FFW Notice of Special Meeting of Shareholders

FFW Notice of Special Shareholder Meeting Page 1



12 March 2018


NOTICE IS HEREBY GIVEN that a Special Meeting of the Shareholders of Foley Family Wines
Limited (FFWL, the Company) will be held at:

Venue: Grove Mill Winery, 13 Waihopai Valley Road, Blenheim
Time: Wednesday 28 March 2018 commencing at 3.00 pm.


The nature of the business to be transacted at the meeting is to consider and if thought fit to pass
ordinary resolutions to:

• approve the Company acquiring the business and assets of Mt Difficulty Wines Limited
(MDWL, the Proposed Transaction); and
• issue up to $20 million of new ordinary shares (including to certain Related Parties of the
Company) to partially fund the Proposed Transaction (the Private Placement),

as further set out in the Agenda and Explanatory Notes.


AGENDA:

The agenda for the meeting is as follows:

1. Chairman’s Introduction

2. Chief Executive’s Presentation

3. Shareholder Questions

4. Notice of Motions – Proposed Transaction - Ordinary Resolution (note 1):
To consider, and if thought fit, to pass the following ordinary resolution to approve
the Proposed Transaction as a material transaction, requiring a simple majority of
votes by those shareholders entitled to vote and voting, as required by NZAX Listing
Rule 9.1.1 (b):

Resolution 1: That for the purposes of NZAX Listing Rule 9.1.1 (b) the Company is
authorised to acquire the business, assets and certain liabilities of Mt Difficulty Wines
Limited subject to the terms and conditions set out in the Asset Sale and Purchase
Agreement entered into on 14 November 2017.

The Directors unanimously recommend that shareholders vote in favour
of resolution 1.

5. Notice of Motions – Private Placement – Ordinary Resolution (note 2):
To consider, and if thought fit, to pass the following ordinary resolution to approve
the issue of new ordinary shares under the Private Placement, including to Related
Parties of the Company, requiring a simple majority of votes by those shareholders
entitled to vote and voting, as required by NZAX Listing Rules 7.3.1 (a) and 9.2.1:

Resolution 2: That:

(a) For the purposes of NZAX Listing Rule 7.3.1(a), the Board be authorised to issue
up to $20 million of new ordinary shares in the Company to partially fund the
Proposed Transaction; and

FFW Notice of Special Shareholder Meeting Page 2
(b) For the purposes of NZAX Listing Rule 9.2.1, that Foley Family Wines Holdings,
New Zealand Limited, the Directors of the Company and their Associated Persons
(as defined in the NZAX Listing Rules) are authorised to participate in the Private
Placement,

on the terms and conditions described in this Notice of Meeting.

The Directors unanimously recommend that shareholders vote in favour
of resolution 2 (a) and (b). However, please note that the Directors
themselves and Associated Persons of the Directors cannot vote on
Resolution 2 (b) as they are Disqualified Persons for the purposes of
NZAX Listing Rule 9.3.

6. General Business: To consider any other business that may be properly brought
before the meeting.

Further details of the resolutions to be put to the meeting are included in the Explanatory Notes
attached.

PROXIES
A Voting/Proxy form is attached for your use. Refer to the Final Section on the Explanatory Notes for
instructions for completing the Voting/Proxy Form. Please deliver the completed proxy to the Company
by 3.00 pm on Monday 26 March 2018. All Voting/Proxy Forms must be signed by the shareholder/s
including those provided by way of email.

Note: In accordance with NZAX Listing Rule 9.3.3 the Directors and their Associated Persons are unable
to act as discretionary proxy as they are disqualified from voting on Resolution 2 (b). One of the
Directors or the Chairperson or their Associated Persons may act as a proxy but only where the
shareholder has expressly stated how they wish the Proxy to vote on their behalf. Any discretionary
proxy given to the disqualified persons above will otherwise be void.

Important Note
This Notice of Special Meeting is an important document and requires your attention. It should be
read in its entirety. This Notice of Special Meeting has been prepared to advise you of the upcoming
Special Meeting and to assist you in understanding the resolutions to be put to shareholders for
consideration. The Directors encourage you to read this Notice of Special Meeting and exercise your
right to vote. If you do not understand any part of this document or are in doubt as to how to deal with
it, you should consult your broker or other professional adviser as soon as possible.

