office PROSPECTUS MACQUARIE OFFICE TRUST ARSN MACQUARIE PARK STREET TRUST ARSN

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1 office MACQUARIE OFFICE TRUST ARSN MACQUARIE PARK STREET TRUST ARSN PROSPECTUS Public Offer of RePS to Raise a Maximum of $90 Million

2 important notice Macquarie Office Management Limited ( Trust Manager ), the responsible entity of Macquarie Park Street Trust ( MPST ) and Macquarie Office Trust ( MOF ), is a wholly owned subsidiary of Macquarie Bank Limited. Investments in reset preference units in MPST ( RePS ) or Ordinary Units in MOF following Conversion of RePS, are not deposits with or other liabilities of Macquarie Bank Limited or of any Macquarie Bank Group company and are subject to investment risk including possible delays in repayment and the loss of income and capital invested. Macquarie Bank Limited and member companies of the Macquarie Bank Group do not guarantee any particular rate of return and do not stand behind the capital value and/or performance of MPST. MOF has certain obligations to RePS Holders in relation to the payment of distributions by MPST as outlined in the Guarantee. Neither the Trust Manager nor any member of the Macquarie Bank Group warrants the price at which RePS will trade on the Australian Stock Exchange ( ASX ). This Prospectus is for the issue of up to 900,000 RePS at a price of $100 each payable in full on Application. A copy of this Prospectus has been lodged with ASIC. ASIC and ASX take no responsibility for the contents of this Prospectus. The fact that ASX may admit MPST to its official list is not to be taken in any way as an indication of the merits of MPST. No RePS will be allotted or issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. Applications under this Prospectus will not be accepted by the Trust Manager prior to the opening of the Offer period, and in any case, until after expiry of the exposure period. The exposure period is generally seven days from the date of lodgement of this Prospectus with ASIC which may be extended by ASIC to a period of 14 days. Applicants should read this Prospectus in its entirety before deciding whether to participate in the Offer. If after reading this Prospectus, you have any questions about the Offer, you should contact your stockbroker, accountant or other professional adviser. Applications for RePS can only be submitted on original Application Forms attached to, or accompanying this Prospectus. Application Forms are only available with a Prospectus. Please refer to Section 3.2. Some terms used in this Prospectus have defined meanings. The Glossary in Section 13 defines these terms. The Trust Manager has authorised and caused the issue of this Prospectus. The Prospectus has been prepared by the Trust Manager based on information within its knowledge or provided to it by its advisers. RePS is a registered trademark of Macquarie Equity Capital Markets Limited. Disclaimer No person is authorised to give any information or to make any representation in connection with the Offer or the RePS described in this Prospectus or Ordinary Units upon Conversion of RePS which is not contained in this Prospectus. Any information or representation not so contained may not be relied upon as having been authorised by the Trust Manager in connection with the Offer. Overseas Investors This Prospectus does not and is not intended to constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. No action has been taken to register or qualify the RePS or the Offer, or to otherwise permit a public offering of RePS, in any jurisdiction outside Australia. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions.

3 Summary of Key Dates Event Date 1 Retail offer opens 26 November 2001 TPS unitholder meeting 10 December 2001 Institutional offer opens 12 December 2001 Institutional offer closes 14 December 2001 Retail offer closes 14 December 2001 Distribution, Minimum Conversion Number and Allocation Announcement 17 December 2001 Allotment of RePS 20 December 2001 RePS commence trading on ASX on a deferred settlement basis 2 21 December 2001 Despatch of RePS holding statements 2 7 January 2002 RePS trading on ASX on a normal settlement basis 2 8 January 2002 First Quarter for Distribution Payment 31 March 2002 Notes: 1. These dates are indicative only and are subject to change. The Trust Manager has the right in its discretion with the consent of the Lead Manager, to close the Offer early or to extend the Closing Date of the Offer without notice or to change any other date. If the Closing Date of the Offer is extended, the subsequent dates may also be extended accordingly. Investors are encouraged to submit their Application Forms as soon as possible after the Offer opens. 2. Application will be made to ASX for official quotation of the RePS, within seven days after the date of this Prospectus. These dates are indicative only and depend on ASX approving this application. For any enquiries concerning the Offer, please contact your stockbroker, accountant or other professional adviser or Ask Macquarie on (local call cost). This Prospectus is dated 16 November Citigroup Centre, Sydney 1

4 2 contents

5 Contents Summary of Key Dates 1 Chairman s Letter 4 1Offer Summary 5 2Details of the Offer 9 3 How to Invest in RePS 13 4 Answers to Key Questions 15 5Macquarie Park Street Trust 19 6Macquarie Office Trust 22 7Financial Information 28 8Risk Factors 33 9Taxation Material Contracts Additional Information Terms of RePS Glossary Application Forms Corporate Directory 65 3

6 Chairman s Letter 16 November 2001 Dear Investor On 8 November 2001, Macquarie Office Trust ( MOF ) and General Property Trust ( GPT ) announced an offer to acquire additional units in 2 Park Street Trust ( TPS ) for $4.05 cash per TPS unit to take their holdings from 17.8% and 16.4% respectively, to 50% each. The joint MOF and GPT offer is to be effected by an informal scheme which is subject to a TPS unitholders vote on 10 December On behalf of the Board of Macquarie Office Management Limited, I am pleased to offer you this opportunity to invest in Macquarie Park Street Trust ( MPST ). MPST is a subtrust of MOF and will hold the 50% interest in TPS. MPST will partially finance the acquisition through an issue of equity in the form of reset preference units ( RePS ) raising up to $90 million. MPST proposes to issue up to 900,000 RePS at an Issue Price of $100 each, with priority allocation being made available to MOF Unitholders in the event of excess demand. The minimum investment in RePS for applicants is $5,000. If the scheme is approved by TPS unitholders, the proceeds of the RePS issue will be used to assist MPST in funding the acquisition of a further 32.2% interest in TPS to take MPST s total holding to 50%. The balance of the funding required by MPST for the acquisition is being provided by equity and debt from MOF. The RePS are being issued out of a subtrust, MPST, to enhance the funding structure. Key features of the RePS include: Major tenants include Citigroup, Gilbert & Tobin and Zurich Capital Markets. The Citigroup Centre was independently valued for TPS at $560 million as at 30 June 2001 and was independently valued for MOF and GPT at $535 million as at 30 September MOF s cost for 50% of TPS to be held by MPST will be approximately $254 million. The issue of RePS will diversify MOF s equity capital base and will provide funding for the acquisition at a lower cost of capital than the issue of ordinary equity in MOF. This Prospectus contains details of the Offer, the terms of the RePS and a description of some of the risks associated with an investment in the RePS. It also outlines the effect on MOF and MPST. As the RePS may convert to Ordinary Units, this Prospectus also contains information in relation to MOF and its Ordinary Units. Please read this Prospectus carefully before deciding whether to invest. If there is any matter on which you require further information or if you are uncertain as to whether RePS are a suitable investment for your purposes, you should consult your stockbroker, accountant or other professional adviser. On behalf of the Board of Macquarie Office Management Limited, I commend this investment opportunity to you. Yours faithfully Macquarie Office Management Limited preferred distribution a non-cumulative fixed distribution of at least 7.25% per annum, paid quarterly, for an initial period of approximately five years; conversion into Ordinary Units opportunity to convert the RePS into Ordinary Units at a 5% discount to the Ordinary Unit price or equivalent cash value at the Reset Date; and David Clarke, AO Chairman participation in growth participation in any increase in the Ordinary Unit price above at most $1.50. TPS s major asset, the Citigroup Centre, is a landmark office tower located in the Sydney CBD, which was completed in July This premium quality building includes 41 office levels with a net total lettable area of 74,090 square metres as well as parking for 256 cars and is currently 89% leased. The Citigroup Centre has an average unexpired lease term of 10 years. 4

7 1. Offer Summary The Trust Manager proposes to raise up to $90 million through the issue of RePS. Set out below is a summary of the key terms and conditions of the RePS. This information is a summary only, and should be read in conjunction with other information contained in this Prospectus. Issuer Macquarie Park Street Trust ( MPST ), a subtrust of Macquarie Office Trust ( MOF ). Guarantor MOF. Security RePS. Issue Size Up to 900,000 RePS, with a minimum of 250,000. Issue Price $100, with each RePS having a Face Value of $100. Minimum Application 50 RePS ($5,000) and thereafter in multiples of five RePS ($500). Listing Application will be made to ASX for official quotation of the RePS. Distribution Rate A preferential non-cumulative distribution fixed until the first Reset Date (being a date in the 12 month period to 31 December 2006) at the higher of: 7.25% per annum; or the Bookbuild Distribution Rate (the indicative range is 7.25% to 8.0%) per annum, payable quarterly in arrears in respect of the quarters ending 31 March, 30 June, 30 September and 31 December each year. Payment will be made on the last Business Day of the month following the end of each quarter. The first quarter end is 31 March This distribution will include the accrued distribution from the Allotment Date to 31 December The Distribution Rate may be increased or decreased on Reset Dates (the first Reset Date being in the 12 month period to 31 December 2006). Tax Advantaged Distribution The RePS distribution is expected to be on average 90% tax advantaged over the period to 31 December MOF Guarantee Payment of RePS distributions is dependent on there being amounts available for distribution in MPST. A subordinated guarantee exists between MOF and a security trustee for registered holders of RePS ( Holders ) such that in the event that MPST has insufficient amounts available to pay the distribution, MOF will be required to pay to the Holders an amount equal to the shortfall. The amount that MOF is required to pay under the Guarantee in respect of distributions will not be greater than the net income that MOF has available to distribute to MOF Unitholders. In addition, in the event of termination or winding up of MPST, if the amount of the capital returned to Holders is less than the Face Value, MOF will pay Holders an amount equal to the shortfall. The obligations of MOF under the Guarantee are subordinated to all creditors of MOF, but rank ahead of MOF Unitholders. Holder Conversion During the 12 month period to 31 December 2006, the Trust Manager must issue a Reset Notice specifying the new RePS terms to apply from the first Reset Date. Investors not wishing to retain their RePS may request Conversion. Where investors elect to convert, the Trust Manager will, at its election: 1. convert the RePS into Ordinary Units; or 2. purchase the RePS for cash; or 3. arrange that the RePS be acquired by a third party and that the proceeds be paid to the Holder. If option 2 or 3 is chosen by the Trust Manager, the cash amount received by the Holder will be at least equal to the value of Ordinary Units that would have been received under option 1. Full details are set out in Section 12. Holders may request Conversion in certain other circumstances as outlined in Section 12 (3.1 and 3.2). If a Holder elects Conversion, the minimum number of RePS that may be converted is 50. Trust Manager Conversion During the 12 month period up to 31 December 2006, the Trust Manager may issue a Conversion Notice forcing Conversion (or purchase at an equivalent value). This right can still be exercised when a Holder has not requested Conversion. Additionally, the Trust Manager may convert or purchase the RePS as outlined in Section 12 (3.3). 5

8 Conversion Ratio Where the Trust Manager elects to convert or where a Holder elects to convert either on a Reset Date, or subsequent to either the announcement of new reset terms or a Trigger Event then, when Conversion is to occur, each RePS will convert into a number of Ordinary Units calculated generally with reference to the Conversion Discount and the volume weighted average sale price of Ordinary Units traded on ASX during the 25 Business Days immediately preceding the date of Conversion. The number of Ordinary Units issued on Conversion will be at least equal to the Minimum Conversion Number. The Minimum Conversion Number will be the higher of: 70; and the Bookbuild Conversion Number (the indicative range is 70 to 75). For example, if a Holder converts at a Reset Date and the weighted average sale price (as calculated above) is $1.50 then Holders will receive 70 Ordinary Units, being $100 divided by $1.50, discounted by 5%. If a Holder elects to convert after 20 December 2003, other than in the above circumstances, on Conversion they will receive the Minimum Conversion Number of Ordinary Units for each RePS. More information on the Minimum Conversion Number is contained in Section 2.5. Conversion Discount 5%. Reset Dates Certain terms including the Distribution Rate and Conversion may be reset on each Reset Date. The first Reset Date will be in the 12 month period to 31 December Ranking In a winding up of MPST, RePS will rank for repayment of $100 per RePS and any distribution entitlement behind all creditors of MPST but ahead of ordinary units in MPST. The Guarantee will apply if there is a shortfall, but subject to the terms of the Guarantee. Participation Prior to Conversion, Holders do not have a right to participate in issues of securities to, or capital reconstructions affecting, MOF Unitholders. However, the Minimum Conversion Number will be adjusted for rights issues, bonus issues and capital reconstructions of MOF to the extent MOF Unitholders are offered rights issues and bonus issues and Holders are not offered Ordinary Units at the same price in a comparable ratio. Voting Rights Holders are entitled to vote at meetings of MPST unitholders and are entitled to receive notices of meeting and other documents in relation to meetings of MOF. Holders are not entitled to vote at meetings of MOF. Citigroup Centre, Sydney 6

9 Macquarie Office Trust a Leading Investor in Office Property MOF is a listed sector-specific office trust, with total assets of $1.08 billion as at 30 June 2001 and net operating income of $65.3 million for the year ended 30 June Net income $ m Growth in Net Operating Income MOF invests in a portfolio of office buildings, underpinned by a secure income stream. Annual Distribution per Ordinary Unit Cents MOF is listed on ASX and based on the closing Ordinary Unit price on 12 November 2001 of $1.26, MOF had a market capitalisation of $892 million. MOF Asset Growth 1,200 1,000 1,077 $ m MOF has a strong financial profile with a gearing ratio (debt to total assets) of 28.1% and interest cover ratio of 4.6 times earnings as at 30 June Gearing and Interest Cover Ratio Profile % 32.1% 29.7% 29.3% 28.1% per cent /6/97 Gearing 30/6/98 30/6/99 30/6/00 Interest Cover Ratio 30/6/01 7

10 MOF holds investments in 21 quality properties located in Australia s capital cities and major regional centres, with investments in 16 distinct office markets. Following the acquisition of a further 32.2% of TPS units, MOF will have: A high quality tenant profile, with 71% of income derived from government and investment grade corporate tenants. An occupancy rate of 99% for the property portfolio (including rental guarantees) and an average unexpired lease term of 4.7 years. Citigroup Centre, Sydney 8

11 2. Details of the Offer 2.1 Purpose of the RePS Issue All proceeds of the RePS Issue will be applied to partly fund the acquisition by MPST of a further 32.2% of TPS units (being 26,856,769 TPS units) at a price of $4.05 per unit at a cost of $108.8 million. In the event that the scheme is not approved by TPS unitholders and the acquisition of additional TPS units does not proceed, a maximum of $50 million will be raised to finance the acquisition of 17.8% of TPS units already held by MPST. 2.2 Trust Structure A summary of the structure is as follows: Macquarie Office Management Limited Responsible Entity Macquarie Office Trust Guarantee 100% of Ordinary Units Responsible Entity Macquarie Park Street Trust RePS Holders 50% 2 Park Street Trust 100% Citigroup Centre 9

