RULES OF THE DISTRIBUTION REINVESTMENT PLAN
FOR THE PASSIVE INCOME (USA COMMERCIAL PROPERTY) FUND (Fund)
ARSN 155 770 095

Summary

Distribution Reinvestment Plan

Under the Plantation Capital Limited rules for the Distribution Reinvestment Plan for the Passive Income (USA Commercial Property) Fund (Plan), you may reinvest your cash distribution and receive new fully paid units in the Fund (Units) at a discount to the issue price of Units at that point in time.

Increase your holding

The Plan is a cost effective and convenient way of increasing your Unitholding in the Fund.

Entitlement to Units

If you participate in the Plan, until you elect otherwise, each distribution paid in respect of the Units participating in the Plan will be automatically reinvested in new Units.

Discount on Issue price

It is intended that Units will be allotted under the Plan at a discount to the issue price so that the reinvestment price is equivalent to the redemption price at the same date. The Plan gives the Responsible Entity discretion as to the amount of the discount up to the maximum permitted under the Constitution and relevant legal requirements. Units will be allotted to you free of brokerage, commission and administrative costs.

Entitlement rounded-down

Where the allotment formula results in a fraction of a Unit, your entitlement will be rounded-down to the nearest whole unit (per PDS).

Units ranked equally

Units allotted under the Plan rank equally with existing fully paid Units.

Optional participation

Participation of Unitholders in the Plan is entirely optional. You may elect to participate in the Plan or withdraw from the Plan by completing the relevant form (each of which can be found in the schedules to the Terms and Conditions) and sending it to the Responsible Entity at PO Box 532 Canterbury VIC 3126. Forms received after the close of the Register for a distribution will not be effective until the next date for distribution.

Statements

A statement will be sent to you on or after each distribution payment date, setting out the details of your participation in the Plan.

Amendment, suspension and termination

The Responsible Entity may amend, suspend or terminate the Plan at its sole discretion, but in so doing cannot vary any entitlement you have received or accrued up to that point.

Terms and Conditions

The detailed terms and conditions of the Plan are contained in this booklet.  Please read them before deciding whether or not to participate in the Plan.

Please note that the defined terms used in this booklet are detailed on page 7.

Enquiries

If you wish to enquire about the Plan, please contact the Client Services Officer at the following address:

Client Services Officer
Address: PO Box 532 CANTERBURY VIC 3126
Telephone: (03) 8592 0270
Fax: (03) 8592 0277
Email: admin@passiveincomefund.com
Website: www.passiveincomefund.com

Frequently Asked Questions

Who can participate?

Each registered holder of Units in the Fund whose address in the Register is in Australia (Eligible Unitholder). Eligible Unitholders can participate in the Plan up to the limit of their Unitholding. Any Unitholder who has a registered address or is resident in a country other than Australia is not automatically eligible to participate in the Plan. However, the Responsible Entity has the discretion to permit any such Unitholder to participate in the Plan and may require that Unitholder to provide proof, in the form of a statutory declaration or other document, of the legality of their participation.

Is participation optional?

Yes. You may decide to participate fully or not at all.

How do I participate in the Plan?

The limit of your participation for a given distribution entitlement is determined by the number of Units registered in your name on the Record Date for the relevant distribution or such other date advised by the Responsible Entity.

How do I elect to participate in the Plan?

Complete the Application form which can be found at Schedule 1 of the Terms and Conditions and return it via post to PO Box 532 Canterbury VIC 3126.

No action is required from existing unit-holders who have already elected to reinvest their distributions unless they wish to choose the cash option.

When will my participation in the Plan commence?

It will commence with the first distribution after receipt of your Application. This is subject to the Application being received 14 days prior to the Record Date or such other date nominated by the Responsible Entity in respect of that distribution so as to allow sufficient time for forms to be processed before payment of the distribution.

What happens if I have more than one Unitholding?

Where you have separate Unitholdings registered under different names or in joint names, you will need to lodge separate Applications for each separate Unitholding. You must correctly identify the Unitholding on each Application.