FFW Notice of Special Shareholder Meeting Page 3
EXPLANATORY NOTES TO THE AGENDA

Note 1 – Resolution 1: Acquisition of Mt Difficulty Wines business

Introduction

As previously advised through media releases to the NZX, the Company has entered into a
conditional sale and purchase agreement to purchase all of the assets and business of Mt
Difficulty Wines Limited (MDWL), including its iconic Central Otago wine brands Mt
Difficulty and Roaring Meg and its property interests, winemaking and cellar door facilities,
for an aggregate purchase price of approximately $55 million (subject to working capital
adjustments) (the Sale Agreement).

Completion of the transaction agreement is conditional on a number of matters including
approval of the Company’s shareholders, which is being sought at this meeting, Overseas
Investment Office approval, and obtaining key third party consents. The shareholders of Mt
Difficulty Wines Limited have approved the sale.

Overview of Mt Difficulty Wines

The Mt Difficulty wine label was established by a group of five owners of newly-planted
vineyards in the mid-1990s in Central Otago. In 1999 Matt Dicey came on board as
winemaker, and he made the 1999 and 2000 vintage wines at Longburn Winery prior to Mt
Difficulty’s own winery being built in time for the 2001 vintage. Matt was appointed General
Manager in November 2003 and has guided Mt Difficulty through the various growth
pathways that they have undertaken. In 2004 MDWL was formed, and the majority of the
individual vineyards passed into the ownership of the company. MDWL now owns six fully
productive vineyards and one property on Felton Road containing a production winery with
new barrel room/boardroom and a cellar door/restaurant. Six of the properties are located on
Felton Road in Bannockburn and one in Lowburn. The land holding that Mt Difficulty has in
the Bannockburn area makes it one of the larger vineyard operations within this area. The
Felton Road locality contains a number of vineyard developments and well-known cellar
doors and this locality features on the Central Otago Wine Trail route. This is a well-regarded
and recognised viticulture locality.

Mt Difficulty Estate comprises of six vineyards; Templars Hill, Pipeclay Terrace, Menzies
Terrace, Mansons Farm, Target Gully and Long Gully. The properties combined provide 91
hectares of total land area with approximately 68 hectares established in vineyard. The
properties range in size from 2.23 hectares to 40.99 hectares. The unique microclimate of the
Bannockburn area is partially created by the presence of Mount Difficulty which overlooks the
southern Cromwell basin, and is the namesake of Mt Difficulty Wines. Mount Difficulty is
integral in providing low rainfall and humidity for the region. Bannockburn enjoys hot
summers, a large diurnal temperature variation and long cool autumns; conditions which
bring the best out of the Pinot Noir grapes. These conditions, along with soils which are ideal
for viticulture, provide an excellent basis not only for Pinot Noir, but also for Pinot Gris,
Riesling, and Chardonnay. The soils are a mix of clay and gravels, but all feature a high pH
level; grapes produce their best wines on sweet soils.

MDWL sources grapes from the six Estate vineyards (with a planted area of approximately 68
hectares), fifteen lease vineyards covering a planted area of approximately 78 hectares which
range in size from 0.4 hectares to 24.62 hectares, and a small number of contract growers.
New leases are currently being negotiated for a further three vineyards covering a planted area
of approximately 15 hectares. The lease vineyards are located in the greater Lake Dunstan
area. The Lessors of the vineyard leases are parties who have a long-term relationship with
Mt Difficulty Wines either through shareholding, employment or as long-term contract
growers.

The Mt Difficulty winery was built as a 400 tonne facility for the 2001 vintage. The
development of the winery to its current capacity of 1,200 tonnes has taken place in two
recent stages. The first stage in 2009 was the development of the vintage cellar. The vintage
cellar processes the bulk of the Roaring Meg Pinot noir, mostly through the addition of larger
volume fermentors. The second stage, which occurred for vintage 2012, was the construction
of a new barrel room and dry goods warehousing facility. This stage freed up space inside the
existing winery for additional white wine fermentation capacity and additional dry goods

FFW Notice of Special Shareholder Meeting Page 4
storage.

