Owenlaw First Mortgage Income Fund ARSN 091 886 789 Responsible entity: Owenlaw Trust Limited ABN 96 004 414 653 ONLINE LODGE YOUR VOTE By mail: Owenlaw First Mortgage Income Fund C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia www.linkmarketservices.com.au By fax: +61 2 9287 0309 All enquiries to: Telephone: 1300 554 474 Overseas: +61 1300 554 474 NAME AND ADDRESS OF MEMBER SRN/HIN APPOINTMENT OF PROXY I/We being a member(s) of the Owenlaw First Mortgage Income Fund (Fund) and entitled to attend and vote hereby appoint: STEP 1 the Chairman of the Meeting (mark box) APPOINT A PROXY OR if you are NOT appointing the Chairman of the Meeting as your proxy, please write the name of the person or body corporate you are appointing as your proxy or failing the person/body corporate named attending the Meeting, or if no person/body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the Meeting on my/our behalf and to vote in accordance with the following instructions (or if no directions have been given or if other matters arise, as the proxy sees fit) at the Member s Meeting of the Fund to be held at Owenlaw Trust Ltd s offices at 55-57 Cardigan Street, Albert Park, Victoria, 3206 at 9:00am on Wednesday, 3 December 2014 and at any adjournment of that Meeting. Where more than one proxy is to be appointed or where voting intentions cannot be adequately expressed using this form an additional form of proxy is available on request from Link Market Services. Proxies will only be valid and accepted if they are signed and received no later than 9:00am (ADST) on Monday, 1 December 2014. The Chairman of the Meeting intends to vote undirected proxies in favour of all items of business. To direct your proxy how to vote on the resolution please insert X in the appropriate box below. STEP 2 VOTING DIRECTIONS Special Resolution That: (a) with effect from the date that the supplemental deed is lodged with the Australian Securities and Investments Commission, the constitution of the Owenlaw First Mortgage Income Fund (Fund) be amended as set out in the supplemental deed tabled at the Meeting (or at any Meeting reconvened following the adjournment thereof) and initialed by the Chairman of the Meeting for identification purposes (with any minor, non adverse or non material amendments Owenlaw Trust Limited (Owenlaw) thinks desirable), details of which are explained in the Explanatory Memorandum accompanying the Notice of Meeting; and (b) Owenlaw be authorised to do all things which it reasonably considers necessary or incidental to implement the changes to the constitution. For Against Abstain* * If you mark the Abstain box, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll. STEP 3 Title (Director/Secretary/Sole Director/ Trustee POA) SIGNATURE OF MEMBERS THIS MUST BE COMPLETED This form should be signed by the Member. Joint Investments must be signed by all investors. Corporate Investors must be signed either under seal and signed as directors: or by two directors or director and company secretary; or sole director/sole secretary (where applicable). Please state your name and role in the company beneath your signature. If signed by the Member s attorney, and you have not previously lodged the power of attorney with Owenlaw for notation, please attach a certified copy of the power of attorney to this form when you return it. Member 1 (Individual) Joint Member 2 (Individual) Joint Member 3 (Individual) Title (Director/Secretary/Sole Director/ Trustee POA) Title (Director/Secretary/Sole Director/ Trustee POA) OWEU PRX401R *OWEU PRX401*
HOW TO COMPLETE THE PROXY FORM If you plan to attend the Meeting in person you do not need to complete a proxy form. Ballot papers will be issued at the Meeting. However please bring your proxy form/account number to assist in the registration process. You cannot change ownership of your investment in the Fund using this proxy form. Your name and address This is your name and address as it appears on the register of Members of the Fund. If this information is incorrect, please make the correction on the Proxy Form. Additional information may be required by Link Market Services to confirm the changes made. Appointment of proxy If you are entitled to vote at the Meeting you have a right to appoint a proxy and should use this Proxy Form. The proxy need not be a Member. If you want to appoint someone other than the Chairman of the Meeting as your proxy, write the name of that person or body