<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 1, 1998
REGISTRATION NO. 333-46945
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
PRE-EFFECTIVE AMENDMENT NO. 4 TO
FORM S-11
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
WESTPAC SECURITISATION MANAGEMENT PTY LIMITED
(ACN 081 709 211)
(Exact name of registrant as specified in its governing instruments)
LEVEL 4, 60 MARTIN PLACE
SYDNEY, NSW 2000
AUSTRALIA
TELEPHONE: 612-9226-3589
(Address, including zip code/post code, and telephone number, including area
code, of registrant's principal executive offices)
------------------------------
LEWIS E. LOVE, JR.
DIRECTOR & SECRETARY
WESTPAC SECURITISATION MANAGEMENT PTY LIMITED
575 FIFTH AVENUE, 39TH FLOOR
NEW YORK, NEW YORK 10017-2422
TELEPHONE: (212) 551-1905
(Name, address, including zip code and telephone number, including area code,
of agent for service)
------------------------------
WITH A COPY TO:
<TABLE>
<S> <C> <C>
KIMBERLEY GIRE DIANE CITRON, ESQ. CATHY M. KAPLAN, ESQ.
DIRECTOR MAYER, BROWN & PLATT BROWN & WOOD LLP
WESTPAC SECURITISATION MANAGEMENT 190 SOUTH LASALLE STREET ONE WORLD TRADE CENTER
PTY LIMITED CHICAGO, ILLINOIS 60603 NEW YORK, NEW YORK 10048
LEVEL 6, 60 MARTIN PLACE
SYDNEY, NSW 2000
AUSTRALIA
</TABLE>
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time on or after the effective date of the registration statement, as
determined by market conditions.
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________
If delivery of the prospectus is expected to be made pursuant to Rule 434
check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
<S> <C> <C> <C> <C>
Mortgage Backed Floating Rate Notes......... $1,405,000,000 100% $1,405,000,000 $414,475*
</TABLE>
* $295.00 previously filed.
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
NAME AND CAPTION IN FORM S-11 CAPTION IN PROSPECTUS
- ----------------------------------------------------------------- ------------------------------------------------------
<C> <S> <C>
1. Forepart of Registration Statement and Outside Front
Cover Page of Prospectus............................ Front Cover of Registration Statement; Outside Front
Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus.......................................... Inside Front Cover Page of Prospectus; Outside Back
Cover Page of Prospectus
3. Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges........................... Summary of Terms; Risk Factors
4. Determination of Offering Price....................... *
5. Dilution.............................................. *
6. Selling Security Holders.............................. *
7. Plan of Distribution.................................. Underwriting
8. Use of Proceeds....................................... Use of Proceeds
9. Selected Financial Data............................... *
10. Management's Discussion and Analysis of Financial
Condition and Results of Operations................. The Trust Fund; The Trust Manager
11. General Information as to Registrant.................. Description of the Offered Notes; The Trust Manager
12. Policy with respect to Certain Activities............. Description of the Offered Notes
13. Investment Policies of Registrant..................... Description of the Offered Notes
14. Description of Real Estate............................ The Trust Fund; Westpac Residential Loan Program
15. Operating Data........................................ *
16. Tax Treatment of Registrant and Its Security
Holders............................................. United States Federal Income Tax Consequences; Certain
Australian Tax Matters
17. Market Price of and Dividends on the Registrant's
Common Equity and Related Stockholder Matters....... *
18. Description of Registrant's Securities................ Description of the Offered Notes
19. Legal Proceedings..................................... *
20. Security Ownership of Certain Beneficial Owners and
Management.......................................... The Trust Manager
21. Directors and Executive Officers...................... The Trust Manager
22. Executive Compensation................................ *
23. Certain Relationships and Related Transactions........ *
24. Selection, Management and Custody of Registrant's
Investments......................................... Description of the Offered Notes; Westpac Residential
Loan Program
25. Policies with Respect to Certain Transactions......... Description of the Offered Notes
26. Limitations of Liability.............................. Description of the Offered Notes
27. Financial Statements and Information.................. *
28. Interests of Named Experts and Counsel................ *
29. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities...................... Part II of Registration Statement
30. Quantitative and Qualitative Disclosures about Market
Risk................................................ *
</TABLE>
- ------------------------
* Not Applicable
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 1, 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PRELIMINARY PROSPECTUS
US$1,405,000,000
WESTPAC SECURITIES ADMINISTRATION LIMITED
(ACN 000 049 472)
IN ITS CAPACITY AS TRUSTEE OF THE
SERIES 1998-1G WST TRUST
US$1,372,700,000 CLASS A MORTGAGE BACKED FLOATING RATE NOTES DUE
US$32,300,000 CLASS B MORTGAGE BACKED FLOATING RATE NOTES DUE
Interest on the Class A Mortgage Backed Floating Rate Notes (the "Class A
Notes") and the Class B Mortgage Backed Floating Rate Notes (the "Class B Notes"
and together with the Class A Notes, the "Offered Notes") offered hereby and
issued by Westpac Securities Administration Limited solely in its capacity as
trustee of the Series 1998-1G WST Trust (the "Trust") (the "Issuer Trustee")
will be payable quarterly on the 19th day of each of April, July, October and
January (or if such 19th day is not a Business Day (as defined herein), the next
succeeding Business Day in the same month or, if not in the same month, the
immediately preceding Business Day), commencing July 20, 1998 (each, a "Payment
Date"). The principal of a class of Offered Notes will be payable on its
maturity date indicated above, subject to earlier redemption in whole or in part
as described herein. Only the Offered Notes are offered hereby.
Under certain limited circumstances, the Issuer Trustee may issue certain
additional securities, the RFSs, which in certain circumstances will convert to
RFS Class A Notes. The RFSs will be senior in priority of distributions of
principal to the Class A Notes and the RFS Class A Notes (except with respect to
enforcement, in which case such classes will be PARI PASSU) and senior in
priority of distributions of principal and interest to the Class B Notes. Upon
conversion, the RFS Class A Notes will rank PARI PASSU in respect of priority of
principal and interest with the Class A Notes and senior in priority of
distributions of principal and interest to the Class B Notes. The RFSs and RFS
Class A Notes are not offered hereby. See "SUMMARY OF TERMS--Redraws, RFSs and
RFS Class A Notes."
(CONTINUED ON NEXT PAGE)
--------------------------
PROSPECTIVE INVESTORS IN THE NOTES SHOULD REVIEW THE INFORMATION SET FORTH
UNDER "RISK FACTORS" BEGINNING ON PAGE 34 HEREIN.
THE OFFERED NOTES REPRESENT OBLIGATIONS OF THE ISSUER TRUSTEE IN ITS CAPACITY AS
TRUSTEE OF THE TRUST ONLY AND DO NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF
WESTPAC, THE MORTGAGE COMPANY PTY LIMITED, WESTPAC SECURITISATION
MANAGEMENT PTY LIMITED, ANY OF THEIR RESPECTIVE AFFILIATES (OTHER THAN
THE ISSUER TRUSTEE) OR ANY GOVERNMENT OR GOVERNMENTAL AGENCY.
NEITHER THE OFFERED NOTES NOR THE HOUSING LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENT OR GOVERNMENTAL AGENCY EXCEPT TO
THE LIMITED EXTENT DESCRIBED HEREIN.
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Proceeds to
Underwriting Issuer
Price to Public Discount Trustee(1)
<S> <C> <C> <C>
Class A Notes...................................... % % %
Class B Notes...................................... % % %
Total.............................................. US$ US$ US$
</TABLE>
(1) Before deducting expenses, estimated to be US$ .
Application has been made to the London Stock Exchange Limited (the "London
Stock Exchange") for the Offered Notes to be admitted to the Official List.
Copies of this Prospectus (which includes the Appendices), which comprise
Listing Particulars with regard to the Issuer Trustee and the Offered Notes in
accordance with the listing rules made under Part IV of the Financial Services
Act of 1986, have been delivered to the Registrar of Companies in England and
Wales for registration in accordance with Section 149 of that Act.
The Offered Notes are offered by the Underwriters (as defined herein)
subject to prior sale when, as and if issued to and accepted by them, subject to
approval of certain legal matters by counsel for the Underwriters. The
Underwriters reserve the right to reject any order in whole or in part and to
withdraw, cancel or modify the offer without notice. It is expected that
delivery of the Offered Notes will be made in book-entry form through the
facilities of The Depository Trust Company ("DTC"), Cedel Bank, SOCIETE ANONYME
("Cedel") and the Euroclear System ("Euroclear") on or about June 9, 1998
against payment therefor in immediately available funds.
J.P. MORGAN & CO. MORGAN STANLEY DEAN WITTER
J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated are acting
as joint bookrunners in connection with the activities relating to this
offering.
WESTPAC BANKING CORPORATION
DEUTSCHE MORGAN GRENFELL
MERRILL LYNCH & CO.
SBC WARBURG DILLON READ
NOMURA INTERNATIONAL PLC
The date of this Prospectus is June , 1998.
<PAGE>
(CONTINUED FROM THE COVER PAGE)
The Offered Notes will be collateralized by a pool of variable and fixed
rate residential housing loans secured by Mortgaged Properties (as defined
herein) located in Australia (the "Housing Loans") which are repayable in
Australian dollars, rights under certain insurance policies with respect to the
Housing Loans, amounts on deposit in certain accounts, amounts invested in
Authorized Investments (as defined herein) and the Issuer Trustee's rights under
the Transaction Documents (as defined herein) (collectively, the "Trust
Assets"). The Housing Loans are from a general portfolio of residential Housing
Loans which have been originated by Westpac Banking Corporation (ARBN 007 457
141) ("Westpac") in the ordinary course of its business. The Housing Loans will
be sold either by Westpac or the Seller Trustee (as defined herein) to the
Issuer Trustee. The Offered Notes and the Transaction Documents (other than the
Security Trust Deed and certain of the Swap Agreements) are governed by, and
shall be construed in accordance with, the laws of New South Wales, Australia.
The Security Trust Deed (as defined herein) is governed by, and shall be
construed in accordance with, the laws of the Australian Capital Territory.
The Issuer Trustee was incorporated on 11th July 1944 as, and continues to
exist and operate as, a limited liability public company under the Corporations
Law of New South Wales, Australia. The Trust will be formed on or about
, 1998 pursuant to the Notice of Creation of Trust (as defined
herein) executed by the Issuer Trustee and Westpac Securitisation Management Pty
Limited (the "Trust Manager"). The Issuer Trustee will issue the Offered Notes
in its capacity as trustee of the Trust.
The Offered Notes shall be subject to mandatory redemption in part on any
Payment Date if on that date there are any Principal Collections (as defined
herein) available to be distributed in relation to the Offered Notes. The
Offered Notes are also subject to optional redemption in full in certain
circumstances described herein.
The Class A Notes rank PARI PASSU and without any preference among
themselves and the Class B Notes rank PARI PASSU and without any preference
among themselves. The right to payment of principal of and interest on the Class
B Notes is subordinated and may be limited as more particularly described
herein. In addition, under certain limited circumstances, the Trust may issue
certain additional debt securities, the Redraw Funding Securities ("RFSs"),
which in certain circumstances will convert to RFS Class A Notes (the "RFS Class
A Notes"). Upon conversion, the RFS Class A Notes will rank PARI PASSU in
respect of priority of principal and interest with the Class A Notes. The RFSs,
along with repayments under the Redraw Facility (as defined herein), will be
senior in priority of distributions of principal to the Class A Notes and the
RFS Class A Notes. The RFSs, the RFS Class A Notes and fees with respect to the
Redraw Facility and the Class A Notes will rank PARI PASSU in respect to
priority of payments of interest. Payments in respect of principal and interest
in respect of the Class B Notes are subordinated to such payments in respect of
the Class A Notes, RFSs and RFS Class A Notes. See "DESCRIPTION OF THE OFFERED
NOTES--Description of the Redraw Facility, the Redraw Funding Securities and the
RFS Class A Notes," "--Interest Payable on the RFSs and the RFS Class A Notes"
and "--Subordination of the Class B Notes; Priority of Payment of Principal to
RFSs." The RFSs and the RFS Class A Notes are not being offered hereby.
The Offered Notes may not, in connection with their initial distribution, be
offered or sold, directly or indirectly, in the Commonwealth of Australia, its
territories or possessions or to any resident of Australia.
The Offered Notes should not be acquired by any associate (as defined in
Section 128F of the Income Tax Assessment Act of 1936 of Australia) of the
Issuer Trustee (which for these purposes, is Westpac and its associates).
The Issuer Trustee's liability to make payments in respect of the Offered
Notes is limited to its right of indemnity from the assets of the Trust which
are from time to time available for this purpose pursuant to the Master Trust
Deed, the Series Notice and the Security Trust Deed. All claims against the
Issuer Trustee
2
<PAGE>
in relation to the Offered Notes may only be satisfied out of the assets of the
Trust, and are limited in recourse to the assets of the Trust.
Each Noteholder is required to accept any distribution of moneys under the
Security Trust Deed in full and final satisfaction of all moneys owing to it,
and any debt represented by any shortfall that exists after any such final
distribution is extinguished. The Issuer Trustee shall not be liable to satisfy
any obligations or liabilities in relation to the Offered Notes from its
personal assets except arising from (and to the extent of ) any fraud,
negligence or breach of trust on the part of the Issuer Trustee.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR, AND PURCHASE, THE SECURITIES IN THE OPEN MARKET. SEE
"UNDERWRITING."
UNTIL 90 DAYS AFTER THE DATE OF THIS PROSPECTUS, ALL DEALERS EFFECTING
TRANSACTIONS IN THE OFFERED NOTES, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO
THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
THE OFFERED NOTES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSIONER
OF INSURANCE OF THE STATE OF NORTH CAROLINA, NOR HAS THE COMMISSIONER OF
INSURANCE RULED UPON THE ACCURACY OR THE ADEQUACY OF THIS PROSPECTUS.
ANNOUNCEMENT
By distributing or arranging for the distribution of this Prospectus to the
Underwriters and the persons to whom this Prospectus is distributed, the Issuer
Trustee announces to the Underwriters and each such person that: (1) the Offered
Notes will be issued in the form of one or more Book-Entry Notes issued to and
lodged with Cede & Co. as nominee of DTC; (2) in connection with the issue, DTC
will confer rights in relation to the Offered Notes and Noteholders and will
record the existence of those rights; and (3) as a result of the issue of the
Offered Notes in this manner, such rights will be able to be created.
REPORTS TO NOTEHOLDERS
Unless and until Definitive Notes (as defined herein) are issued, quarterly
and annual unaudited reports containing information concerning the Trust and the
Offered Notes will be prepared by the Trust Manager and sent on behalf of the
Issuer Trustee to Cede & Co. ("Cede"), as nominee of DTC as registered holder of
the Offered Notes pursuant to the Note Trust Deed. See "DESCRIPTION OF THE
OFFERED NOTES--Book-Entry Registration" and "--Determination Date- Calculations
and Reports to Noteholders." Such reports will be made available by the Issuer
Trustee to DTC and its participants. DTC and its participants will make such
reports available to holders of interests in the Offered Notes in accordance
with the rules, regulations and procedures creating and affecting DTC. However,
such reports will not be sent directly to each beneficial owner while the
Offered Notes are in book-entry form. Upon the issuance of fully registered,
certificated Offered Notes, such reports will be sent directly to each
Noteholder. Such reports will not constitute financial statements prepared in
accordance with generally accepted accounting principles. The Trust Manager, on
behalf of the Issuer Trustee, will file with the Securities and Exchange
Commission (the "Commission") such periodic reports as are required under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations of the Commission thereunder. However, in accordance with the
Exchange Act and the rules and regulations of the Commission thereunder, the
Trust Manager expects that the Issuer Trustee's obligation to file such reports
will be terminated following the end of June 1999.
3
<PAGE>
DISCLAIMERS WITH RESPECT TO SALES TO NON-U.S. INVESTORS
This section applies only to the offer to subscribe for, or purchase, the
Offered Notes in any country outside the United States of America. The Issuer
Trustee's responsibility for, and liability in respect of, this Prospectus is
limited accordingly.