The cellar door and restaurant were built in 2003 and are located on an elevated site on
Templars Hill above the winery. With extensive views on the surrounding landscape, Kawarau
River, Cromwell and Lake Dunstan it has become an iconic destination to profile the wines,
food and the Mt Difficulty experience.

In 2004, MDWL launched the Roaring Meg wine label. The fruit driven, early drinking style of
the Roaring Meg wines struck a chord with the consumer and the label has been the main
source of growth for Mt Difficulty Wines since 2007. Grapes for the Roaring Meg brand are
sourced from the wider Cromwell basin in Central Otago, whereas the Mt Difficulty brand
continues to be sourced exclusively from the Bannockburn area.

New Zealand is the core of MDWL’s sales activity, currently representing approximately 75%
of its annual sales volume. MDWL exports to 15 countries with the main international
markets being Australia and UK.

Proposed Transaction

On 14 November 2017 the Company entered into the conditional Sale Agreement to purchase
all of MDWL’s assets and business. The Company will also assume various liabilities
connected with those assets under the Sale Agreement, including trade creditors, accrued
expenses, and obligations under business agreements relating to periods after completion of
the Proposed Transaction.

The Proposed Transaction constitutes a Material Transaction for the purposes of the NZAX
Listing Rules as the gross value is in excess of 50% of the Average Market Capitalisation of the
Company. The Average Market Capitalisation of the Company on 6 March 2018 was $77.733
million. Accordingly, the Proposed Transaction is subject to the approval by the Company’s
shareholders by Ordinary resolution in accordance with NZAX Listing Rule 9.1.1.

In addition to shareholder approval, the Proposed Transaction is conditional on Overseas
Investment Office (OIO) approval and obtaining key third party consents. These conditions
are required to be obtained by various dates, with 30 September 2018 being the final date for
satisfaction of all conditions. Subject to these conditions being met it is anticipated the
acquisition will be completed within the third quarter of 2018.

Overseas Investment Office approval is required for the Company to complete the Proposed
Transaction because the Company is an “overseas person” for the purposes of the Overseas
Investment Act 2005 (the Act) due to the 66.46% shareholding of Foley Family Wines
Holdings, New Zealand Limited (FFWHNZL) which is 94.64% overseas owned and the
MDWL assets include a number of owned and leased properties that will be “sensitive land” or
“farm land” for the purposes of the Act. The Company has a strong record with the OIO and
has successfully achieved consents for similar transactions in the past, including the
acquisition of The New Zealand Wine Fund Limited in 2009, the Te Kairanga Wines assets in
2011, The New Zealand Wine Company Limited in 2012 and more recently Martinborough
Vineyards Estates Limited in 2014, and is confident that the required consents will be received
prior to the required date for satisfaction of this condition of 30 September 2018 set out in the
Sale Agreement.

The key third party consents required relate to MDWL obtaining approval to the assignment
to, or novation in favour of, the Company on the Completion Date of the Key Contracts and
the Material Leases, in each case in a form and on terms, acceptable to the Company. The Key
Contracts include a vineyard management agreement, two distribution agreements and two
water supply/water rights agreements. The Material Leases include twelve leases for
producing vineyards covering a planted area of approximately 83.60 hectares which range in
size from 1.36 hectares to 24.62 hectares, two of which were still being negotiated when the
Sale Agreement was entered in to covering 13.60 hectares. The Directors are confident that
the required assignments or novation will be obtained prior to Completion with effect on
Completion.

Terms and Conditions of Asset Sale and Purchase Agreement

The Sale Agreement outlines the assets that will be acquired which include the winery and

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vineyard properties (freehold and leasehold), fixed assets, other business assets, such as
inventory and stock, accounts receivable, and intellectual property.

The purchase price is approximately $55 million (excluding GST (if any)) subject to working
capital adjustments which will be determined following the completion date in accordance
with the Agreement.