12 2.3 Structure of the Offer 900,000 RePS, each with a Face Value of $100, are offered for subscription under this Prospectus. The RePS will be offered to retail investors and Australian institutions. Institutions will be invited to submit bids for RePS in an open price Institutional Bookbuild, managed by the Lead Manager. The minimum investment for applicants is $5,000. Applications from both retail and institutional investors will be made at the Face Value of $100 per RePS. The final terms of the RePS will include the fixed distribution payable by MPST in respect of each RePS, and the Minimum Conversion Number of Ordinary Units into which the RePS may convert under the terms of the RePS. Both the Distribution Rate and the Minimum Conversion Number will be determined through the Institutional Bookbuild as described in Section 2.7, and the terms so determined will apply to all RePS. 2.5 RePS Minimum Conversion Number A Holder electing to convert into Ordinary Units will receive, for each RePS, at least the higher of: 70 Ordinary Units; or Bookbuild Conversion Number Determined by an Institutional Bookbuild (in the indicative range of 70 to 75 Ordinary Units). The Minimum Conversion Number is the minimum number of Ordinary Units a Holder will receive on Conversion. 2.4 RePS Distributions A Holder will receive a preferential non-cumulative distribution fixed until the Reset Date, of the higher of: Minimum Distribution Rate Bookbuild Distribution Rate 7.25% per annum; or Determined by an Institutional Bookbuild (in the indicative range of 7.25% to 8.0% per annum). The RePS distribution is expected to be on average 90% tax advantaged over the period to 31 December The tax advantaged component of each distribution will not be included in the Holder s assessable income. The cost base of the RePS to which the distribution relates will be reduced by the amount of the tax advantaged component. For details, refer to Sections 5 and Citigroup Centre, Sydney

13 2.6 Allotment and Allocation Policy The Lead Manager has the right, in consultation with the Trust Manager, to nominate the persons to whom the RePS will be allocated, including allocations to institutional investors and brokers for their private clients. The distribution of any firm allocation to clients by a broker will be at the discretion of that broker, will not be scaled back, and will be subject to the terms and conditions of the relevant offer made by the Lead Manager. If demand for RePS exceeds 900,000, the Trust Manager, in consultation with the Lead Manager, will scale back the Applications. The Trust Manager and the Lead Manager reserve the right to reject any Applications, or to allocate any applicant a lesser number of RePS than that applied for, including less than the Minimum Application. If an Application is not accepted, or is accepted in part only, the relevant part of the Application Monies will be refunded to the applicant as soon as practicable after the Offer closes. No interest will be payable on the refunded Application Monies. 2.7 Institutional Bookbuild The Institutional Bookbuild is expected to commence at 9.00 am (Sydney time) on 12 December 2001 and to finish at noon (Sydney time) on 14 December Bidding institutions may only submit bids in to the book through the Lead Manager. Bids can be withdrawn or amended at any time up to the close of the bookbuild period. Any bid still current at the close of the bookbuild will be irrevocable, legally binding and capable of acceptance in whole or in part. 2.8 MOF Unitholder Priority Allocation If there is excess demand, MOF Unitholders registered at 7.00 pm (Sydney time) on 19 November 2001 who submit a yellow Application Form will receive priority allocation. 2.9 Conditional Offer The RePS issue for $90 million will not proceed unless TPS unitholders approve the acquisition of TPS units by MPST. However, the Trust Manager will accept subscriptions for up to $50 million (with a minimum of $25 million) in the event that TPS unitholders do not approve the acquisition and MPST still holds at least 17.8% of TPS. In this set of circumstances, the proceeds will be used to finance the 17.8% of TPS units already held by MPST. If the RePS issue does not proceed at all, applicants will be posted a refund cheque as soon as practicable. No interest will be payable on the Application Monies Provision of Holding Statements The Trust Manager will apply for RePS to participate in CHESS. No unit certificates will be issued. Each Holder will be provided with a statement of holding which sets out the number of RePS held. Statements of holding for the RePS issued pursuant to this Prospectus are expected to be despatched on or before 7 January The Lead Manager will determine the allocation of RePS among bidders in the Institutional Bookbuild. There is no assurance that any investor lodging a bid in the Institutional Bookbuild will be allocated any RePS or the number of RePS for which it has bid. Allocations are expected to be advised to successful bidders on or before 17 December 2001 with allotment on 20 December

14 2.11 ASX Listing Application will be made to ASX for of ficial quotation of the RePS, within seven days after the date of this Pr ospectus. If quotation is not granted, the RePS will not be issued and all Application Monies will be r efunded, without inter est, to applicants. It is the r esponsibility of each applicant to confirm their holding prior to trading in the RePS. Applicants who sell RePS before they receive their Holder statements will do so at their own risk Deferred Settlement Trading It is expected that trading of the RePS on ASX will c ommence on a deferr ed settlement basis on 21 December 2001 following announcement of allocations, and will continue on that basis until 7 January This is because trading will take place before entries ar e made in CHESS in r espect of holdings of the RePS and befor e holding statements ar e sent out to successful applicants. On 7 January 2002, the T rust Manager expects to despatch Holder statements under CHESS as Issuer Sponsor ed Statements, which will set out the number of RePS issued to each successful applicant. Avaya House, North Ryde 12

15 3. How to Invest in RePS 3.1 When to Apply The Offer will open at 9.00 am (Sydney time) on 26 November 2001, and is expected to close at 5.00 pm (Sydney time) on 14 December Applications must be received at ASX Perpetual Registrars Limited by no later than 5.00 pm (Sydney time) on 14 December The Trust Manager may close the Offer early or extend the Closing Date without notice. Investors are encouraged to submit their Application Forms as soon as possible after the Offer opens. If the Closing Date is varied, subsequent dates may also be varied accordingly. 3.2 How to Apply To apply for RePS, you must complete the correct Application Form either within or accompanying this Prospectus in accordance with the instructions set out on the back of the Application Form. Your completed Application Form and payment should be returned to the address set out in Section Macquarie Office Trust Unitholders If there is excess demand, Applications from investors registered as a MOF Unitholder at 7.00 pm (Sydney time) on 21 November 2001 will receive priority allocation over public applicants (who do not have a broker firm allocation). You should receive a yellow personalised Application Form in addition to this Prospectus. You must use the yellow personalised Application Form to ensure that you receive your MOF Unitholder priority, rather than the Application Forms in Section 14. If you misplace your personalised Application Form, please contact ASX Perpetual Registrars Limited on (local call cost) to request a replacement. 3.4 Other Applicants If you were not registered as a MOF Unitholder at 7.00 pm (Sydney) time on 21 November 2001, you should use the blue Application Form attached to this Prospectus in Section Where to Send your Completed Application Form Completed Application Forms (excluding Applications for institutional investors and broker firm allocations) and accompanying cheque(s) or money order(s) must be mailed to: Macquarie Park Street Trust c/- ASX Perpetual Registrars Limited Level George Street Sydney NSW 2000 Locked Bag A14 Sydney South NSW Application Forms and accompanying cheque(s) or money order(s) will not be accepted at the Trust Manager s office. Please see Section 3.7 for details on broker firm allocations. 3.6 Payment Application Forms, duly completed, must be accompanied by a cheque(s) or money order(s) in Australian dollars drawn on an Australian branch of a financial institution. Cheques should be crossed not negotiable and made payable to Macquarie Park Street Trust RePS Offer Account. Clients of brokers with firm allocations should refer to their adviser for settlement instructions. Please see Section 3.7 for details on broker firm allocations. 13

16 3.7 Broker Firm Allocations If you have received a firm allocation of RePS, your Application and payment procedures will differ in two important respects from those described above: your cheque or money order must be made payable to the broker (not to Macquarie Park Street Trust RePS Offer Account); your completed Application Form and cheque or money order must be delivered to the broker directly (not to ASX Perpetual Registrars Limited). These differences, and any other requirements, will be explained to you by your broker. If you have a firm allocation of RePS and are in any doubt about what action you should take, you should immediately contact the broker who has made you an offer of firm allocation. 3.8 Minimum Application The Issue Price for each RePS is $100. Applications must be for a minimum of 50 RePS equating to $5,000. Applications made in excess of $5,000 must be made in multiples of $ Handling Fee A handling fee of 1% of the Application Monies paid for RePS pursuant to the Offer will be paid to participating organisations of ASX and members of the Financial Planning Association up to a maximum of $250 per individual Application on Applications bearing their stamp from MOF Unitholders who receive a yellow personalised Application Form. However no handling fee is payable on Applications by any investor who uses the blue Application Form Enquiries If you require assistance to complete the Application Form, or require additional copies of this Prospectus, please Ask Macquarie on (local call cost). If you are unclear in relation to any matter or are uncertain if RePS are a suitable investment, you should contact your stockbroker, accountant or other professional adviser. By returning an Application Form, the applicant acknowledges that they have received and read this Prospectus in its entirety. 3.9 Brokerage and Stamp Duty No brokerage or stamp duty is payable on the allotment of RePS by investors who apply using the correct Application Form Refunds If you are allocated less than the number of RePS you applied for, you will be posted a refund cheque for the relevant part of the Application Monies as soon as practicable after the closing date of the Offer. No interest will be payable on Application Monies refunded. 14 The Denison, North Sydney

17 4. Answers to Key Questions The purpose of this Section is to answer some of the questions which prospective investors may have about RePS. These answers are intended as a guide only. Further details are provided elsewhere in this Prospectus, which you should read in its entirety. The terms of issue of the RePS are set out in full in Section What are Macquarie Park Street Trust RePS? RePS are a class of MPST units. Holders will be entitled to a fixed distribution from MPST which is non-cumulative, except in limited circumstances. The distribution is set for a period of five years, after which, new terms regarding the RePS will be set. 4.2 What distributions will I get? Holders will receive a Distribution Rate as determined by the Institutional Bookbuild. However, the Distribution Rate will be not less than 7.25%. The Distribution Rate is expected to be announced on or before 17 December This distribution entitlement is subject to there being either amounts in MPST available to pay distributions or a payment due under the Guarantee. The amounts available for distribution comprise the net income of MPST and such amounts from the capital of MPST, as the Trust Manager in its discretion determines, are available for distribution to Holders. The Guarantee provides that where MPST has insufficient amounts available to pay the distribution to Holders, MOF will make a payment to Holders equivalent to the distribution shortfall, but this payment may not exceed the amount of net income MOF has available to distribute to MOF Unitholders for the relevant period. The Distribution Rate may be reset by the Trust Manager between 31 December 2005 and 31 December 2006 and, following this, on specified Reset Dates. This reset Distribution Rate may be above or below the initial or subsequent distribution rate. On Reset Dates, Holders may convert the RePS in accordance with the terms of issue. 4.3 When will distributions be paid? Subject to the conditions described below, distributions will be payable in respect of the quarters ending 31 March, 30 June, 30 September and 31 December each year. Distributions will be payable on the last Business Day of the month following the end of the relevant quarter. The first distribution will be payable in respect of the quarter ending 31 March 2002 and will include the accrued distribution from the Allotment Date to 31 December What are tax advantaged distributions? Distributions made on RePS from capital will not be included in the Holder s assessable income. The cost base of the RePS will be reduced by an amount equivalent to this tax advantaged component. This tax advantaged component of the RePS distribution is expected to average 90% over the period to 31 December Will distributions always be paid? A RePS is not a debt instrument, and distributions are not the same as interest payments. To the extent that there are insufficient amounts in MPST, MOF will make a payment to Holders of an amount equal to the distribution shortfall. The amount of this payment under the Guarantee is limited to the amount of distributable net income available to MOF Unitholders. Payments under the Guarantee will not have a tax advantaged component. Where there is a shortfall on payment of a distribution, MPST or MOF may pay the shortfall (as well as the payment of the RePS distribution for the current quarter) in a quarter in the same financial year or the subsequent financial year when surplus amounts for distribution become available. These amounts will be paid to the Holder at the time the shortfall payment is made. However, distributions are generally non-cumulative, and if a distribution, or part of a distribution, is not paid by the end of the next financial year it will not be paid at all. 15

18 4.6 What happens on Reset Dates? At least 45 Business Days before a Reset Date, the Trust Manager must issue a Reset Notice specifying the new RePS terms to apply for the next period. Upon receiving the Reset Notice, Holders may elect to convert their RePS, or to retain their RePS subject to the new terms. If a Holder chooses to convert, the Trust Manager may instead purchase or arrange for a third party to purchase the RePS at an equivalent price. Alternatively, the Trust Manager may elect to convert or purchase or arrange the purchase of the RePS during the 12 months prior to the Reset Date. If the Conversion Date specified in the notice is earlier than the Reset Date, the Reset Date will be brought forward to the Conversion Date. 4.7 When do Reset Dates occur? The first Reset Date will occur in the 12 months prior to 31 December At each Reset Date, the Trust Manager has the right to determine the timing of the following Reset Date. 4.8 When can Holders elect to convert? Holders may elect to convert at any time after 20 December 2003 in which case they will receive a number of Ordinary Units equal to the Minimum Conversion Number. Holders may also elect to convert on a Reset Date, or earlier following notice of a Trigger Event, in which case they will receive Ordinary Units calculated in accordance with a formula described in Section 4.10 and Section 12. If a Holder chooses to convert, the Trust Manager may instead purchase, or arrange for a third party to purchase, the RePS at an equivalent price. Citigroup Centre, Sydney 16

19 4.9 How do Holders elect to convert? Where Holders wish to convert, the Holder must give a Conversion Notice to the Trust Manager at least 35 Business Days before the intended date of Conversion What happens on Conversion? On Conversion, each of the RePS will convert into Ordinary Units that will rank equally in all respects with existing Ordinary Units from the Conversion Date. Except in circumstances where the Holder receives only the Minimum Conversion Number on Conversion, Holders will receive Ordinary Units with a value of at least $105. The number of Ordinary Units issued on Conversion will be not less than the Minimum Conversion Number. Holders will therefore participate in any increase in the average sale price of Ordinary Units above at most $1.50 (depending on the determination of the Minimum Conversion Number). For example, if a Holder converts at a Reset Date and the weighted average sale price is $1.50, then Holders will receive 70 Ordinary Units, being $100 divided by $1.50, discounted by 5% Can the Trust Manager purchase the RePS in lieu of Conversion? RePS can be purchased by the Trust Manager in lieu of Conversion. The RePS will be purchased at the higher of: (a) (b) Face Value divided by (100% Conversion Discount); and 101% of Ordinary Units VWAP x Minimum Conversion Number. Therefore, the cash received is dependent on the price of Ordinary Units. Holders will receive at least $105 per RePS. If the Holder has issued a Conversion Notice and MPST elects to have the RePS acquired by a third party, the Holder will receive the same cash amount as if purchase by the Trust Manager had occurred Will I be able to request repayment of my investment? Holders will have no right to require MPST to repay the money originally paid for the RePS except in a winding up of MPST. On Reset Dates, and in certain circumstances prior to Reset Dates and at any time after 20 December 2003, Holders may elect to convert their RePS into Ordinary Units In a winding up, what will Holders receive? In the event of a winding up of MPST, Holders will be entitled to a return of capital of the Face Value of the RePS after all creditors and other liabilities of MPST have been paid. MOF has guaranteed the payment of Face Value to Holders. This Guarantee is subordinated to creditors of MOF but ranks ahead of MOF Unitholders. Under the Guarantee, RePS Holders will rank ahead of MOF Unitholders in a winding up to the extent of the Face Value of the RePS. In the event of a shortfall of funds in MPST on a winding up, there is a risk that Holders will not receive a full return of capital or distribution entitlement on the RePS Can RePS be purchased or sold on ASX? The Trust Manager will apply for the RePS to be officially quoted on ASX. Once quoted, the RePS can be purchased or sold through any stockbroker When can the Trust Manager force Conversion? The Trust Manager has the right to force Conversion: on a Reset Date; if a Trigger Event occurs (adverse change in tax law, takeover offer or scheme of arrangement or MPST ceases to have an indirect interest in the Citigroup Centre); if the number of RePS on issue falls below 150,000; or if a meeting of the members of MPST is called or requisitioned by members to replace the Trust Manager, terminate MPST or amend the constitution of MPST What are the taxation implications of holding or selling RePS? The taxation implications of investing in RePS will depend on an investor s individual circumstance. MOF Unitholders and prospective investors should obtain their own taxation advice. A summary of some of the relevant matters appears in the letter from Mallesons Stephen Jaques to the Trust Manager set out in Section 9. 17