Can I change my participation in the Plan?

Yes. Members who are currently participating in the Plan can subsequently elect not to participate in the Plan and choose to receive a distribution in accordance with the cash option. Simply complete a Change of Details form specifying your decision to receive the cash option and send it to PO Box 532 Canterbury VIC 3126.

The change will be effective from the next distribution payment, subject to the Change of Details form being received on or before the relevant Record Date or such other date nominated by the Responsible Entity.

At what price will the Units be allotted?

Units will be allotted under the Plan at the Issue Price which will be the Issue Price less the Discount, struck on the Business Day immediately following the Record Date in respect of the distribution as determined by the Responsible Entity.

How is the Discount determined?

The amount of the Discount, up to the maximum permitted under the Constitution and relevant legal requirements, will be decided from time to time by the Responsible Entity but cannot be changed once declared for a particular distribution period. Details of the discount applicable to each distribution will be announced to via email.

Do the Units allotted under the Plan participate in the Plan?

Where the Unitholder has elected to participate in the Plan, Units allotted under the Plan subsequently participate in the Plan unless a Change of Details form, electing the cash option in respect of all Units, is given by the Unitholder.

What costs are associated with participating in the Plan?

There are no costs for participation. You will not be charged brokerage fees, commissions or administrative costs for any allotment of Units under the Plan.

Can I sell Units allotted to me under the Plan?

Units participating in the Plan or acquired under the Plan may be sold at any time, subject to the restrictions that apply to transfers of Units under the Fund’s constitution.

The Responsible Entity takes no responsibility for the taxation liabilities of Unitholders and recommends that you obtain professional taxation advice before participating in the Plan. Unitholders resident overseas are advised to make enquiries about their tax liabilities in their country of residence as well as in Australia.

When will I receive a statement?

After each distribution is paid by the Responsible Entity, statements will be issued to each Unitholder showing:

  1. the number of your Units participating in the Plan;
  2. the distribution entitlement on such Units;
  3. the number and price of new Units allotted under the Plan;
  4. the amount and extent to which any distribution is taxable, tax-free or tax-deferred (if known at that time); and
  5. the amount of any tax that has been withheld from the distribution.

Can the Plan Terms and Conditions be amended?

The terms and conditions of the Plan may be amended by the Responsible Entity. The Responsible Entity will notify Unitholders of any change to the terms and conditions of the Plan by way of an announcement via email.

Can the Plan be suspended or terminated?

The Plan may be suspended or terminated by the Responsible Entity without it giving prior notice to Unitholders.

What happens if I do not participate in the Plan?

If you elect not to participate in the Plan, you will continue to receive cash distributions in the normal manner. However, non-participation in the Plan will result in a dilution of your holding of Units relative to other Unitholders.

Enquiries

If you have any enquiries (other than taxation) about how the Plan operates and how you can participate, write or telephone:

Client Services Officer
Address: PO Box 532 CANTERBURY VIC 3126
Telephone: (03) 8592 0270
Fax: (03) 8592 0277
Email: admin@passiveincomefund.com
Website: www.passiveincomefund.com

Please note that neither the Responsible Entity nor the Registry is in a position to answer enquiries concerning the taxation implications for Unitholders. Such enquiries should be addressed to your professional taxation adviser.

Terms and Conditions

In accordance with the Constitution, the Responsible Entity has determined the following terms and conditions will apply to the Distribution Reinvestment Plan.