corporate where indicated. You cannot appoint yourselves. If you do not write a name in, or your named proxy does not attend the Meeting, the Chairman of the Meeting will be your proxy and vote on your behalf. If you hold the interests in the Fund in joint ownership (e.g. husband/wife, multiple trustees) you may appoint one of the other joint members of your interests to vote on your behalf at the Meeting. To appoint the Chairman or a third party all joint members must sign the Proxy Form. If you appoint a body corporate as your proxy, that body corporate will need to ensure that it appoints an individual as its corporate representative to exercise its powers at meetings, in accordance with section 253B of the Corporations Act 2001 (Cth) and provide satisfactory evidence of the appointment of its corporate representative prior to commencement of the Meeting. A form of the appointment document may be obtained from our website www.owenlawtrust.com.au. Your proxy s authority to speak and vote for you at the Meeting is suspended if you are present at the Meeting. Voting directions to your proxy You can direct your proxy how to vote by placing a tick or a cross in the relevant box against the resolution on the Proxy Form. All your votes will be cast in accordance with your directions. If you mark the For box you are directing your proxy to vote in support of the special resolution. If you mark the Against box you are directing your proxy to vote against the special resolution. If you mark the Abstain box you are directing your proxy not to vote on that item on a poll and your votes will not be counted. If you want your proxy to vote only some of your interests in a particular way, write the percentage in the relevant box. You cannot cast more than 100% of your votes on a resolution. If you do not mark the boxes relating to a resolution, your proxy will vote on the resolution as he or she chooses. If the Chairman is your proxy and you do not mark a box relating to a resolution, the Chairman will vote in favour of the resolution. Appointing a second proxy You may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If you choose to appoint a second proxy you will be required to submit a second proxy form. Additional proxy forms can be obtained, by telephoning Link Market Services Limited on 1300 554 474 or you can copy this form. Both Proxy Forms should be lodged together. If you appoint 2 proxies and do not specify the proportion or number of votes each proxy may exercise, each proxy may exercise half of the votes (ignoring fractions). Lodgement of a Proxy Form Correctly completed proxy forms, and the original or an original certified copy of the power of attorney (if the Proxy Form is signed by an attorney), must be received by Link Market Services Limited not later than 9:00am (ADST) on Monday, 1 December 2014 being not later than 48 hours before the commencement of the Meeting. Emailed proxy forms can not be accepted. Forms received after 9:00am (ADST) on Monday, 1 December 2014 will not be valid for the Meeting. Proxy Forms may be lodged using the reply paid envelope or: ONLINE www.linkmarketservices.com.au Login to the Link website using the holding details as shown on the Proxy Form. Select Voting and follow the prompts to lodge your vote. To use the online lodgement facility, members will need their Holder Identifier (Securityholder Reference Number (SRN) or Holder Identification Number (HIN) as shown on the front of the Proxy Form). by mail: Owenlaw First Mortgage Income Fund C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia by fax: +61 2 9287 0309 by hand: delivering it to Link Market Services Limited, Level 12, 680 George Street, Sydney NSW 2000. If you would like to attend and vote at the Meeting, please bring this form with you. This will assist in registering your attendance. Owenlaw Trust Limited advises that Chapter 2C of the Corporations Act 2001 (Cth) requires information about you as a Member (including your name, address and details of the interests you hold) to be included in the public register of the entity in which you hold interests. This information must continue to be included in the public register if you cease to be a Member. These statutory obligations are not altered by the Privacy Amendment (Private Sector) Act 2000. Information is collected to administer your interests and if some or all of the information is not collected then it might not be possible to administer your holding.