This Prospectus does not constitute an offer of, or an invitation by or on
behalf of, the Issuer Trustee or the Underwriters or any of them, to subscribe
for or purchase any of the Offered Notes, and must not be relied upon by anybody
intending to purchase the Offered Notes.
No action has been or will be taken by the Issuer Trustee or the
Underwriters that would permit a public offer of the Offered Notes in any
country or jurisdiction (other than in the United States of America) where
action for that purpose is required. Accordingly, the Offered Notes may not be
offered or sold, directly or indirectly, and neither this Prospectus nor any
offering circular, prospectus, form of application, advertisment or other
offering material may be issued or distributed or published in any country or
jurisdiction, except in circumstances that will result in compliance with all
applicable laws and regulations and the Underwriters have represented that all
offers and sales by them have been and will be made on such terms. Persons into
whose possession this document comes are required by the Issuer Trustee and the
Underwriters to inform themselves about and to observe any such restrictions.
For a description of certain further restrictions on offers and sales of Offered
Notes, see "UNDERWRITING."
The Issuer Trustee accepts responsibility for the information contained in
this Prospectus (which includes the Appendices). To the best of the knowledge
and belief of the Issuer Trustee (which has taken all reasonable care to ensure
that such is the case), the information contained in this Prospectus (which
includes the Appendices) is in accordance with the facts and does not omit
anything likely to affect the import of such information.
The Currency Swap Providers (as defined herein) accept responsibility for
the information contained in "CURRENCY SWAP PROVIDERS" and "DESCRIPTION OF THE
SWAP AGREEMENTS-- Description of Currency Swaps". To the best of the knowledge
and belief of the Currency Swap Providers (which have taken all reasonable care
to ensure that such is the case), such information is in accordance with the
facts and does not omit anything likely to affect the import of such
information. The Currency Swap Providers do not accept responsibility for any
other information contained in this Prospectus. Save for the above information,
the Currency Swap Providers have not separately verified the information
contained herein. No representation, warranty or undertaking, express or
implied, is made and no responsibility or liability is accepted by the Currency
Swap Providers as to the accuracy or completeness of any of the information in
this Prospectus (other than the information described above) or any other
information supplied in connection with the Offered Notes or their distribution.
None of the Seller Trustee, the Servicer, Trust Manager, Westpac, the
Security Trustee, the Note Trustee, any Mortgage Insurer or the Underwriters
accepts any responsibility for any information contained in this Prospectus and
none of them has separately verified the information contained herein. No
representation, warranty or undertaking, express or implied, is made and no
responsibility or liability is accepted by the Seller Trustee, the Servicer, the
Trust Manager, Westpac, the Security Trustee, the Note Trustee, any Mortgage
Insurer or the Underwriters as to the accuracy or completeness of any
information contained in this Prospectus or any other information supplied in
connection with the Offered Notes or their distribution. Each person receiving
this Prospectus acknowledges that such person has not relied on the Seller
Trustee, the Servicer, the Trust Manager, Westpac, the Security Trustee, the
Note Trustee, any Mortgage Insurer or the Underwriters nor on any person
affiliated with any of them in connection with its investigation of the accuracy
of such information or its investment decisions.
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection with
the issue or sale of the Offered Notes and, if given or made, such information
or representation must not be relied upon as having been authorized by the
Issuer
4
<PAGE>
Trustee or any of the Underwriters. Neither the delivery of this Prospectus nor
any sale made in connection herewith shall, under any circumstances, create any
implication that there has been no material change in the affairs of the Issuer
Trustee or any other party named in the Prospectus since the date hereof or the
date upon which this document has been most recently amended or supplemented or
that there has been no material adverse change in the financial position of the
Issuer Trustee or any other party named in the Prospectus since the date hereof
or the date upon which this document has been most recently amended or
supplemented or that any other information supplied in connection with the
Offered Notes is correct as of any time subsequent to the date on which it is
supplied or, if different, the date indicated in the document containing the
same. The Underwriters expressly do not undertake to review the financial
condition or affairs of the Issuer Trustee or any other party named in the
Prospectus during the life of the Offered Notes.
Neither this Prospectus nor any other information supplied in connection
with the Offered Notes is intended to provide the basis of any credit or other
evaluation and should not be considered as a recommendation by the Issuer
Trustee, the Note Trustee, the Currency Swap Providers or any of the
Underwriters that any recipient of this Prospectus, or any other information
supplied in connection with the Offered Notes, should purchase any of the
Offered Notes. Each investor contemplating purchasing any of the Offered Notes
should make its own independent investigation of the financial condition and
affairs, and its own appraisal of the creditworthiness of the Issuer Trustee and
each investor should seek its own tax, accounting and legal advice as to the
consequences of investing in any of the Offered Notes and none of the Servicer,
Trust Manager, the Seller Trustee, Westpac, the Note Trustee, the Security
Trustee, any Mortgage Insurer or any of the Underwriters accept any
responsibility or make any representation as to the tax consequences of
investing in the Offered Notes.
AVAILABLE INFORMATION
The Trust Manager has filed with the Commission a Registration Statement
(together with all amendments and exhibits thereto, referred to herein as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the Offered Notes offered pursuant to this
Prospectus. For further information, reference is made to the Registration
Statement and amendments thereof and to the exhibits thereto, which are
available for inspection without charge at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549;
and at the Commission's regional offices at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade Center, Suite
1300, New York, New York 10048. Copies of the Registration Statement and
amendments thereof and exhibits thereto may be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission also maintains a World Wide Web site
which provides on-line access to reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission at the address "http://www.sec.gov."
5
<PAGE>
AUSTRALIAN DISCLAIMERS
(a) The Offered Notes do not represent deposits or other liabilities of
Westpac or associates of Westpac.
(b) The holding of the Offered Notes is subject to investment risk,
including possible delays in repayment and loss of income and principal
invested.
(c) Neither Westpac nor any associate of Westpac in any way stands behind
the capital value and/or performance of the Offered Notes or the assets of the
Trust except to the limited extent provided in the Transaction Documents for the
Trust.
(d) None of Westpac, the Issuer Trustee, The Mortgage Company Pty Limited
(the "Servicer") or the Trust Manager guarantees the payment of interest or the
repayment of principal due on the Offered Notes.
(e) None of the obligations of the Trust Manager are guaranteed in any way
by Westpac or any associate of Westpac.
------------------------
6
<PAGE>
ENFORCEMENT OF FOREIGN JUDGMENTS IN AUSTRALIA
The Trust Manager is an Australian proprietary company incorporated with
limited liability under the Corporations Law. Any final and conclusive judgment
of any New York State or United States Federal Court sitting in the Borough of
Manhattan in the City of New York having jurisdiction recognized by the relevant
Australian jurisdiction in respect of an obligation of the Trust Manager in
respect of an Offered Note, which is for a fixed sum of money and which has not
been stayed or satisfied in full, would be enforceable by action against the
Trust Manager in the courts of the relevant Australian jurisdiction without a
re-examination of the merits of the issues determined by the proceedings in the
New York State or United States Federal Court, as applicable, unless: (a) the
proceedings in New York State or United States Federal Court, as applicable,
involved a denial of the principles of natural justice; (b) the judgment is
contrary to the public policy of the relevant Australian jurisdiction; (c) the
judgment was obtained by fraud or duress or was based on a clear mistake of
fact; (d) the judgment is a penal or revenue judgment; or (e) there has been a
prior judgment in another court between the same parties concerning the same
issues as are dealt with in the judgment of the New York State or United States
Federal Court, as applicable. A judgment by a court may be given in some cases
only in Australian dollars. The Trust Manager expressly submits to the
jurisdiction of New York State and United States Federal Courts sitting in the
Borough of Manhattan in the City of New York for the purpose of any suit, action
or proceedings arising out of this offering. The Trust Manager has appointed
Lewis E. Love, Jr., its Director and Secretary, 575 Fifth Avenue, 39th Floor,
New York, New York 10017-2422, as its agent upon whom process may be served in
any such action.
The majority of the directors and executive officers of the Trust Manager,
and certain experts named herein, reside outside the United States (in the
Commonwealth of Australia). Substantially all or a substantial portion of the
assets of all or many of such persons are located outside the United States. As
a result, it may not be possible for holders of the Offered Notes to effect
service of process within the United States upon such persons or to enforce
against them judgments obtained in United States courts predicated upon the
civil liability provisions of Federal securities laws of the United States. The
Trust Manager has been advised by its Australian counsel Allen Allen & Hemsley,
that, based on the restrictions referred to above, there is doubt as to the
enforceability in the Commonwealth of Australia, in original actions or in
actions for enforcement of judgments of United States courts, of civil
liabilities predicated upon the Federal securities laws of the United States.
EXCHANGE CONTROLS AND LIMITATIONS
Under temporary Australian foreign exchange controls, payments by an
Australian resident to, or on behalf of: (a) the Government of Iraq or its
agencies or nationals; (b) the authorities of the Federal Republic of Yugoslavia
(Serbia and Montenegro); or (c) the Government of Libya or any public authority
or controlled entity of the Government of Libya may only be made with Reserve
Bank of Australia approval. Such restrictions may change in the future. See
"RISK FACTORS--Risks of Currency Exchange Controls."
U.S. DOLLAR PRESENTATION
In this Prospectus, references to "U.S. dollars" and "US$" are references to
U.S. currency and references to "Australian dollars" and "A$" are references to
Australian currency. Unless otherwise stated herein, the translations of
Australian dollars into U.S. dollars have been made at a rate of
US$.6260=A$1.00, the noon buying rate in New York City for cable transfers in
Australian dollars as certified for customs purposes by the Federal Reserve Bank
of New York on May 29, 1998. Use of such rate is not a representation that
Australian dollar amounts actually represent such U.S. dollar amounts or could
be converted into U.S. dollars at that rate.
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SUMMARY OF TERMS.......................................................................................... 13
STRUCTURAL CHART.......................................................................................... 28
CASH FLOW SUMMARY......................................................................................... 29
Collections........................................................................................... 29
Gross Principal Collections........................................................................... 29
Principal Losses...................................................................................... 30
Income Collections.................................................................................... 30
Liquidity Support..................................................................................... 31
Currency Swaps........................................................................................ 31
CASH FLOW CHART........................................................................................... 32
RISK FACTORS.............................................................................................. 34
Limited Liability under the Offered Notes............................................................. 34
Risk of Equitable Assignment of Housing Loans Rather Than Legal Assignment............................ 34
Risk of Losses and Delays from Enforcement of the Housing Loans....................................... 35
Mortgage Insurance Policies Are Subject to Exclusions and Limitations................................. 35
Risks Associated with High LVR Housing Loans.......................................................... 35
Risks Associated with Westpac's Ability to Set Rates on Variable
Rate Housing Loans at its Discretion................................................................ 35
Ability to Change Housing Loan Features May Result in Changes to the Mortgage Pool and Higher Rates of
Principal Prepayment on the Offered Notes............................................................ 36
Risks of Currency Exchange Controls................................................................... 36
Risks Related to a Termination of the Swap Agreements................................................. 36
Delinquency and Default Risk.......................................................................... 38
Risk of Early Defaults................................................................................ 38
Principal Prepayment and Yield Considerations......................................................... 38
No Gross-Up; Tax Redemption........................................................................... 39
Reinvestment Risk..................................................................................... 39
Servicer Risk......................................................................................... 40
Subordination of the Class B Notes.................................................................... 40
Priority of RFSs and RFS Class A Notes Owned by Australian Resident Investors......................... 40
Credit Enhancement Provides Only Limited Protection Against Losses.................................... 41
Limitations on the Liquidity Support.................................................................. 41
Exercise of Clean-up Offer May Result in Shortfalls to Noteholders.................................... 41
Redemption of the Notes............................................................................... 41
Geographic Concentration May Affect Performance....................................................... 42
Consumer Credit Legislation........................................................................... 42
Risk of Commingling................................................................................... 43
Limited Liquidity..................................................................................... 43
Ratings of the Notes; Factors Affecting Ability to Maintain Ratings................................... 43
Book-Entry Notes...................................................................................... 44
Other Considerations.................................................................................. 44
FORMATION OF THE TRUST.................................................................................... 44
Westpac Securitisation Trust Programme................................................................ 44
Series 1998-1G WST Trust.............................................................................. 44
Trust Assets.......................................................................................... 45
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SECURITY FOR THE NOTES.................................................................................... 45
Charge................................................................................................ 45
Security Trustee...................................................................................... 46
Nature of Security.................................................................................... 46
Enforcement........................................................................................... 47
Priorities under the Security Trust Deed.............................................................. 48
Security Trustee's Fees and Expenses.................................................................. 49
Retirement and Removal................................................................................ 49
Additional Provisions of the Security Trust Deed...................................................... 50
THE TRUST FUND............................................................................................ 51
General............................................................................................... 51
Transfer and Assignment of Housing Loans.............................................................. 51
Representations and Warranties........................................................................ 52
Breach of Representations and Warranties.............................................................. 53
Housing Loan Statistics............................................................................... 54
THE ISSUER TRUSTEE........................................................................................ 61
Incorporation......................................................................................... 61
Share Capital......................................................................................... 61
Business.............................................................................................. 61
Experience............................................................................................ 61
Directors............................................................................................. 62
Powers................................................................................................ 62
Duties................................................................................................ 62
Delegation............................................................................................ 63
Issuer Trustee Fees and Expenses...................................................................... 63
Removal of the Issuer Trustee......................................................................... 63
Voluntary Retirement of the Issuer Trustee............................................................ 64
Limitation of Issuer Trustee's Liability.............................................................. 64
Rights of Indemnity of Issuer Trustee................................................................. 65
Limitation of Seller Trustee's Liability and Rights of Indemnity...................................... 65
Rights of Indemnity of Seller Trustee................................................................. 65
THE NOTE TRUSTEE.......................................................................................... 66
ORIGINATOR OF THE HOUSING LOANS........................................................................... 66
Year 2000............................................................................................. 66
THE SERVICER.............................................................................................. 66
General............................................................................................... 66
Servicing of Housing Loans............................................................................ 67
Document Custody...................................................................................... 67
Collection and Enforcement Procedures................................................................. 67
Delinquencies and Mortgagee in Possession with respect to the Securitized Portfolios.................. 68
THE TRUST MANAGER......................................................................................... 70
General............................................................................................... 70
Incorporation......................................................................................... 70
Share Capital......................................................................................... 70
Directors............................................................................................. 70
Duties and Role of the Trust Manager.................................................................. 71
Removal of the Trust Manager.......................................................................... 71
Voluntary Retirement of the Trust Manager............................................................. 72
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Limitation of Trust Manager's Liability............................................................... 72
WESTPAC RESIDENTIAL LOAN PROGRAM.......................................................................... 73
Origination of Housing Loans.......................................................................... 73
Underwriting of Housing Loans......................................................................... 73
Servicing of Housing Loans............................................................................ 74
Housing Loan Products................................................................................. 74
Housing Loan Features................................................................................. 75
THE MORTGAGE INSURANCE POLICIES........................................................................... 77
Mortgage Insurance Policies--General.................................................................. 77
The HLIC Mortgage Pool Insurance Policy............................................................... 78
Primary Mortgage Insurance Policies................................................................... 82
PREPAYMENT AND YIELD CONSIDERATIONS....................................................................... 84
General............................................................................................... 84
Prepayments........................................................................................... 84
Weighted Average Lives................................................................................ 84
DESCRIPTION OF THE OFFERED NOTES.......................................................................... 88
General............................................................................................... 88
Collections and Payment............................................................................... 89