  1. Definitions

    In these Rules, the following definitions will apply:

    1. ‘Application’ means the application to participate in the Plan in the form as set out at Schedule 1.
    2. ‘Business Days’ has the same meaning as in the Constitution.
    3. ‘Change of details’ means a notice to vary participation in the Plan in the form as set out at Schedule 2.
    4. ‘Constitution’ means the constitution of the Fund.
    5. ‘Designated Units’ means in relation to a Unitholder the number of Units designated by the Unitholder in an Application as varied from time to time by the Participant.
    6. ‘Discount’ means such percentage discount (if any) determined by the Responsible Entity from time to time to be applied in calculating the Issue Price under Clause 8.
    7. ‘Issue Price’ has the meaning given to it in the Constitution.
    8. ‘Participant’ means a Unitholder who participates in the Plan.
    9. ‘Participating Units’ means Units participating in the Plan.
    10. ‘Plan’ means the Distribution Reinvestment Plan established by these Rules.
    11. ‘Record Date’ means close of business on the date which a person must be registered as a Unitholder in order to receive a distribution from the Fund.
    12. ‘Register’ means the register of holders of Units maintained by the Registry.
    13. ‘Registry’ means Plantation Capital Limited ACN 133 678 029
    14. ‘Reinvestment Record’ means a register kept by the Responsible Entity of Unitholders’ participation in the Plan.
    15. ‘Responsible Entity’ means Plantation Capital limited ABN 65 133 678 029.
    16. ‘Termination Date’ means the day on which the participation of a Participant in the Plan is terminated pursuant to these Rules.
    17. ‘Terms and Conditions’ means these terms, provisions and conditions of the Plan, as may be amended from time to time in accordance with Clause 15.
    18. ‘Unit’ means a unit in the Fund.
    19. ‘Unitholder’ means a holder of Units in the Fund.
    20. ‘Withholding Tax’ means any tax or withholding amount that the Responsible Entity is required to withhold from a distribution payable to a Participant.
  2.  Interpretation
    1. Unitholders who, in respect of distinct numbers of Units held by them have separate holder numbers, shall, for the purposes of the Terms and Conditions, be deemed to be separate and distinct Unitholders in relation to each holder number and the Units from time to time allocated to that holder number.
  3. Participation in the Plan
    1. Under the Plan, a Unitholder may elect to receive new Units instead of cash for distributions declared by the Responsible Entity in respect of their Unitholding.
    2. A Unitholder’s participation in the Plan is optional, non-transferable and subject to these Terms and Conditions
    3. Except as provided in Clause 3(d) and 3(e), all Unitholders may apply for participation in the Plan.
    4. A Unitholder whose registered address is not in Australia (as shown on the Register) is not eligible to participate in the Plan. Before electing to participate in the Plan, Unitholders should seek professional advice to ascertain if any restrictions apply.
    5. If, in the opinion of the Responsible Entity, the laws of Australia or any other country (or any other matter or thing) result in a Unitholder’s participation being illegal, impossible or impracticable, the Responsible Entity may determine that the Unitholder is not able to participate in the Plan. The Responsible Entity may, at its sole discretion, permit a Unitholder whose registered address is not in Australia (as shown on the Register) to participate in the Plan. It is the responsibility of such Unitholders to obtain any approvals as may be required by the Responsible Entity. The allotment of Units to Unitholders who are not resident in Australia at the time of allotment will be subject to all necessary government approvals.
    6. The Responsible Entity may, at its sole discretion, require that a Unitholder provide a statutory declaration or other proof that the Unitholder is not in breach of any law by participating in the Plan.
    7. Participation may, subject to these Terms and Conditions, be varied or terminated by a Unitholder at any time by providing the Responsible Entity with a Change of Details form to be sent to PO Box 532 Canterbury VIC 3126.
    8. The Responsible Entity is entitled (but not obliged) to refuse a Unitholder’s request for participation in the Plan where the Unitholder has, in the opinion of the Responsible Entity, split a Unitholding, or acquired Units of such a split, in order to increase the number of Participating Units that may be allocated to the Unitholder or another person.
  4. Application to Participate
    1. To participate in the Plan, an Application must be completed (or such other written form acceptable to the Responsible Entity) and sent to PO Box 532 Canterbury VIC 3126. Applications may be lodged at any time.
    2. Once the Responsible Entity has received and accepted a duly completed and executed Application form, a Unitholder’s participation in the Plan will commence from the next Record Date. To be valid for a distribution payment, instructions must be received by the Responsible Entity 14 days before that distribution’s Record Date.
    3. If the Responsible Entity decides to reject an Application, it will inform the relevant Unitholder of its decision in writing within a reasonable time of receiving the Unitholder’s Application form.
  5. Degree of Participation