7 November 2014 Dear Investor, Owenlaw First Mortgage Income Fund - proposal to amend the Constitution The Constitution was adopted when I established the Fund in 2000, some 14 years ago. It was amended in 2005 following changes to the Corporations Law and we made two small amendments last year. The Fund s Constitution governs the operation of the Fund, and the rights and obligations of Owenlaw and its members, or investors, of the Fund. Recently, we undertook a complete review of the Constitution of the Fund and, are proposing that a new Constitution be adopted. The amendments are required to strengthen the Fund s compliance and administration regime. Since 2005 there have been a number of legislative and regulatory changes governing financial products and services in Australia. The proposed amendments better align the Fund s Constitution with the most current legislative and regulatory requirements. Under the Corporations Law, a meeting of investors in the Fund may be required to approve amendments of the Constitution. Changes are approved by passing a special resolution by the members attending either personally or by proxy. You can get a copy of the proposed Constitution from our website www.owenlawtrust.com.au or by telephoning our office on 1300 856 600. You do not have to attend the meeting and can complete a Proxy form to indicate how you would like to vote. I enclose: 1. Notice of Meeting to be held on 3 December 2014 together with notes on meeting procedure; 2. Explanatory Memorandum on the changes; 3. Proxy form and notes. As a quite separate matter I would like to advise you that after almost 40 years running our mortgage practice, I plan to retire. I am well progressed in discussions to sell Owenlaw Trust Ltd to Australian Unity, a well established Australian company based in South Melbourne with experienced mortgage and investment managers. Should the sale proceed as anticipated, both Director Luke Anderson and Office Manager Maria Andricopoulos will be moving to Australian Unity and so will continue to look after Owenlaw investors. Australian Unity has seen the proposed new Constitution and has confirmed that it would be able to continue to operate the Fund effectively under its terms. My discussions regarding Australian Unity potentially taking over the management and operation of the Fund remain subject to a number of conditions. No contracts have been signed at this time. I will advise all investors if a binding contract is signed, and if signed, I anticipate the transaction will be completed in December this year. Yours sincerely David Owen Chairman
NOTICE OF MEETING OWENLAW FIRST MORTGAGE INCOME FUND ARSN 091 886 789 Owenlaw Trust Limited ABN 96 004 414 653 AFSL No. 300670 (Owenlaw) as responsible entity of the Owenlaw First Mortgage Income Fund ARSN 091 886 789 (Fund) gives notice pursuant to Section 252A of the Corporations Act 2001 (Cth) (Corporations Act) that a meeting of all members of the Fund (Members) will be held on: Date: Wednesday 3 December 2014 Time: Venue: 9.00am the office of Owenlaw Trust Ltd, 55-57 Cardigan Place, Albert Park, Victoria 3206 Proxy form lodgement deadline: 9.00am on Monday 1 December 2014 Members should read the Explanatory Memorandum for the Fund dated 7 November 2014 accompanying this Notice of Meeting before voting. BUSINESS: TO APPROVE AMENDMENTS TO THE FUND CONSTITUTION. To consider, and if thought fit, to pass the following resolution as a special resolution (Special Resolution): That: (a) with effect from the date that the supplemental deed is lodged with the Australian Securities and Investments Commission the constitution of the Owenlaw First Mortgage Income Fund (Fund) be amended as set out in the supplemental deed tabled at the meeting (or at any meeting reconvened following the adjournment thereof) and initialed by the chairman of the meeting for identification purposes (with any minor, non adverse or non material amendments Owenlaw Trust Limited (Owenlaw) thinks desirable), details of which are explained in the Explanatory Memorandum accompanying the Notice of Meeting; and (b) Owenlaw be authorised to do all things which it reasonably considers necessary or incidental to implement the changes to the constitution. The nature and effect of the Special Resolution is set out in the Explanatory Memorandum. By order of the Board of Owenlaw Trust Limited David Owen Chairman & Director 7 November 2014