Collections........................................................................................... 89
Calculation of Total Available Funds.................................................................. 90
Available Income...................................................................................... 90
Principal Draws....................................................................................... 92
Liquidity Draws....................................................................................... 92
Remaining Liquidity Shortfall......................................................................... 92
Distribution of Total Available Funds................................................................. 93
Excess Available Income............................................................................... 95
Gross Principal Collections........................................................................... 96
Principal Collections................................................................................. 97
Distribution of Principal Collections................................................................. 97
Payments of Principal on the Notes.................................................................... 98
Application of Principal Charge Offs.................................................................. 101
Payments into US$ Account............................................................................. 102
Payments out of US$ Account........................................................................... 103
Prepayment Costs and Prepayment Benefits.............................................................. 103
Description of the Redraw Facility, the Redraw Funding Securities and the RFS Class A Notes........... 103
Redraw Facility....................................................................................... 103
Issuance of Redraw Funding Securities ("RFS")......................................................... 107
RFS Class A Notes..................................................................................... 107
Form of the RFSs and the RFS Class A Notes............................................................ 107
Interest Payable on the RFSs and the RFS Class A Notes................................................ 108
Subordination of Class B Notes; Priority of Payment of Principal to RFSs.............................. 108
Substitution of Housing Loans......................................................................... 108
Prescription.......................................................................................... 108
Clean-up Offer........................................................................................ 109
Redemption of the Notes............................................................................... 109
Withholding or Tax Deductions......................................................................... 109
Redemption of the Offered Notes for Taxation or Other Reasons......................................... 110
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Termination of the Trust.............................................................................. 110
Trust Accounts........................................................................................ 111
General............................................................................................... 112
Determination Date--Calculations and Reports to Noteholders........................................... 112
Book-Entry Registration............................................................................... 113
Definitive Notes...................................................................................... 116
Modification of Master Trust Deed, Series Notice and the Note Trust Deed Without Noteholder Consent... 117
Modification of Master Trust Deed, Series Notice and the Note Trust Deed With Noteholder Consent...... 117
Meetings of Voting Mortgagees......................................................................... 118
Voting of Class A Noteholders; Modification; Consents; Waiver......................................... 118
Voting of Class B Noteholders; Modifications; Consents; Waiver........................................ 119
Events of Default; Rights Upon Event of Default....................................................... 119
Enforcement of the Security Trust Deed................................................................ 120
Certain Covenants..................................................................................... 123
Annual Compliance Statement........................................................................... 124
The Note Trustee...................................................................................... 124
Governing Law......................................................................................... 124
London Stock Exchange Listing......................................................................... 124
DESCRIPTION OF THE SERVICING AGREEMENT.................................................................... 124
General............................................................................................... 124
Servicing............................................................................................. 125
Document Custody...................................................................................... 128
Amendment............................................................................................. 129
Termination of Servicing Agreement.................................................................... 129
THE LIQUIDITY FACILITY.................................................................................... 130
General Description................................................................................... 130
Liquidity Draws....................................................................................... 130
Conditions Precedent to a Liquidity Draw.............................................................. 130
Deposit into a Collateral Account..................................................................... 130
Interest on Liquidity Draws........................................................................... 131
Commitment Fee........................................................................................ 131
Repayment of Liquidity Drawings....................................................................... 131
Events of Default..................................................................................... 132
Consequences of Default............................................................................... 132
Termination........................................................................................... 132
DESCRIPTION OF THE SWAP AGREEMENTS........................................................................ 133
Description of Interest Rate Swap Agreements.......................................................... 133
Description of Currency Swaps......................................................................... 135
Replacement of Currency Swaps......................................................................... 137
Downgrade of Currency Swap Providers.................................................................. 137
Cross Support......................................................................................... 137
CURRENCY SWAP PROVIDERS................................................................................... 137
CERTAIN LEGAL ASPECTS OF THE HOUSING LOANS................................................................ 138
General............................................................................................... 138
Nature of Housing Loans as Security................................................................... 139
Enforcement of Housing Loans.......................................................................... 141
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Penalties and Prohibited Fees......................................................................... 141
Consumer Credit Legislation........................................................................... 142
Bankruptcy............................................................................................ 142
Environmental......................................................................................... 143
Insolvency Considerations............................................................................. 143
Treatment of Interest Payments with respect to Australian Housing Loans............................... 143
USE OF PROCEEDS........................................................................................... 144
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES............................................................. 144
General............................................................................................... 144
Sales of Notes........................................................................................ 144
Market Discount....................................................................................... 145
Premium............................................................................................... 145
Backup Withholding.................................................................................... 146
CERTAIN AUSTRALIAN TAX MATTERS............................................................................ 146
Payments of Principal, Premiums and Interest.......................................................... 146
Profit on Sale........................................................................................ 147
Other Taxes........................................................................................... 148
ERISA CONSIDERATIONS...................................................................................... 148
RATINGS OF THE NOTES...................................................................................... 149
LEGAL INVESTMENT CONSIDERATIONS........................................................................... 149
UNDERWRITING.............................................................................................. 149
United Kingdom........................................................................................ 150
Australia............................................................................................. 150
LISTING AND GENERAL INFORMATION........................................................................... 151
Listing............................................................................................... 151
Authorization......................................................................................... 151
Litigation............................................................................................ 151
Euroclear and Cedel................................................................................... 151
Documents Available for Collection and Inspection..................................................... 151
Temporary Australian Foreign Exchange Controls........................................................ 152
Consents to Opinions.................................................................................. 152
LEGAL MATTERS............................................................................................. 153
INDEX OF DEFINED TERMS.................................................................................... 154
APPENDIX I--GLOSSARY OF AUSTRALIAN LEGAL TERMS............................................................ I-1
APPENDIX II--TERMS AND CONDITIONS OF THE CLASS A NOTES.................................................... II-1
APPENDIX III--TERMS AND CONDITIONS OF THE CLASS B NOTES................................................... III-1
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SUMMARY OF TERMS
This Summary of Terms is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus. Certain capitalized
terms used in this Summary of Terms are defined elsewhere in this Prospectus on
the pages indicated in the "Index of Defined Terms."
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Issuer Trustee.................. Westpac Securities Administration Limited (ACN 000 049
472), a limited liability public company under the
Corporations Law of New South Wales, Australia, a wholly
owned, indirect subsidiary of Westpac Banking Corporation,
in its capacity as trustee of the Series 1998-1G WST Trust
(the "Trust") (the "Issuer Trustee") will issue the
Offered Notes.
Approved Seller................. Either Westpac Banking Corporation (ARBN 007 457 141)
("Westpac"), a corporation organized under the laws of New
South Wales in the Commonwealth of Australia, in its
capacity as seller under a notice of sale (the "Sale
Notice") between Westpac and the Issuer Trustee or the
Seller Trustee (as defined herein) under a Sale Notice
between the Seller Trustee and the Issuer Trustee. Westpac
and Westpac Securities Administration Limited, in its
capacity as Seller Trustee, are referred to herein as
"Approved Sellers."
Servicer........................ The Mortgage Company Pty Limited (ACN 070 968 302) (the
"Servicer" or "TMC"), a wholly owned direct subsidiary of
Westpac, in its capacity as servicer under the Servicing
Agreement among Westpac, the Servicer and the Issuer
Trustee dated February 18, 1997, as amended from time to
time (the "Servicing Agreement").
Trust Manager and Registrant.... Westpac Securitisation Management Pty Limited (ACN 081 709
211) (the "Trust Manager"), a wholly owned indirect
subsidiary of Westpac, in its capacity as trust manager
under the Master Trust Deed, dated February 14, 1997 (the
"Master Trust Deed"), as amended by the Series Notice (as
defined herein), between the Issuer Trustee and the Trust
Manager dated on or about the Closing Date. See "FORMATION
OF THE TRUST."
Note Trustee.................... Morgan Guaranty Trust Company of New York, London Branch
(the "Note Trustee"), in its capacity as note trustee
under the Note Trust Deed among the Issuer Trustee, the
Trust Manager and the Note Trustee dated on or about
, 1998, as amended from time to time (the "Note
Trust Deed"). Morgan Guaranty Trust Company of New York is
a wholly owned subsidiary of J.P. Morgan & Co.
Incorporated. Citibank, N.A. of 47-49 Tooley Street,
London, is in the process of finalizing the purchase of
the Global Trust and Agency Services group of Morgan
Guaranty Trust Company of New York. It expects to finalize
its acquisition in June, 1998. Upon the completion of such
acquisition, Citibank, N.A. will act as Note Trustee. See
"THE NOTE TRUSTEE."
Security Trustee................ Perpetual Trustee Company Limited (ACN 000 001 007) (the
"Security Trustee"), a company within the Perpetual group
with its holding company being Perpetual Trustees
Australia Limited (ACN 000 431 827), in its capacity as
security trustee under the Security Trust Deed among the
Issuer Trustee, the Trust Manager, the Note Trustee and
the Security Trustee dated on or about , 1998, as
amended from time to time (the "Security Trust Deed").
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Seller Trustee.................. Westpac Securities Administration Limited in its capacity
as trustee of any other WST trust established under the
Master Trust Deed (in that capacity, the "Seller
Trustee"). The Seller Trustee may sell housing loans
relating to such other trusts to the Trust and may
repurchase the Housing Loans relating to the Trust upon
the exercise of the Clean-up Offer (as defined herein).
Paying Agents................... Morgan Guaranty Trust Company of New York, London Branch,
60 Victoria Embankment, London EC4Y 0JP, will act as the
principal paying agent ("Principal Paying Agent"). The
Principal Paying Agent and any other paying agents are
referred to herein as the "Paying Agents".
Roles of the Security Trustee
and Note Trustee.............. The structure of the Series 1998-1G WST Trust transaction
employs several different trustees. The Security Trustee
is the entity that holds a security interest over the
Trust Assets (as defined herein) and has the
responsibility of securing such assets and distributing
the proceeds received upon the liquidation of such assets
upon the occurrence of a default and enforcement of the
security interest. The Note Trustee is the entity which
represents the interests of the Offered Noteholders. The
provisions of the Security Trust Deed require the Security
Trustee to consult with, and obtain the consent of, the
Note Trustee before taking certain actions. Thus, not only
does the Security Trustee owe fiduciary duties to the Note
Trustee (and the Offered Noteholders and the other secured
creditors), it has contractual obligations to consult with
and act at the Note Trustee's direction in accordance with
the Security Trust Deed. The Note Trustee owes fiduciary
duties to the Offered Noteholders and must act in
accordance with those duties when directing the Security
Trustee to act or not to act. The roles of the Note
Trustee and the Security Trustee together approximate the
role of an indenture trustee in a typical United States
transaction.
Securities Offered.............. The Issuer Trustee, in its capacity as trustee of the
Series 1998-1G WST Trust, which was formed under the laws
of New South Wales, will issue and hereby offer the
following Mortgage Backed Floating Rate Notes:
Class A Mortgage Backed Floating Rate Notes due July 19,
2029 in the aggregate principal amount of US$1,372,700,000
(the "Class A Notes").
Class B Mortgage Backed Floating Rate Notes due July 19,
2029 in the aggregate principal amount of US$32,300,000
(the "Class B Notes").
The Class A Notes and the Class B Notes are collectively
referred to herein as the "Offered Notes."
Redraws, RFSs and RFS Class A
Notes......................... Certain Housing Loans provide the relevant Borrower (as
defined herein) with the ability to "reborrow" from
Westpac amounts that have been previously paid by the
Borrower which are in excess of scheduled repayments
required under the contractual amortization schedule for
the relevant Housing Loan. Such amounts drawn by Borrowers
on principal repayments made in excess of scheduled
payments are called "redraws". Westpac is entitled to be
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reimbursed by the Issuer Trustee for such redraws from
Gross Principal Collections (as defined herein) prior to
any payments being made on the Offered Notes from such
Collections.
On or before the Closing Date, Westpac as provider of the
Redraw Facility (as defined herein) will enter into a
Redraw Facility Agreement (as defined herein). If Gross
Principal Collections for a period are insufficient to
fund a redraw provided to a Borrower by Westpac, drawings
will be made under the Redraw Facility Agreement to fund
the redraw (up to the limit set out in the Redraw Facility
Agreement).
If there are insufficient amounts available under the
Redraw Facility Agreement to fund redraws, the Trust
Manager may direct the Issuer Trustee to issue additional
debt securities known as "Redraw Funding Securities" or
"RFSs". The RFSs and payments under the Redraw Facility
Agreement will be senior in priority of distributions of
principal to the Class A Notes and RFS Class A Notes (as
defined herein). Interest on the RFSs, RFS Class A Notes
and Class A Notes and fees with respect to the Redraw
Facility Agreement will rank PARI PASSU in respect of
priority.
If any RFSs remain outstanding for a period of five or
more Collection Periods (as defined herein), they shall
convert into RFS Class A Notes (the "RFS Class A Notes"),
the holders of which will rank PARI PASSU with the Class A
Notes as to the payment of interest and principal and have
certain rights of payment senior to those rights of
holders of the Class B Notes. The RFSs, RFS Class A Notes
and the Offered Notes are referred to herein as the
"Notes."
The RFSs and RFS Class A Notes, if issued, will be
denominated in Australian dollars and issued in Australia
to Australian residents only. The RFSs and RFS Class A
Notes will be in book-entry form and will not be
registered with the Securities and Exchange Commission in
the United States and will not be registered with the
relevant companies authority in Australia. The RFSs and
RFS Class A Notes are not offered hereby.
For a description of the RFSs, the RFS Class A Notes and
the priority of their payment, see "Priority of
Distribution with respect to the Offered Notes, RFSs and
RFS Class A Notes" herein and "DESCRIPTION OF THE OFFERED
NOTES--Description of the Redraw Facility, Redraw Funding
Securities and the RFS Class A Notes," "--Interest Payable
on the RFSs and the RFS Class A Notes" and
"--Subordination of the Class B Notes; Priority of
Principal Payments to RFSs" herein.
Cut-Off Date.................... May 6, 1998 (the "Cut-Off Date").
Closing Date.................... June 9, 1998 (the "Closing Date").
Maturity Date................... July 19, 2029 (the "Maturity Date").
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Terms of the Offered Notes
General....................... Payments of interest and principal on each class ("Class")
of Offered Notes will be made quarterly on the 19th day of
each of April, July, October and January (or if such 19th
day is not a Business Day, the next succeeding Business
Day in the same month or, if not in the same month, the
immediately preceding Business Day), commencing on July
20, 1998 (each such date, a "Payment Date").
As used in this Prospectus, "Business Day" means (a) in
relation to the Note Trust Deed, the Agency Agreement and
any Note, any day, other than a Saturday, Sunday or public
holiday, on which banks are open for business in Sydney,
London and New York City; (b) in relation to US$ payments
under a Currency Swap any day, other than a Saturday,
Sunday or public holiday, on which banks are open for
business in London and New York City; and (c) in relation
to A$ payments under the Currency Swap and any other
Transaction Document, any day, other than a Saturday,
Sunday or public holiday, on which banks are open for
business in Sydney. If a public holiday is occurring in
any of the referenced locales, then such day is not a
Business Day, and no scheduled payments will be made on
such day.
Payments of interest and principal will be made to the
holders of the Offered Notes (the "Offered Noteholders")
of record as of the day which is two Business Days
preceding the Payment Date (so long as the Offered Notes
are held in book-entry form) or the last day of the prior
calendar month (if Definitive Notes have been issued)
(such day, the "Record Date"). Each Offered Note bears
interest on its Invested Amount. The "Invested Amount" of
an Offered Note is equal to the Initial Invested Amount
(as defined herein) of such Offered Note less all payments
previously made in respect of principal in respect of such
Offered Note. The "Initial Invested Amount" of a Class of
Notes is its principal balance on the date of its
issuance. Each "Interest Period" (other than the initial
Interest Period and the final Interest Period) with
respect to the Offered Notes commences on (and includes) a
Payment Date and ends on (but excludes) the next Payment
Date. The initial Interest Period with respect to the
Offered Notes commences on (and includes) the Closing Date
and ends on (but excludes) the first Payment Date. The
final Interest Period ends on (but excludes) the Maturity
Date.
The "Interest Rate" for the Class A Notes for a particular
Interest Period is equal to USD-LIBOR-BBA on the related
Interest Determination Date (as defined herein) plus %.
The "Interest Rate" for the Class B Notes for a particular
Interest Period is equal to USD-LIBOR-BBA on the related
Interest Determination Date plus %. The Interest Rate
on the Class A Notes for the first Interest Period is .
The Interest Rate on the Class B Notes for the first
Interest Period is . See "DESCRIPTION OF THE OFFERED
NOTES--Calculation of USD-LIBOR-BBA" herein.