    Participation in the Plan must be either full participation or no participation at all:

    1. Full participation applies to income distributions on all the Participant’s Units (including Units allotted under the Plan) from time to time.
    2. The Responsible Entity shall not be liable to any Unitholder for any loss, damage or claim in respect of either the Unitholder’s participation or non-participation (as the case may be) pursuant to the exercise by the Responsible Entity of its discretion.
    3. The Responsible Entity may at any time, by giving notice in writing to Participants, limit the amount of any Distribution which may be reinvested for the issue of Units under the Plan.
  6. Operation of the Plan
    1. The Responsible Entity must hold all income distributions on the Designated Units on behalf of the Participant and subscribe for further Units to be issued in the name of that Participant, or transfer to that Participant Units then held by the Responsible Entity. Subscriptions or transfers will be made on the date an income distribution is paid.
    2. The number of Units to be subscribed for on behalf of or to be transferred to a Participant is the number (rounded down to the nearest whole unit ) to be calculated by applying the following formula:

      U = (P × D)/I

      ‘U’ is the number of Units to be allotted to the Participant;

      ‘P’ is the number of Participating Units registered in the name of the Participant as at the Record Date to which the allotment relates;

      ‘D’ is the amount of the distribution per Unit declared by the Responsible Entity on the Units, less the amount of any Withholding Tax applicable to that distribution; and

      ‘I’ is the Issue Price as calculated in accordance with Clause 8.

    3. Any amount remaining after subscribing for Units will be eliminated from the Plan and shall form a part of the general property of the Fund.
  7. Issue Price of Units

    The issue price for each Unit under the Plan will be the next Issue Price less the Discount, struck following the Record Date in respect of a distribution as determined by the Responsible Entity in accordance with the Constitution.

  8. Units to be Allotted Under the Plan
    1. Allotment or transfer under the Plan will be made as soon as practicable after the distribution’s record date.
    2. All units allotted under the Plan will rank equally in all respects with existing Participating Units.
  9. Costs to Participants
    1. No brokerage, commission or other administration costs will be payable by a Participant on Units allotted or transferred under the Plan.
    2. In the event of a change in the existing legislation with the effect that, on the date of any issue of Units under the Plan, stamp duty is payable in respect of all or any part of the issue, the amount of such stamp duty shall be paid by the Participant to whom the Units are issued.
  10. Statements to Participants

    After each allotment made pursuant to Clause 7, the Responsible Entity will forward to each Participant a holding statement containing the following details as at the relevant allotment date:

    1. the number of the Participant’s Participating Units as at the close of the Register for determination of entitlements to distributions;
    2. the amount of distribution payable on all of the Participant’s Participating Units;
    3. the amount of any Withholding Tax and the extent to which it is taxable, tax-free, or tax-deferred (if known at that time);
    4. the number of Units allotted to the Participant under the Plan and the allotment to which the statement relates;
    5. the price at which these Units were allotted and any Discount reflected in the price; and
    6. the Participant’s total holding of Participating Units after such an allotment.

    Holding statements will usually be issued within 60 days of the date of allotment or transfer.

  11. Variation or Termination of Participation

    A Participant may at any time give written notice to the Responsible Entity terminating participation in the Plan by submitting a Change of Details form.

    The variation or termination takes effect from the Record Date for the next distribution.

    Participation in the Plan will also cease upon receipt by the Responsible Entity of a notice of the death of a Participant (or in the case of joint Participants upon notice of the death of one joint Participant).