20 4.17 Do RePS having voting rights? Holders are entitled to vote at meetings of MPST unitholders and are entitled to receive notices of meeting and other documents in relation to meetings of MOF. Holders are not entitled to vote at meetings of MOF Is brokerage or stamp duty payable? No brokerage or stamp duty on the allotment of RePS is payable by investors who apply using the correct Application Form. RePS will be officially quoted securities and therefore will incur no stamp duty on sale Why are the funds being raised? The Offer is being made as part of the funding for the acquisition of a further 32.2% of TPS units at $4.05 per TPS unit, which acquisition will be put to a vote of TPS unitholders on 10 December What are the risks of investing in RePS? An investment in RePS will involve some risks. You should refer to Section 8 for further information. YOU SHOULD READ THE WHOLE OF THIS PROSPECTUS CAREFULLY. IF YOU ARE UNCLEAR IN RELATION TO ANY MATTER OR UNCERTAIN IF RePS ARE A SUITABLE INVESTMENT FOR YOU, YOU SHOULD CONSULT YOUR STOCKBROKER, ACCOUNTANT, OR OTHER PROFESSIONAL ADVISER. Naylor House, Adelaide 18

21 5. Macquarie Park Street Trust 5.1 Overview MPST is a subtrust of MOF that has been formed for the purpose of holding a 50% interest in TPS. On 8 November 2001, the Trust Manager announced its intention, on behalf of MPST, to acquire up to a further 32.2% of units in TPS, bringing MPST s holding to 50% of the units in TPS. General Property Trust ( GPT ) simultaneously announced its intention to purchase additional units so that it also owns 50% of units on issue in TPS. TPS is a listed property trust, whose only property investment is the Citigroup Centre at 2 Park Street, Sydney. The Citigroup Centre is a modern office building completed in July 2000 and located in the midtown precinct in the Sydney CBD with street frontages to George, Pitt and Park Streets. The building comprises 41 levels of office space, 256 car parking spaces, six levels of plant and the ground floor banking chamber with a total lettable area of 74,090 square metres. The building services and amenities housed within the office tower have been designed to conform to premium grade quality specifications. The main tenant, Citigroup, occupies 46% of the total net lettable area. The lease details of the major tenants are as follows: Tenanted % of Lease Major tenants area (sqm) NLA expiry Citigroup 34, Gilbert & Tobin 8, Sparke Helmore 4, Regus 3, Reach (Telstra joint venture) 3, Zurich Capital Markets 2, Other 8, Various Total tenanted area 65,871 Vacant (Levels 18, 42 45) 8, Total area 74, Car parking spaces 256 The building is prominently located opposite the Queen Victoria Building and is adjacent to Town Hall railway station. The building also houses a monorail station. In addition to the office tower, the Citigroup Centre complex includes the Galeries Victoria shopping centre; however, this is held on separate title and is not included in TPS. The Citigroup Centre was independently valued for MOF and GPT at $535 million as at 30 September MPST s cost for 50% of TPS will be approximately $254 million. Key features of the Citigroup Centre include: newly developed premium quality office building; quality tenancy profile; average unexpired lease term in excess of 10 years; centrally located in Sydney CBD; 84% of leases with market rent reviews (some capped); and opportunity to increase rental income from current 89% occupancy level. Square metres Citigroup Centre Lease Expiry Profile by Lettable Area 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5, % 7.4% 1.2% 1.3% 0% 1.0% 1.5% 3.1% 0% % 4.0%

22 Citigroup Centre Tenancies Plant Signage Citigroup Level Level Level Level Level Level Level Level Level Level Level Level Level Level Level Level Level Level Level Level 28 Plant Room Level 27 Plant Room Level Level Level Level Level Level Level Level Level Level Level Level Level Level Level Level Level Level Level Level Level Level Retail Zurich Multiple Tenancies Vacant Multiple Tenancies Citigroup Regus Gilbert & Tobin Multiple Tenancies Hickson Wisewoulds Multiple Tenancies Sparke Helmore Citigroup Ansett Worldwide Vacant Reach Citigroup Legend Sky rise High rise Parking Mid rise Low rise 20

23 5.2 Acquisition of TPS units The offer of $4.05 for a further 32.2% of TPS units (or $3.98 ex-distribution) will, if successful, result in MPST issuing RePS up to the value of $90 million. The RePS distributions will be paid out of MPST s 50% share of TPS s net income and the Guarantee from MOF. To the extent that MPST has income left over after paying Holders their distributions, it will pay a distribution to MOF. The acquisition of units in TPS by MPST and GPT needs to be approved by the unitholders of TPS and will be put to a vote on 10 December The acquisition by MPST of the additional units will be partly financed by the proceeds of the issue of RePS under this Prospectus, with the balance being provided in the form of debt and equity from MOF to MPST. MPST and GPT intend to de-list TPS following completion of the acquisition and appoint a newly-incorporated company jointly owned by the Trust Manager and GPT Management Limited as manager of TPS. Further details concerning the management of TPS are included in the Joint Ownership Agreement summary in Section 10. If the acquisition of units in TPS is not approved by TPS unitholders, and MOF has not announced an intention to sell its units in TPS, then MPST intends to limit the amount raised under this Prospectus to $50 million, subject to a minimum of $25 million. In this set of circumstances, the proceeds will be used to finance the 17.8% of TPS units already held by MPST. On completion of the acquisition of units in TPS, MPST and GPT intend to procure the retirement of existing TPS debt. MOF then intends to provide a non-interest bearing loan to MPST. Following the acquisition of a further 32.2% of TPS units and the refinancing of the current borrowings in TPS, MPST will have total assets of $287.6 million. This is funded by a noninterest bearing loan from MOF of $125.5 million and unitholders equity of $162.1 million comprising $73.5 million of Ordinary Units, $87.5 million of RePS and undistributed income of $1.1 million. Citigroup Centre, Sydney 21

24 6. Macquarie Office Trust 6.1 Overview MOF was established in October MOF s strategy is to invest in a portfolio of office buildings that offers a superior total return to MOF Unitholders, underpinned by a secure income stream. MOF s main objectives are to: seek property assets that provide a superior total return; sustain and improve income growth by maintaining a diversified portfolio of assets; Distributions are paid following the expiry of each quarter. A distribution reinvestment plan is currently in operation allowing Unitholders to reinvest their distributions at a 2.5% discount to the average volume weighted price of the Ordinary Units for the 10 days commencing from the ex-distribution date each quarter. MOF aims to utilise debt to reduce its average cost of funds and maintain an interest rate hedging profile which minimises interest rate exposure. overweight the portfolio to strengthening markets with prospects for superior rental growth; focus on major tenant renewals well before lease expiry; and maximise the investment return by preferring properties that represent good value for the level of risk, offer large floor plates to accommodate the needs of large space users, appeal to government and investment grade corporate tenants and are cost efficient. MOF has acquired a property portfolio which substantially meets the needs of larger office space users, which are usually characterised by being of stronger credit quality (including government and investment grade corporate tenants). The characteristics of MOF s property portfolio, including the acquisition by MPST of the additional 32.2% of TPS units, include: quality properties located in and around Australia s capital cities and major regional centres, with investments in 16 distinct office markets; quality tenant profile with 71% of income derived from government and investment grade corporate tenants; an average floor plate size of approximately 1,680 square metres, which provides large space users with efficient layouts resulting in accommodation savings; a high tenant retention rate 88% of tenants have renewed their leases on expiry since inception of MOF; and an occupancy rate of 99% for the property portfolio (including rental guarantees). Argus Centre, Melbourne 22

25 6.2 Diversified Portfolio of Office Property Following the acquisition of the additional units in TPS, the property portfolio will comprise investments in 21 properties in seven states and territories of Australia. New South Wales and Victoria will represent the major investment markets comprising 83% of property assets. The acquisition will raise the weighting of New South Wales assets (by asset value) from 46% to 56% of total assets. The following chart shows the asset values by states or territories following the acquisition of the additional units in TPS. 6.3 Security of Income Following the acquisition of the additional units in TPS, MOF will derive 71% of income from government and investment grade corporate tenants across the portfolio. The average unexpired lease term for MOF is approximately 4.7 years. Lease renewal risks are further diversified with no single tenancy representing more than 8% of net income of MOF. Contribution to Net Income by Tenant Parking 7% Geographic Spread (Contribution by asset value) WA 7% SA 3% ACT 3% QLD 3% NT 1% Other 22% Telstra 11% Cwlth Govt 36%% NSW 56% Investment Grade Corporate 15% State Govt 9% VIC 27% MOF has further diversification across a range of tenants, a spread of lease expiries and a mixture of market and fixed rent reviews. Across the portfolio, at the next rent review, 55% of leases have market reviews and 43% have fixed reviews. The fixed reviews increase rents by an average of 6.7% at the next review. 23

26 6.4 Diversification of Income The chart below shows the progressive diversification of the MOF portfolio and shows the net income by property following the acquisition of the additional TPS units. 100% 90% 80% 70% 60% 50% 40% 30% 20%... NOW WIDELY DIVERSIFIED Contribution to net income by property Denison Avaya House Citigroup Centre NCR House Zurich House Jetset House Capital Hill Argus Centre Celsius House Lang Centre MLC House Wentworth Place Elizabeth Plaza Australia Place Charter Grove 10% Naylor House Energy House 0% Newcastle ATO Telstra Towers Moonee Ponds ATO Northbridge ATO 6.5 Ordinary Unit Price Performance Below is a graph illustrating Ordinary Unit price performance from MOF s inception to 9 November MOF Unit Price Performance Dec 93 June 94 Dec 94 June 95 Dec 95 Jun 96 Dec 96 Jun 97 Dec 97 Jun 98 Dec 98 Jun 99 Dec 99 Jun 00 Dec 00 Jun 01 Nov 01 24

27 6.6 Macquarie Office Trust s Property Portfolio Upon settlement of the acquisition of the additional units in TPS, the portfolio will have the following profile: Existing Direct Property Holdings Properties Net lettable area (sqm) Purchase date Book value $m NSW Elizabeth Plaza, North Sydney 7,899 July NCR House, North Sydney 11,192 June The Denison, North Sydney 15,099 Feb Charter Grove, St Leonards 17,665 July Avaya House, North Ryde 16,677 Mar Telstra Towers, Burwood 16,305 April Wentworth Place, Parramatta 7,681 July Lang Centre, Parramatta 8,744 July Australian Taxation Office, Newcastle 14,157 Nov Victoria Argus Centre, Melbourne 33,020 Dec Celsius House, Melbourne 28,511 Dec Jetset Centre, Melbourne 17,741 Sept Zurich House, Melbourne 17,477 Jan Australian Taxation Office, Moonee Ponds 22,107 Dec South Australia Naylor House, Adelaide 17,502 May Western Australia Australian Taxation Office, Northbridge 23,536 Dec MLC House, West Perth 7,182 Dec Queensland Capital Hill, Brisbane 10,652 June Northern Territory Energy House, Darwin 8,703 Sept ACT Australia Place, Canberra 9,383 Oct Total (existing properties) 311,514 1, Park Street Trust NSW Citigroup Centre (50%)* Aug 2000 to Dec Estimated portfolio book value after new acquisitions 1,268.4 *The total net lettable area of the Citigroup Centre is 74,090 sqm. 25

28 Existing MOF Properties ARGUS CENTRE JETSET CENTRE NCR HOUSE Melbourne VIC Melbourne VIC North Sydney NSW ELIZABETH PLAZA LANG CENTRE WENTWORTH PLACE North Sydney NSW Parramatta NSW Parramatta NSW CELSIUS HOUSE CAPITAL HILL AUSTRALIAN TAXATION OFFICE Melbourne VIC Brisbane QLD Moonee Ponds VIC

29 AVAYA HOUSE North Ryde NSW THE DENISON North Sydney NSW TELSTRA TOWERS ZURICH HOUSE NAYLOR HOUSE Burwood NSW Melbourne VIC Adelaide SA CHARTER GROVE AUSTRALIA PLACE AUSTRALIAN TAXATION OFFICE St Leonards NSW Canberra ACT Newcastle NSW AUSTRALIAN TAXATION OFFICE ENERGY HOUSE MLC HOUSE Northbridge WA Darwin NT West Perth WA

30 financial information

31 7. Financial Information 7.1 Capital Structure The capital structure of MOF/MPST is as follows: Proforma* Number of units Number of units 12 November November 2001 Ordinary Units 707,780, ,780,249 RePS in MPST 0 900,000 * Proforma adjustment reflects issue of 900,000 RePS. 7.2 Financial Impact on MOF The following financial statements are extracts from MOF s audited accounts for the years ended 30 June 2000 and The proforma statement of financial position shown below has been prepared as if both the acquisition of 50% of TPS and the RePS issue had occurred on 30 June 2001, MPST had been formed and consolidated with MOF as at that date and assumes gross proceeds of the RePS issue were $90 million with associated transaction costs of approximately $7 million and an income distribution of 7 cents per unit from TPS for the period to 31 December Proforma Statement of Consolidated Financial Position of MOF* 2001 Proforma At 30 June $ 000 $ 000 $ 000 Current Assets Cash 11,744 20,864 10,423 Receivables 5,444 2,529 1,689 Other 1,914 1, Total Current Assets 19,102 25,307 12,878 Non-Current Assets Property Investments 1,001,728 1,001, ,102 Investments in TPS 266,713 49,977 Total Non-Current Assets 1,268,441 1,051, ,102 Total Assets 1,287,543 1,077, ,980 Current Liabilities Payables 9,060 9,060 9,920 Provisions 18,088 18,088 13,633 Other 1,501 1,501 3,218 Total Current Liabilities 28,649 28,649 26,771 * Assumes MOF owns 50% of TPS and RePS issue for $90 million proceeds. 29

32 Proforma Consolidated Statement of Financial Position of MOF (continued) 2001 Proforma At 30 June $ 000 $ 000 $ 000 Non-Current Liabilities Interest Bearing Liabilities 369, , ,500 Other 1,082 1, Total Non-Current Liabilities 370, , ,453 Total Liabilities 399, , ,224 Net Assets 888, , ,756 Unitholders Equity Ordinary Units on Issue 723, , ,559 Outside Equity Interest 87,525 Reserves 69,424 64,069 20,954 Undistributed Income 7,470 6,333 4,243 Total Unitholders Equity 888, , ,756 Number of Fully Paid Ordinary Units ( 000) 707, , ,602 Net Tangible Assets (per Fully Paid Ordinary Unit) $1.25* $1.12 $1.04 Debt to Total Assets 28.7% 28.1% 32.1% * Approximately $1.15 on fully diluted basis assuming 100% Conversion, based on a Minimum Conversion Number of between 70 and 75 MOF units. 30