On the second London banking day before the beginning of
each Interest Period (each an "Interest Determination
Date"), Morgan
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Guaranty Trust Company of New York, London Branch (the
"Agent Bank") will determine the rate "USD-LIBOR-BBA" as
the applicable Floating Rate Option under the Definitions
of the International Swaps and Derivatives Association,
Inc. ("ISDA") (the "ISDA Definitions") being the rate
applicable to any Interest Period for three-month deposits
in U.S. dollars which appears on the Telerate Page 3750 as
of 11:00 A.M., London time, on the Interest Determination
Date. If such rate does not appear on the Telerate Page
3750, the rate for that Interest Period will be determined
as if the Issuer Trustee and Agent Bank had specified
"USD-LIBOR-Reference Banks" as the applicable Floating
Rate Option under the ISDA Definitions.
"USD-LIBOR-Reference Banks" means that the rate for an
Interest Period will be determined on the basis of the
rates at which deposits in U.S. Dollars are offered by the
Reference Banks (being four major banks in the London
interbank market) at approximately 11:00 A.M., London
time, on the Interest Determination Date to prime banks in
the London interbank market for a period of three months
commencing on the first day of the Interest Period and in
a Representative Amount (as defined in the ISDA
Definitions). The Agent Bank will request the principal
London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are
provided, the rate for that Interest Period will be the
arithmetic mean of the quotations. If fewer than two
quotations are provided as requested, the rate for that
Interest Period will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the
Agent Bank, at approximately 11:00 A.M., New York City
time, on that Interest Determination Date for loans in
U.S. dollars to leading European banks for a period of
three months commencing on the first day of the Interest
Period and in a Representative Amount, provided that on
the first day of the first Interest Period USD-LIBOR-BBA
shall be an interpolated rate calculated with reference to
the period from (and including) the Closing Date to (but
excluding) the first Payment Date.
With respect to any Payment Date, interest on a Class of
Offered Notes will be calculated as the product of (a) the
Invested Amount of such Class as of the first day of that
Interest Period after giving effect to any payments of
principal to be made thereon; (b) the Interest Rate for
such Class for the related Interest Period; and (c) a
fraction, the numerator of which is the actual number of
days in that Interest Period and the denominator of which
is 360 days (such product with respect to a Payment Date,
"Interest"); provided, however, that once the Stated
Amount of such Class has been reduced to zero, the related
Class will no longer accrue interest because the related
Class will have been redeemed pursuant to the terms of the
Transaction Documents. The "Stated Amount" of a Note is
the Invested Amount of the Note less the Carryover Charge
Offs (as defined herein) applied against it.
If Total Available Funds (as defined herein) available
after payment of any Accrued Interest Adjustment (as
defined herein), interest or fees payable under the
Liquidity Facility (as defined
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herein), Trust Expenses (as defined herein) and certain
amounts payable to any Interest Rate Swap Provider (as
defined herein) are sufficient to pay Interest on each
Class of Offered Notes, Interest will be payable in
arrears on each Payment Date to each Class of Offered
Notes in respect of the Interest Period ending on that
Payment Date. If Total Available Funds are available on a
Payment Date for the payment of Interest on the Offered
Notes, failure to pay such Interest within 10 Business
Days of the date such payment is due will be an event of
default under the Security Trust Deed.
If Total Available Funds available after payment of Trust
Expenses and certain amounts payable under any Fixed Rate
and Variable Rate Basis Swaps are insufficient to pay full
Interest on all Classes of Notes for an Interest Period,
Total Available Funds available for the payment of
Interest on the Notes on the Payment Date will be paid in
the following order of priority either through a direct
payment in Australian dollars with respect to the RFSs,
the RFS Class A Notes or any payment in respect of the
Redraw Facility (as defined herein) or through a payment
to the Currency Swap Providers (as defined herein) with
respect to the Offered Notes:
(i) PRO RATA, to the Class A Notes, RFS Class A Notes (if
any), RFSs (if any) and any fee or outstanding amount
payable under the Redraw Facility, based on their related
interest or income entitlements, as the case may be; and
(ii) any remaining Total Available Funds, to the Class B
Notes.
See "DESCRIPTION OF THE OFFERED NOTES" herein.
Principal....................... On each Payment Date, Gross Principal Collections (as
described herein) will be used first to reimburse Westpac
for any Redraws (as defined herein) funded by Westpac
during the related Collection Period. See "WESTPAC
RESIDENTIAL LOAN PROGRAM-- Housing Loan Features--Redraw."
Any amount of Gross Principal Collections remaining after
such reimbursement will be distributed in the following
order of priority:
(i) to Westpac as reimbursement for any outstanding
Redraws, to the extent not otherwise reimbursed;
(ii) to Westpac, in its capacity as the provider of the
Redraw Facility (the "Redraw Facility Provider"), to repay
any Principal Outstanding (as defined herein) under the
Redraw Facility Agreement;
(iii) to fund any Principal Draw (as defined herein) for
such Payment Date; and
(iv) to any holder of an RFS, in chronological order of
issuance, until each such RFS is repaid in full.
Any amount of Gross Principal Collections remaining after
the distributions described in clauses (i) through (iv)
above will be referred to herein as "Net Principal
Collections." On any Payment Date, Net Principal
Collections will be available to pay any RFS Class A
Noteholder and the Currency Swap Providers to enable the
Issuer Trustee to make payments to the Class A Noteholders
and Class B Noteholders in the amounts and priorities set
forth herein under "DESCRIPTION OF THE OFFERED
NOTES--Payments of Principal on the Notes."
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Priority of Distribution with
respect to the Offered Notes,
RFSs and RFS Class A Notes.... The Class A Notes rank PARI PASSU and without any
preference among themselves and the Class B Notes rank
PARI PASSU and without any preference among themselves.
The right to payment of principal of and interest on the
Class B Notes is subordinated and may be limited as more
particularly described herein. In addition, under certain
limited circumstances, the Trust may issue RFSs, which in
certain circumstances will convert to RFS Class A Notes.
Upon conversion, the RFS Class A Notes will rank PARI
PASSU in respect of priority of payment of principal and
interest with the Class A Notes. The RFSs and any
repayments under the Redraw Facility will be senior to the
Class A Notes and the RFS Class A Notes in priority of
distributions of principal. Interest on the RFSs, the RFS
Class A Notes and the Class A Notes and fees with respect
to the Redraw Facility will rank PARI PASSU in respect of
priority. Payments of principal and interest in respect of
the Class B Notes are subordinated to the extent set forth
herein to such payments in respect of Class A Notes, RFSs
and RFS Class A Notes. See "RISK FACTORS--Priority of RFSs
and RFS Class A Notes Owned by Australian Resident
Investors" and "DESCRIPTION OF THE OFFERED
NOTES--Description of the Redraw Facility, the Redraw
Funding Securities and the RFS Class A Notes," "--Interest
Payable on the RFSs and the RFS Class A Notes" and
"--Subordination of the Class B Notes; Priority of
Principal Payments to RFSs."
Credit Enhancement.............. Credit enhancement with respect to the Class A Notes will
be provided by (i) the Mortgage Insurance Policies, (ii)
subordination of the Excess Available Income (as defined
herein) and (iii) the subordination of payments of the
Class B Notes to payments to the Class A Notes. Credit
enhancement with respect to the Class B Notes will be
provided by (i) the Mortgage Insurance Policies and (ii)
subordination of the Excess Available Income.
A. Mortgage Insurance
Policies.................... On or before the Closing Date, a mortgage pool insurance
policy (the "Mortgage Pool Insurance Policy") will be
provided by Housing Loans Insurance Corporation Limited
(ACN 071 466 344) of 31 Market Street, Sydney NSW 2000,
Australia ("HLIC") to the Issuer Trustee to cover losses
in respect of each Housing Loan that is not subject to a
primary mortgage insurance policy (a "PMI Policy" and,
together with the Mortgage Pool Insurance Policy, the
"Mortgage Insurance Policies"). The Mortgage Pool
Insurance Policy generally applies to loans with a Loan to
Value Ratio ("LVR") of 80% or less at the Cut-Off Date.
The Mortgage Pool Insurance Policy will cover losses up to
a maximum aggregate amount of A$82,000,000. HLIC is a
private insurance company which is a subsidiary of GE
Capital Australia (ACN 008 562 534).
For a description of HLIC, see "THE MORTGAGE INSURANCE
POLICIES--The HLIC Mortgage Pool Insurance Policy."
Each Housing Loan with an LVR of greater than 80% at the
time of origination (or a lower LVR where required by
Westpac's
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standard credit policy) will have been insured under a PMI
Policy issued by one of the following: Royal & Sun
Alliance Lenders Mortgage Insurance Limited (ACN 001 825
725) of Level 9, 465 Victoria Avenue, Chatswood NSW
("Royal & Sun"), MGICA Limited (ACN 000 511 071) of Level
23 AMP Centre, 50 Bridge Street, Sydney NSW ("MGICA"),
Westpac Lenders Mortgage Insurance Limited (ACN 074 042
934) of Level 11, 50 Pitt Street, Sydney NSW ("WLMI") or
HLIC. Approximately 33.64% of the Housing Loans are
subject to a PMI Policy. Each Approved Seller will
equitably assign its interest in each PMI Policy to the
Issuer Trustee on the Closing Date.
These Mortgage Insurance Policies are intended to enhance
the likelihood of regular receipt by the holders of the
Notes of the full amount of interest and principal
payments due to such holders and to provide holders of the
Notes limited protection against losses on the Housing
Loans. See "THE MORTGAGE INSURANCE POLICIES" herein.
HLIC, Royal & Sun, MGICA and WLMI are referred to herein
as "Mortgage Insurers."
B. Subordination of Excess
Available Income.......... On each Payment Date, Excess Available Income will be
applied either in reduction of any current or outstanding
Principal Charge Offs (as defined herein) or as repayment
of any unrepaid Principal Draws on such Payment Date. The
application of such amounts, if any, will reduce the
likelihood of the Offered Noteholders receiving less than
their Initial Invested Amount on or prior to the Maturity
Date.
C. Subordination of
Class B Notes............. The rights of the holders of the Class B Notes to receive
payments of Interest on each Payment Date will be
subordinated to such rights of the holders of the RFSs (if
any), Class A Notes, RFS Class A Notes (if any) and the
Redraw Facility Provider to the extent set forth herein.
In addition, the rights of the holders of the Class B
Notes to receive distributions of principal on each
Payment Date generally will be subordinated to such rights
of the holders of the RFSs (if any) and the Redraw
Facility Provider with respect to repayments pursuant to
the Redraw Facility Agreement and to the holders of the
Class A Notes and RFS Class A Notes (if any). For a
description of the priority among the RFSs, Class A Notes,
RFS Class A Notes and the Redraw Facility Provider, see
"Priority of Distribution with respect to the Offered
Notes, RFSs and RFS Class A Notes" herein. Further, any
Principal Charge Offs will be applied first in reduction
of the principal balance of the Class B Notes. The
subordination described above is intended to enhance the
likelihood of regular receipt by the holders of the Class
A Notes of the full amount of interest and principal
payments due to such Noteholders and to afford such
holders protection against losses on the Housing Loans.
See "DESCRIPTION OF THE OFFERED NOTES--Collections and
Payment" herein.
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Security for the Offered Notes
General....................... The Offered Notes are debt obligations of the Issuer
Trustee in its capacity as trustee of the Trust only (and
therefore the Issuer Trustee's liability to make payments
of interest and principal on the Offered Notes is limited
to the collections received by the Issuer Trustee from the
Trust Assets) and except in certain limited circumstances
are not the personal obligation of the Issuer Trustee. See
"THE ISSUER TRUSTEE--Limitation of Issuer Trustee's
Liability." The Offered Notes are issued with the benefit
of, and subject to the terms of, the Transaction
Documents. The Issuer Trustee's liability in respect of
the Offered Notes is limited to the assets of the Trust
available in accordance with the terms of the Transaction
Documents to meet its obligations in relation to the
Offered Notes and, except in certain limited
circumstances, the Issuer Trustee will not be personally
liable in respect of the Offered Notes.
A. The Housing Loans.......... The Housing Loans will consist of 21,132 Housing Loans
with an aggregate Balance Outstanding on the Cut-Off Date
of A$2,252,766,010. The Housing Loans are also referred to
herein as the "Mortgage Pool." The Housing Loans will be
secured by Mortgaged Properties (as defined herein)
located in any of the six states or two territories of
Australia. A "Mortgaged Property" means the land,
including all improvements thereon, that is the subject of
a Mortgage.
Generally each Housing Loan is secured by a registered
first ranking mortgage over the related Mortgaged Property
or if the Housing Loan is not secured by a first ranking
mortgage the Approved Seller will assign to the Issuer
Trustee all prior ranking registered mortgages in relation
to that Housing Loan. "Registered" means the mortgage has
been filed with the lands office in the relevant
Australian State or Territory, granting certain rights
with respect to the applicable Mortgaged Property. See
"APPENDIX I--GLOSSARY OF AUSTRALIAN LEGAL TERMS."
Each Housing Loan requires that the borrowers on such
Housing Loan (each, a "Borrower") make a minimum payment
(the "Scheduled Payment") on or before the due date for
such Scheduled Payment under the relevant Housing Loan
documents. If Scheduled Payments are not received with
respect to certain Housing Loans on the related due date
either a default rate of interest may be charged on any
overdue amounts or there will be a compounding of
interest.
All weighted averages specified herein are weighted based
on the Cut-Off Date Balances Outstanding of the Housing
Loans. With respect to each Housing Loan, the "Cut-Off
Date Balance Outstanding" is the unpaid principal balance
of such Housing Loan as of the close of business on the
Cut-Off Date. All Housing Loan statistics set forth herein
are based on principal balances, interest rates, terms to
maturity, mortgage loan counts and similar statistics as
of the Cut-Off Date, unless indicated to the contrary
herein.
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References to percentages of the Housing Loans mean
percentages of the Cut-Off Date Balance Outstanding.
The Housing Loans bear interest at variable and fixed
rates (the "Mortgage Rates") which, as of the Cut-Off
Date, range from approximately 5.69% per annum to 10.15%
per annum. The weighted average Mortgage Rate of the
Housing Loans on the Cut-Off Date is approximately 6.57%
per annum. The Cut-Off Date Balances Outstanding of the
Housing Loans ranged from approximately A$10,027 to
A$735,606. The average Cut-Off Date Balance Outstanding of
the Housing Loans is approximately A$106,604. The weighted
average original term to stated maturity of the Housing
Loans is approximately 297.11 months. The weighted average
remaining term to stated maturity of the Housing Loans is
approximately 288.41 months. As of the Cut-Off Date, the
weighted average number of months that had elapsed since
origination of the Housing Loans is approximately 8.7
months.
Housing Loans representing approximately 18.92% of the
Cut-Off Date Pool Balance are secured by Mortgaged
Properties which are investment properties (based solely
upon statements made by the related Mortgagors at the time
of origination of the related Housing Loans).
The lowest and highest LVR as of the Cut-Off Date of the
Housing Loans were approximately 1.99% and 94.96%. LVR is
calculated as a fraction, expressed as a percentage, the
numerator of which is the outstanding amount of the
Housing Loan, plus any other amount serviced on the
Servicing System of the Servicer (the "Mortgage Servicing
System") and secured by the relevant Mortgage Property at
the Cut-Off Date and the denominator of which is the
aggregate value of the Mortgaged Property subject to the
related Mortgage for that Housing Loan. The Mortgaged
Property is generally valued at the time of origination.
B. Mortgage Insurance
Policies.................... See "Mortgage Insurance Policies" in this summary and "THE
MORTGAGE INSURANCE POLICIES" herein.
C. Collections Account........ Westpac or the Servicer will be required to remit
Collections received with respect to the Housing Loans
during a Collection Period to one or more accounts in the
name of the Issuer Trustee (the "Collections Account").
Initially, the Collections Account shall be maintained
with Westpac. Under certain conditions described herein,
such remittances may be made on a quarterly basis, two
Business Days prior to the related Payment Date. If such
conditions are not met, the Servicer shall deposit all
Collections in its possession or control into the
Collections Account no later than five Business Days
following receipt. See "DESCRIPTION OF THE OFFERED
NOTES--Collections and Payment."