Consistent with what would typically be expected in a commercial transaction of this nature
and size, other key terms of the Sale Agreement include:
• An adjustment mechanism for the purchase price to reflect movements in net working
capital between the date of execution of the Sale Agreement and the completion of the
Proposed Transaction (the Interim Period). Any increase in the net working capital will
result in an additional payment required to be made by the Purchaser and any decrease in
net working capital will result in a payment being made by the Vendor (or a reduction in
the deferred consideration amount – referred to below);
• Various responsibilities and obligations during the Interim Period in connection with the
operation of the MDWL business and assets, including operating and conducting the
business in a manner consistent with the ordinary course of business;
• Details of the Assumed Liabilities such as Trade Creditors and Accrued Expenses (which
form part of the net working capital) and how these are to be valued and adjusted for at
Completion (at 30Jun17 these were approximately $420K);
• Material loss / damage provisions which in certain circumstances permit the cancellation
of the Sale Agreement or a price adjustment in the event of loss or damage to the assets in
the Interim Period;
• Vendor and Purchaser settlement responsibilities and deliverables which are usual for this
type of transaction; and
• A suite of warranties in relation to the business, assets and liabilities of MDWL.

As noted above, the Agreement is conditional on a number of matters including OIO approval
of the Proposed Transaction on terms that do not impose unduly onerous obligations on the
Company. The OIO application was submitted on 19 February 2018 and we anticipate
notification of their decision on this application by the third quarter of 2018.

The terms of the Sale Agreement were negotiated in conjunction with the Company’s legal
advisers and following appropriate due diligence being completed for the purchase.

The purchase price for this iconic winery has been negotiated on an arm’s length basis based
on market price and expected future maintainable earnings by a US based Mergers &
Acquisition specialist who is employed by Bill Foley and the MDWL Directors in conjunction
with their independent advisors who provided them with advice around valuation and the
transaction.

MDWL is currently owned by seventeen shareholders, none of which have any relationship
with FFWL. The MDWL shareholders have voted in favour of the sale of the MDWL business
and assets to the Company.

The Company and Directors had no pre-existing relationship with MDWL prior to the
negotiation of the Sale Agreement. The Directors consider that the terms of the Sale
Agreement are fair to the Company and are in the best interests of the Company.

If the Proposed Transaction does not proceed

If the conditions set out in the Sale Agreement are not met, including if the Company’s
shareholders do not approve Resolution 1, then the Sale Agreement provides for cancellation
of the Sale Agreement on these grounds. If the Sale Agreement is cancelled the Sale
Agreement has no further effect and no party has any Claim against any other party arising
under or in connection with that cancellation other than in respect of any breach of the Sale
Agreement occurring before cancellation.

Financing of the Transaction

Under the Sale Agreement a payment of approximately $49.5 million is due on Completion,
with a deferred consideration component of $5.5 million due to be paid 18 months after the
completion date. The final purchase price is subject to a number of adjustments as provided

FFW Notice of Special Shareholder Meeting Page 6
for in the Sale Agreement.

The Company intends to fund the transaction via a mix of bank debt and new equity. The
majority of the funding will be obtained from term loan facilities through BNZ. The current
BNZ term loan facility which matures on 31 August 2020 will be drawn in full to its $20
million limit (providing funding for approximately $10 million of the purchase price) and
credit approval has been obtained for a new 3 year term loan facility for $30 million. The
terms of the new term loan facility are as follows: Interest is payable at 1.75% per annum
above the base rate. The base rate is the 'BKBM' rate as quoted on the Reuters Monitor Money
Rates Services page. Principal repayments of $500,000 per quarter are due at the end of each
quarter commencing one quarter following drawdown. The facility limit reduces by the
amount of the principal repayments each quarter. The facility term is 3 years from drawdown.
The remainder of the purchase price is expected to be funded through the Private Placement
equity raising. The Company is keen to grow its New Zealand investor base through that
Private Placement by targeting New Zealand based investors, and Board Chairman Bill Foley
has undertaken to contribute up to $14 million in equity for the transaction.