PROCEDURAL REQUIREMENTS FOR THE MEETING Quorum A quorum of two Members, being Members of the Fund present in person or attending as proxies or body corporate representative, must be present. The meeting will be adjourned to a day, time and place determined by Owenlaw if a quorum is not present within 30 minutes of the scheduled time for the meeting. If no quorum is present at the resumed meeting within 30 minutes after the time for the start of the meeting, the meeting is dissolved. Chair Owenlaw will appoint a Chairman for the meeting. The Chairman will vote any undirected proxies appointing the chair as proxy in favour of the Special Resolution. Voting Members can vote in any of the following ways: by attending the meeting and voting in person, or in the case of corporate Members, by a corporate representative; or by appointing a proxy to attend and vote on your behalf. In the absence of any special circumstances, the register of Members of the Fund as at close of business on the business day prior to the date of the meeting or any adjourned meeting will be taken as evidence of those Members entitled to vote at that meeting. You will have one vote for each whole dollar of the value of the total interests you have in the Fund. Fractions of votes will be disregarded. Voting on the Special Resolution will be conducted by way of a poll. Voting papers will be issued when you register before the meeting. If you hold your interest in the Fund jointly, (e.g. husband/wife or multiple trustees) and more than one of you attend and vote at the meeting, only the vote of the member first named in the register of Members will be counted. If only one of you is attending the meeting it is preferable for the other joint members to complete a Proxy Form appointing the one who is attending. You do not have to exercise all your votes in the same way, and you do not have to cast all of your votes. The Special Resolution can only validly pass as a special resolution if passed by at least 75% (by value) of the votes that are actually cast in person or by proxy by Members entitled to vote on the Special Resolution. Owenlaw reserves the right to adjourn the meeting in its absolute discretion. Voting in person or by corporate representative If you plan to vote in person at the meeting, please arrive at least 30 minutes before the starting time so your attendance can be registered. Please bring your (unused) Proxy Form with you to assist in the registration process. Corporations wishing to vote at the meeting must appoint a representative who must bring with them the original document properly authorising their appointment under section 253B of the Corporations Act. The appointment must set out what the representative is authorised to do and may set out restrictions on the representative s powers. If the appointment is by reference to a position held, the appointment must identify that position. A form to enable the appointment of a corporate representative is included with these materials. Additional copies may be obtained by telephoning Link Market Services on 1300 554 474. Voting by proxy If you are unable to attend the meeting you have the right to appoint a proxy to attend the meeting and vote for you. That person need not be a Member of the Fund and may be the Chairman of the meeting. Your proxy will have the same rights as you to speak during the meeting. You may direct your proxy how to vote. Your proxy must vote as directed by you. If you do not provide a direction and your proxy is the Chairman, the Chairman will vote in favour of the Special Resolution. If you do not provide a direction and your proxy is not the Chairman, then your proxy may choose how to vote on your behalf. If you complete and submit the Proxy Form and do not nominate a named proxy, or the named proxy fails to attend the meeting, the Chairman will act as your proxy. Where two proxies are appointed, each proxy may be appointed to represent a specified proportion of your voting rights. If the Proxy Forms do not specify the proportion of voting rights that each proxy may exercise, each proxy may exercise half of your votes. Fractions of votes will be disregarded. You must use the enclosed Proxy Form to appoint a proxy. Additional or replacement Proxy Forms may be obtained by telephoning Link Market Services on 1300 554 474. Where two or more persons are registered as Members (e.g. husband/wife or multiple trustees) you may appoint one of the other joint members to vote on your behalf at the meeting. To appoint the Chairman or a third party as a proxy, each joint member must sign the Proxy Form. The section "How to Complete the Proxy Form" in the enclosed Proxy Form explains how the Proxy Form should be completed. Proxy Forms should be returned in the enclosed reply paid envelope or mailed or faxed to Link Market Services Locked Bag A14 Sydney NSW 1235 Fax: +61 2 9287 0309 online: www.linkmarketservices.com.au Proxy appointments must be received by Link Market Services by 9.00am on Monday 1 December 2014 (Melbourne, ADST) for the proxy appointment to be effective. If the Proxy Form is signed under a power of attorney, Link Market Services must receive an original certified copy of the power of attorney by 9.00am on Monday 1 December 2014 (Melbourne, ADST) for the proxy appointment to be effective. Please send your Proxy Form as early as possible, to assist us with the counting of votes. Contact Owenlaw on 1300 856 600 if you have any queries. KEY DATES 9.00am Monday 1 December 2014 9.00am Wednesday 3 December 2014 Thursday 4 December 2014 Deadline for receiving proxy appointments. Meeting date. Results of the meeting will be declared at the meeting and will be communicated to Members of the Fund by placing the results on Owenlaw's website.