D. Liquidity Support.......... 1. PRINCIPAL DRAWS: If the Trust Manager determines on any
Collection Determination Date that the Available Income
(as defined herein) of the Trust for a Collection Period
is insufficient to meet Total Payments of the Trust on the
following Payment Date (a "Payment Shortfall"), then
Principal Collections collected during
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that Collection Period can be used to fund the Payment
Shortfall (a "Principal Draw"). See "DESCRIPTION OF THE
OFFERED NOTES--Principal Draws" below.
Amounts paid from any Principal Collections in this way
will be reimbursed through any Excess Available Income to
the extent available in subsequent periods after all
Principal Charge Offs and Carryover Charge Offs (as
defined herein) have been met out of that Excess Available
Income for the relevant period. If there is insufficient
Excess Available Income to reimburse Principal Draws, the
principal repayable on the Notes at maturity may be
reduced by an amount equal to the amount of any such
shortfall.
2. LIQUIDITY FACILITY: Under the Liquidity Facility,
Westpac in its capacity as the provider of the Liquidity
Facility (the "Liquidity Facility Provider") agrees to
make advances to the Issuer Trustee for the purpose of
temporarily funding certain income shortfalls in the
Trust, up to an aggregate amount being the lesser of: (1)
A$79,000,000, (2) the Unpaid Balance of all Performing
Loans from time to time, and (3) any lesser amount as is
agreed in writing between the Liquidity Facility Provider,
the Issuer Trustee, the Trust Manager and the Rating
Agencies, as such amount may be reduced or cancelled under
the Liquidity Facility (the "Liquidity Limit"). The
"Unpaid Balance" of a Housing Loan, means the sum of (a)
the unpaid principal amount of that Housing Loan; and (b)
the unpaid amount of all finance charges, interest
payments and other amounts accrued on or payable under or
in connection with that Housing Loan or the related
Mortgage or other rights relating to the Housing Loan.
A "Performing Loan" at any date is a Housing Loan which is
not Delinquent or has been Delinquent for less than 90
consecutive days, or if it has been Delinquent for 90 or
more consecutive days, was insured under a Mortgage
Insurance Policy at the date of the Liquidity Facility. A
Housing Loan is "Delinquent" if the related Borrower fails
to pay any amount due on the related due date. Delayed
payments arising from agreed payment holidays based on
early repayments, or from maternity or paternity leave
repayment reductions will not, by themselves, lead to a
Housing Loan being considered Delinquent. See "WESTPAC
RESIDENTIAL LOAN PROGRAM--Housing Loan Features" and "THE
LIQUIDITY FACILITY" herein.
E. Transaction Documents...... MASTER TRUST DEED AND SERIES NOTICE: The Master Trust
Deed, which is governed by the laws of New South Wales,
Australia, provides for the creation of an unlimited
number of WST trusts. Each WST trust is a separate and
distinct trust fund. The Series 1998-1G WST Trust (the
"Trust") will be created pursuant to the Master Trust
Deed, the Notice of Creation of Trust and a series notice
(the "Series Notice") which sets forth specific provisions
regarding the Trust and details the provisions of the
Notes. See "FORMATION OF THE TRUST" and "DESCRIPTION OF
THE OFFERED NOTES."
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SECURITY TRUST DEED: Pursuant to the Security Trust Deed,
the Issuer Trustee will grant a first ranking floating
charge over the Trust Assets to the Security Trustee, in
order to secure the Issuer Trustee's obligations to the
Offered Noteholders, the Note Trustee, the Trust Manager,
the Swap Providers (as defined herein), the Security
Trustee, each Paying Agent, each provider of a Support
Facility (other than the provider of a Mortgage Insurance
Policy), to the Approved Sellers in respect of any Accrued
Interest Adjustment, to Westpac in respect of Redraws, to
the holders of the RFSs (if any) and the holders of the
RFS Class A Notes (if any) (such creditors, together the
"Mortgagees"). A "Support Facility" is any of the
Liquidity Facility, the Redraw Facility, the Swap
Agreements (as defined herein) or any of the Mortgage
Insurance Policies. See "SECURITY FOR THE NOTES."
The Issuer Trustee will grant a "floating charge" over the
Trust Assets to the Security Trustee in order to secure
the Issuer Trustee's obligations in respect of the Notes
and the Transaction Documents. A "charge" is a proprietary
interest created over property. A floating charge is a
grant of a proprietary interest which "floats" over a
group of assets which assets may change or be dealt with
from time to time. A floating charge allows the person or
entity granting the charge (the "chargor") to deal with
the assets and to give third parties title to those assets
free from any encumbrance, provided such dealings and
transfers of title are in the ordinary course of the
chargor's business. For a description of a floating charge
and the crystallization of floating charges, see "SECURITY
FOR THE NOTES--Nature of Security", "-- Charge" and
"APPENDIX I--GLOSSARY OF AUSTRALIAN LEGAL TERMS."
SERVICING AGREEMENT: Under the Servicing Agreement, TMC is
appointed as the initial Servicer of the Housing Loans and
custodian of the documents relating to the Housing Loans
and Mortgages. See "DESCRIPTION OF THE SERVICING
AGREEMENT."
NOTE TRUST DEED: The Note Trust Deed provides for the
issuance and registration of the Offered Notes. See
"DESCRIPTION OF THE OFFERED NOTES."
SWAP AGREEMENTS: The rights of the Issuer Trustee under
the Swap Agreements will be subject to the security
created by the Security Trust Deed. The "Swap Agreements"
are constituted by three 1991 ISDA Master Agreements (each
an "ISDA Master Agreement"), the schedules supplementing
such agreements and written swap confirmations confirming
the Variable Rate Basis Swap, two Fixed Rate Basis Swaps
and the Currency Swaps. See "DESCRIPTION OF THE SWAP
AGREEMENTS."
AGENCY AGREEMENT: Pursuant to the Agency Agreement, the
Issuer Trustee will appoint paying agents and an agent
bank with respect to the Offered Notes. The terms and
conditions of these appointments are set forth in the
Agency Agreement.
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LIQUIDITY FACILITY AGREEMENT: Under the Liquidity Facility
Agreement, the Liquidity Facility Provider agrees to make
advances to the Issuer Trustee for the purpose of
providing liquidity to cover certain income shortfalls in
the Trust. See "THE LIQUIDITY FACILITY."
REDRAW FACILITY AGREEMENT: On or prior to the Closing
Date, Westpac will enter into a Redraw Facility Agreement
(the "Redraw Facility Agreement") in its capacity as
Redraw Facility Provider with the Issuer Trustee. Pursuant
to the terms of the Redraw Facility Agreement, the Redraw
Facility Provider shall be obligated, subject to the
limitations set forth herein, to fund the amount of any
Redraws not funded by Gross Principal Collections. See
"DESCRIPTION OF THE OFFERED NOTES--Redraw Facility."
The Master Trust Deed, the Series Notice, the Servicing
Agreement, the Security Trust Deed, the Note Trust Deed,
the Swap Agreements, the Agency Agreement, the Liquidity
Facility Agreement and the Redraw Facility Agreement are
collectively referred to herein as the "Transaction
Documents."
Clearance and Settlement........ Persons acquiring beneficial ownership interests in the
Offered Notes will hold their Offered Notes through any of
DTC (in the United States) or Cedel or Euroclear (in
Europe). Transfers within DTC, Cedel or Euroclear, as the
case may be, will be in accordance with the usual rules
and operating procedures of the relevant system.
Crossmarket transfers between persons holding directly or
indirectly through DTC, on the one hand, and
counterparties holding directly or indirectly through
Cedel or Euroclear, on the other, will be effected in DTC
through the Relevant Depositaries (as defined herein) of
Cedel or Euroclear. See "DESCRIPTION OF THE OFFERED
NOTES--Book-Entry Registration."
Clean-up Offer.................. If at any time the aggregate Housing Loan Principal,
expressed as a percentage of the aggregate Housing Loan
Principal as of the Cut-Off Date, is less than 10%, then,
if instructed by the Trust Manager, the Seller Trustee, as
trustee of certain other trusts under the Master Trust
Deed, may repurchase, on the following Payment Date, the
equitable title to the Housing Loans held by the Trust for
an amount equal to the Unpaid Balance (in the case of
performing Housing Loans) or the Fair Market Value (in the
case of non-performing Housing Loans) (the "Clean-up
Offer"). The proceeds of sale will be applied by the
Issuer Trustee to repay moneys owing to Noteholders at
that time in accordance with the priorities for applying
payments of Interest and principal between the Classes of
Notes. With respect to any Housing Loan and date, "Housing
Loan Principal" shall be the unpaid principal amount of
that Housing Loan on such date. "Unpaid Balance" of a
Housing Loan, means the sum of (a) the unpaid principal
amount of that Housing Loan; and (b) the unpaid amount of
all finance charges, interest payments and other amounts
accrued on or payable under or in connection with that
Housing Loan or the related Mortgage or other rights
relating to the Housing Loan. The "Fair Market Value" with
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respect to any non-performing Housing Loans is the fair
market value of such Housing Loan agreed on by the Trust
Manager (based on appropriate expert advice) and the
Approved Seller.
Redemption for Taxation or Other
Reasons....................... If the Trust Manager satisfies the Issuer Trustee and the
Note Trustee immediately prior to giving the notice
referred to below that either (i) on the next Payment Date
the Issuer Trustee would be required to deduct or withhold
from any payment of principal or interest in respect of
any Offered Notes any amount for or on account of any
present or future taxes, duties, assessments or
governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by the Commonwealth of
Australia or any of its political subdivisions or any of
its authorities (a "Withholding Tax Event") or (ii) the
total amount payable in respect of interest in relation to
any of the Housing Loans for a Collection Period ceases to
be receivable (whether or not actually received) by the
Issuer Trustee during such Collection Period by reason of
any present or future taxes, duties, assessments or
governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by the Commonwealth of
Australia or any of its political subdivisions or any of
its authorities, the Issuer Trustee must, when so directed
by the Trust Manager (at any time at the Trust Manager's
option) (provided that the Issuer Trustee will be in a
position on such Payment Date to discharge (and will so
certify to the Issuer Trustee and the Note Trustee) all
its liabilities in respect of such Class and any amounts
required under the Security Trust Deed to be paid in
priority to or PARI PASSU with such Class) upon having
given not more than 60 nor less than 30 days' notice to
the Noteholders of such Class, redeem all, but not some,
of such Class at their Invested Amount (or at the option
of the holders of 75% of the aggregate Invested Amount of
such Class, at their Stated Amount), together with accrued
interest to the date of redemption on any subsequent
Payment Date, provided that the the holders of 75% of the
aggregate Invested Amount of such Class may elect, and
shall notify the Issuer Trustee and the Trust Manager,
that they do not require the Issuer Trustee to redeem such
Class of Notes in the circumstances described above. All
amounts ranking prior to or PARI PASSU with respect to a
Class of Notes must be redeemed concurrently with such
Class. Thus the Class B Notes may not be redeemed unless
the Class A Notes are also redeemed. See "RISK FACTORS--No
Gross-Up; Tax Redemption."
Legal Investment
Considerations................ The Offered Notes will not constitute "mortgage related
securities" for purposes of the Secondary Mortgage Market
Enhancement Act of 1984 ("SMMEA"). No representation is
made as to whether the Offered Notes constitute legal
investments under any applicable statute, law, rule,
regulation or order for any entity whose investment
activities are subject to investment laws and regulations
or to review by certain regulatory authorities.
Prospective purchasers are urged to consult with their
counsel concerning the
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status of the Offered Notes as legal investments for such
purchasers. See "LEGAL INVESTMENT CONSIDERATIONS" herein.
Tax Status...................... In the opinion of Mayer, Brown & Platt, special tax
counsel for the Trust, the Offered Notes will be
characterized as debt for U.S. federal income tax
purposes. Each Offered Noteholder, by acceptance of an
Offered Note, will agree to treat the Offered Notes as
indebtedness. See "UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES" herein.
Payments of principal and Interest in respect of the
Offered Notes will be made subject to withholding tax (if
any) applicable to the Offered Notes without the Issuer
Trustee being obliged to pay any additional amounts to the
Offered Noteholders in respect of such withholding tax.
See "RISK FACTORS--No Gross-Up; Tax Redemption."
ERISA Considerations............ Subject to the considerations discussed under "ERISA
CONSIDERATIONS," the Offered Notes are eligible for
purchase by employee benefit plans.
Ratings of the Offered Notes.... It is a condition to the issuance of the Class A Notes
that they be rated "AAA" by Standard & Poor's Ratings
Group, a division of The McGraw-Hill Companies ("Standard
& Poor's"), "Aaa" by Moody's Investors Service, Inc.
("Moody's") and "AAA" by Fitch IBCA, Inc. ("Fitch").
Moody's, Fitch and Standard & Poor's are referred to
herein as the "Rating Agencies." It is a condition to the
issuance of the Class B Notes that they be rated "AA-" by
Standard & Poor's and "AA-" by Fitch. The security ratings
of the Offered Notes should be evaluated independently
from similar ratings on other types of securities. A
security rating is not a recommendation to buy, sell or
hold securities and may be subject to revision or
withdrawal at any time by the Rating Agencies. See
"RATINGS OF THE NOTES" herein.
Governing Law................... The Notes and the Transaction Documents (other than the
Security Trust Deed and certain of the Swap Agreements)
are governed by, and shall be construed in accordance
with, the laws of New South Wales, Australia. The Security
Trust Deed is governed by, and shall be construed in
accordance with, the laws of the Australian Capital
Territory.
The Issuer Trustee has, under the Note Trust Deed,
submitted to the non-exclusive jurisdiction of the courts
of New South Wales for all purposes in connection with the
Offered Notes.
Risk Factors.................... In considering an investment in the Offered Notes,
investors should recognize that there are risks associated
with such an investment. See "Risk Factors" herein.
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STRUCTURAL CHART
This chart depicts the basic structure of the transaction
28
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CASH FLOW SUMMARY
THE FOLLOWING IS A BRIEF SUMMARY OF THE ALLOCATION OF CASHFLOWS IN RELATION
TO THE TRUST. THIS CASH FLOW SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO THE DETAILED INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS --SEE
"DESCRIPTION OF THE OFFERED NOTES" FOR A FULL DESCRIPTION OF CASHFLOW
ALLOCATION. TERMS DEFINED BELOW ARE DEFINED IN MORE DETAIL ELSEWHERE--THE
DEFINITIONS BELOW ARE FOR CONVENIENCE ONLY.
COLLECTIONS
Amounts collected by or on behalf of the Issuer Trustee in respect of the
Trust are calculated for each Collection Period and include, for the relevant
Collection Period:
1. scheduled payments (of interest, principal and fees) and prepayments of
principal under the Housing Loans;
2. proceeds from enforcement of Housing Loans and related Mortgages (see
"CERTAIN LEGAL ASPECTS OF THE HOUSING LOANS--Enforcement of Housing Loans");
3. amounts payable under Mortgage Insurance Policies with respect to losses
on Housing Loans and related Mortgages;
4. amounts received from an Approved Seller or the Servicer for breaches of
representations or undertakings; and
5. interest on amounts in the Collections Account.
These amounts are known as "Collections" which will be attributed between
income and principal. The Collections attributed to income, less certain
amounts, are "Available Income". The Collections attributed to principal, less
certain amounts, are "Gross Principal Collections".
The cashflow allocation methodology treats Available Income and Gross
Principal Collections in two separate "streams". Generally, the two streams are
treated separately. However, in some circumstances, principal will be treated as
income and applied in the income stream, and in other circumstances income will
be treated as principal and applied in the principal stream.
