independent Director Committee The Board of SLI has formed a sub-committee of directors comprising Greg Cross (Independent Chairman), Sarah Smith (Independent Director) and Andy Lark (Independent Director) who will respond to ESW's Takeover Notice and any resulting offer (the Independent Director Committee). The Independent Director Committee has appointed Northington Partners as its independent adviser (who has been approved by the Takeovers Panel) to provide a report on the merits of the offer for SLI shareholders and option holders. Chapman Tripp is providing SLI with legal advice. The Independent Director Committee recommends that shareholders do not take any action in respect of their shares until they receive a target company statement, including any recommendation from SLI's Independent Director Committee and a copy of Northington Partners' independent adviser's report on the merits of the offer. Shareholders who are considering selling their Shares before then are recommended to seek their own professional advice. Yours sincerely Greg Cross Chairman Attachments o Takeover Notice under Rule 41 of the Takeovers Code About SLI Systems SLI Systems (SLI.NZ) accelerates e-commerce for the world's top retailers by converting shoppers into buyers, maximising order values and generating more traffic. The SLI Product Discovery Suite(TM) uses sophisticated machine learning to predict what each shopper is most likely to buy right now, and includes solutions for improving site search, navigation, mobile, merchandising, recommendations and SEO. The SLI Commerce Console(TM) organises key sales insight and tuning capabilities into one easy-to-use control centre. For 17 years, established brands have trusted SLI Systems to deliver innovative features, knowledgeable service, and reliable SaaS-based infrastructure, that delights customers and increases revenue. SLI Systems operates on five continents, supports 20 languages, and is a leader among cloud-based site search providers to U.S. Internet Retailer Top 1000 retailers. SLI listed on NZX in May 2013. For more information, visit www.sli-systems.com. End CA:00325596 For:SLI Type:TRANSACT Time:2018-10-23 08:30:35