All communications to: Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Telephone: +61 1300 554 474 Facsimile: +61 2 9287 0309 Website: www.linkmarketservices.com.au APPOINTMENT OF CORPORATE REPRESENTATIVE Pursuant to Section 250D and 253B of the Corporations Act 2001 This form may be used by a company or other body corporate which is a securityholder or which has been appointed as a proxy by a securityholder. SRN/HIN Insert the name of the body corporate making the appointment hereby appoints Insert the SRN/HIN (as per proxy form) Insert the name of the appointee. Please note that multiple representatives can be appointed but only one representative may exercise the body corporate s powers at any one time. to act as its representative at all meetings OR the meeting to be held on / / of Insert the date of the meeting Insert the name of the company holding the meeting SIGNATURES THIS MUST BE COMPLETED Director Sole Director & Sole Secretary Common Seal (if applicable) Director/Secretary Date / / Information In order to be effective, the form must be received by Link Market Services Limited within the time limit (if any) specified in the relevant company s constitution for receipt of Corporate Representative Appointments. You should check the time requirements with the company holding the meeting. The original of this form will be retained by the company. A body corporate may appoint an individual as a representative to exercise all or any of the powers the body corporate may exercise at meetings of a company s members, creditors or debenture holders. The appointment may be by reference to a position held provided that the appointment identifies the position. The appointment must be executed in accordance with the body corporate s constitution and (if applicable) section 127 of the Corporations Act 2001. An appointment may be a standing one, which will continue until revoked. A permanent register of such appointments is maintained and so it is not necessary to evidence the appointment at each meeting. If more than one representative is appointed, only one representative may exercise the body corporate s powers at any one time. Personal Information Collection Notification Statement: Link Group advises that personal information it holds about you (including your name, address, date of birth and details of the financial assets) is collected by Link Group organisations to administer your investment. Personal information is held on the public register in accordance with Chapter 2C of the Corporations Act 2001. Some or all of your personal information may be disclosed to contracted third parties, or related Link Group companies in Australia and overseas. Your information may also be disclosed to Australian government agencies, law enforcement agencies and regulators, or as required under other Australian law, contract, and court or tribunal order. For further details about our personal information handling practices, including how you may access and correct your personal information and raise privacy concerns, visit our website at www.linkmarketservices.com.au for a copy of the Link Group condensed privacy statement, or contact us by phone on +61 1800 502 355 (free call within Australia) 9am 5pm (Sydney time) Monday to Friday (excluding public holidays) to request a copy of our complete privacy policy. Please bring this form to the Meeting with you or return by fax to +61 2 9287 0309. If you return by fax please bring the original with you to the relevant meeting.
EXPLANATORY MEMORANDUM OWENLAW FIRST MORTGAGE INCOME FUND ARSN 091 886 789 This Explanatory Memorandum is issued by Owenlaw Trust Limited ABN 96 004 414 653, Australian Financial Services Licence 300670, (Owenlaw) as the responsible entity of the Owenlaw First Mortgage Income Fund ARSN 091 886 789 (Fund). This Explanatory Memorandum is dated 7 November 2014. This Explanatory Memorandum provides Members with information about the Special Resolution proposed in the Notice of Meeting to be held at the office of Owenlaw Trust Ltd, 55-57 Cardigan Place, Albert Park, 3206 on Wednesday 3 December 2014 at 9AM. Accordingly this document should be read in conjunction with the Notice of Meeting which it accompanies. Capitalised terms used in this Explanatory Memorandum have the meanings given to them in the Notice of Meeting. This Explanatory Memorandum has been prepared without taking into account any Member's objectives, financial situation or needs. Therefore, in making a decision on how to vote in relation to the Special Resolution, Members should read this Explanatory Memorandum in its entirety before making a decision on how to vote and consult with their financial, legal or tax adviser if appropriate. 