GROSS PRINCIPAL COLLECTIONS
Gross Principal Collections are applied first to repay Westpac for any
Redraws funded by Westpac in the relevant Collection Period. The balance of
Gross Principal Collections remaining after such repayment of Westpac is known
as "Principal Collections." Those Principal Collections are applied:
1. First, to repay Westpac for any Redraws funded by Westpac to the extent
not previously reimbursed (I.E., not restricted to Redraws funded during the
relevant Collection Period);
2. Second, to repay amounts outstanding under the Redraw Facility
Agreement;
3. Third, to be treated as income to the extent necessary if there is
insufficient income for the Collection Period to make required income payments
(this application of principal as income is a "Principal Draw");
4. Fourth, to pay principal outstanding under the RFSs until repaid in
full;
5. Fifth, to pay principal outstanding under the Class A Notes and the RFS
Class A Notes. Those payments may be applied either sequentially or serially
with respect to Class B Notes, depending on whether certain threshold tests have
been satisfied.
Initially all Principal Collections will be applied "sequentially," meaning
that such Principal Collections will be applied to the RFSs (if any), Class A
Notes and RFS Class A Notes (if any), pro rata, until such classes are paid in
full. The Class B Notes are then entitled to Principal Collections.
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If certain distribution tests have been met, Principal Collections will be
applied "serially," entitling the Class A Notes and the Class B Notes to share
in Principal Collections. There are two serial distribution tests which focus on
whether the subordination provided by the Class B Notes to the Class A Notes
effectively doubles from the initial level of subordination at the start of the
transaction, whether the distribution of Principal Collections is occurring
prior to a certain date and whether certain credit tests focusing on
delinquencies and losses on the Housing Loans have been met. For a complete
description of the serial distribution tests, see the definitions of "Serial
Method 1 Distribution Test" and "Serial Method 2 Distribution Test" set forth in
"DESCRIPTION OF THE OFFERED NOTES--Payments of Principal on the Notes."
6. Sixth, to pay principal outstanding under the Class B Notes under the
sequential or serial methods referred to above.
PRINCIPAL LOSSES
It may be that principal losses are incurred in respect of a Housing Loan
during a Collection Period.
If (i) a Borrower defaults; (ii) the relevant Housing Loan and related
Mortgage are enforced; and (iii) the amount recovered (after payment of
enforcement expenses) will not satisfy the Unpaid Balance of the Housing Loan,
there will be a "Liquidation Loss". A Liquidation Loss will usually comprise
both interest and principal. To the extent that it relates to principal, a
Liquidation Loss is known as a "Principal Loss". If, following a Principal Loss,
the relevant Mortgage Insurance Policy does not cover that loss and the Issuer
Trustee does not have a right to recover any amounts from an Approved Seller or
the Servicer due to a breach of representation or undertaking, there will be a
loss on the underlying principal in the pool. Such a loss is a "Mortgage
Shortfall". The total amount of all Mortgage Shortfalls in a Collection Period
is known as the "Principal Charge Off" for that Collection Period.
Any Principal Charge Off for a Collection Period may be met by any excess
income which is available from the income stream for that purpose (as summarized
below). If the Principal Charge Off cannot be satisfied in full from that excess
income, the principal loss represented by the balance of the Principal Charge
Off which is not so satisfied must be "carried over" into succeeding periods.
This is a "Carryover Charge Off".
Each Carryover Charge Off must be represented by a reduction in the
principal amount of the Notes. Thus, the principal amount of the Notes (the
"Invested Amount") is reduced:
(a) First, in respect of Class B Notes; and
(b) Second, if the Class B Notes are reduced to zero, PRO RATA, in
respect of the Class A Notes, the RFSs, the RFS Class A Notes and the
Principal Outstanding under the Redraw Facility.
The "Stated Amount" of a Note is thus the Invested Amount of the Note less
the Carryover Charge Offs applied against it as set out above.
Excess income may be used to recover principal which has been reduced
following a Carryover Charge Off. The application of income for this purpose is
summarized below.
INCOME COLLECTIONS
Available Income is applied in the following order of priority:
(a) First, in respect of the first Collection Period, to the Approved
Seller for income received by the Issuer Trustee on the pool relating to the
period prior to the Closing Date. This is the "Accrued Interest Adjustment";
(b) Second, to Trust Expenses which have not previously been paid;
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(c) Third, to repay amounts outstanding under the Support Facilities
(other than the Currency Swaps and fees under the Liquidity Facility
Agreement);
(d) Fourth, to repay Liquidity Draws under the Liquidity Facility
Agreement;
(e) Fifth, PARI PASSU and ratably, to interest on the Class A Notes, the
RFSs and the RFS Class A Notes and to fees under the Redraw Facility
Agreement; and
(f) Sixth, to interest on the Class B Notes.
These payments are "Total Payments".
Any Available Income in excess of Total Payments for a Collection Period is
"Excess Available Income", and is applied in the following order of priority:
(i) First, against Principal Charge Offs for the Collection Period;
(ii) Second, PARI PASSU and ratably, against Carryover Charge Offs for
Class A Notes, RFSs, RFS Class A Notes and fees or amounts owing under the
Redraw Facility Agreement;
(iii) Third, against Carryover Charge Offs for Class B Notes; and
(iv) Fourth, to Principal Draws which have not previously been repaid.
Any amount remaining after application of these payments is an "Excess
Collections Distribution", and will be paid to Westpac as beneficiary of the
Trust.
LIQUIDITY SUPPORT
If there are insufficient interest Collections to meet Total Payments for a
Collection Period, principal may be used to provide liquidity by way of a
"Principal Draw" (see above).
If Principal Draws are not available to meet Total Payments, a drawing must
be made under the Liquidity Facility Agreement up to its facility limit (being
A$79,000,000) to provide liquidity to allow Total Payments to be made.
CURRENCY SWAPS
All payments required to be made to Offered Noteholders will be made in
Australian dollars to the Currency Swap Providers, who will swap the amounts
into US dollars.
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CASH FLOW CHART
[CHART]
This chart depicts a cash-flow summary
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[CHART]
This chart depicts a cash-flow summary
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RISK FACTORS
In addition to the matters described elsewhere in this Prospectus,
prospective investors should carefully consider the following factors before
deciding to invest in the Offered Notes.
LIMITED LIABILITY UNDER THE OFFERED NOTES
The Offered Notes are debt obligations of the Issuer Trustee in its capacity
as trustee of the Trust. They are issued with the benefit of, and subject to the
Master Trust Deed, the Series Notice, the Security Trust Deed and the Note Trust
Deed. The Issuer Trustee's liability in respect of the Offered Notes is limited
to the assets of the Trust available in accordance with the terms of the Master
Trust Deed, the Series Notice, the Note Trust Deed and the Security Trust Deed
to meet its obligations in relation to the Offered Notes and, except in certain
limited circumstances, the Issuer Trustee will not be personally liable in
respect of the Offered Notes. See "THE ISSUER TRUSTEE--Limitation of Issuer
Trustee's Liability."
In addition, the Offered Notes will not represent an interest in or
obligation of the Servicer, the Trust Manager, the Approved Sellers, the Note
Trustee, the Security Trustee or any of their respective affiliates (other than
the Issuer Trustee to the extent referred to above). The only obligations of the
foregoing entities with respect to the Offered Notes or any Housing Loan will be
the obligations of the Approved Sellers pursuant to certain limited
representations and warranties made with respect to the Housing Loans, of the
Servicer with respect to its servicing obligations under the Servicing Agreement
and the Trust Manager in respect of its undertakings in the Transaction
Documents. The Offered Notes will not be guaranteed or insured by any
governmental agency or instrumentality, or by the Issuer Trustee, the Servicer,
the Trust Manager, the Approved Sellers, the Note Trustee, the Security Trustee
or any of their respective affiliates. The Housing Loans are subject to certain
mortgage insurance policies, but only limited losses are covered. Housing Loans
insured by HLIC prior to December 12, 1997 will have the benefit of a
Commonwealth Government Guarantee. See "THE MORTGAGE INSURANCE POLICIES."
Proceeds of the assets included in the Trust (including the Housing Loans) will
be the sole source of payments on the Offered Notes, and there will be no
recourse to the Servicer, the Trust Manager, the Approved Sellers, the Note
Trustee, the Security Trustee or any other entity in the event that such
proceeds are insufficient or otherwise unavailable to make all payments provided
for under the Offered Notes.
RISK OF EQUITABLE ASSIGNMENT OF HOUSING LOANS RATHER THAN LEGAL ASSIGNMENT
Although the Housing Loans and the related Mortgages could have been legally
assigned by the Seller Trustee to the Issuer Trustee, they will initially only
be equitably assigned until a Title Perfection Event (as defined below) occurs.
A "Title Perfection Event" in relation to the Housing Loans is the occurrence of
any of the following: (i) Westpac ceases to have a long term credit rating of at
least "BBB" from Standard & Poor's, "Baa2" from Moody's; and "BBB" from Fitch
(ii) an Insolvency Event occurs with respect to Westpac; and (iii) Westpac fails
to transfer Collections within five Business Days after receiving notice from
the Issuer Trustee or the Trust Manager to do so. Until such time, pursuant to
the Transaction Documents, the Issuer Trustee is not permitted to take any steps
to perfect legal title and it cannot, and will not, notify the Borrowers of the
equitable assignment of the Housing Loans to the Issuer Trustee. If a Title
Perfection Event occurs, the Issuer Trustee, with the assistance of the
Servicer, is required take such steps as are necessary to perfect the Issuer
Trustee's legal title in the Housing Loans.
The delay in the notification to a Borrower of the assignment of the Housing
Loans to the Issuer Trustee may have the following consequences:
(1) until a Borrower has notice of the assignment, that Borrower is not
bound to make payments under the relevant Housing Loan to anyone other than
Westpac and can obtain a valid discharge from Westpac. However, the Servicer, a
delegate of Westpac, will act as the initial Servicer of the Housing Loans and
is obligated to deal with all moneys received from the Borrowers in accordance
with the Servicing Agreement and the Master Trust Deed;
(2) for so long as the Issuer Trustee holds only an equitable interest in
the Housing Loans, the Issuer Trustee's interest in them may become subject to
the interests of third parties created after the creation of
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the Issuer Trustee's equitable interest but prior to it acquiring a legal
interest in the Housing Loans. However, the Servicer undertakes not to consent
to the creation or existence of any higher or equal ranking security interest
over the Mortgaged Property (the "Servicer's Security Undertaking"); and
(3) for so long as the Issuer Trustee holds only an equitable interest in
the Housing Loans, it must join Westpac as a party to any legal proceedings
against any Borrower in relation to the enforcement of any Housing Loan. In this
regard, Westpac undertakes in the Servicing Agreement to co-operate with the
Servicer in connection with the enforcement of any Housing Loans. Westpac has
granted an irrevocable power of attorney to the Issuer Trustee to perfect its
interest in the Housing Loans.
So long as the Issuer Trustee holds equitable title, rather than legal
title, to a Housing Loan, the Issuer Trustee's interest in such Housing Loan may
be impaired by the creation or existence of any higher or equal ranking security
interest over the related Mortgaged Property if the Servicer fails to adhere to
the Servicer's Security Undertaking. Such failure may result in losses to
Noteholders.
RISK OF LOSSES AND DELAYS FROM ENFORCEMENT OF THE HOUSING LOANS
Substantial delays could be encountered in connection with the liquidation
of a Housing Loan and result in shortfalls in distributions to Noteholders to
the extent not covered by a Mortgage Insurance Policy or if the relevant
Mortgage Insurance Policy provider fails to perform its obligations. Further,
liquidation expenses such as legal fees, real estate taxes, and maintenance and
preservation expenses (to the extent not covered by a Mortgage Insurance Policy)
will reduce the net amounts recoverable by the Issuer Trustee from an enforced
Housing Loan and mortgage and will reduce Excess Available Income. In the event
any of the Mortgaged Properties fail to provide adequate security for the
related Housing Loans, Noteholders could experience a loss to the extent not
covered by a Mortgage Insurance Policy or if the relevant Mortgage Insurance
Policy provider fails to perform its obligations and the subordination of Excess
Available Income is not sufficient.
MORTGAGE INSURANCE POLICIES ARE SUBJECT TO EXCLUSIONS AND LIMITATIONS
The liability of each of the Mortgage Insurers under the Mortgage Pool
Insurance Policy and the PMI Policies, as applicable, is subject to certain
exclusions. Each of them also has the right to cancel the coverage of, or
terminate its Mortgage Insurance Policy in respect of, a Housing Loan in certain
circumstances. The exclusions and rights vary among the different Mortgage
Insurance Policies and may affect the ability of the Issuer Trustee to make
timely and full payments of principal and Interest on the Notes. See "THE
MORTGAGE INSURANCE POLICIES" for further details.
RISKS ASSOCIATED WITH HIGH LVR HOUSING LOANS
Approximately 32.79% of the Housing Loans by aggregate principal balance of
the related Housing Loans as of the CutOff Date, had an LVR in excess of 80%.
Housing Loans with higher LVRs may present a greater risk of delinquency.
Although each Housing Loan in the Trust with an LVR in excess of 80% is covered
by a PMI Policy which insures the full amount of the Unpaid Balance of the
related Housing Loan, if a Borrower fails to make payments under such a Housing
Loan and the applicable Mortgage Insurer cancels the relevant PMI Policy,
reduces the amount of a claim or fails to honor its obligation under the PMI
Policy, proceeds from a liquidation of such Housing Loan may be insufficient to
cover the Unpaid Balance thereof. As a result, Noteholders may experience losses
including Principal Charge Offs (as defined herein) with respect to the Offered
Notes. For a description of such coverage, see "THE MORTGAGE INSURANCE
POLICIES."
RISKS ASSOCIATED WITH WESTPAC'S ABILITY TO SET RATES ON VARIABLE RATE HOUSING
LOANS AT ITS DISCRETION
The interest rates with respect to the Variable Rate Housing Loans are not
tied to an objective interest index but rather may be set at the sole discretion
of Westpac, as originator of the Housing Loans. See "WESTPAC RESIDENTIAL LOAN
PROGRAM--Housing Loan Features." In the event that Westpac increases interest
rates on the Variable Rate Housing Loans, Borrowers may be unable to meet their
Scheduled Payments and accordingly, may become delinquent or may default on
their respective
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Housing Loans. In addition, if such increase raises interest rates above market
interest rates, Borrowers may refinance their loans with another lender to
obtain a lower interest rate, which in turn could cause investors in the Offered
Notes to experience higher rates of principal prepayment on the Offered Notes
than anticipated.
ABILITY TO CHANGE HOUSING LOAN FEATURES MAY RESULT IN CHANGES TO THE MORTGAGE
POOL AND HIGHER RATES OF PRINCIPAL PREPAYMENT ON THE OFFERED NOTES.
During the term of any Housing Loan, Westpac may from time to time or at the
request of the related Borrower change certain features of such Housing Loan. A
Borrower may request, among other changes, (a) additional funds with respect to
its Housing Loan (a "top up"), (b) a substitution or modification of the
security for the related Mortgage, (c) a switch to another type of Housing Loan
product, (d) a draw on principal repayments made in excess of scheduled
repayments (a "Redraw"), (e) an interest rate switch from variable to fixed or
vice versa, (f) reduced payments due to maternity or paternity leave, (g) a
repayment holiday if a prepayment of certain amounts has resulted in a buffer of
funds and (h) a switch from owner occupied to investment property status or vice
versa (which may result in a change in interest rates). For a more detailed
discussion of the various features available to Borrowers, see "WESTPAC
RESIDENTIAL LOAN PROGRAM-- Housing Loan Features."
In addition, Westpac may initiate certain changes to the Housing Loans. Most
frequently, Westpac will change the Mortgage Rate. The change to the Mortgage
Rate can be either product or individual loan specific. In addition, subject to
certain conditions, Westpac may begin to offer additional product features with
respect to the Housing Loans which are not set forth herein. See "WESTPAC
RESIDENTIAL LOAN PROGRAM-Housing Loan Features-Additional Features."
As a result of both Borrower and Westpac initiated changes, the
characteristics of the Housing Loans as of the Cut-Off Date may differ from the
characteristics of the Housing Loans at any other point in time. In addition,
certain types of modifications to a Housing Loan result in the removal of such
Housing Loan from the Mortgage Pool, which in turn could cause investors in the
Offered Notes to experience higher rates of principal prepayment on the Offered
Notes than anticipated. Similarly, if Westpac elects to change certain features
of the Housing Loans, Borrowers may elect to refinance their loan with another
lender to obtain more favorable features, which also could lead to higher
principal prepayment on the Offered Notes than expected. See "PREPAYMENT AND
YIELD CONSIDERATIONS."
