SDOT2 Product Disclosure Statement - Stockland

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the Responsible Entity may be required to raise
additional equity to reduce the level of the new loan
facilities held by the Trust. This may impact the returns
achieved by Investors and the amount of Trust
distributions.
Westpac will provide the Bank Loan to the Trust. In
the event that there is a Change of Control of the
Trust or a change in the Responsible Entity, then the
facilities provided by Westpac may be terminated. It
is market practice and a matter of prudent credit
standards that the provider of the Bank Loan has the
option to terminate it where there is a Change of
Control of the Trust.
The other key default events under the Bank Loan
include:
- termination or winding up of the Trust;
- a capital distribution or reduction of capital made
from the Trust’s assets without the consent of the
Financier; and
- a default under any other material contract relating
to the Offer.
Property vacancy
The Financial Forecasts assume that Optus will
remain the tenant of the Property until lease expiry.
There are three leases of 14, 15 and 16 years
respectively. Each lease is for two of the six
Buildings. Optus can elect to vacate the Property
prior to the expiry of the leases without fully
compensating MPT under the following
circumstances:
- Partial termination - Optus has the right to
surrender Building A (including 356 undercover
and 18 uncovered car spaces) after providing not
less than 18 months' prior written notice. In the
event that this option is exercised, the lease
applicable to Buildings A and B will be varied to
apply only to Building B with appropriate
adjustments in rent and outgoings made in
proportion to the surveyed areas of Buildings A
and B. Optus will hand back the exclusive
common area and pay for works associated with
separating the two Buildings and make good
Building A; and
- Default by the lessor - Termination following a
default by MPT under the Optus Lease.
In the event of termination or partial termination, the
vacant space may:
- not be re-let;
- be re-let on less favourable terms to MPT and/or
require the payment of an incentive to the
incoming tenant;
- be let to a number of tenants which requires more
area to be used as common area where no rent is
payable; or
- be let to a tenant with a lower financial standing
than Optus.
Any of these scenarios will detrimentally affect
distributions to Investors.
Insurance
The Responsible Entity will endeavour to maintain, or
cause MPT to maintain, adequate insurance for the
Property. However, the availability of appropriate
insurance cannot be known with certainty.
There are a number of exclusions to many insurance
policies which are typical for commercial properties
including war, nuclear/biological perils, care custody
and control, and contamination/remediation.
In the event of damage to the Property as a result of
one of the above exclusions, under the Optus Lease,
MPT (of which the Trust will own 49%) will be liable
for the rectification and replacement of the assets.
Any such costs may have an impact on the
distributions and returns to Investors.
At and from Lease Commencement, MPT will
endeavour to insure the Property, however the
availability of appropriate insurance cannot be known
with certainty. Insurance costs will be borne by Optus
under the Optus Lease.
Environmental factors
The Property is currently being developed, which
involves the demolition of existing buildings on the
Property, excavation of certain areas of the Property
for the basement car parking, and the construction of
the Buildings. Stockland Development, as developer
of the Property, is responsible for the environmental
risk until the date of Lease Commencement.
After Lease Commencement, MPT is responsible for
the environmental risk on the Property, unless it was
caused by Optus. The Trust will own 49% of the
Ordinary Units in MPT after Lease Commencement.