1. INTRODUCTION The Fund is a registered Managed Investment Scheme, constituted by a Constitution dated 3 March 2000 as amended from time to time. The Constitution governs the operation of the Fund and the rights and obligations of Owenlaw and Members. The Fund currently has $57,463,831 in funds under management as at 30 June 2014. Purpose of meeting The purpose of the meeting is to seek approval of Members to convert the existing Constitution into a modern style Constitution for a contributory mortgage scheme and to bring it up to date with the current regulatory environment. Pursuant to the Corporations Act, the amendments require the approval via a Special Resolution of Members. Owenlaw believes that the Special Resolution to be proposed at the meeting is in the best interests of Members and recommends that Members vote in favour of the Special Resolution. 2. PROPOSED CONSTITUTIONAL AMENDMENTS The changes to the existing Constitution are extensive but will not alter the way in which a Member continues to hold their investment in the Fund. In adopting the new Constitution Members will continue to receive a high quality service whilst at the same time administrative, operational and compliance efficiencies can be achieved. Further, the changes will not affect the value of any Member s investment. Explanatory Memorandum 1
2.1 Purpose of proposed constitutional amendments Owenlaw is seeking to amend the Constitution by converting the existing Constitution into a modern style Constitution for a contributory mortgage scheme and to bring it up to date with the most current requirements (including the Australian Securities & Investments Commission (ASIC) policy requirement) for a registered scheme constitution. It is the responsible entity s opinion that the constitution complies with the regulatory requirements, and the constitution has been amended to more closely align with the policy requirements in respect of ASIC regulatory Guide 134 and not more broadly. ASIC has not reviewed and takes no responsibility for the contents of this document. The new Constitution includes a number of provisions that are generally governed by the Corporations Act and expands on those processes (for example in relation to meetings of Members, withdrawal rights of Members, retirement or removal of the responsible entity and termination of the Fund). The new Constitution also includes more detail around such matters as valuation and the calculation of net trust value, distributions of income, distribution reinvestment, and the mechanical steps which occur when a Member enters the Fund. More detail has been included on the steps which will arise if a meeting of Members is to occur and how the Constitution is to be changed. The inclusion of these matters is not intended to alter the way in which the Fund is currently administered, but to provide greater detail and alignment with regulatory requirements and the Corporations Act. Currently, the terms of the issue and offer to investors are set out in the existing Constitution and Product Disclosure Statement (including the Invitation to Invest or Supplementary Product Disclosure Statement) for the Fund. It is proposed that all relevant provisions applicable to the issue of interests in the Fund be consolidated into the new Constitution and for the new Constitution to include provisions which align it to current regulatory practice. Members will continue to receive an offer to invest in a particular mortgage loan via a Supplementary Product Disclosure Statement/Invitation to Invest. The Supplementary Product Disclosure Statement/Invitation to Invest will continue to contain the material terms of the mortgage loan that Members need to know before making a decision to be allocated to that mortgage loan. 2.2 Summary of the proposed constitutional amendments A summary of the key changes made to the Fund by the adoption of the new Constitution is as follows. Improved expression, with new clauses intended to replicate current practice. Introducing the power for the responsible entity to introduce classes of interests. There is no current intention to create different classes of interests. The power has been included to provide greater flexibility to the responsible entity if in the future it decides that the offer or creation of different classes of Interests may make the Fund more attractive to retain and attract new or existing Members. Introducing the concept of a 'Syndicate Fund', whereby interests in a different Syndicate Fund will be created and issued to investors for each distinct mortgage investment and pool of assets. The income, profits, losses and liabilities of each mortgage investment will relate exclusively to the investors in the Syndicate Fund to which the mortgage investment relates. This is intended to replicate the creation of and allocation of Members to sub-funds or discreet mortgages, as occurs now under the existing Constitution, Product Disclosure Statement and Supplementary Product Disclosure Statement/Invitation to Invest. We have altered the language of how we refer to what is otherwise known as a sub-fund to keep the references more in line with the terminology commonly used in the mortgage fund industry. The practice of coming into the Fund and having initial interests issued in a Cash Fund pending allocation of interests (either via the general investment authority or specific investment authority process) to a particular mortgage loan (Syndicate Fund) will continue. Including provisions facilitating the creation of a Cash Fund and issue of interests in the Cash Fund to investors prior to the allocation of their monies to a Syndicate Fund and mortgage investment. This is intended to replicate the way in which Members currently enter the Fund. Explanatory Memorandum 2