The increase in bank debt proposed will increase the gearing ratio of the Company from 19%
at 30 June 2017 to approximately 32% post completion. Based on industry benchmarking, the
Company was previously under-geared compared to industry averages and this transaction
will bring it closer to the industry norm. For example, by comparison, Delegat Group Limited
(NZX: DGL) had a gearing ratio of 48% at 30 June 2017 (calculated based on the information
provided in the Delegat Group Limited Annual Report 2017). The Wine Industry
Benchmarking and Insights 2017 Report prepared by Deloitte in conjunction with ANZ and
New Zealand Winegrowers (this report is available for download from the Deloitte website at
https://www2.deloitte.com/nz/en/pages/primary/articles/vintage.html) noted that long term
debt levels averaged 34.9% for similar sized wineries participating in the survey in the $20
million+ of total annual revenue tier.

The Directors are comfortable that the level of debt is acceptable for a company of our size and
are confident that the Company will continue to comply with all covenants imposed by BNZ
on the term loan funding facilities.

Rationale for the Mt Difficulty Transaction

At the Annual Shareholders Meeting in November 2017 CEO Mark Turnbull presented the
Vision for FFW as follows:
To become New Zealand’s most revered wine group through the ownership of iconic brands
and wineries in New Zealand’s most acclaimed wine regions.

The Directors believe that the proposed acquisition of the Mt Difficulty brand and winery in
Central Otago aligns with and supports this vision and the Company’s strategic direction to
become NZ's most revered wine group by becoming a super-premium wine producer and a
leader in the super-premium category. The addition of a third iconic wine region, providing
geographical diversification, will complement the Foley Family Wines branded wine portfolio
and provide further opportunity to strengthen distribution in New Zealand and
internationally.

The Company have identified synergies in areas such as logistics, sales, distribution
arrangements and back office. However, the overriding value of this transaction is building a
super-premium wine portfolio from New Zealand.

The Proposed Transaction will increase the production capacity of the Company by
approximately 16% and is expected to increase bottled wine sale volumes by approximately
20% (based on the sales volumes for the year ended 30 June 2017).

The Proposed Transaction will result in the following planted vineyard area:
Planted

FFWL

MDWL Total
Hectares Marlborough Martinborough Total FFW Central Otago incl MDWL
Owned 94 108 202 68 270
Leased * 111 29 140 93 233
Total 205 137 342 161 503
* Note: MDWL includes leases under negotiation of 15 hectares.

FFW Notice of Special Shareholder Meeting Page 7

The Directors further believe that this transaction is important to give the business the scale
required to support its potential move to the NZX Main Board.

Recommendation

The Directors consider the Proposed Transaction to be in the best interests of
the Company and its shareholders and unanimously recommend that
shareholders vote in favour of Resolution 1.


Note: If Resolution 1 is not passed by shareholder Resolution 2 will not be put to shareholders.

Note 2 – Resolution 2 (a) and (b): Private Placement

Introduction

As noted in the financing section of Note 1, the Company will be looking to partially fund the
Proposed Transaction through the issue of new equity funding via the Private Placement. Bill
Foley, Board Chairman, has undertaken to contribute up to $14 million in equity for the
Proposed Transaction.

Listing Rule Requirements

NZAX Listing Rule 7.3.1 (a) provides that equity securities can be issued where the precise
terms and conditions of the specific proposal to issue those equity securities have been
approved by shareholders.

NZAX Listing Rule 9.2 requires that any share issue to a Related Party having a market value
of more than 10% of the average market capitalisation of the company must be approved by
an ordinary resolution of the shareholders of the company as it is a Material Transaction.

NZAX Listing Rule 9.2.3 outlines the definition of a "Related Party" and this includes
(a) a Director or executive officer of the NZAX Issuer or any of its Subsidiaries; or
(b) the holder of a Relevant Interest in 10% or more of a class of Equity Securities of the
NZAX Issuer carrying Votes.

The Directors of the Company, being Bill Foley, Tony Anselmi and Mark Turnbull, and
majority Shareholder Foley Family Wines Holdings, New Zealand Limited (FFWHNZL) are
Related Parties for the purposes of the Rules.

Terms of the Private Placement

It is proposed that up to $20 million of new ordinary shares will be issued to investors to
partially fund the Proposed Transaction. Those shares will be issued on the same terms, and
rank equally in all respects with, the existing ordinary shares of the Company.