33 7.3 Financial Performance of MOF Consolidated Statement of Financial Performance of MOF For the Year ended 30 June $ 000 $ 000 Income Property Income Property Rental Income 94,298 79,082 Property Expenses (6,544) (6,501) Net Property Income 87,754 72,581 Other Income Interest Income 1, Distribution Income 664 Total Income from Ordinary Activities 89,514 73,211 Expenditure Trust Manager s Base Fee 4,223 3,517 Borrowing Costs 18,286 14,974 Auditor s Remuneration Other MOF Expenses 1,324 1,474 Total Expenditure from Ordinary Activities 23,903 19,996 Net Operating Income before Performance Fee 65,611 53,215 Trust Manager s Performance Fee Net Operating Income from Ordinary Activities 65,326 52,923 Investment Revaluations Credited Directly to Reserves 43,725 22,984 Increase in Equity (excluding Transactions with MOF Unitholders) 109,051 75,907 Distribution Net Operating Income from Ordinary Activities 65,326 52,923 Undistributed Income Brought Forward 4,243 1 Transfer from Reserves 610 3,961 Undistributed Income Carried Forward (6,333) (4,243) Distribution Paid and Payable 63,846 52,642 31

34 7.4 Guarantee A Guarantee exists between MOF and a security trustee for Holders, such that in the event that MPST has either insufficient income to pay the distribution or insufficient funds to pay Face Value on the winding up, MOF will, subject to some limitations, be required to pay the Holders an amount equal to the shortfall. The Trust Manager s obligation to deliver Ordinary Units on Conversion is also guaranteed. The amount that MOF is required to pay under the Guarantee in respect of distributions will not be greater than the income that MOF has available to distribute to MOF Unitholders. The obligations of MOF under the Guarantee are subordinate to the claims of creditors. The following table details the coverage ratios for the payment of the RePS distribution based on MOF s earnings for Distribution Rate Distribution Coverage (x) 7.25% % 9.07 This is based on earnings for the year ended 30 June 2001 and does not incorporate the earnings impact of owning 50% of TPS. NCR House, North Sydney 32

35 8. Risk Factors Before applying for RePS, prospective investors should consider whether RePS are a suitable investment for them. Prospective investors should be aware that there are risks associated with an investment in RePS, many of which are outside the control of MPST, MOF, the Trust Manager or its Board, including the risk factors set out below and other matters referred to in this Prospectus. 8.1 Risks Associated with Investing in RePS Financial Market Conditions The market price of RePS will fluctuate due to various factors, including but not limited to general movements in the Australian and international equity markets, investor perceptions, worldwide economic conditions, interest rates and movements in the market price of Ordinary Units. The market price of RePS may be more sensitive than Ordinary Units to changes in interest rates, and RePS could trade on ASX at a price below the Issue Price. The Ordinary Units obtained as a result of any Conversion will rank equally with existing Ordinary Units. Accordingly, their value after Conversion will depend upon the market price of the Ordinary Units. Liquidity The market for the RePS may be less liquid than the market for the Ordinary Units. Distributions RePS are not debt instruments, and distributions are not the same as interest payments. Payment of distributions on the RePS is subject to there being net income or other amounts in MPST which the Trust Manager determines to distribute, or net income in MOF to allow a payment under the Guarantee. Distributions are non-cumulative beyond the end of the next financial year and therefore if a distribution is not paid in full from amounts available to be distributed by MPST or by payment under the Guarantee by MOF by the end of the financial year after the payment was missed, no payment will be made. Conversion A Holder may request the Trust Manager to exchange the RePS on a Reset Date. If a Holder delivers a Conversion Notice to the Trust Manager, the Trust Manager will, at its election: 1. convert the RePS into Ordinary Units; or 2. purchase the RePS for cash; or 3. arrange that the RePS be acquired by a third party and that the proceeds be delivered to the Holder. The option that the Trust Manager elects may not coincide with the Holder s individual preference, which may be disadvantageous to them in light of market conditions or individual circumstances. MPST may, at its own election, or where a Conversion Notice is issued by a Holder, convert all or a portion of the RePS into Ordinary Units on Reset Dates and earlier in certain circumstances. The Ordinary Units issued on Conversion will have the same rights as other Ordinary Units, which are different to the rights attaching to RePS. The number of Ordinary Units issued on Conversion will generally vary depending on the Ordinary Unit price over the 25 Business Days immediately prior to the relevant Reset Date. The value of the Ordinary Units issued on the Reset Date may therefore be different to the value calculated through the 25 Business Day pricing period. Further, if the Holder elects to convert RePS at the Minimum Conversion Number, the value of Ordinary Units issued on Conversion may be less than $100. Purchase of RePS by Trust Manager The Trust Manager, on behalf of MPST or MOF may, where a Conversion Notice is issued by a Holder, purchase, or arrange for the purchase by a third party, of all or a portion of the RePS. The Trust Manager may also make this election in lieu of Conversion by the Trust Manager on Reset Dates or following a Trigger Event. As the cash amount received is equivalent to the value of Ordinary Units received on Conversion, it may be affected by the Ordinary Unit price in the 25 Business Day pricing period. Early Conversion The Trust Manager has the right to purchase all or a portion of a Holder s RePS in certain Tax Events and Regulatory Events and other circumstances referred to in Section 12. Consequently, Holders may be required to convert or sell their RePS at dates not previously contemplated by them, which may be disadvantageous in light of market conditions or individual circumstances. 33

36 Ranking RePS are not debt instruments. There is a risk that Holders will not receive a full return of capital or any distribution entitlement on the RePS. Upon any winding up of MPST, Holders will rank behind creditors of MPST, but in priority to MPST ordinary unitholders to the extent of the Face Value of the RePS and any distribution entitlement. In the event of a shortfall of funds on a winding up of MPST, MOF has guaranteed that it will pay the shortfall. This Guarantee will rank behind creditors of MOF but in priority to MOF Unitholders. MPST may issue other preference units, including further RePS, which rank equally with the RePS. Taxation Considerations A summary of the potential taxation implications for Holders is set out in Section 9. This discussion is in general terms and is not intended to provide specific advice in relation to the circumstances of any particular investor. Accordingly, Holders should seek independent advice in relation to their own individual taxation position. Where there is a change in taxation legislation that has a material adverse impact on MPST or MOF, the Trust Manager may convert the RePS into Ordinary Units or purchase the RePS. Therefore, the exact period for which Holders are entitled to the benefit of the rights attaching to the RePS is unknown. Investors should refer to the terms of issue of the RePS set out in Section 12. If there are insufficient amounts available in MPST to pay RePS distributions and a payment is made by MOF under the Guarantee, that payment will not contain a tax advantaged component and all of the payments under the Guarantee will be assessable income to the Holder and may therefore have an adverse tax effect on a Holder. The extent to which RePS distributions are tax advantaged may be influenced by variations in net property income, MPST expenses, depreciation and other building allowances and timing differences between accounting and taxable income Risks Associated with MOF and MPST Holders should recognise that there are a number of risks associated with investing in both property and quoted securities. The price at which Ordinary Units trade on ASX can fall as well as rise. Other factors which may have an effect on the value of MOF s or MPST s investment properties, the financial performance of MOF and MPST and the price at which the Ordinary Units trade on ASX include: movements in local and international equity markets and changes in economic conditions; changes in taxation laws affecting trusts and in other government policy or other legislative changes; movements in interest rates which may impact on borrowing costs that are not fixed and on the relative attractiveness of the Ordinary Units as compared to other types of investments; fluctuations in the value of investments due to market conditions or tenancy matters; default by tenants on their obligations under lease agreements; non-renewal of leases or leasing of vacant areas on less favourable terms, or later than, forecast; abatement of rent or termination of leases due to inadequate standards of performance of properties or to equipment malfunction or partial or full destruction; effect of unforeseen capital expenditure on debt and equity requirements; downsizing of major tenants leaving vacant areas and affecting property values; risk of significant reduction in rental or property investment income due to the vacancy of single or substantially single tenanted properties or the fall of income at lease expiry; higher than expected expenses; risks associated with insurance not covering events or being paid; unresolvable dispute with joint venture partner, resulting in disposal of asset; failure to achieve assumptions used in preparing forecasts; failure of the due diligence process and the use of experts to limit all potential costs or expenses; and changes in Federal or state government office occupation policies. The above summary is not exhaustive and prospective investors should read this Prospectus in its entirety and consult their stockbroker, accountant or other professional adviser before deciding whether to invest in RePS.

37 9. Taxation Mallesons Stephen Jaques S O L I C I T O R S 15 November 2001 The Directors Macquarie Office Management Limited Level 8 No. 1 Martin Place Sydney NSW 2000 Dear Sirs Macquarie Park Street Trust Reset Convertible Preference Units This letter has been prepared at the request of Macquarie Office Management Limited, the responsible entity of the Macquarie Park Street Trust ( MPST ), for inclusion in a prospectus ("Prospectus") to be dated 16 November 2001 for the issue of up to 900,000 Reset Convertible Preference Units ("RePS") at a price of $100 each. Our advice has been sought on the potential Australian income taxation, GST and stamp duty consequences to a Holder acquiring, holding and disposing of RePS. Following is a summary of the principal consequences. The summary is based on Australian revenue legislation, public taxation rulings, determinations and administrative practice as at the date of this letter. This discussion relates only to Holders who are Australian residents and who hold RePS as a capital asset; that is, they do not hold the RePS in the course of the business of trading or dealing in such securities. The summary is necessarily general in nature and investors should seek and rely on their own specific professional taxation advice. The taxation consequences associated with an investment in RePS will depend upon the particular circumstances of the Holder. Specifically, provisions of the Income Tax Assessment Act 1936 ("1936 Tax Act"), the Income Tax Assessment Act 1997 ("1997 Tax Act"), the A New Tax System (Goods & Services Tax) Act 1999 ("GST Act") and the A New Tax System (Goods & Service Tax Regulations 1999 ("GST Regulations") are referred to. Capitalised terms in this letter have the same meaning as in the remainder of the Prospectus, unless defined to the contrary. LEVEL 60 GOVERNOR PHILLIP TOWER 1 FARRER PLACE SYDNEY NSW 2000 AUSTRALIA DX 113 SYDNEY ABN TELEPHONE (61 2) FAX (61 2) syd@msj.com.au SYDNEY MELBOURNE PERTH BRISBANE CANBERRA ADELAIDE HONG KONG BEIJING TAIPEI JAKARTA PORT MORESBY LONDON 1 INCOME TAXATION Taxation treatment of distributions paid in respect of RePS We understand that the Manager will determine that the net Income of MPST for a Distribution Period be calculated in accordance with the provisions of the 1936 Tax Act and the 1997 Tax Act. On that basis a Holder will be required to include in their assessable income for the year of income in which a Distribution Period ends such part of a Distribution which represents a Distribution of the net Income for a Distribution Period. 35

38 Mallesons Stephen Jaques S O L I C I T O R S A Holder will generally not be required to include in their assessable income such part of a Distribution which represents an amount paid from the capital contributed by the applicants for the issue of RePS (described in the Prospectus as a tax advantaged payment ). The Manager will advise Holders of the extent (if any) to which a Distribution consists of tax advantaged payments. We understand that Holders will be provided with the opportunity to disclose their Tax File Number ("TFN"). Although disclosure of a TFN is not compulsory, Holders should be aware that, unless exempt, failure to disclose their TFN may result in an amount of tax being deducted from the Distribution payments at the top marginal tax rate (plus Medicare levy). Alternatively, where the Holder holds the RePS in the course or furtherance of an enterprise carried on by the Holder, the Holder may quote its Australian Business Number ("ABN"). Taxation treatment of Amounts paid under Guarantee in respect of RePS Distributions A Holder will be required to include in their assessable income the amount of any payment they receive from MOF under the Guarantee in respect of a shortfall in the payment of a Distribution. Capital gains tax consequences arising from the receipt of Non-Assessable Amounts If a Distribution consists of a tax advantaged payment then the cost base of a RePS to the Holder will be reduced by an amount equal to the tax advantaged payment. If the cost base of a RePS is reduced to nil as a result of receiving such tax advantaged payments then any further tax advantaged payments received by a Holder in respect of the RePS will result in a capital gain arising to the Holder under CGT Event E4. Taxation Treatment of Disposal of RePS prior to Conversion Holders of RePS will need to consider their CGT liability upon a sale or other disposal of their RePS. This is because each RePS will be a "CGT asset" under the capital gains tax provisions of Parts 3-1 and 3-3 of the 1997 Tax Act. A capital gain would arise to the Holder to the extent of any excess of capital proceeds received from the sale or disposal of the RePS over the cost base of the RePS to the Holder. The cost base of the RePS would include the amount paid by the Holder to acquire the RePS (whether upon issue by MPST or as a result of purchase from a previous Holder) as well as the costs associated with the acquisition and disposal of the RePS (such as brokerage) incurred by the Holder. As noted above, the cost base of the RePS may be reduced where a Distribution or part of a Distribution is attributable to a tax advantaged payment. If the Holder is an individual and has held the RePS for at least 12 months prior to disposing of it, the Holder will only be required to include one-half of their capital gain (that is, after application of any available capital losses) in their assessable income. If the Holder is a superannuation fund or a life insurance company, the RePS are a virtual PST asset and the RePS have been held for at least 12 months prior to disposal, only two-thirds of the capital gain (after application of any available capital losses) is included in assessable income. If the Holder is the trustee of a trust and has held the RePS for at least 12 months then only one half of the capital gain (after application of any available capital losses) will be used to determine the net income of that trust for Australian income tax purposes. Conversely, a capital loss could arise where the capital proceeds are less than the cost base of the RePS. Taxation treatment of Conversion of RePS Upon "Conversion", the terms of issue of the RePS provide for either the exchange of RePS for units in MOF (which occurs by a redemption of the RePS for $100 and the redemption proceeds being applied to subscribe for units in MOF) or the disposal of the RePS for cash to the Trust Manager or a third party. Where the RePS are converted into units in MOF, this will constitute the disposal of the RePS for capital gains tax purposes. A capital gain would arise to the Holder to the extent of any excess of capital proceeds received from such a disposal of the RePS over the cost base of the RePS to the Holder. The capital proceeds will be the 36

39 Mallesons Stephen Jaques S O L I C I T O R S Face Value of the RePS which is applied on behalf of a Holder to subscribe for the issue of units in MOF. The cost base of the RePS would include the amount paid by the Holder to acquire the RePS (whether upon issue by MPST or as a result of purchase from a previous Holder) as well as the costs associated with the acquisition and disposal of the RePS (such as brokerage) incurred by the Holder. As noted above, the cost base of the RePS may be reduced where a Distribution or part of a Distribution is attributable to a tax advantaged payment. If the Holder is an individual and has held the RePS for at least 12 months prior to Conversion, the Holder will only be required to include one-half of their capital gain (that is, after application of any available capital losses) in their assessable income. If the Holder is a superannuation fund or a life insurance company, the RePS are a virtual PST asset and the RePS have been held for at least 12 months prior to disposal, only two-thirds of the capital gain (after application of any available capital losses) is included in assessable income. If the Holder is the trustee of a trust and has held the RePS for at least 12 months then only one half of the capital gain (after application of any available capital losses) will be used to determine the net income of that trust for Australian income tax purposes. The units in MOF acquired by the Holder upon Conversion will have a cost base equal to the Face Value of the RePS. Where the RePS are sold for cash to the Manager or a third party, the income tax treatment of the Holder is as discussed above under the heading "Taxation Treatment of the Disposal of RePS prior to Conversion". The cash paid to the Holder by the Manager or a third party will represent capital proceeds for the disposal of the RePS. Deductibility of Costs of Borrowing When a Holder borrows all or part of the cost of acquiring RePS, interest and other expenses related to that borrowing may be incurred. The deductibility of such items to a Holder will depend upon a number of circumstances peculiar to the Holder, including the duration of the period for which they intend to hold RePS or units in MOF into which the RePS may be converted. Holders should seek specific professional taxation advice in relation to these matters. 2 STAMP DUTY As the RePS will be listed on the ASX their issue, transfer, or redemption will not attract any stamp duty. As the MOF units are also listed upon the ASX their issue and transfer will not attract any stamp duty. 3 GST Under the GST Act, GST is imposed on "taxable supplies." A "financial supply", which is instead input taxed, will not be a taxable supply. Although no GST is payable on a supply which is input taxed, the person making the supply is unable to obtain input tax credits in respect of any GST imposed on another person making supplies to them, in respect of such input taxed supplies. The GST Regulations provide that the provision, acquisition or disposal of an interest in a "security" is a financial supply. For these purposes, a security includes the capital of a trust. As the RePS will constitute an interest in the capital of MPST: (a) the transfer of the RePS by the Holder by way of sale; and (b) the disposal of the RePS by the Holder upon Conversion (whether to MPST or to a third party) will be a financial supply which is input taxed and in respect of which no GST is payable. Yours faithfully 37