The naming and distinction of the Cash Fund helps in the distinction between the liquid and non-liquid parts of the Fund, and the distinct withdrawal rights which attach to each. Members will still be able to make withdrawals from the Cash Fund as they do now. Amendment of withdrawal provisions from the Cash Fund The amendments introduce a provision which allows the responsible entity 90 days within which to process and pay a withdrawal request from the Cash Fund. There is however no intention to change the current practice of paying withdrawal requests from the Cash Fund within 2 business days of receipt of the request. Were the responsible entity to change the time within which it intended to meet withdrawal requests from the Cash Fund in the future, appropriate disclosure to Members would occur ahead of the implementation of the change in accordance with the requirements under the Corporations Act. Change to investment policy The investment policy of the Cash Fund is proposed to be broadened in two ways. Firstly, it has been changed to enable the responsible entity to invest indirectly, through a managed investment scheme, in cash (as well as directly in cash). Secondly, the proposed change would allow a broader range of cash equivalent investments-for example, bank bills and certain short term fixed interest securities-noting that many cash managed investment schemes include such diversification. Investment in such cash equivalent securities may occur directly or indirectly through a managed investment scheme. No immediate change to the Cash Fund is intended at this time. The responsible entity may apply the broader investment policy in the future should it consider it to be in the best interests of Members, and consistent with the disclosed risks of the Fund. Potential benefits include an enhanced yield for cash holdings and a broader range of cash type investments. Expanded provision for the responsible entity to recoup outgoings No changes are proposed to the fees of the Fund. The proposed changes to the Constitution have included an ability for the responsible entity to recoup a number of new outgoings that may become increasingly relevant to the Fund as it grows over time. Such outgoings include costs for entering the Fund in an industry or regulatory survey, and fees payable to a ratings or research organization or for certain marketing activities to support the ongoing growth of the Fund. These outgoings would not typically be payable by Members, but are payable out of the Fund and would generally be recouped indirectly from borrowers, or payable by the responsible entity out of its fees. The change proposed also enables recoupment of fees payable in respect of a managed investment scheme in which the Cash Fund has invested (refer to the above change to the investment policy of the Fund). This type of outgoing would be paid indirectly by Members-and would be considered against anticipated improved returns (amongst other factors) in any decision the responsible entity may make in regard to the suitable investments of the Fund. No changes are proposed to the current direct fee arrangements as set out in the current Constitution and Product Disclosure Statement. Investors will pay no fees to enter, remain in or exit the Fund, other than any bank dishonor or similar fees. Including provisions that expand on the processes where the Fund is terminated in accordance with the provisions of the Corporations Act. Improved clarity on matters already implied by law, with no changes introduced. Including provisions for the responsible entity, where the responsible entity acts without fraud, negligence or breach of trust, to not be liable to Members for its acts or omissions or for any amount in excess of what it is entitled to and does recover through its right of indemnity from the trust property. There is no express limitation of liability clause in the existing Constitution in favour of the responsible entity. In the event that losses were incurred to the Fund or any Syndicate Fund (for example because a mortgagor defaulted on a loan, a forced sale of the mortgaged property occurred which resulted in a deficiency between the value of the outstanding loan amount and the proceeds of sale), and the responsible entity has properly administered the Fund and has not been fraudulent, negligent or in breach of trust in the administration of the Fund, then the insertion of this clause seeks to clarify that the responsible entity is not liable for any shortfall. Explanatory Memorandum 3
