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Waltons Emporium Unit Trust

TERM SHEET for issue of CONVERTIBLE NOTES December 10, 2019

1. Proposed Transaction

2. Issuer

3. Lead Broker / Adviser

4. Investment

The Trustee of Waltons Emporium Unit Trust (WET) offers up to $30m of Convertible Notes for subscription, on and subject to the terms and conditions provided in this term sheet.

Gibraltar Capital Pty Ltd ACN 610 194 986 as Trustee (Trustee) for the Waltons Emporium Unit Trust (ACN 687 400 419)

The offer is not underwritten

The Trustee will offer up to $30m of Convertible Notes in the Fund. The funds raised will be used to provide capital to complete the purchase and develop the commercial property development in Brisbane known as the Waltons Emporium Development. The Funds are provided secured on a first mortgage basis held by WET over the site. (further information below).

5. Price and Size

30 million Notes will be offered at $1.00 per Note raising up to $30m. The notes will be unlisted.

6. Valuation

The Property is being acquired for $50 million by WET. The vendor has agreed to hold a second mortgage for the balance and is allowing settlement to occur on that basis.

7. Convertible Note Terms

The Investor will be issued with Convertible Notes on the following terms:


1. Term of Note is 12 months from the date of issuance

2. Interest on the Note is 10% per annum paid Quarterly in arrears. Default interest rate is 15%

3. The Note may be redeemed for initial investment amount after 12 months

4. The note may convert at any time in the first 12 months at the holder’s election

5. Conversion feature of the Note is as follows;

- Upon conversion the Note holder will receive a unit in the WET trust at a 20% discount to the stated NTA of the trust at the time of conversion.

- In addition, the Note holder will receive 1 option for every 2 units issued following conversion of the Note

- The option will allow the holder to purchase new units in the WET trust at the same price they are issued at when the Note is converted

- The option will be exercisable any time for 2 years from issuance

- Units in the WET trust issued as a result of converting the Note or exercising the option will rank the same as all existing Unit holders in WET trust

6. The Note is fully secured by holding directly a first Mortgage over the Property known as the Waltons Emporium Project in Brisbane

7. Procedure for redeeming or converting the Note and other terms are provided in the Convertible note Deed.

8. Timetable

The offer of Notes will open immediately on Wednesday, 10 December 2019 and will close at the discretion of the Trustee.

9. Use of Funds

The funds are to be used by the Trustee in line with the stated purposes in this Term Sheet. This will include the purchase of the Waltons Emporium Development and associated expenses.

10. Additional

The Trustee has the right to provide additional conversion options to the Note holder in the future. Any additional conversion option will not replace or alter the current terms offered in this Term Sheet.

The Property

The Property, known as the ‘Waltons Building’, comprises several interconnected buildings located above the Fortitude Valley Train Station and has been held by the same owner for over 35 years.

The Property is positioned to benefit from the ongoing transformation of the Fortitude Valley precinct and the neighbouring $500 million Valley Metro development, is within close proximity to luxury retail and other transport infrastructure, and is within 20 minutes of Brisbane International Airport.

The proposed development will be well served by foot traffic and directly connected to the train network.

The neighbourhood is already the subject of substantial redevelopment and, when complete, the Property will form a major element of one of Australia’s premier commercial, residential and retail precincts, providing a significant opportunity for capital growth.

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