40 10. Material Contracts 10.1 Implementation Deed Overview James Fielding Investments Limited ( JFIL ), General Property Trust Management Limited ( GPTML ) and the Trust Manager have entered into the Implementation Deed. The Implementation Deed: requires JFIL to convene a meeting of TPS unitholders and to recommend the Trust Scheme to TPS unitholders, having regard to its duties to its unitholders; deals with the obligations of the parties to seek all approvals, agreements, waivers and exemptions to implement the Trust Scheme; describes the conditions required to be met for the Trust Scheme to proceed and binds the parties to satisfy such conditions; binds each of the parties to carry out certain specific steps required to implement the Trust Scheme and to perform their obligations under the Trust Scheme; sets out representations and warranties given by each of the parties; and sets out the rights of the parties to terminate or vary the terms of the Implementation Deed. Conditions of the Trust Scheme Implementation of the Trust Scheme is conditional, subject to any waiver by GPTML and the Trust Manager, on the following: all resolutions necessary for implementation of the Trust Scheme being passed at the meeting of TPS unitholders; obtaining all approvals, consents, waivers, and exemptions from ASIC, ASX and other persons identifies in the Implementation Deed; TPS remaining listed on the Official List of the ASX at all times prior to completion of the Trust Scheme; no event described in section 652C of the Corporations Act, as it applies to listed managed investment schemes, occurring in relation to TPS prior to completion of the Trust Scheme; Conduct of JFIL prior to Completion of the Trust Scheme Prior to completion of the Trust Scheme, JFIL must, unless GPTML and the Trust Manager otherwise jointly consent or JFIL is otherwise permitted: ensure that the business of TPS is conducted in the ordinary course of business; notify such person who is nominated in writing by GPTML and the Trust Manager of any material decisions, proposals or developments concerning the business or assets of TPS; not change the business or capital structure of TPS or amend the TPS Constitution; not incur any liability or capital expenditure in excess of $100,000 for any one item other than in the ordinary course of business of TPS; not enter into or amend any material contract or arrangement relating to TPS or the assets, business or operations of TPS; not dispose or agree to dispose of the whole or any substantial part of TPS s business or assets; not issue any units or options in respect of units, redeem any units or declare or pay any distributions from TPS to unitholders; not make or agree to any changes to the tenancies in Park Street; not apply to the ASX for removal, or do or omit to do anything which may lead to removal, of TPS from the Official List of ASX. Post-Completion Conduct On completion of the Trust Scheme, JFIL will execute a deed of retirement of responsible entity under which JFIL will retire as responsible entity of TPS on completion of the Trust Scheme and will appoint TPS Property as responsible entity of TPS with effect from that time. completion of the Trust Scheme occurring on or before 31 December 2001 or such later date as the parties to the Implementation Deed agree. 38

41 Representations and Warranties Under the Implementation Deed each of the parties has given certain representations and warranties to the others, relating to matters such as incorporation, authorisations and the binding nature of the Implementation Deed. In addition, JFIL, in its personal capacity, has given warranties to each of GPTML and the Trust Manager to the best of its knowledge as to: the accurateness and completeness of the information concerning TPS provided to GPTML and the Trust Manager; certain matters concerning control of the Park Plaza Development Trust; certain matters concerning the status of the TPS Constitution and continued existence of TPS, the capital structure of TPS and certain matters concerning its assets. GPTML and the Trust Manager have also warranted that they are not actually aware at the date of the Implementation Deed that they have a claim under the warranties. Limitation of Liability and Indemnities Except in respect of obligations incurred in their personal capacity, any liability of the parties arising in connection with the Implementation Deed is limited to the extent that the parties are able to be indemnified for that liability out of their respective trust assets, except where such liability arises out of a party s own fraud, negligence, breach of trust or breach of duty. Termination of the Implementation Deed The Implementation Deed will terminate (and each party will be released from certain obligations under the Implementation Deed): by agreement between JFIL, GPTML and the Trust Manager; if prior to the date for a meeting of TPS unitholders, JFIL decides it will not recommend or will withdraw its recommendation of the Trust Scheme and gives notice thereof; immediately on the failure of the conditions precedent to the Trust Scheme; at any time prior to completion of the Trust Scheme, immediately after service of notice by GPTML and the Trust Manager to JFIL, if JFIL is in material breach of its obligations to recommend the Trust Scheme or of its pre-completion conduct; at any time prior to completion of the Trust Scheme, immediately after service of notice by GPTML and the Trust Manager to JFIL or by JFIL to GPTML and the Trust Manager, if any representation and warranty given by either party is or becomes materially false, misleading or incorrect when made in accordance with the Implementation Deed; or at any time prior to completion of the Trust Scheme, immediately after service of notice by GPTML and the Trust Manager to JFIL, where any of the warranties provided by JFIL in its personal capacity is or becomes materially false, misleading or incorrect or where tax returns are not prepared, where there is a mortgage, charge or encumbrance over any material asset of TPS or where certain financing arrangements are entered into Constitution of Macquarie Park Street Trust The constitution is dated 6 November MPST has been registered as a managed investment scheme under Chapter 5C of the Corporations Act. The rights and obligations of members (including Holders) and the Trust Manager are governed by the constitution and the Corporations Act. The constitution is incorporated by reference under the Corporations Act into this Prospectus. A copy of the constitution is available free of charge during the life of this Prospectus by way of mail or facsimile from the Trust Manager at Level 8, No. 1 Martin Place, Sydney NSW 2000, or by telephoning during normal business hours. Many of the provisions of the constitution set out the rights of investors and are important. Some of the provisions of the constitution are discussed elsewhere in this Prospectus, notably those relating to the terms of the RePS, which are set out in detail in Section 12. The provisions of the constitution relate to: units; application and redemption price for Ordinary Units; application and redemption procedures; Conversion; valuation of assets; income and distribution to members; payments by the Trust Manager; 39

42 powers of the Trust Manager; retirement of the Trust Manager; notices to members and the Trust Manager; meetings of members; rights and liabilities of the Trust Manager; limitation of liability and indemnity in favour of the Trust Manager; liability of members; remuneration and expenses of the Trust Manager; duration of the trust; procedure on termination; amendments to the constitution; compliance committee; complaints; restricted securities; small holdings. The constitution contains procedures for complaints handling. You may lodge any complaints in relation to the Trust Manager s conduct in its management or administration of MPST, by writing to the Trust Manager at the address shown in the Corporate Directory. If you make a complaint the Trust Manager will: act in good faith and ensure an appropriate person or entity considers your complaint; respond to your complaint within 45 days with its decision, the remedies available and give you information on any further avenue for complaint Summary of Selling Agreement (This Section incorporates terms defined in the Selling Agreement which may not be defined in the Glossary.) A Selling Agreement dated 13 November 2001 has been entered into between the Trust Manager (both as the responsible entity for MPST and MOF) and the Lead Manager (Agreement). Subject to certain conditions, the Lead Manager has agreed to manage the Institutional Bookbuild and allocation of RePS, provide credit support to the settlement of the offer of RePS to institutions (the Institutional Offer) and the Offer, and to market the Institutional Offer. The Offer and the Institutional Offer The Lead Manager will receive a fee equal to 2.75% of the gross proceeds in relation to the Offer and the Institutional Offer. The Trust Manager must reimburse the Lead Manager for all reasonable costs and expenses (including legal costs and disbursements) which the Lead Manager incurs in relation to the Agreement (including, without limitation, the expenses incurred in establishing the settlement mechanics and processes with ASX in respect of the Institutional Offer and the Offer). Termination Events If any of the following events occurs at any time between the date of the Agreement and the Settlement Closing Date (inclusive), then the Lead Manager may terminate the Agreement at any time (without cost or liability to itself) by notice in writing to the Trust Manager specifying the relevant event: No quotation if the ASX does not permit official quotation of all of the securities comprised in the Offer (including RePS offered under the Institutional Offer), or does not provide confirmation in the usual form, or suspends quotation of the Ordinary Units (other than a trading halt granted with the prior approval of the Lead Managers) or removes MOF from the official list of the ASX; Certificates the Trust Manager does not furnish the Certificates as required under the Agreement or the Certificates contain a statement which is untrue or incorrect in a material respect; Breach the Trust Manager fails to perform or observe any of its material obligations under the Agreement (including any representations or warranties); 40

43 ASIC if ASIC gives notice of an intention to hold a hearing or issue a stop order in relation to the Prospectus, or applies for any order to disclose information under the Corporations Law in relation to the Prospectus, Offer or Institutional Offer, or investigates or prosecutes the Trust Manager or any member of the MOF Group, or gives notice of an intention to do so; Prospectus misleading a statement contained in the Prospectus is found to be misleading or deceptive, or an omission of information required to be included in the Prospectus is discovered; Withdrawal of consent any person (other than the Lead Manager or its advisers) who consented to being named in the Prospectus or to the issue of the Prospectus withdraws that consent; Non-compliance ASIC or a court determines that the Prospectus fails to comply with the Corporations Law; Supplementary prospectus a supplementary prospectus or replacement prospectus is required under the Corporations Law; Return of Offer Proceeds if the Trust Manager is required to return the Offer Proceeds to applicants under the Corporations Law; Change of law there is a change of law of the Commonwealth of Australia or any State or Territory of Australia, or the Reserve Bank of Australia or a Government Agency adopts a policy which, in the Lead Manager s judgment, makes it impracticable to enforce contracts to issue and allot the securities or have a material adverse effect on the success of the Offer (including RePS offered under the Institutional Offer); Indemnity The Manager indemnifies the Lead Manager and each of its related bodies corporate and each of its officers, employees and advisers (the Indemnified Parties) against each claim, judgment, damage, loss and expense (including all reasonable legal costs), for liability incurred or suffered or brought or made or recovered against the Indemnified Parties in connection with: any misleading or deceptive statement or any omission from the MOF Materials; any investigations, enquiries or legal proceedings initiated by ASIC or any other person in connection with the offer of the securities; any claim that an Indemnified Party has any liability under the Corporations Law or any other law in relation to the Institutional Offer and Offer; any non-compliance with the Corporations Law, the Listing Rules or any other legal obligation in relation to the Offer, the allotment of securities, the Prospectus or otherwise; any breach by the Trust Manager of its obligations, representations, warranties and undertakings under the Agreement; any representation or warranty made or given by the Trust Manager under the Agreement proving to have been untrue or incorrect; and any announcement, advertisement, or publicity made or distributed by any Indemnified Party with the approval of the Trust Manager. Director of Trust Manager if a director of the Trust Manager is charged with an indictable offence relating to any financial or corporate matter or any regulatory body commences any public action against the Trust Manager or any of its directors in his or her capacity as a director announces that it intends to take any such action; Insider trading an application is made by ASIC under Section 1013(6) of the Corporations Law concerning the Prospectus and that application is not dismissed or withdrawn; Misrepresentation any representation or warranty made or given by the Trust Manager under the Agreement proving to have been untrue or incorrect. 41

44 10.4 Guarantee The Trust Manager, in its capacity as responsible entity of MOF, has agreed to guarantee the obligations of MPST to a limited extent. The Trust Manager has given a subordinated guarantee in the favour of Union Trustee Company (Canberra) Limited. Union Trustee Company (Canberra) Limited is a party to the subordinated guarantee as security trustee acting on behalf of the Holders. The Trust Manager guarantees to Union Trustee Company (Canberra) Limited for the benefit of the Holders, the following: (a) (b) (c) the payment to Holders of the quarterly distribution on their RePS to the extent that MPST has insufficient distributable amounts available to pay the distribution; the payment of $100 per RePS in the event of the termination, dissolution, liquidation or winding up of MPST; and the issue of Ordinary Units in exchange for RePS where the Trust Manager is required to cause the issue of Ordinary Units on Conversion in accordance with the terms of issue of the RePS. The guarantee obligations under (a) and (b) above are subordinated to all unsubordinated creditors of the Trust Manager as responsible entity of MOF. Payment is not required to be made under the Guarantee to the extent that payment would adversely affect the ability of MOF to pay its creditors. In the case of (a) above, the guarantee is also limited to the extent of MOF s net income available for the relevant distribution period after providing for all expenses (except liabilities under the subordinated guarantee). If MOF has insufficient income in a quarter to make the payment under (a) ( shortfall ), but has income in subsequent quarters up to the end of the next succeeding financial year after making any payments required to be made under (a) in respect of those quarters, then MOF is required to apply the excess towards payment of the shortfall. The security trustee is not required to enforce the Guarantee unless requested by Holders. The Guarantee is incorporated by reference into this Prospectus Joint Ownership Agreement with GPT Summary of joint venture arrangements The Trust Manager, GPT Management Limited (in its capacity as trustee of General Property Trust) ( GPTML ) and TPS Property (in its capacity as the trustee of TPS) have agreed on certain joint venture arrangements in relation to the management, operation and administration of TPS and TPS Property. The material aspects of the agreed joint venture arrangements that will apply in relation to TPS Property and TPS are summarised below. Control The Trust Manager and GPTML will exercise day to day control of TPS and TPS Property with the intention that TPS Property will act as instructed jointly by the Trust Manager and GPTML in relation to TPS. TPS Property The Trust Manager and GPTML, in their personal capacities, will each be 50% shareholders of TPS Property and each will be permitted to appoint two directors to the board of TPS Property. The Trust Manager and GPTML will have control over TPS Property. The Trust Manager and GPTML have agreed to ensure that TPS Property is adequately capitalised and administered. The Trust Manager and GPTML have agreed to restrict sales in shares of TPS Property in order to ensure that ownership of the shares in TPS Property will generally follow ownership of the units in TPS. The obligations in relation to TPS Property have been entered into by the Trust Manager and GPTML in their personal capacities. Transfer of units in TPS Where a unitholder in TPS proposes to dispose of its units to a third party, it must provide the other unitholder with the opportunity to purchase those units. If this initial pre-emptive right is not exercised, the disposing unitholder is to have a period of up to five months to negotiate the terms of disposal of the units to the third party. At the end of this period, the disposing unitholder must provide the other unitholder with the opportunity to purchase the units on the same terms negotiated with the third party. 42