This right is implied by law. The change merely formalises this implied right, rather than introducing a new right. This provision is typically found in modern registered managed investment scheme constitutions lodged with ASIC. Including a provision limiting the liability of Members to the amount subscribed or agreed to be subscribed by the Member for interests in the Fund. Including provisions facilitating the distribution of income from a Syndicate Fund to Members who hold interests in that Syndicate Fund. The insertion of this clause will not alter the way in which returns are currently paid to Members. The language and content is to align with provisions that are typically seen in constitutions for modern registered managed investment scheme constitutions. Including provisions governing meetings of Members consistent with the Corporations Act. The current constitution merely defers to the Corporations Act. The change simply inserts and expands on the processes in the default provisions from the Corporations Act into the Constitution. Including provisions for the retirement or removal of the responsible entity in accordance with the Corporations Act. The current constitution merely defers to the Corporations Act. The change simply inserts and expands on the processes in the default provisions from the Corporations Act into the Constitution. 2.3 Copy of new Constitution Prior to the meeting a copy of the proposed new Constitution will be available online at www.owenlawtrust.com.au and will be posted or emailed to you by contacting our office on telephone 1300 856 600 or +61 3 9645 5352 or by email request to finance@owenlaw.com.au Do the proposed constitutional amendments have any tax or stamp duty effect on Members? The proposed constitutional amendments should not have any tax or stamp duty impact on Members or the Fund. Members should continue to hold their interests in the Fund at their current cost base. There is no change in the underlying value of Fund investments because of the adoption of the new Constitution. The responsible entity has received professional advice from which has enabled it to form this view and in particular that the proposed changes should not result in any resettlement risk to the Fund. 3 QUESTIONS AND ANSWERS What happens if I cannot attend the meeting in person? Please refer to the attached Notice of Meeting which contains all the relevant information regarding voting and how to appoint a proxy. What happens if the Special Resolution is not approved at the meeting? If the Special Resolution is not approved, Owenlaw will continue to manage the Fund in accordance with the existing Constitution and Product Disclosure Statement, noting that the existing Constitution will not be up to date with the most current regulatory requirements. Owenlaw remains committed to acting in the best interests of all Members and thanks you for your ongoing support. Should you have any queries prior to the meeting please do not hesitate to contact either director Mr Luke Anderson on telephone +61 3 9684 7814 or director Mr David Owen on telephone +61 3 9684 7805. Owenlaw Trust Limited Dated: 7 November 2014 Explanatory Memorandum 4
OWENLAW FIRST MORTGAGE INCOME FUND Supplementary Product Disclosure Statement Dated 7 November 2014 Owenlaw First Mortgage Income Fund ARSN 091 886 789 Responsible Entity Owenlaw Trust Limited ABN 96 004 414 653 Australian Financial Services Licence No. 300670 Incorporated 12 September 1958 This is a Supplementary Product Disclosure Statement (SPDS) dated 7 November 2014 to the SPDS for Owenlaw First Mortgage Income Fund ( Fund ) dated 5 July 2013 and the Product Disclosure Statement (PDS) dated 12 September 2010. You should read this SPDS together with the SPDS dated 5 July 2013 and the PDS dated 12 September 2010. This SPDS is issued by Owenlaw Trust Ltd, ABN 96 004 414 653, AFS Licence No. 300670, as the Responsible Entity for the Fund. Proposed changes to the Fund Constitution A meeting of members of the Fund has been convened to occur on 3 December 2014. The purpose of the meeting is to seek approval to the resolution for the adoption of a new constitution for the Fund. A copy of the Notice of Meeting and Explanatory Memorandum dated 7 November 2014 accompany this document. A copy of the proposed new constitution), is made available at www.owenlaw.com.au or can be obtained by contacting us on 1300 856 600 and you should read these before making a decision to invest. A person investing between the period of the date of the Notice of Meeting and the 2 nd December 2014 will be deemed to have waived the notice period for the Notice of Meeting but are entitled to exercise the right to vote in accordance with the procedures set out in the Notice of Meeting. Contact Us 55-57 Cardigan Place Albert Park Victoria 3206 Tel: (03) 9645 5352 or 1300 856 600 Fax: (03) 9645 5597 or 1300 856 685 Email: finance@owenlaw.com.au Web: www.owenlaw.com.au