RISKS OF CURRENCY EXCHANGE CONTROLS
The Issuer Trustee will receive Australian dollar payments on the Housing
Loans in Australia and, under the Currency Swaps, is required to pay certain
collections to the Currency Swap Providers as required under the Series Notice.
It is possible that in the future Australia may impose exchange controls that
affect the availability of Australian dollar payments for making payments under
the Currency Swaps. The Offered Noteholders will bear the risk of the imposition
of foreign exchange controls by the Australian government that impact upon the
Issuer Trustee's ability to exchange the Collections for U.S. dollars. The
Issuer Trustee has no control over such risk, which will generally be affected
by economic and political events in Australia. If the Issuer Trustee does not
pay some or all of the amounts in Australian dollars which it is required by the
Transaction Documents to pay to the Currency Swap Providers under the Currency
Swaps, the Currency Swap Providers are only required to pay the U.S. dollar
equivalent of the amounts they actually receive. In such event, it is unlikely
that the Trust would have sufficient U.S. dollars to make the payments due on
the Offered Notes.
RISKS RELATED TO A TERMINATION OF THE SWAP AGREEMENTS
By entering into the Swap Agreements, the Issuer Trustee intends to transfer
to the Interest Rate Swap Provider and Currency Swap Providers, as applicable,
the risks set forth below that the Trust would otherwise have with respect to
payments on the Offered Notes and the Housing Loans.
(a) Currency Exchange Risk. Interest and principal on the Offered Notes is
payable in U.S. dollars and the Trust's primary source for funding its payments
on the Offered Notes is its collections on the
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Housing Loans, which will be in Australian dollars. If the Currency Swap
Providers were to fail to perform under the Currency Swaps or were to be
discharged from such performance because of a default thereunder by the Trust,
the Issuer Trustee might have to exchange its Australian dollars for U.S.
dollars at an exchange rate that is less favorable to the Trust than the
original Swap Currency Exchange Rate (which is 1.603733 Australian dollars for
each U.S. dollar) and might therefore not have sufficient U.S. dollars to make
timely payments on the Offered Notes, even though the delinquency and loss
experience on the Housing Loans may be acceptable.
(b) Risks Specific to the Variable Rate Basis Swap. The basis risk between
the floating rate obligations of the Trust (including Interest payable on the
Notes) and the variable administered rates set by Westpac will be hedged by
means of the Variable Rate Basis Swap. Pursuant to the Variable Rate Basis Swap,
each quarter the Interest Rate Swap Provider will pay the Issuer Trustee the
three month Bank Bill Rate plus a fixed margin and receive from the Issuer
Trustee the weighted average variable housing rate. The margin is fixed for the
life of the swap and will be set with regard for the ongoing expenses of the
Trust.
If Westpac is downgraded below A-1+/A2/F-1+ by Standard & Poor's, Moody's or
Fitch, respectively, and fails to provide eligible collateral or arrange for a
suitable alternative swap provider, it will be an Additional Termination Event
under the terms of the ISDA Master Agreement. If the Variable Rate Basis Swap is
terminated, the Trust Manager is required to calculate each month the minimum
interest rate required to be set on the variable rate Housing Loans in order to
cover amounts payable by the Issuer Trustee (including anticipated Trust
Expenses and taxes) and amounts due to the Issuer Trustee, the Trust Manager,
the Servicer, the Liquidity Facility Provider, the Redraw Facility Provider and
the Noteholders (the "Threshold Rate"). In this situation, the Housing Loan
rates across Westpac's whole portfolio of loans of the same product type may be
set at above market interest rates on the variable housing loans to meet Trust
Expenses which could result in the affected Borrowers refinancing their loans
with another bank, which in turn could cause Offered Noteholders to experience
higher rates of principal repayment on the Offered Notes than anticipated. If
the Variable Rate Basis Swap is terminated, the Trust may be subject to
reinvestment risk to the extent that any payments and prepayments invested in
Authorized Investments do not earn a sufficient rate of interest to cover the
interest owing on the Notes.
(c) Risks Specific to the Fixed Rate Swaps. Two Fixed Rate Swaps will be
used to hedge the interest rate risk between the floating rate obligations of
the Trust (including Interest payable on the Notes) and the discretionary fixed
rate set by Westpac on those Housing Loans being charged a fixed rate of
interest (a "Fixed Rate") (not including those loans with a Concessional Fixed
Rate). A Housing Loan is being charged a "Concessional Fixed Rate" when it has a
fixed rate of interest for the first 12 months, which converts to the standard
variable rate after that period. Loans subject to a Concessional Fixed Rate are
included under the Variable Rate Basis Swap. An amortizing Fixed Rate Swap will
be entered into on the Closing Date to hedge that portion of the pool earning a
Fixed Rate of interest as of the Cutoff Date. The Issuer Trustee will pay the
applicable daily weighted average fixed rate and receive the three month Bank
Bill Rate plus a fixed margin. The margin is fixed for the life of the swap and
has been set based on the actual margin on the underlying Fixed Rate Housing
Loans and the prevailing market rate existing on or about the Closing Date. A
further Fixed Rate Basis Swap will be entered into to hedge the interest rate
risk occurring when the Borrowers switch from a variable rate of interest to a
fixed rate of interest. Under that second Fixed Rate Basis Swap, the Issuer
Trustee will pay the applicable daily weighted average fixed rate and receive
the three month Bank Bill Rate plus a fixed margin. The margin is fixed for the
life of the swap.
If Westpac is downgraded below A-1+/A2/F-1+ by Standard & Poor's, Moody's or
Fitch, respectively, and fails to provide eligible collateral or arrange for a
suitable alternative swap provider, it will be an Additional Termination Event
under the terms of the ISDA Master Agreement only at the discretion of the
Issuer Trustee, who shall make such decision at the direction of the Trust
Manager. If the swap remains in place, the Rating Agencies may consider
downgrading the Offered Notes and an investor may then be
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holding Offered Notes which have been downgraded. If the swap is terminated, the
investor is exposed to the risk of the possible narrowing of the spread between
the customer rate applicable on the Housing Loans and the floating rate
obligations of the Trust (including the Interest on the Notes). If the relevant
Fixed Rate Basis Swap is terminated, the Trust will be subject to the risk that
the floating rate obligations of the Trust may change in such a way that the
discretionary fixed rate set by Westpac on those Housing Loans being charged a
fixed rate of interst will be insufficient to make payments on such floating
rate obligations.
DELINQUENCY AND DEFAULT RISK
If Borrowers fail to make Scheduled Payments under Housing Loans when due
there is a possibility that the Issuer Trustee may have insufficient funds to
make full payments of Interest and principal due to the Noteholders.
The Issuer Trustee's obligation to pay principal in respect of the Offered
Notes in full is limited by reference to, among other things, receipts by the
Issuer Trustee of amounts due under or in respect of the outstanding Housing
Loans. Noteholders must rely for payment of principal and Interest under the
Offered Notes on Borrowers making payments under the Housing Loans and on
amounts being available under the Mortgage Insurance Policies and any amounts
payable by an Approved Seller or the Servicer in respect of any breach of a
representation and warranty or undertaking respectively and, in addition, in the
case of Interest, on receipts of principal and required payments under the
Liquidity Facility. Furthermore, the Issuer Trustee is not required to make any
advances to cover shortfalls. See "DESCRIPTION OF THE OFFERED NOTES" and "THE
LIQUIDITY FACILITY."
A wide variety of factors of a legal, economic, political or other nature
could affect the performance of Borrowers in making payments of principal and
interest under the Housing Loans. In particular, if interest rates increase
significantly, Borrowers may experience distress and increased default rates on
the Housing Loans may result. Under the Consumer Credit Legislation (as defined
herein), among other remedies, a court may order a Housing Loan to be varied on
the grounds of hardship. See "CERTAIN LEGAL ASPECTS OF THE HOUSING LOANS." Any
such variance may reduce the principal or interest payable under a particular
Housing Loan.
If a Borrower defaults on payments under a Housing Loan and the Servicer
enforces the Housing Loan and takes possession of the relevant Mortgaged
Property, many factors may affect the price for which the Mortgaged Property is
sold and the length of time required to realize the proceeds of sale. Any delay,
and any loss incurred as a result of the realized proceeds of the sale of a
Mortgaged Property being less than the amount due under the Housing Loan may
affect the ability of the Issuer Trustee to make payments, or the timing of
those payments, in respect of the Offered Notes, notwithstanding any amounts
that may be claimed under a Mortgage Insurance Policy or otherwise allocated
from Principal Collections or drawn under the Liquidity Facility.
RISK OF EARLY DEFAULTS
Although little data is available and no empirical verification has been
made by the Trust Manager, the Underwriters or the Issuer Trustee, defaults on
mortgage loans, including mortgage loans similar to the Housing Loans, are
generally expected to occur with greater frequency in the early years of the
terms of mortgage loans.
PRINCIPAL PREPAYMENT AND YIELD CONSIDERATIONS
The yield to maturity experienced by a Offered Noteholder may be affected by
the rate of payment of principal of the Housing Loans. The Trust may receive
early payments of principal on the Housing Loans and, therefore, pay Principal
Collections to the Noteholders earlier than would otherwise have been the case.
For example, early payments of principal may occur in the following situations:
(1) receipt by the Issuer Trustee of enforcement proceeds due to a Borrower
having defaulted on its Housing Loan;
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(2) receipt by the Issuer Trustee of insurance proceeds in relation to a
claim under a Mortgage Insurance Policy in respect of a Housing Loan;
(3) repurchase by Westpac of Housing Loans as a result of a breach by it of
certain representations (see "THE TRUST FUND--Representations and Warranties"
and "--Breach of Representations and Warranties");
(4) receipt by the Trust of any net amount attributable to principal from
another WST trust established under the Master Trust Deed with respect to the
substitution of a Housing Loan;
(5) repurchase of the Housing Loans as a result of a Clean-Up Offer or a
redemption for taxation or other reasons (see "DESCRIPTION OF THE OFFERED
NOTES--Clean-Up Offer" and "--Redemption of the Offered Notes for Taxation or
Other Reasons");
(6) receipt of proceeds of enforcement of the Security Trust Deed prior to
the Maturity Date of the Notes (see "DESCRIPTION OF THE OFFERED
NOTES--Redemption of the Notes"); or
(7) receipt of proceeds of the sale of Housing Loans if the Trust is
terminated while Offered Notes are outstanding (for example, if required by law)
and the Housing Loans are then either (a) repurchased by Westpac under its right
of first refusal or (b) sold to a third party.
Additionally, in certain limited circumstances (for example, if the
principal amount of a Housing Loan is increased other than as a result of a
Redraw (see "DESCRIPTION OF THE OFFERED NOTES-- Description of the Redraw
Facility, the Redraw Funding Securities and the Class A RFS Notes")), the Issuer
Trustee may transfer Housing Loans which comprise assets of the Trust to another
WST trust established under the Master Trust Deed. The consideration for that
transfer, to the extent it constitutes principal, will form part of Gross
Principal Collections (as defined herein) during the related Collection Period
and will be distributed as if it were a prepayment of principal by the relevant
Borrower.
Also, the Trust's principal payment experience may be affected by a wide
variety of factors, including general economic conditions, interest rates, the
availability of alternative financing and homeowner mobility. Furthermore,
unlike the United States, under Australian law, interest on loans used to
purchase a person's primary place of residence is not ordinarily deductible for
taxation purposes. Conversely, interest payments on mortgage loans and other
non-capital expenditures relating to investment properties that generate taxable
income are generally allowable as tax deductions. This is one contributing
factor to borrowers prepaying housing loans relating to owner-occupied
properties in Australia in a manner that differs from the United States. See
"CERTAIN LEGAL ASPECTS OF THE HOUSING LOANS-- Treatment of Interest Payments
with respect to Australian Housing Loans".
See "PREPAYMENT AND YIELD CONSIDERATIONS."
NO GROSS-UP; TAX REDEMPTION
In the event that any withholding tax is imposed on payments of interest on
any of the Offered Notes, the holders of the Offered Notes will not be entitled
to receive grossed-up amounts to compensate for such withholding tax.
Consequently, there can be no assurance that the remaining payments on the
Housing Loans would be sufficient to make timely payments of Interest on and
payment of principal at the maturity date of the Offered Notes. In addition,
upon the occurrence of a Withholding Tax Event, the Issuer Trustee (at the
direction of the Trust Manager) may on any Payment Date simultaneously redeem in
whole but not in part, at the redemption prices specified herein, the affected
Class of Offered Notes in accordance with the procedures described under
"DESCRIPTION OF THE OFFERED NOTES--Redemption of the Offered Notes for Taxation
or Other Reasons" herein. Holders of 75% of the Invested Amount of a Class may
also elect not to redeem the affected Class of Offered Notes in the event of a
Withholding Tax Event.
REINVESTMENT RISK
The Interest Rate Swap Agreements transfer the reinvestment risk detailed
below to the applicable Swap Provider. In the event that the Variable Rate Basis
Swap is terminated, the reinvestment risk will transfer back to the Issuer
Trustee. If a prepayment is received on a Housing Loan during any Collection
Period, interest at the then current interest rate on the Housing Loan will
cease to accrue on that part of
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the Housing Loan prepaid from the date of the prepayment. The amount prepaid
will be invested in Authorized Investments for the balance of the Collection
Period at a rate that may be less than the then rate on the Housing Loan.
Interest will, however, continue to be payable in respect of an Invested Amount
of principal on the Offered Notes until the next Payment Date following the
prepayment. Accordingly, the difference between the rate earned on the prepaid
amount of the Housing Loan and the amount of interest payable on the Offered
Notes may affect the ability of the Issuer Trustee to pay interest in full on
the Offered Notes. Certain Principal Collections and the Liquidity Facility may
cover such shortfalls in whole or in part but there is no assurance that
sufficient amounts will be available. For further details see "DESCRIPTION OF
THE OFFERED NOTES--Available Income" and "--Principal Draws."
SERVICER RISK
The appointment of the Servicer under the Master Trust Deed and Servicing
Agreement may be terminated under certain circumstances or the Servicer may
resign (see "DESCRIPTION OF THE SERVICING AGREEMENT"). If the Servicer is
removed for any reason, the Issuer Trustee is obligated to appoint a suitably
qualified person as Servicer whose appointment would not materially prejudice
the interests of Noteholders (an "Eligible Servicer") to assume responsibility
for servicing the Housing Loans in accordance with the Master Trust Deed and the
Servicing Agreement. There is no guarantee (a) that an Eligible Servicer will be
found who would be willing to service the Housing Loans on the terms of the
Master Trust Deed and the Servicing Agreement, in which case the Issuer Trustee
must act as the Eligible Servicer or (b) that an Eligible Servicer will be able
to service the Housing Loans with the same level of skill and competence as the
initial Servicer. The ability of the Eligible Servicer (whether it is the Issuer
Trustee or a third party) to perform the servicing functions under the Master
Trust Deed and Servicing Agreement would depend on the information and records
available to it.
SUBORDINATION OF THE CLASS B NOTES
The rights of the holders of the Class B Notes to receive payments of
Interest on each Payment Date will be subordinated to such rights of the holders
of the RFSs (if any), Class A Notes, RFS Class A Notes (if any) and the Redraw
Facility Provider to the extent set forth herein. In addition, the rights of the
holders of the Class B Notes to receive distributions of principal on each
Payment Date generally will be subordinated to such rights of the holders of the
RFSs (if any) and the Redraw Facility Provider with respect to repayments
pursuant to Redraw Facility Agreement and to holders of the Class A Notes and
RFS Class A Notes (if any). Furthermore, any Principal Charge Offs will be
applied first in reduction of the principal balance of the Class B Notes.
In the event that the Note Trustee is required by the Transaction Documents
or the Offered Notes to have regard to the interests of the Class A Noteholders
and the Class B Noteholders and where, in the opinion of the Note Trustee, there
is a conflict between the interests of the Class A Noteholders and the interests
of the Class B Noteholders, the Note Trustee shall have regard only to the
interests of the Class A Noteholders despite anything to the contrary in the
Transaction Documents.