45 The pre-emptive rights do not apply where the units are transferred to an entity which is a related corporation (as defined in the Corporations Act 2001) of that unitholder (providing that if the transferee at any time ceases to be a related corporation (as defined in the Corporations Act 2001) of that unitholder the relevant units must be transferred to the unitholder or a related corporation (as defined in the Corporations Act 2001 of that unitholder) or the trustee or responsible entity of a trust or scheme holding assets of a trust, fund or other entity, the trustee, responsible entity or manager of which is the unitholder or a related corporation (as defined in the Corporations Act 2001) of the unitholder. Restrictions on TPS activities Without the consent of all unitholders, TPS Property will not issue further units in TPS (except to the extent necessary to retire certain existing debt), redeem units, pay trust distributions, borrow, grant security over trust assets, acquire significant assets or enter into significant transactions or arrangements. Dealing in units A unitholder may only deal with its entire unitholding in TPS. Default If a unitholder commits a breach of the agreed joint venture arrangements that is not cured within 10 business days or that is not capable of being cured, transfers their units in breach of the joint venture arrangements and is unable to unwind the transfer, defaults under any mortgage which is secured against units in TPS or becomes insolvent, then the other unitholder has the right to purchase the defaulting unitholder s holding for the fair market price as determined by an independent valuer. Mortgage of units Each unitholder may not grant a mortgage or grant a security interest of the whole or any part of its respective holding in TPS without the prior written consent of the other unitholder, which consent cannot be unreasonably withheld or delayed in certain circumstances. Committees A unitholders committee comprising one representative from each unitholder (together with an alternate) will review, consider and make determinations on substantive issues with respect to the management of TPS. All decisions of the unitholders committee must be unanimous. TPS Property is bound by decisions of the unitholders committee. Where the unitholders committee cannot come to an agreement in relation to an issue, then the matter will be referred to a special committee, which will be comprised of the unitholders committee plus a senior representative from each of the unitholders. All decisions of the special committee must be unanimous. TPS Property is bound by decisions of the special committee. Deadlock resolution Where there is a dispute that is unable to be resolved by the unitholders committee or the special committee, the unitholders committee must seek the assistance of an independent third party as a mediator with a view to resolving the dispute. If the mediation is unsuccessful and the matter in dispute relates to the sale, co-ownership, management, leasing or development of the assets of TPS, the unitholders will confer with a view to one of the unitholders selling its unit holding in TPS to the other unitholder. If the unitholders are still unable to resolve the dispute after the appointment of the mediator a unitholder may require TPS Property to wind up TPS and dispose of the assets in the trust. Property valuation TPS Property will arrange a valuation of the property assets of TPS every three years, unless there is reason to believe that there has been a material change in which case a valuation will be arranged at this time. Capitalisation of TPS TPS Property will: retire all outstanding borrowings in TPS with loans of equal amount from the Trust Manager and GPTML; maintain sufficient equity in TPS to meet the ongoing obligations of TPS; and distribute the maximum amount of TPS income possible to unitholders on a quarterly basis. Indemnities Each unitholder indemnifies the other unitholder against loss and damage caused by any default or breach by the unitholder, of the joint venture arrangements. 43

46 11. Additional Information 11.1 Terms of Issue The rights attaching to RePS will be governed by: MPST s constitution; and the terms of issue of the RePS set out in Section MOF and MPST Disclosing Entities MOF is a disclosing entity for the purposes of section 111AC(1) of the Corporations Act 2001 and is therefore subject to regular reporting and disclosure obligations under the Corporations Act 2001 and the Listing Rules. It is intended that RePS will be quoted on ASX and therefore MPST will also become a disclosing entity. These obligations require ASX to be continuously notified of information about specific events and matters as they arise for the purpose of ASX making the information available to the stock market conducted by ASX. In particular, MOF has, and MPST will have, an obligation under the Listing Rules (subject to certain limited exceptions), to notify ASX immediately of any information concerning it, of which it becomes aware, which a reasonable person would expect to have a material effect on the price or value of its units. Each is also required to prepare and lodge with ASIC both yearly and half yearly financial statements accompanied by a directors statement and report and an audit or review report Other Documents MOF will provide a copy of any of the following documents, free of charge, to any person who requests a copy during the Offer period in relation to this Prospectus: MPST constitution; MOF Constitution; Guarantee; the financial statements of MOF for the year ended 30 June 2001 (being the most recent annual financial reports lodged with ASIC before the issue of this Prospectus); and any other document or financial statement lodged by MOF with ASIC or ASX under the continuous disclosure reporting requirements in the period after lodgement of those financial statements and before lodgement of this Prospectus with ASIC, being: 9 August 2001 Preliminary Final Report 10 August 2001 Investor Presentation Annual Results 15 August 2001 Trading Halt 16 August 2001 Placement of Macquarie Office Trust Units 16 August 2001 Appendix 3B DRP 16 August 2001 Appendix 3B Further Property Acquisition/Capital Expenditure 19 September 2001 Quarterly Distribution to 30 September October 2001 September Quarter Update 9 October 2001 Notice of Annual General Meeting 1 November 2001 Chairman s Annual Meeting Address to Shareholders 1 November 2001 Confirmation of September Quarter Distribution 1 November 2001 Confirmation of Discussions re: Acquisition 2 November 2001 Results of Meeting 8 November 2001 Presentation re Acquisition of TPS 8 November 2001 MOF and GPT to Acquire TPS 12 November 2001 Appendix 3B DRP Summary of Rights Attaching to Ordinary Units The following information is a summary of the MOF Constitution in order to incorporate it by reference into this Prospectus. MOF Unitholders have the right to acquire a copy of the MOF Constitution, free of charge, from the Trust Manager until the expiry of this Prospectus Right to Transfer Ordinary Units MOF Unitholders may transfer Ordinary Units except where the Listing Rules apply and require that restricted securities not be transferred during the applicable escrow period. 44

47 Right to Income MOF Unitholders who are on the register at the close of business of the last Business Day of a distribution period (currently determined to be a calendar quarter), are presently entitled to the net income of MOF together with other amounts that the Trust Manager may determine. The Trust Manager is entitled to deduct amounts relating to tax and other charges from the amounts to be distributed. Distributions must be made within two months of the end of the distribution period (if not reinvested). The Trust Manager has the power to offer MOF Unitholders the right to reinvest income in further Ordinary Units. The procedures are set out in the MOF Constitution. Ordinary Units issued on Conversion pursuant to this Prospectus will rank equally with all other Ordinary Units for distribution, whereas in all other respects the Ordinary Units issued on Conversion pursuant to this Prospectus will rank equally with all other issued Ordinary Units Right to Redemption The MOF Constitution sets out the procedures for how MOF Unitholders may withdraw from MOF. These withdrawal procedures do not apply while Ordinary Units are officially quoted on ASX (including a suspension for less than 60 days) Right to Call and Attend Meetings MOF Unitholders have a right to call and attend meetings as set out in the Corporations Act 2001 and the MOF Constitution Rights on Winding Up The MOF Constitution sets out the procedures to be followed on winding up of MOF and MOF Unitholders entitlements Liability of MOF Unitholders The liability of a MOF Unitholder is limited to the amount, if any, which remains unpaid in relation to the Unitholder s subscription for Ordinary Units. In certain circumstances set out in the MOF Constitution, the Trust Manager is entitled to be indemnified by a MOF Unitholder or former MOF Unitholder to the extent that the Trust Manager incurs any liability for tax or other fees which the Trust Manager considers should be borne by the MOF Unitholder Manager s Remuneration The MOF Constitution sets out the Trust Manager s right to remuneration. The Trust Manager is also entitled to be reimbursed for expenses incurred in relation to the proper performance of the Trust Manager s duties in respect of MOF. The Trust Manager may also be reimbursed if it becomes liable to pay GST in respect of a supply in connection with the MOF Constitution Other Provisions In addition, the MOF Constitution contains provisions governing: the nature of Ordinary Units; what happens in the case of a MOF Unitholder s death or legal disability; procedures for the issue and pricing of Ordinary Units; when and how a property is to be valued; how income is calculated and distribution of capital; the way payments are to be made and notices are to be given to the Trust Manager and MOF Unitholders; the powers, rights and liabilities and indemnities of the Trust Manager; the principal investment policy of the MOF; retirement and removal of the Trust Manager; procedures for conducting MOF Unitholder meetings; restrictions on MOF Unitholders; duration and termination of MOF; how the MOF Constitution may be amended; the compliance committee; how MOF Unitholder complaints are to be dealt with; and the Trust Manager s power to sell or redeem unitholdings with a market value of less than $2, Disclosure of Interests The following parties hold investments directly or indirectly in the number of Ordinary Units shown below, and will be entitled to participate in this offer on the same basis as other MOF Unitholders: David Clarke (Chairman of the Trust Manager) 2,000,000 James Broadbent (Director of Trust Manager) 25,000 Simon Jones (Alternate Director of Trust Manager) 8,518 Trust Manager 501,061 45

48 In accordance with the MOF Constitution, the Trust Manager has received fees and Ordinary Units with a combined value of $8,317,000 over the two year period ended 30 June George Bennett has received, or will receive, director and compliance fees of $56,875 in the two year period ended 30 June James Broadbent has received, or will receive, director and compliance fees of $56,875 in the two year period ended 30 June Macquarie Equity Capital Markets Limited has acted as Lead Manager for the Offer, in respect of which it will receive fees as set out in Section Macquarie Equity Capital Markets Limited has received, or will receive, fees of $1,713,758 for underwriting, managing issues of units, and advisory services for MOF and MPST in the previous two years. Mallesons Stephen Jaques has performed work in relation to the due diligence enquiries on legal matters, provided tax advice in relation to the Offer and prepared the taxation letter in Section 9. In respect of this work, MOF estimates that it will pay approximately $95,000 (excluding disbursements and GST) to Mallesons Stephen Jaques. Further amounts may be paid to Mallesons Stephen Jaques in accordance with its normal time-based charges. Mallesons Stephen Jaques has, in addition, received fees of $25,273 for legal work in respect of due diligence and prospectus preparation for MOF in the previous two years. Partners of Mallesons Stephen Jaques may directly or indirectly hold units in MOF, these holdings are not material. Except as set out above, no: parties named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus; or stockbroker or underwriter to the Offer, holds at the time of lodgement of this Prospectus with ASIC, or has held in the two years before lodgement of this Prospectus with ASIC, a material interest in: the formation or promotion of MPST or MOF; the Offer; or any property acquired or proposed to be acquired by MPST in connection with its formation or promotion or the Offer, nor has anyone paid or agreed to pay or given or agreed to give any benefit to such parties in connection with the formation or promotion of MPST or MOF or the Offer Other Related Party Disclosures Macquarie Asset Services Limited, a related body corporate of the Trust Manager, has provided property due diligence services to MOF and MPST in relation to the acquisition of the additional units in TPS for which it will be paid a fee of $421,635. Macquarie Investment Banking Group, a related body corporate of the Trust Manager, has provided advisory services to MOF and MPST in relation to the acquisition of the additional units in TPS for which it will be paid a fee of $843, Consents None of the parties referred to below has made any statement that is included in this Prospectus or any statement on which a statement made in this Prospectus is based, other than as specified below. Each of these parties, to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any statements or omissions from this Prospectus, other than the reference to its name and a statement or report included in this Prospectus with the consent of that party as specified below. Macquarie Equity Capital Markets Limited has given and has not, before the lodgement of this Prospectus with ASIC, withdrawn its written consent to be named in this Prospectus in the form and context in which it is named. Mallesons Stephen Jaques has given and has not, before the lodgement of this Prospectus with ASIC, withdrawn its written consent to the inclusion in this Prospectus of its taxation letter in the form and context in which it is included in Section 9, and to be named in this Prospectus in the form and context in which it is named. 46

49 11.8 Directors Interests No director or proposed director holds, at the time of lodgement of this Prospectus with ASIC, or has held in the two years before lodgement of this Prospectus with ASIC, an interest in: the formation or promotion of MPST; or the Offer; or any property acquired or proposed to be acquired by MPST or MOF in connection with its formation or promotion of the Offer. Except as set out in this Prospectus, no party has paid or agreed to pay any amount, and no party has given or agreed to give any benefit, to any director or proposed director: ASIC Relief The Trust Manager has requested the following ASIC relief: modification of Section 711(6) so that the 13 month requirement applies to RePS and not Ordinary Units (which relief has been granted); regarding the change of responsible entity of TPS from James Fielding Investments Limited to TPS Property Pty Ltd; and from Chapter 5C.6 of the Corporations Act 2001 so that the RePS can be redeemed on Conversion without a withdrawal offer needing to be made. to induce a person to become, or qualify as, a director; or for services provided by a director or proposed director in connection with the formation or promotion of MPST or the Offer ASX Waivers MPST has applied to ASX for the following waivers: a waiver of Listing Rule 7.1 so that RePS issued to finance the acquisition of TPS units pursuant to the TPS Scheme and Ordinary Units issued on Conversion will be excluded from the calculation of the maximum number of Ordinary Units that can be issued in any year; a waiver from Condition 5 of Listing Rule 1.1 such that it has the ability to redeem the RePS on conversion in accordance with the RePS terms; and deferred settlement trading of the RePS in relation to the Offer as described in Section 2. 47

50 12. Terms of RePS Defined terms used in this Section are set out in clause 9 below. References to clauses and paragraphs in the text below are clauses and paragraphs of these terms of issue. 1. Face Value The face value of each Reset Preference Unit (RePS) will be $100 (Face Value), even if RePS are issued at a price which differs from this amount. 2. Distributions 2.1 Distributions Subject to these terms, the Holder on the relevant Distribution Entitlement Date of each RePS is entitled to receive on each relevant Distribution Payment Date a distribution (Distribution) calculated in accordance with the following formula: Distribution = Distribution Rate x $[Face Value] x N 365 where: N is the number of days from (and including) the date of allotment of the first RePS or from (but not including) the preceding Distribution Entitlement Date (whichever is the later) until (and including) the relevant Distribution Entitlement Date; and Distribution Rate is: (a) for the period to 31 December 2006, the higher of 7.25% per annum; and the distribution rate per annum set under the Institutional Bookbuild; and (b) for the period after 31 December 2006 until and including the next Reset Date, a rate expressed as a percentage per annum of the Face Value as specified in accordance with clause Payment of Distribution The payment of a Distribution is subject to there being Distributable Amounts in MPST available for the payment of Distributions. If there are insufficient Distributable Amounts in MPST, the shortfall is to be made up under the Guarantee, to the extent of an amount no greater than the amount of MOF Income. If the amount of the shortfall exceeds an amount equal to MOF Income, any remaining shortfall may be met on subsequent Distribution Payment Dates, subject to the terms of clause Non-Cumulative Distributions Subject to clause 5.5, if and to the extent that all or any part of a Distribution is not paid because of the provisions of clause 2.2, the Manager and MPST have no liability to pay such Distribution and the Holder has no claim in respect of such non-payment, except pursuant to the Guarantee. 2.4 Calculation of Distributions All calculations of Distributions will be to four decimal places. For the purposes of making any Distribution payment in respect of a Holder s aggregate RePS, any fraction of a cent will be disregarded. 2.5 Distribution Entitlement and Payment Dates (a) Subject to clause 2.2, Distributions will be payable to those persons registered as Holders at the date on which the books of MPST close for Holders (Distribution Entitlement Date) in respect of each relevant Distribution, which shall be each 31 March, 30 June, 30 September and 31 December until the RePS are converted or redeemed or in the case of a change in the terms of the RePS pursuant to clause 4, in accordance with such change. The first Distribution Entitlement Date shall be 31 March (b) Subject to this clause 2, Distributions will be payable on the last Business Day of the month following the relevant Distribution Entitlement Date. (c) For the avoidance of doubt, where a Reset Date falls on a Distribution Entitlement Date, Holders will be entitled to receive the relevant Distribution notwithstanding the fact that the date for payment of the Distribution will fall after the Reset Date. (d) In the event of termination of MPST, the date of termination will be a Distribution Entitlement Date. 48