It is expected that the Private Placements will be made to both new investors and certain
existing shareholders of the Company (which may include Directors of the Company and their
Associated Persons). It is proposed that all investors will participate on the same terms, and
the level of participation of all investors will be determined according to criteria which will
apply equally to all persons participating in the Private Placement.

The timing of the issue of new shares under the Private Placement is still being finalised by
the Board, but will occur prior to completion of the Proposed Transaction.

The price for the new shares to be issued under the Private Placement will be determined by
the weighted average market price over the twenty Business day period prior to the date of
this Special Meeting, being 28 March 2018. For example, the following table outlines the
effect based on the share price range in the twenty Business days from 7 February to 6 March
2018 the weighted average market price was $1.48.

FFW Notice of Special Shareholder Meeting Page 8

Current VWAP
Weighted average market price 7Feb-6Mar18 $1.48

$1.48
Total number of shares on issue

52,222,534 52,222,534
Shares to be issued under the Convertible Note

7,863,025 7,863,025
(Refer Note 15 FFWL Annual Report 2017)

Shares to be issued under Private Placement $20M

13,513,514
Total number of shares in class 60,085,559 73,599,073
Percentage of overall dilution

18.361%
Example of dilution effect on sample shareholder:

Total number of shares held by example holder 10,000 10,000
Total percentage held of shares in class - before

0.017%

Total percentage held of shares in class - after 0.014%

Related Party transaction

Shareholder approval is also being sought for the Private Placement to permit Related Parties
(as defined in Listing Rule 9.2.3) to participate. The Related Parties include the Directors, Bill
Foley, Tony Anselmi and Mark Turnbull, and majority shareholder Foley Family Wines
Holdings, New Zealand Limited (FFWHNZL).

As at 26 February 2018 the shareholdings in the Company of the Related Parties were:

FFWNZL held 34,708,796 shares in FFWL being a 66.46% interest in the Company. This
interest was 70.85% including the 7,863,025 shares to be issued under the Convertible Note
(Refer Note 15 of the FFWL Annual Report 2017 for further details of the Convertible Note).

WP (Bill) Foley II – Individually and with CJ Foley held a direct interest in FFWL of 59%
through his shareholding in Foley Family Wines Holdings, Inc. (FFWH), the ultimate parent
of FFWHNZL which is the New Zealand based parent company and majority shareholder of
FFWL and through his shareholding in FFWHNZL. This interest was 63% including the
shares to be issued under the Convertible Note.

AJ (Tony) Anselmi – held a direct interest in FFW of 2.1% through his shareholding in
FFWHNZL. This interest was 2.3% including the shares to be issued under the Convertible
Note.

AM (Mark) Turnbull – held a direct interest in FFW of 1.5% through his shareholding in
FFWHNZL (1.5%) and through the ownership of 10,000 ordinary FFW shares (0.02%). This
interest was 1.6% including the shares to be issued under the Convertible Note.
In particular, Board Chairman Bill Foley and / or an investment entity controlled by him,
such as Foley Family Wines Holdings, New Zealand Limited, are proposed to participate in
the Private Placement (for which he has proposed investing up to $14 million). Further,
certain Directors of the Company or their Associated Ppersons may participate in the Private
Placement. Each of those persons will be a Related Party for the purposes of the NZAX
Listing Rules.

The level of participation by Bill Foley and / or any investment entity controlled by him under
the Private Placement will be limited to maintaining his current proportionate shareholding
in the Company. Any increase in his proportionate shareholding would require approval from
the New Zealand Overseas Investment Office. The following table shows the effect of the
proposed private placement on FFWHNZL using the example outlined above.

Weighted average market price 7Feb-6Mar18 Current VWAP
Private Placement Potential Issue Price

$1.48
Number of shares currently issued 34,708,796 34,708,796
Shares to be issued under the Convertible Note 7,863,025 7,863,025
Shares to be issued under Private Placement $14M

9,459,459
Total number held in class 42,571,821 52,031,280
Total percentage held in class 70.852% 70.696%

Based on the Average Market Capitalisation of the Company on 6 March 2018 of $77.733
million the proposed Private Placement of up to $20 million, being an amount of more than
10% of the Average Market Capitalisation, would constitute a Material Transaction for the

FFW Notice of Special Shareholder Meeting Page 9
purposes of NZAX Listing Rule 9.2.2 (b). As such, shareholder approval by ordinary
resolution is required under NZAX Listing Rule 9.2.1 to permit those persons to participate in
the Private Placement, which is likely to constitute a Material Transaction with a Related
Party.