  12. Termination of Participation Upon Disposal of Units
    1. If a Participant transfers all of that Participant’s Units, without giving notice of termination of participation in the Plan, the Participant will be deemed to have given notice to terminate their participation in the Plan on the last date when the Responsible Entity registered a transfer or instrument of disposal of the Participant’s Units.
    2. When a Participant transfers Participating Units, the Participating Units shall upon registration of such transfer or instrument of disposal cease to be Participating Units.
  13. Applications and notices
    1. Notices must be in writing and in such form as the Responsible Entity may from time to time require.
    2. Applications must be made and notices must be given by Participants separately in respect of each holding of Units identified by a separate holder number in the Register.
    3. Applications and notice will be effective upon receipt by the Responsible Entity or the Registry subject to:
      1. these Terms and Conditions;
      2. in the case of Applications, acceptance by the Responsible Entity;
      3. subject to sub-clause (d), such Applications or notices received on or before the relevant Record Date; and
      4. such other determinations or restrictions as to the period of notice required as the Responsible Entity may from time to time impose.
    4. Applications and notices received after the due date will be effective from the date following the reopening of the Register.
  14. Modification and Termination of the Plan

    The Plan may be modified, suspended or terminated by the Responsible Entity at any time by giving not less than one month’s written notice to all Unitholders. In the case of modification, existing Participants will continue under the modified Plan unless the Participant notifies the Responsible Entity in writing that they wish to terminate their participation in the Plan. The accidental omission to give notice of modification, suspension or termination or the non-receipt of any notice by a Unitholder will not invalidate the modification, suspension or termination of the Plan.

  15. Administration of the Plan
    1. The Responsible Entity reserves the power to:
      1. Determine appropriate procedures for administration of the Plan consistent with the provisions of these Terms and Conditions and the Constitution;
      2. Waive strict compliance with any of the provisions of these Terms and Conditions;
      3. Delegate the exercise of its power or discretions under the Plan; and
      4. Settle in such manner as it thinks expedient any difficulties, anomalies or disputes which may arise in connection with, or by reason of, the operation of the Plan, whether generally or in relation to any Participant or any Units, and the determination of the Responsible entity shall be conclusive and binding on all Participants and other persons to whom the determination relates.
    2. The Responsible Entity and its officers and employees shall not be liable to any Unitholders for any loss, damage or claim in respect of either the Unitholder’s participation or non-participation, as the case may be, in the Plan by reason of the administration or lack of administration of the Plan or the exercise by the Responsible Entity of any of its discretions under the Plan.
    3. Unless the Responsible Entity shall otherwise decide, entries made in the Register shall be conclusive in determining whether or not any Unit is a Participating Unit.
  16. Taxation

    The Responsible Entity takes no responsibility for the taxation liabilities of Participants, including stamp or other duties payable on the issue of Units under this Plan. As individual circumstances and laws vary considerably, specific taxation advice should be obtained by the Participant.

  17. Governing law and jurisdiction

    The Plan shall be governed by and shall be construed in accordance with the laws of the State of Victoria and each Participant submits to the non-exclusive jurisdiction of the courts of that State.The Plan and its operation and the terms and conditions contained in the document are governed by the provisions of the Constitution and the Corporations Act 2001 (Cth).

  18. Acknowledgements

    By applying to participate in the Plan, Unitholders:

    1. acknowledge that neither the Responsible Entity or the Registry have provided Unitholders with investment, financial product, taxation or other advice concerning the Unitholder’s decision to apply to participate in the Plan and that neither the Responsible Entity or the Registry has any obligation to provide such advice; and
    2. acknowledge that the responsible entity may in its absolute discretion reject any Application, without being bound to give any reason for doing so.
  19. Terms and Conditions to bind Unitholders

    These Terms and Conditions shall be binding upon every Unitholder.

General Advice Warning: This information is of a general nature only and does not take into account your objectives, financial situation or needs. You should consider the Product Disclosure Statement (dated 4 July 2018) issued by Plantation Capital Limited ACN 133 678 029 AFSL 339481 in deciding whether to acquire an interest in the Passive Income (USA Commercial Property) Fund. PropertyInvesting.com Pty Ltd is an authorised representative of Plantation Capital Limited ABN 98 096 059 353, AFSL 339481. Past performance is not a guarantee of future performance.