51 2.6 Payments The Manager will not deduct from any Distribution payable to a Holder the amount of any withholding or other tax, duty or levy except where such amounts are required by law to be deducted. If any such deduction has been made and the amount of the deduction accounted for by the Manager on behalf of MPST to the appropriate revenue authority and the balance of the amount payable has been paid to the Holder, then the full amount payable to such Holder shall be deemed to have been duly paid and satisfied by the Manager on behalf of MPST. The Manager on behalf of MPST shall pay the full amount required to be deducted to the relevant revenue authority within the time allowed for such payment without incurring penalty under the applicable law and shall, if required by any Holder, deliver to that Holder the relevant receipt issued by the revenue authority without delay after it is received by the Manager. 3. Conversion 3.1 Holder Conversion (a) Holders of RePS may request the Manager to convert their RePS by giving a notice to the Manager (Holder Conversion Notice): (1) at least 35 Business Days (but no more than three months) before the Reset Date, in respect of all or some of their RePS. If a Holder Conversion Notice is issued under this clause 3.1(a)(1), the date of conversion (Conversion Date) is the Reset Date immediately following the giving of the notice; (2) at any time after the second anniversary of the date of issue of the RePS, in respect of all or some of their RePS. If a Holder Conversion Notice is issued under this clause 3.1(a)(2): (A) the Conversion Date is the thirty-fifth Business Day following the giving of the Holder Conversion Notice; and (B) for the purposes of clause 3.7, the Conversion Ratio (if applicable) will equal the Minimum Conversion Number; or (3) pursuant to clause 3.2. To be valid, the Holder Conversion Notice must indicate under which paragraph the Holder is giving notice. (b) Once a Holder has given a Holder Conversion Notice under this clause 3.1, the Holder must not deal with, transfer, dispose of or otherwise encumber the RePS the subject of the Holder Conversion Notice. (c) On receipt of a valid Holder Conversion Notice under clause 3.1(a)(1), (2) or (3) from a Holder, the Manager must, at its option, do one of the following in relation to the RePS which are the subject of the Holder Conversion Notice, on or before the Conversion Date: (1) convert the RePS into MOF Units in accordance with clause 3.7; (2) purchase the RePS for an amount (Manager Purchase Price) equal to the higher of: (A) Face Value ; and (100% CD) (B) Minimum Conversion Number x Conversion VWAP x 101%. where: Face Value is as defined in clause 1; CD means the Conversion Discount of 5% (Conversion Discount); Conversion VWAP is as defined in clause 9; and Minimum Conversion Number is as defined in clause 3.7(b); or (3) procure the acquisition of RePS by a third party, including the Manager as the responsible entity for MOF, at the Manager Purchase Price and deliver the proceeds to the Holder on the relevant Conversion Date. (d) The Manager may, at its discretion, redeem RePS purchased pursuant to clause 3.1(c)(2), in accordance with clause 3.6. (e) No later than 25 Business Days prior to the relevant Conversion Date, the Manager must notify Holders who have submitted a Holder Conversion Notice of which of the alternatives referred to in clause 3.1(c) it has chosen. (f) Where the Manager is in receipt of more than one Holder Conversion Notice at any one time, the Manager may adopt more than one of the alternatives referred to in clause 3.1(c). (g) If the Manager does not notify the Holders in accordance with this clause 3.1, then clause 3.1(c)(1) will apply. (h) The minimum number of RePS that a Holder may convert pursuant to clause 3.1(a)(1) or clause 3.1(a)(2) is 50, or, if the Holder holds less than 50 RePS, all of the Holder s RePS. 49

52 3.2 Holder Trigger Event Conversion (a) If a Trigger Event occurs, a Holder may require the Manager to convert all (but not some only) of its RePS by giving notice to the Manager (Holder Trigger Event Conversion Notice) at any time after the Trigger Event occurs but no later than 30 Business Days after the publication of the notice referred to in clause 3.2(c). In that event, the Conversion Date will be the thirty-fifth Business Day following the receipt of the Holder Trigger Event Conversion Notice by the Manager. (b) A Trigger Event means the occurrence of any of the following events: 50 (1) a resolution is passed at a meeting of members of MPST removing or replacing the Manager without the recommendation of the Manager; (2) MPST or MOF terminates; (3) a Date of Delisting occurs; (4) either the RePS or the MOF Units are the subject of a takeover bid which becomes unconditional and pursuant to which the bidder is or becomes entitled to more than 50% of the RePS or MOF Units; (5) the members of MPST approve a formal or informal scheme of arrangement pursuant to which either MPST or MOF is to merge with any other managed investment scheme or entity or pursuant to which there is a material change in the ownership or control of MPST or MOF; (6) the Holders do not receive (after including any amounts paid pursuant to clause 5.5 and the Guarantee), the full amount of the Distribution calculated in accordance with clause 2.1 for any period, and the unpaid amount of the Distribution remains unpaid for 12 months or more; (7) MOF Units or the RePS are suspended from trading on ASX for a period of 10 consecutive Business Days; (8) there is a breach of the borrowing covenant in the Guarantee; or (9) MPST ceases to have an indirect interest in the property at 2 Park Street, Sydney known as Citigroup Centre. (c) The Manager must notify Holders of the occurrence of a Trigger Event by publishing a notice in The Australian or a daily financial newspaper in Australia which specifies the particular Trigger Event as soon as practicable after becoming aware of the applicable event. (d) Where a Holder issues a valid Holder Trigger Event Conversion Notice under this clause 3.2, the Manager must, at its option, do one of the following in relation to the RePS which are the subject of the Holder Trigger Event Conversion Notice, on or before the Conversion Date: (1) convert the RePS into MOF Units in accordance with clause 3.7; (2) purchase the RePS for the Manager Purchase Price; or (3) procure the acquisition of RePS by a third party, including the Manager as the responsible entity of MOF, at the Manager Purchase Price and deliver the proceeds to the Holder on the relevant Conversion Date. (e) The Manager may, at its discretion, redeem RePS purchased pursuant to clause 3.2(d)(2), in accordance with clause 3.6. (f) Where the Manager is in receipt of more than one Holder Trigger Event Conversion Notice at any time, the Manager may adopt more than one of the alternatives referred to in clause 3.2(d). (g) No later than 25 Business Days prior to the Conversion Date, the Manager must notify Holders of RePS who have submitted a Holder Trigger Event Conversion Notice of which of the alternatives referred to in clause 3.2(d) it has chosen. (h) If the Manager does not notify the Holders in accordance with this clause 3.2, then clause 3.2(d)(1) will apply. 3.3 Conversion by Manager (a) The Manager may convert the RePS by giving notice to Holders (Manager Conversion Notice): (1) in respect of all or some of the RePS at least 35 Business Days (but no more than 12 months) before the Reset Date; (2) in respect of all (but not some only) of the RePS, if the Manager resolves on reasonable grounds (having obtained an opinion from reputable legal counsel or tax adviser) that a change in any taxation law, interpretation or ruling issued by any relevant governmental body has occurred (or is announced) and that change will materially adversely affect MPST or MOF; or

53 (3) in respect of all (but not some only) of the RePS: (A) after the Manager has published a notice under clause 3.2(c) following a takeover offer or scheme of arrangement described in clause 3.2(b)(4) or (5) or after MPST has ceased to have an indirect interest in the property at 2 Park Street, Sydney known as Citigroup Centre; (B) if the total Face Value of RePS remaining on issue is less than $15 million; or (C) if a meeting of the members of MPST is called by any members of MPST or upon the requisition of members of MPST to replace the Manager, to terminate MPST or amend the constitution of MPST. (b) The Conversion Date will be: (1) in the case of paragraph 3.3(a)(1), the earlier of: (A) the Reset Date immediately following the date the Manager Conversion Notice was served; and (B) the thirty-fifth Business Day after the publication of the Manager Conversion Notice. (2) in the case of clause 3.3(a)(2), 3.3(a)(3)(A) and 3.3(a)(3)(B), the thirty-fifth Business Day following publication of the Manager Conversion Notice; and (3) in the case of clause 3.3(a)(3)(C), a date nominated by the Manager, which shall be at least 10 Business Days following publication of the Manager Conversion Notice. (c) The Manager cannot elect to convert only some RePS if, as at the date of the Manager Conversion Notice, that conversion would result in there being RePS on issue with an aggregate Face Value of less than $15 million. In a partial conversion, the Manager must treat Holders on a proportionate basis, subject to rounding and not leaving Holders with non-marketable parcels of RePS. (d) Where under clause 3.3(b)(1) the Conversion Date is earlier than the Reset Date, the Reset Date will be brought forward to the Conversion Date as determined in accordance with clause 3.3(b)(1), and the Manager will issue a Reset Notice in accordance with clause 4.2 in respect of any RePS which are not the subject of a Manager Conversion Notice. (e) Where the Manager issues a Manager Conversion Notice under this clause 3.3, the Manager must, at its option, do one of the following in relation to the RePS which are the subject of the Manager Conversion Notice, and must notify in the Manager Conversion Notice which of the alternatives referred to in this clause 3.3(e) it has chosen: (f) (1) convert the RePS into MOF Units in accordance with clause 3.7; (2) purchase the RePS for the Manager Purchase Price; or (3) procure the acquisition of RePS by a third party including the Manager as the responsible entity of MOF, at the Manager Purchase Price and deliver the proceeds to the Holder on the relevant Conversion Date. The Manager may, at its discretion, redeem RePS purchased pursuant to clause 3.3(e)(2), in accordance with clause 3.6. (g) The minimum number of RePS that the Manager may convert pursuant to clause 3.3(a)(1) is 50 or, if the Holder holds less than 50 RePS, all of the Holder s RePS. 3.4 Notices (a) A notice given by the Manager or a Holder under clauses 3.1 to 3.3 is irrevocable. (b) Notice given by a Holder under clauses 3.1 and 3.2(a) must be accompanied by evidence of title acceptable to the Manager for the RePS being converted. (c) A form of notice which may be used by Holders under clauses 3.1 and 3.2(a) will be made available by the Manager upon request. 3.5 Meaning of Conversion Each RePS confers the right to request the Manager to arrange the conversion of the RePS into MOF Units in accordance with clause 3.7. Where a conversion into MOF Units is to occur, the Manager must cause the RePS to be redeemed at the Redemption Price in accordance with clause 3.6 and apply the redemption proceeds as agent on behalf of the Holder in subscribing for that number of MOF Units determined in accordance with clause 3.7. The Manager must cause that number of MOF Units to be issued to the Holder. 51

54 3.6 Redemption A RePS which is redeemed will be redeemed at the Face Value (Redemption Price). A Holder, other than the Manager, has no right to redeem except where conversion occurs. 3.7 Conversion and MOF Units (a) Except where conversion occurs pursuant to clause 3.1(a)(2), upon conversion, each RePS will entitle the Holder to be allotted a number of MOF Units equal to the Conversion Ratio, where, subject to clause (d) below, the Conversion Ratio is an amount calculated in accordance with the following formula (Conversion Ratio): where: Face Value Conversion VWAP x [100% CD] Face Value is as defined in clause 1; CD is the Conversion Discount; Conversion VWAP is as defined in clause 9. (b) The Conversion Ratio shall not be less than the Minimum Conversion Number, where: Minimum Conversion Number means: (1) as at the date the RePS are issued, the number set under the Institutional Bookbuild which shall be no less than 70 and no more than 75; and (2) thereafter, the number determined in accordance with clauses 3.10 to 3.13 as those clauses apply from time to time, so long as successive applications of these clauses, if any, will be based upon the Minimum Conversion Number applying immediately prior to the application of the relevant clause (referred to in clauses 3.10 and 3.11 as CNo). (c) Where conversion occurs pursuant to clause 3.1(a)(2), each RePS will entitle the Holder to be allotted a number of MOF Units equal to the Minimum Conversion Number. (d) Where the total number of MOF Units to be allotted on conversion to a RePS Holder includes a fraction, that fraction will be disregarded. 3.8 Distribution Following Trigger Event Conversion If conversion of a RePS is carried out by the Manager in accordance with clause 3.2 or 3.3(a) (1), (2) or (3), the Holder will be entitled subject to clause 2.2 to receive any Distributions calculated in accordance with clause 2.1, up to the Conversion Date of the RePS as if that date was a Distribution Entitlement Date. 3.9 Adjustment to VWAP For the purposes of calculating VWAP in clause 9: (a) where, on some or all of the Business Days in the Reference Period, MOF Units have been quoted on ASX as cum any distribution or other entitlement and the RePS will convert into MOF Units after the date those MOF Units no longer carry that entitlement (Ex Date), then the VWAP on the Business Days on which those MOF Units have been quoted cum distribution or cum entitlement shall be reduced by an amount (Cum Value) equal to: (1) the amount of that distribution; (2) (in the case of an entitlement which is traded on ASX on any of those Business Days), the volume weighted average price of all such entitlements sold on ASX during the Reference Period on the Business Days on which those entitlements were traded as attributed to each MOF Unit; or (3) (in the case of an entitlement not traded on ASX during the Reference Period), the value of the entitlement per MOF Unit as reasonably determined by the Manager; and (b) where, on some or all of the Business Days in the Reference Period, MOF Units have been quoted ex distribution or ex entitlement, and the RePS will convert into MOF Units which would be entitled to receive the relevant distribution or entitlement, the VWAP on the Business Days on which those MOF Units have been quoted ex distribution or ex entitlement shall be increased by the Cum Value Adjustments for Rights and Bonus Issues (a) Subject to paragraphs (b), (c) and (d) below, if MOF makes a pro rata rights issue or bonus issue of MOF Units to Holders of MOF Units generally, the Minimum Conversion Number shall be adjusted immediately in accordance with the following formula: 52