NZAX Rule 9.2.5(b) requires that this notice be accompanied by a certificate from the
Directors (other than any Director who is interested in the transaction) certifying that the
terms of the transaction are fair and reasonable to shareholders and in the best interests of
the Issuer. All FFWL’s Directors will be “interested” in the Private Placement transaction for
the purposes of NZAX Listing Rule 9.2.5(b) by virtue of either their direct participation or
through their shareholding in FFWHNZL which will participate in that placement, and as
such they are unable to provide the certificate in the form contemplated under that Rule. NZX
has requested, and FFWL has provided to NZX, a certificate signed by all FFWL’s Directors
certifying that the terms of the Private Placement are fair and reasonable to shareholders and
in the best interest of FFWL.

Recommendation

That the shareholders vote in favour of Resolution 2 (a) and 2 (b) to allow the
Board to undertake the required steps to secure the desired equity funding for
the Mt Difficulty transaction and to allow the Directors, and more specifically
Board Chairman Bill Foley and his Associated Persons, to participate in the
equity raising.

Please note that the Directors themselves and their Associated Persons cannot
vote on Resolution 2 (b) as they are Disqualified Persons for the purposes of
NZAX Listing Rule 9.3. Any proxies that the Disqualified Persons hold for
shareholders will only be voted if the shareholder has indicated a vote on the
Proxy/Voting form. Further, Foley Family Wines Holdings, New Zealand
Limited may not vote in respect of this resolution as it is a Related Party under
the Rules.

Note 3 - NZX Approval

NZX has approved this Notice of Special Meeting but does not take any responsibility for any
statement contained in this Notice of Special Meeting.


This explanatory note is of a general nature only and is not intended to be an exhaustive summary
of all the provisions of the transaction proposed.


Important Information: General Note Applicable to All Resolutions requiring Votes at
the Shareholder Meeting

Voting entitlements will be determined at 5.00pm on Friday 9 March 2018. Registered
shareholders at that time will be the only persons entitled to vote at the Special Meeting and only the
shares registered in those shareholders' names at that time may be voted at the Special Meeting.

Voting will be 1 share, 1 vote and may be conducted by way of a poll. An ordinary resolution
means a resolution passed by a simple majority of the votes of those shareholders entitled to vote and
voting on the resolution.

You may vote

1. By Attending. You should bring the Voting/Proxy Form (Included with this Notice) with you
since voting may be by way of a poll.

2. By Proxy. If you do not plan to attend, you can appoint a proxy to vote for you.

A Voting/Proxy Form is included with this Notice of Meeting which allows you to vote either for,
against, or abstain from, the resolutions notified in this Notice of Meeting.

Any shareholder of the Company, who is entitled to attend and vote at the Shareholder Meeting, is

FFW Notice of Special Shareholder Meeting Page 10
entitled to appoint a proxy to attend the meeting and vote on his or her behalf. A proxy need not be a
shareholder of the Company.

If you appoint a proxy, you may either direct your proxy how to vote for you, or you may give the
proxy discretion to vote as he or she sees fit. If you wish to give your proxy discretion then you should
make the appropriate election on the Proxy Form, to grant your proxy that discretion.

You will be deemed to have given your proxy discretion if you do not make an election in relation to
any resolution.

The Chairman of the meeting is willing to act as proxy for any shareholder who appoints him or her
for that purpose. If you appoint the Chairman of the meeting as your proxy and do not direct the
Chairman how to vote in the Voting/Proxy Form, the Chairman will vote in favour of the resolution
except as noted below.

If, in appointing your proxy, you do not name a person as your proxy, or your named proxy does not
attend the meeting, the Chairman of the meeting will be your proxy and may only vote in accordance
with your express direction.

The Chairman intends to vote any discretionary proxies in favour of resolution 1 and 2 (a).

