SDOT2 Product Disclosure Statement - Stockland

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36 7. About Stockland (cont.) - Optus currently has an Agreement for Lease with STML as trustee for Property Trust of Australasia, which is in the process of being novated to MPT. The Agreement for Lease was negotiated on the basis that Stockland Trust would be the developer and owner. There are certain obligations in the Agreement for Lease which a third party purchaser (such as MPT) would not normally assume. Stockland Development, under the Turn-Key Development Deed, is therefore guaranteeing: (i) costs and incentives associated with the Agreement for Lease (thereby placing MPT in a position of acquiring a new building from a developer and separating the obligations of the developer from that of the owner); and (ii) to the Trust only, the Trust's share of the difference between the actual rent payable by Optus and the rent based on 84,000 sqm of Building area under the Optus Lease (in the event that the Building area is less than 84,000 sqm, but more than 79,800 sqm). In the event that less than 79,800 sqm has been built (a 5% tolerance level), then Optus has the right to terminate the Agreement for Lease, in which case the Trust will be wound up and Investors will receive their Application Monies back in full as described in Sections 7.7.2 and 7.7.3; and - Stockland Development will guarantee the licence fee of $80,752 per annum (which is subject to rental reviews on the same basis as the Optus Lease) in relation to car parking spaces that may be occupied by a tenant of a neighbouring Stockland owned property at 16 Giffnock Avenue, and who has been granted a sub-lease by MPT over part of the Property. Section 5.7 provides more detail on this matter. 7.7.2 Stockland Trust guarantee If the Optus Lease does not commence by 1 July 2008 (which allows for one year beyond the scheduled completion date) or such longer period as approved by Investors by Special Resolution, then the Trust will be wound up. In order to effect the termination, MPT will repay the loan by the Trust by either issuing ordinary units in MPT to Stockland Trust or borrowing funds from Stockland Trust which will thereafter retain 100% ownership of the Property. MPT reserves the right to repay the loan from the Trust (which then obligates Stockland Trust to subscribe for further ordinary units in MPT or provide a loan to MPT equal to the face value of the loan by the Trust) at any time until 1 July 2008 if Stockland Development, in its reasonable opinion, advises MPT that Lease Commencement cannot be achieved by 1 July 2008. 7.7.3 Stockland Corporation indemnity If the Trust is wound up as a result of the Optus Lease not having commenced by 1 July 2008 or such longer period as approved by Investors by Special Resolution, Stockland Corporation will indemnify the Trust to prevent any shortfall in the return of the Application Monies to Investors from terminating the Trust. This indemnity will include any costs associated with the early termination of interest rate swaps entered on behalf of the Trust. Investors will not be entitled to interest on their Application Monies but will be entitled to retain any distributions paid by the Trust up to the date of repayment. Stockland Corporation is also providing an indemnity to the interest rate swap counterparty until such time as the counterparty to the swap receives security over the assets and undertaking of the Trust. This is expected to occur on or shortly after Final Allocation. 7.7.4 Stockland Trust loan A loan is proposed to be provided by Stockland Trust to MPT to assist MPT with the acquisition of Paul Street North (which is intended to be part of the Property but is currently owned by the Crown and the NSW Roads and Traffic Authority). These arrangements are discussed in more detail in Section 5.6. The loan, including capitalised interest, will be repayable on Lease Commencement. The consideration for the development of the Buildings paid by MPT to Stockland Development under the Turn-Key Development Deed will effectively reduce by the amount of the bullet repayment (both principal and interest).
37 7.8 Corporate governance and conflict resolution A corporate governance framework has been established by the Responsible Entity to protect the interests of Investors. This framework includes the following approach: - detailed disclosure in this PDS of the Stockland roles, agreements and fees in relation to the Trust and the Trust's Property Interest; - a comprehensive due diligence process for the Offer involving independent legal, tax, accounting and property valuation experts; The directors of the Responsible Entity have a fiduciary duty to act in the best interests of Investors in relation to decisions affecting the Trust. One of the directors of SFML and STML, Graham Bradley, is also a director of Singapore Telecommunications Limited which is the ultimate parent company of Optus. Mr Bradley has declared his conflict of interest and not been involved in the negotiations, nor voted on any board decisions, in relation to the Optus Lease or the development of the Property. - documented and formally approved and executed agreements between Stockland and the Trust, with separate independent legal advice obtained by the Responsible Entity on behalf of the Trust; - the board of the Responsible Entity including two of five directors that are independent of Stockland; - compliance monitoring by the Compliance Committee in accordance with the Corporations Act and the Compliance Plan, and review procedures by Stockland's internal compliance unit in respect of the conduct of other Stockland entities generally; and - a requirement for the approval of all related party transactions by the board of the Responsible Entity to be by unanimous vote, including the independent directors. Any Stockland executive directors are excluded from voting on such transactions.
Page 1 and 2: Optus at Macquarie Park Stockland D
Page 3: Dear Applicant On behalf of Stockla
Page 6 and 7: 02 What you need to do Applicants w
Page 8 and 9: 04 1. Key Investment Features (cont
Page 14 and 15: 10 2. Details of the Offer (cont.)
Page 16 and 17: 12 2. Details of the Offer (cont.)
Page 18 and 19: 14 3. The Trust (cont.) 3.2 Bank Lo
Page 20 and 21: 16 3. The Trust (cont.) If the Orig
Page 22 and 23: 18 3. The Trust (cont.) 3.8 Taxatio
Page 24 and 25: 20 4. Instalment Receipts (cont.) I
Page 26 and 27: 22 4. Instalment Receipts (cont.) 4
Page 28 and 29: 24 5. The Property 5.1 Description
Page 30 and 31: 26 5. The Property (cont.) 5.3 The
Page 32 and 33: 28 6. The Leases and the Tenant 6.1
Page 34 and 35: 30 6. The Leases and the Tenant (co
Page 36 and 37: 32 7. About Stockland (cont.) 7.2 S
Page 38 and 39: 34 7. About Stockland (cont.) Tony
Page 42 and 43: 38 8. Financial Information 8.1 Int
Page 44 and 45: 40 8. Financial Information (cont.)
Page 56 and 57: 52 9. Fees 9.1 Fees and other costs
Page 58 and 59: 54 9. Fees (cont.) 9.2 Additional e
Page 60 and 61: 56 9. Fees (cont.) 9.2.3 Interest a
Page 62 and 63: 58 10. Risk Factors 10.1 Introducti
Page 64 and 65: 60 10. Risk Factors (cont.) To the
Page 66 and 67: 62 10. Risk Factors (cont.) Given t
Page 68: 64 11. Valuation Report
Page 72: 68 12. Financial Services Guide and
Page 76 and 77: 72 12. Financial Services Guide and
Page 78: 74 13. Taxation Report (cont.)
Page 82 and 83: 78 13. Taxation Report (cont.)
Page 84 and 85: 80 14. Legal Report for Superannuat
Page 86 and 87: 82 15. Additional Information (cont
Page 88 and 89: 84 15. Additional Information (cont
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86 15. Additional Information (cont
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94 16. Glossary Term A-GAAP A-IFRS
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96 16. Glossary (cont.) Term Financ
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98 16. Glossary (cont.) Term Specia
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100 Guide to the Application Form (
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102
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Page 2 J Bank account details for T
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Page 2 J Bank account details for T
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Stockland Funds Management Limited
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2. Privacy In order to be able to p
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SDOT2 Product Disclosure Statement - Stockland

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