55 CN = CNo x P x where: (RD + RN) CN = CNo x [ (RDxP) + (RNxA) CN means the Minimum Conversion Number applying immediately after the application of this formula as provided for in clause 3.7; CNo means the Minimum Conversion Number applying immediately prior to the application of this formula as provided for in clause 3.7; P means the VWAP during the period from the first Business Day after the announcement of the rights or bonus issue to ASX up to and including the last Business Day of trading cum rights or bonus issue; A means the subscription or unit price per MOF Unit for the rights issue and is zero in the case of a bonus issue; RN means the number of MOF Units issued pursuant to the rights or bonus issue; and RD means the number of MOF Units on issue immediately prior to the allotment of new MOF Units pursuant to the rights or bonus issue. (b) No adjustment to the Minimum Conversion Number shall occur if A exceeds P. (c) Paragraph (a) does not apply to MOF Units issued as part of a placement, unit purchase plan or a distribution reinvestment plan, or units issued to the Manager under the terms of its management agreement. (d) No adjustment is to be made pursuant to paragraph (a) if at or about the time of the rights issue or bonus issue, MOF offers MOF Units to the Holders at the same issue price and in the same proportion as if the Holders had been able to participate in the rights issue or bonus issue but without having the ability to renounce the rights Adjustment for Return of Capital or Capital Distribution If MOF makes a return of capital other than as part of a normal distribution or there is a Capital Distribution to holders of MOF Units (other than by way of a buy-back), the Minimum Conversion Number shall be adjusted in accordance with the following formula: ] where: P (P C) CN means the Minimum Conversion Number applying immediately after the application of this formula as provided for in clause 3.7; CNo means the Minimum Conversion Number applying immediately prior to the application of this formula as provided for in clause 3.7; P means the VWAP during the period from the first Business Day after the announcement of the return of capital to ASX up to and including the last Business Day of trading cum the return of capital; and C means with respect to a return of capital, the amount of the cash and/or the value (as reasonably determined by the Manager) of any other property distributed to holders of MOF Units per MOF Unit (or such lesser amount such that the difference between P and C is greater than zero). With respect to a Capital Distribution, C is the amount of such Capital Distribution as defined in clause Adjustment for Capital Reconstruction If at any time the MOF Units are reconstructed, consolidated, divided or reclassified (other than by way of a bonus issue, which is dealt with under clause 3.10) into a lesser or greater number of securities, the Minimum Conversion Number must be reconstructed, consolidated, divided or reclassified by the Manager on the same basis Adjustment to the Conversion Ratio for a Takeover or Scheme of Arrangement (a) In the case of conversion under clause 3.2(d)(1) or under 3.3(e)(1) following a takeover offer or a scheme of arrangement, the denominator of the formula in clause 3.7 will be the lower of: (1) (100% CD) of the offer price under the takeover offer or the consideration under the scheme of arrangement; and (2) the VWAP over the 20 Business Days immediately preceding the announcement of the takeover offer or the scheme of arrangement plus 50% of the amount calculated by subtracting that VWAP from the offer price or the consideration (as applicable). 53

56 (b) The offer price or consideration under the takeover offer or scheme of arrangement is the cash consideration offered for each MOF Unit or, if cash consideration is not the only consideration offered, (100% CD) of the value of the consideration offered as reasonably determined by an independent investment bank appointed by the Manager (which shall act as an expert). 4. Reset of Terms 4.1 Manager may Change Terms of Issue Subject to these terms, the Manager may notify Holders of changes to the following terms (Reset Notice): (a) the Distribution Rate applying from the relevant Reset Date until and including the next Reset Date; (b) the Minimum Conversion Number applying from the relevant Reset Date until and including the next Reset Date (subject to the operation of any or all of clauses 3.10 to 3.13); (c) the next Reset Date (which must be at least 12 months after the relevant Reset Date and which must coincide with a Distribution Entitlement Date); (d) the frequency and timing of Distribution Entitlement Dates; and (e) the definition of Capital Distribution. These new terms will apply from the relevant Reset Date until and including the next Reset Date. 4.2 Notification To be effective, the Reset Notice must be given to Holders no later than 45 Business Days immediately preceding the relevant Reset Date. 5. RePS General Rights 5.1 Ranking RePS rank equally amongst themselves in all respects. The issue of any other preference units which rank in priority to the RePS in respect of distributions and return of capital on a winding up constitutes alteration of the rights attached to the RePS. The Manager reserves the right to issue further RePS or preference units which rank equally with existing RePS in respect of distribution and return of capital on a winding up. Such an issue does not constitute an alteration of the rights attached to the existing RePS Preferential Distribution Until conversion, the RePS rank in priority to MPST Units for the payment of distributions. 5.3 Priority on Termination If MPST is terminated, Holders will be entitled in priority to holders of MPST Units, to receive an amount equal to the Redemption Price, or if there is insufficient money available to make this payment in full, the available amount is to be paid to Holders proportionately based on their respective numbers of RePS held as at the date of termination. 5.4 No Set Off Any amount due to a Holder in respect of the RePS may not be set off against any claims by MOF or MPST against the Holder. 5.5 Restrictions on Distributions and Other Issues Until the date on which all RePS have been converted: (a) MPST will pay Distributions in respect of each Distribution Period in priority to distributions on any capital over which the RePS rank in priority for the payment of distributions or return of capital. MPST may only declare and pay distributions on such subordinated capital if all Distributions for the current Distribution Period and Distribution Shortfalls arising under this clause 5.5 have been paid; (b) if any Distribution as calculated under clause 2.1 is not paid or otherwise satisfied in full on a Distribution Payment Date, the amount of the unpaid Distribution (Distribution Shortfall) will be carried forward to subsequent Distribution Payment Dates during the Financial Year in which the Distribution Shortfall arose, and if and to the extent there are surplus Distributable Amounts following payment of Distributions, the Distribution Shortfall will be paid to Holders; (c) if at the end of a Financial Year, any of the Distributions which were payable pursuant to clause 2 during that Financial Year have not been paid in full, including by payment under clause 5.5(b) (Financial Year Shortfall), the amount of the unpaid Distributions will be carried forward to the following Financial Year, and to the extent that there are surplus Distributable Amounts in any Distribution Period in that Financial Year, following payment of Distributions and any Distribution Shortfall under clause 5.5(b), the surplus will be applied in or towards payment of the Financial Year Shortfall. For the avoidance of doubt, where an amount is paid to Holders in respect of a Financial Year Shortfall, that amount will be applied against Distribution Shortfalls in the order in which they arose;

57 (d) if a Financial Year Shortfall has not been paid at the end of the Financial Year following the Financial Year in which it arose, the Manager and MPST will have no liability to pay the Financial Year Shortfall; (e) MPST must not, without approval of a special resolution passed at a separate meeting of Holders, issue units ranking in priority to the RePS or permit the conversion of any existing units to units ranking equally or in priority to the RePS, but the Manager is at all times authorised to issue further preference units ranking equally with any existing RePS; (f) in determining whether there is any shortfall, account will be taken of payments made under the Guarantee in respect of Distributions. (g) any payment to be made to Holders pursuant to clause 5.5 (b) or (c) will be paid to those Holders who are on the register on the Distribution Entitlement Date as at the end of the Distribution Period in which the surplus Distributable Amounts became available. 5.6 Takeover Offers and Schemes of Arrangement If a takeover offer is made for MOF Units, acceptance of which is recommended by the Manager, or the Manager recommends a scheme of arrangement in respect of the MOF Units which will result in a person having a relevant interest in more than 50% of the MOF Units, the Manager will use reasonable endeavours to procure that Holders who convert during the takeover or scheme period will have the right to participate in the takeover or scheme. 5.7 Participation in New Issues Until the RePS are converted, they will confer no rights to subscribe for new securities in MOF or MPST or to participate in any bonus issues. 6. Voting Rights 6.1 MOF Holders will be entitled to receive notice of any general meeting of MOF and a copy of every circular and like document sent out by MOF to MOF Unit holders. Holders will not be entitled to vote at any general meeting of MOF. 6.2 MPST Holders will be entitled to receive notice of any general meeting of MPST and to attend, speak and vote at that meeting in accordance with the Corporations Act. 7. Listing of RePS The Manager must use all reasonable endeavours and furnish all such documents, information and undertakings as may be reasonably necessary in order to procure, at its own expense, listing of the RePS on ASX and all MOF Units issued under clause 3.7, on ASX. 8. Amendments to the Terms of Issue Subject to complying with all applicable laws, the Manager may without the authority, assent or approval of Holders amend or add to these terms of issue if the Manager reasonably considers the change will not adversely affect Holders rights. 9. Interpretation (a) Unless the context otherwise requires, if there is any inconsistency between the provisions of these terms of issue and MPST s constitution, then, to the maximum extent permitted by law, the provisions of these terms of issue will prevail. (b) If a calculation is required under these terms of issue, unless the contrary intention is expressed, the calculation will be performed to four decimal places. (c) Definitions and interpretation under MPST s constitution will also apply to these terms of issue. (d) The following expressions shall have the following meanings: ASX Australian Stock Exchange Limited. Business Day has the same meaning as in the ASX Listing Rules. Capital Distribution is the amount by which the sum of all distributions per MOF Unit paid by MOF in respect of a financial year exceeds the relevant amount shown below for that Financial Year: In respect of the financial year ending: Amount 30 June 2002 $ June 2003 $ June 2004 $ June 2005 $ June 2006 $0.17 Conversion Date means the date of conversion in respect of a Conversion Notice of RePS in accordance with clause 3.1(a), 3.2(a), or 3.3(b). 55

58 Conversion Ratio is defined in clause 3.7(a). Conversion VWAP means: (a) for the purpose of clause 3.2, the VWAP during the period (Reference Period) of 25 Business Days immediately preceding, but not including: 56 (1) if the Manager receives a notice under clause 3.2(a) following a suspension of trading described in clause 3.2(b)(7), the first day the MOF Units are suspended; and (2) otherwise, the Conversion Date. (b) for the purpose of clause 3.3(a)(3)(C), the VWAP during the period (Reference Period) of 10 Business Days immediately following the publication of a Manager Conversion Notice pursuant to clause 3.3(a)(3)(C); and (c) in all other cases, the VWAP during the period (Reference Period) of 25 Business Days immediately preceding, but not including, the Conversion Date. Cum Value is defined in clause 3.9. Date of Delisting means whichever is the first to occur of the following: (a) (b) the date upon which the Manager receives notification from ASX of the removal of MPST from the official list of ASX; or where RePS are suspended from trading by the ASX for a continuous period of 60 days, the day following the expiration of that 60 day period. Distributable Amounts means in relation to a Distribution Period the net income of MPST plus such other amounts which the Manager in its discretion determines are available for distribution to Holders. Distribution in respect of each RePS is the distribution calculated in accordance with clause 2.1(a). Distribution Entitlement Date means each date on which Holders will become entitled to receive a Distribution. Distribution Payment Date means each date on which a Distribution is payable in accordance with clause 2.5 whether or not a Distribution is paid on that date. Distribution Period means a period ending on a Distribution Entitlement Date as referred to in clause 2.5. Distribution Shortfall is defined in clause 5.5. Ex Date is defined in clause 3.9. Face Value in respect of each RePS is $100, as described in clause 1. Financial Year has the same meaning as applies under the Corporations Act. Financial Year Shortfall is defined in clause 5.5. Guarantee means the guarantee dated 16 November 2001 provided by MOF to a security trustee for the benefit of the Holders in respect of the RePS. Holder means a registered owner of RePS. Holder Conversion Notice is defined in clause 3.1. Holder Trigger Event Conversion Notice is defined in clause 3.2(a). Institutional Bookbuild means an open price bookbuild process in which institutions may bid for RePS. Manager Macquarie Office Management Limited (ABN ). Manager Conversion Notice is defined in clause 3.3(a). Manager Purchase Price is defined in clause 3.1(c)(2). Minimum Conversion Number is defined in clause 3.7(b). MOF Macquarie Office Trust (ARSN ). MOF Income means net income of MOF arising in accordance with the constitution of MOF. MOF Units Ordinary Units in the capital of MOF. MPST Macquarie Park Street Trust (ARSN ). MPST Units means ordinary units in MPST. Redemption Price is defined in clause 3.6. Reference Period is the period described in the definition of Conversion VWAP in this clause 9. Reset Date is 31 December 2006 or earlier as provided in clause 3.3, and thereafter the date as specified by the Manager in a notice issued under clause 4.1. Reset Notice is defined in clause 4.1. Trigger Event defined in clause 3.2(b). VWAP is the average of the daily volume weighted average sale price of MOF Units sold on ASX during the relevant period or on the relevant days but does not include any transaction defined in the ASX Business Rules as special, crossings prior to the commencement of normal trading, crossings during the after hours adjust phase nor any overseas trades or the exercise of options over MOF Units.

59 13. Glossary The following is a glossary of the terms used in this Prospectus: Acceptance By Macquarie Office Management Limited of an Application. Allotment Date The date on which RePS are allotted to successful applicants, expected to be 20 December Application An application made on the conditions set out in this Prospectus by using an Application Form to apply for a specified number of RePS. Application Form Each form attached to or accompanying this Prospectus upon which an offer to subscribe for RePS must be made. Application Monies The monies payable on Application, being the product of multiplying the number of RePS applied for by the amount of $100. ASIC Australian Securities & Investments Commission. ASX Australian Stock Exchange Limited (ABN ). Bidding Range The range in which institutions should submit bids in the Institutional Bookbuild will be 7.25% to 8.0%. Board The board of directors of Macquarie Office Management Limited from time to time. Bookbuild Distribution Rate The distribution rate at which the book is cleared to apply to RePS. Bookbuild Conversion Number The conversion number at which the book is cleared, being the minimum number of Ordinary Units for a Holder on Conversion. Business Day(s) Has the same meaning as in the Listing Rules. CHESS Clearing House Electronic Subregister System. Closing Date The last day on which Application Forms will be accepted. Conversion The Conversion of RePS into Ordinary Units. Conversion Date As defined in Section 12. Conversion Discount Has the meaning given to that term in the terms of issue of the RePS set out in Section 12. Conversion Notice Notice given by Holders to the Trust Manager requesting Conversion. Distribution Rate Has the meaning given to that term in the terms of issue of the RePS set out in Section 12. Face Value $100 for each RePS. Guarantee Provided by MOF to Holders as described in Section GPT The unit trust styled General Property Trust (ARSN ) constituted pursuant to the GPT Deed. GPTML GPT Management Limited (ACN ). Holder(s) Registered holder(s) of RePS. Implementation Deed The Implementation Deed made between JFIL, GPTML and the Trust Manager, a summary of which is contained in Section 10 of this Prospectus. Institutional Bookbuild Open price bookbuild process conducted by the Lead Manager in which institutions may submit bids for RePS. Issue Price The price payable for each of the RePS under the Offer, being $100 per RePS. 57

60 JFIL James Fielding Investments Limited (ACN ). Lead Manager Macquarie Equity Capital Markets Limited (ABN ). Listing Rules The Listing Rules of ASX. Macquarie Office Trust or MOF Macquarie Office Trust (ARSN ). Macquarie Park Street Trust or MPST Macquarie Park Street Trust (ARSN ). Minimum Application 50 RePS. Minimum Conversion Number The minimum number of Ordinary Units that Holders will receive on Conversion for each RePS. Minimum Distribution Rate 7.25%. MOF Constitution The Constitution establishing MOF dated 8 October 1993, as amended. MOF Unitholder Ordinary unitholder in MOF. NLA Net lettable area. Offer The invitation made pursuant to this Prospectus for persons to subscribe for RePS. Ordinary Units Ordinary units in the capital of Macquarie Office Trust. Prospectus This document setting out the terms and conditions of the Offer. Regulatory Event An interpretational ruling issued by any relevant government body that the Trust Manager resolves on reasonable grounds has a material adverse effect on MPST or MOF. RePS Reset preference units in MPST issued by Macquarie Office Management Limited pursuant to this Prospectus. RePS is a registered trademark of Macquarie Equity Capital Markets Limited. Reset Date Has the meaning given to that term in the terms of issue of the RePS set out in Section 12. Reset Notice Notice from the Trust Manager to Holders of new terms for the RePS. Tax Event Change in any taxation law which the Trust Manager resolves on reasonable grounds has a material adverse effect on MPST or MOF. TPS 2 Park Street Trust (ARSN ). TPS Constitution The constitution dated 8 April 1998 (as amended) constituting TPS. TPS Property TPS Property Pty Ltd (ACN ). Trigger Event Has the meaning given to that term in the terms of issue of the RePS set out in Section 12. Trust Manager Macquarie Office Management Limited (ABN ), manager of MOF and MPST. Trust Scheme The proposed scheme of arrangement pursuant to which MPST and GPT will each increase their holdings in TPS to 50%. VWAP Volume weighted average sale price, as defined in Section

61 0. head application forms 59