Please note that the Directors themselves cannot vote on Resolution 2 (b) as they are disqualified
persons for the purposes of NZAX Listing Rule 9.3. Any proxies that the Directors hold for
shareholders will only be voted if the shareholder has indicated a vote on the Proxy/Voting form.

To be valid, a completed Voting/Proxy Form must be returned by no later than 3.00pm on
Monday 26 March 2018. Any Voting/Proxy Form received after that time will not be valid for the
meeting.

You may return your completed Voting/Proxy Form by:
• Delivering it in person to FFW Head Office, 13 Waihopai Valley Road, Blenheim;
• Scan and email (please use “FFW Proxy” as the subject of your email) to cfo@ffw.co.nz;
• Return the Voting/Proxy Form by mail to Foley Family Wines Ltd, Attn: Jane Trought, PO Box
67, Renwick 7243, New Zealand.; or
• Fax the Voting/Proxy Form to: +64 3 572 8211.

All Voting/Proxy Forms must be signed by the shareholder/s including emails. Shareholders are
encouraged to return these forms by either email or facsimile to reduce the environmental impact of
this meeting.

By Order of the Board of Directors



Jane Trought
Chief Financial Officer
Foley Family Wines Limited
12 March 2018.

Forward-looking statements
This document may contain forward-looking statements. Forward-looking statements are predictive in nature, they
are subject to a number of known and unknown uncertainties, assumptions and risks, performance or achievements
that could result in the proposed transaction being materially different from those expressed or implied by such
forward- looking statements. Matters not yet known to FFW or not currently considered material by FFW may impact
upon these forward-looking statements. The statements in this Notice of Special Meeting reflect views held as at the
date of this Notice of Special Meeting. In light of these uncertainties, assumptions and risks, the forward-looking
statements discussed in the document may not occur. Given these conditions, shareholders are cautioned not to place
undue reliance on such forward-looking statements. Subject to any continuing obligations under applicable law or any
relevant NZAX Listing Rules, FFW expressly disclaims any obligation to disseminate after the date of this Notice of
Special Meeting any updates or revisions to any such forward-looking statements to reflect any change in expectations
or events, conditions or circumstances upon which any such statements are based.

FFW Notice of Special Shareholder Meeting Page 11
DEFINED TERMS

The following words and expressions have the meanings set out next to them:

“Associated Person” has the meaning given in Listing Rule 1.7.

“Average Market Capitalisation” means the volume weighted average market capitalisation of the
Company’s Equity Securities carrying Votes calculated from trades on the NZSX over the 20 Business
Days before the earlier of the day of the transaction is entered into or is announced to the market.

“Business Day” means a time between 8.30am and 5.30pm on a day on which NZX is open for
trading.

“Class” means a class of Securities having identical rights, privileges, limitations and conditions and
includes and excludes securities which NZX in its discretion deems to be of or not of that Class.

"Company" and “FFWL” means Foley Family Wines Limited.

"Director" means a person appointed and continuing in office for the time being, in accordance with
the Constitution of the Company, as a director of the Company, by whatever name called.

“Equity Security” means an Equity Security, as defined in the Listing Rules, which has been issued,
or is to be issued, by the Company, as the case may require.

“FFWHNZL” means Foley Family Wines Holdings, New Zealand Limited.

“Issuer” has the meaning given in the Listing Rules.

"Listing Rules" or “Rules” means the Listing Rules of the NZX governing the NZAX Board market
(or any successor to that market) as amended from time to time.

“MDWL” means Mt Difficulty Wines Limited.

“NZAX” means the Alternative market operated by NZX.

“NZX” means NZX Limited.

“OIO” means Overseas Investment Office.

"Ordinary Resolution" means (subject to Listing Rule 1.6.8) a resolution of shareholders approved
by a simple majority of the votes of those shareholders entitled to vote and voting on the question.

“Proposed Transaction” mean the proposed acquisition of the business and assets of MDWL.

“Related Party” has the meaning given in Listing Rule 9.2.3.

“Sale Agreement” means the Asset Sale and Purchase Agreement entered in to in relation to the
Proposed Transaction on 14 November 2017.

"Special Meeting" means any meeting (other than an annual meeting) of shareholders entitled to
vote on an issue, called at any time by the board.

“Vote” has the meaning given in the Listing Rules.