PRIORITY OF RFSS AND RFS CLASS A NOTES OWNED BY AUSTRALIAN RESIDENT INVESTORS
In certain limited circumstances, the Issuer Trustee will issue RFSs and RFS
Class A Notes, which will be issued to Australian resident investors only. The
RFSs will be senior to the Class A Notes with respect to payments of principal
and which will rank PARI PASSU with the Class A Notes with respect to Interest.
In addition, on each Payment Date, Gross Principal Collections will be used to
reimburse Westpac for any Redraws funded by Westpac during the related
Collection Period prior to payments being made on the Class A Notes.
Additionally, if RFSs are not repaid on the fifth Collection Determination Date
following the date such RFSs were issued, such RFSs will convert to RFS Class A
Notes. The RFS Class A Notes will rank PARI PASSU with the Class A Notes with
respect to payments of both principal and Interest. In addition, payments due on
the Redraw Facility, RFSs and RFS Class A Notes, if any, will be senior in right
of payment to the Class B Notes with respect to principal, Interest and fees. If
proceeds from the liquidation of the assets included in the Trust following the
enforcement of the Security Trust Deed are not sufficient to pay all
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obligations of the Issuer Trustee in its capacity as trustee of the Trust,
Noteholders with a lower priority of payment are at a greater risk for losses on
their investment. See "DESCRIPTION OF THE OFFERED NOTES--Description of the
Redraw Facility, the Redraw Funding Securities and the RFS Class A Notes."
CREDIT ENHANCEMENT PROVIDES ONLY LIMITED PROTECTION AGAINST LOSSES
Credit enhancement with respect to the Class A Notes will be provided by (i)
the Mortgage Insurance Policies, (ii) subordination of the Excess Available
Income and (iii) the subordination of payments on the Class B Notes to payments
to the Class A Notes. Credit enhancement with respect to the Class B Notes will
be provided by (i) the Mortgage Insurance Policies and (ii) subordination of the
Excess Available Income. Although the credit enhancement is intended to reduce
the risk of delinquent payments or losses to the Noteholders entitled to the
benefit thereof, the amount of such enhancement is limited, will decline and
could be depleted under certain circumstances prior to the payment in full of
the Offered Notes. As a result, the available credit enhancement may be
insufficient to reduce the risk of delinquent payments and losses to the
Noteholders. See "THE MORTGAGE INSURANCE POLICIES" and "DESCRIPTION OF THE
NOTES."
LIMITATIONS ON THE LIQUIDITY SUPPORT
If on any Collection Determination Date, the Available Income of the Trust
is insufficient to meet Total Payments of the Trust for a Collection Period,
Principal Collections collected during such Collection Period may be used to
provide liquidity by way of a Principal Draw. If Principal Draws are not
available to meet Total Payments, a drawing must be made under the Liquidity
Facility up to the Liquidity Limit (as defined herein). In the event that there
are shortfalls in excess of the Liquidity Limit prior to the payment in full of
the Offered Notes, Noteholders may suffer losses. In addition, the Liquidity
Facility does not provide any credit enhancement with respect to the Offered
Notes. See "DESCRIPTION OF THE OFFERED NOTES--Principal Draws" and "THE
LIQUIDITY FACILITY."
EXERCISE OF CLEAN-UP OFFER MAY RESULT IN SHORTFALLS TO NOTEHOLDERS
If at any time the aggregate Housing Loan Principal, expressed as a
percentage of the aggregate Housing Loan Principal as of the Cut-Off Date, is
less than 10%, then, if instructed by the Trust Manager, the Seller Trustee may
repurchase, on the following Payment Date, the equitable title to the Housing
Loans held by the Trust. The proceeds of sale will be applied by the Issuer
Trustee to repay moneys owing to Noteholders at that time in accordance with the
priorities for applying payments of Interest and principal between the Classes
of Notes. In the event that a Housing Loan is non-performing, the purchase price
for such Housing Loan will be based on the Fair Market Value. Fair Market Value
with respect to a Housing Loan may be less than the Unpaid Balance of such
Housing Loan. If a significant number of Housing Loans are non-performing, the
total proceeds from exercising the Clean-up Offer may be less than amounts owing
to Noteholders and Noteholders may suffer losses. See "DESCRIPTION OF THE
NOTES--Clean-up Offer."
REDEMPTION OF THE NOTES
If an Event of Default occurs under the Security Trust Deed while the
Offered Notes are outstanding, the Security Trustee may (subject to the prior
written consent of the Note Trustee in accordance with the provisions of the
Security Trust Deed), and will (if so directed by the Note Trustee alone where
it is the only Voting Mortgagee or, otherwise by a resolution of 75% of the
Voting Mortgagees) enforce the security created by the Security Trust Deed. That
enforcement can include the sale of some or all of the Housing Loans. There is
no guarantee that the Security Trustee will be able to sell the Housing Loans
for their then current Unpaid Balance. Accordingly, the Security Trustee may not
be able to realize the full value of the Housing Loans and this may have an
impact upon the Issuer Trustee's ability to repay all amounts outstanding in
relation to the Notes. Any proceeds from the enforcement of the security will be
applied in accordance with the order of priority of payments as set out in the
Security Trust Deed. See "SECURITY FOR THE NOTES."
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If the Trust terminates while Notes are outstanding, Westpac has a right of
first refusal to acquire the Housing Loans. The price to be paid by Westpac for
performing and non-performing Housing Loans must be not less than their fair
market value. In the case of performing Housing Loans, the Issuer Trustee is
required to offer to sell them to Westpac under its right of first refusal for
their then Unpaid Balance. Where the fair market value of a Housing Loan is less
than its then Unpaid Balance, its acquisition by Westpac will be subject to
prior approval by holders of 75% of the votes of all Noteholders. This is
because in such circumstances there may be a shortfall in the amount available
to the Issuer Trustee to fully repay all amounts outstanding in relation to the
Notes. See "DESCRIPTION OF THE OFFERED NOTES-- Termination of the Trust."
GEOGRAPHIC CONCENTRATION MAY AFFECT PERFORMANCE
Approximately 45.04%, 18.44% and 17.27% (by Cut-Off Date Principal Balance)
of the Housing Loans are secured by Mortgaged Properties in the regions of New
South Wales, Victoria and Queensland, respectively. To the extent that one or
more of such regions has experienced or may experience in the future weaker
economic conditions or greater rates of decline in real estate values than
Australia generally, such a concentration of the Housing Loans may be expected
to increase the risk of delinquencies and losses on the Housing Loans with
respect to such region. None of the Issuer Trustee, the Approved Sellers nor the
Servicer can quantify the impact of any recent property value declines on the
Housing Loans or predict whether, to what extent or for how long such declines
may continue.
CONSUMER CREDIT LEGISLATION
Some of the Housing Loans are regulated by consumer credit legislation (the
"Consumer Credit Legislation"). Under that legislation, a Borrower has the right
to apply to a court to:
(1) vary the terms of his or her Housing Loan on the grounds of hardship
or that it is an unjust contract;
(2) reduce or cancel any interest rate payable on the Housing Loan which
is unconscionable;
(3) have certain provisions of the Housing Loan or relevant Mortgage
which are in breach of the legislation declared unenforceable; or
(4) obtain restitution or compensation from either Westpac or, after a
Title Perfection Event, the Issuer Trustee, in relation to any breaches of
the Consumer Credit Legislation in relation to the Housing Loan or the
relevant Mortgage.
Any such order may affect the timing or amount of interest or principal
payments or repayments under the relevant Housing Loan (which might in turn
affect the timing or amount of Interest or principal payments or repayments
under the Offered Notes).
In addition, a mortgagee's ability to enforce a mortgage which is subject to
the Consumer Credit Legislation is limited by various demand and notice
procedures which are required to be followed. For example, as a general rule
enforcement cannot occur unless the relevant default is not remedied within 30
days after a default notice is given. Borrowers may also be entitled to initiate
negotiations with the mortgagee for a postponement of enforcement proceedings.
Such procedures and negotiations may also affect the timing or amount of
interest or principal payments or repayments under the Housing Loans.
Breaches of the Consumer Credit Legislation may also lead to civil penalties
or criminal fines being imposed on Westpac, for so long as it holds legal title
to the Housing Loans and the Mortgages. If the Issuer Trustee acquires legal
title, it will then become primarily responsible for compliance with the
Consumer Credit Legislation. The Issuer Trustee will (subject to limited
exceptions) be indemnified out of the assets of the Trust for its liabilities
under the Consumer Credit Legislation. If the Issuer Trustee is
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indemnified with respect to such liabilities out of the assets of the Trust,
proceeds of the Trust may be insufficient to make all payments provided for
under the Offered Notes.
Westpac will give, or has given, certain representations and warranties that
the Housing Loans and related Mortgages comply in all material respects with the
Consumer Credit Legislation in force at the time documents were entered into.
The representations and warranties are set forth in "THE TRUST
FUND--Representations and Warranties." The Servicer has undertaken to comply
with the Consumer Credit Legislation in connection with servicing the Housing
Loans and related Mortgages where failure to do so would have an Adverse Effect.
An "Adverse Effect" is an event which will materially and adversely affect the
amount of any payment to be made to any Noteholder, or will materially and
adversely affect the timing of such payment. In certain circumstances the Issuer
Trustee may have the right to claim damages from Westpac or the Servicer, as the
case may be, where the Issuer Trustee suffers a loss in connection with a breach
of the Consumer Credit Legislation which is caused by a breach of a relevant
representation or undertaking. See "CERTAIN LEGAL ASPECTS OF THE HOUSING LOANS."
RISK OF COMMINGLING
Collections under the Housing Loans are received by Westpac or the Servicer.
As described in "DESCRIPTION OF THE OFFERED NOTES--Collections," provided that
Westpac has a short term rating of at least "A-1+" from Standard & Poor's, "P-1"
from Moody's and "F-1+" from Fitch and the Collections Account is maintained
with Westpac or a subsidiary of Westpac, neither Westpac nor the Servicer is
required to pay the Collections into the Collections Account until two (2)
Business Days before the relevant Payment Date. If Westpac does not have the
relevant rating, Collections must be paid into the Collections Account within
five (5) Business Days (if the Collections Account is with Westpac or one of its
subsidiaries) or two (2) Business Days (in any other case) following receipt. In
each of these circumstances, the Collections may be commingled with the assets
of the Servicer or Westpac (as the case may be) and, in the event of the
insolvency of Westpac or the Servicer (as relevant), the Issuer Trustee may only
be able to claim those Collections as an unsecured creditor of the insolvent
company.
LIMITED LIQUIDITY
There will be no market for the Offered Notes prior to the issuance thereof,
and there can be no assurance that a secondary market will develop, or if it
does develop, that it will provide the Offered Noteholders with liquidity of
investment or that it will remain for the term of any Offered Notes. The
Underwriters presently expect to make a secondary market in the Offered Notes,
but have no obligation to do so.
RATINGS OF THE NOTES; FACTORS AFFECTING ABILITY TO MAINTAIN RATINGS
It is a condition to the issuance of the Class A Notes that they be rated
"Aaa" by Moody's, "AAA" by Standard & Poor's and "AAA" by Fitch and that the
Class B Notes be rated at least "AA-" by Standard & Poor's and "AA-" by Fitch. A
rating is not a recommendation to purchase, hold or sell the Offered Notes,
inasmuch as such rating does not comment as to market price or suitability for a
particular investor. The rating of the Offered Notes addresses the likelihood of
the payment of principal and interest on the Offered Notes pursuant to their
terms. There is no assurance that a rating will remain for any given period of
time or that a rating will not be lowered or withdrawn entirely by a Rating
Agency if in its judgment circumstances (including without limitation a
reduction in the credit rating of the Interest Rate Swap Provider, the Currency
Swap Providers, the Mortgage Insurance Providers or a reduction in the foreign
currency rating of Australia) in the future so warrant. The ratings of the
Offered Notes will be based primarily on the creditworthiness of the Housing
Loans, the subordination provided by the Class B Notes with respect to the Class
A Notes, the availability of Excess Available Income, if any, the Mortgage Pool
Insurance Policy and the PMI Policies, the availability of the Liquidity
Facility, the creditworthiness of the Interest Rate Swap Provider, the Currency
Swap Providers and the Mortgage Insurers and the foreign
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currency rating of Australia. In the context of an asset securitization, the
foreign currency rating of a country reflects, in general, a Rating Agency's
view of the likelihood that cash flow on the assets in such country's currency
will be permitted to be sent outside of that country.
BOOK-ENTRY NOTES
Issuance of the Offered Notes in book-entry form may reduce the liquidity of
such Notes in the secondary trading market since investors may be unwilling to
purchase Offered Notes for which they cannot obtain physical certificates. Since
transactions in the Offered Notes can be effected only through DTC, Cedel,
Euroclear, participating organizations, indirect participants and certain banks,
the ability of a Note Owner (as defined herein) to pledge an Offered Note to
persons or entities that do not participate in the DTC, Cedel or Euroclear
systems or otherwise to take actions in respect of such Offered Notes, may be
limited due to lack of a physical certificate representing the Offered Notes.
Note Owners may experience some delay in their receipt of distributions of
interest and principal on the Offered Notes since such distributions will be
forwarded by the Principal Paying Agent to DTC and DTC will credit such
distributions to the accounts of its Participants (as defined herein) which will
thereafter credit them to the accounts of Noteholders either directly or
indirectly through indirect participants. See "DESCRIPTION OF THE OFFERED
NOTES--Book-Entry Registration" herein.
OTHER CONSIDERATIONS
There is no assurance that the market value of the Housing Loans will at any
time be equal to or greater than the Invested Amount of the Notes then
outstanding, plus accrued interest thereon. Moreover, upon an Event of Default
under the Security Trust Deed and a sale of the Trust Assets, the Security
Trustee, the Note Trustee, the Liquidity Facility Provider, the Swap Providers
and any other service provider generally will be entitled to receive the
proceeds of any such sale to the extent of unpaid fees and expenses and other
amounts owing to such persons prior to distributions to holders of the Notes.
After such payment of fees and expenses, the remaining proceeds thereof may be
insufficient to pay in full the principal of and interest on the Notes.
FORMATION OF THE TRUST
WESTPAC SECURITISATION TRUST PROGRAMME
The Westpac Securitisation Trust Programme was established pursuant to the
Master Trust Deed for the purpose of enabling Westpac Securities Administration
Limited, as trustee of each Trust established pursuant thereto, to invest in
pools of consumer assets originated from time to time by the Westpac Banking
Corporation group (the "Westpac Group"). The Master Trust Deed provides for the
creation of an unlimited number of WST trusts. Each WST trust will be a separate
and distinct trust fund and will be created subject to the Master Trust Deed and
a supplemental series notice establishing specific provisions of the relevant
WST trust and the instruments to be issued by that trust. The Trust Assets are
not available to meet the liabilities of any other WST trust formed under the
Master Trust Deed. Likewise, the assets of any other trust formed under the
Master Trust Deed are not available to meet the liabilities of the Series
1998-1G WST Trust. Multiple classes of notes may be issued by the Issuer Trustee
in relation to each WST trust that differ among themselves as to priority of
payments and ratings.
SERIES 1998-1G WST TRUST
The detailed terms of the Trust will be as set out in the Series Notice and
the Master Trust Deed. The Master Trust Deed establishes the general framework
under which WST trusts may be established from time to time. It does not
actually establish any trusts. To establish the Trust, the Trust Manager and the
Issuer Trustee have executed a notice of creation of trust dated on or about
(the "Notice of Creation of Trust").
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In order to supplement the general framework under the Master Trust Deed
with respect to the Trust, all relevant parties (including the Trust Manager,
the Issuer Trustee and each Approved Seller) will execute the Series Notice,
which (among other things) specifies the details of the Notes, establishes the
cashflow allocation, sets out various representations and undertakings of the
parties specific to the Housing Loans, which are additional to those in the
Master Trust Deed, and amends the Master Trust Deed to the extent necessary to
give effect to the specific aspects of the Trust and the issue of the Offered
Notes.
The Transaction Documents should therefore be read together when determining
the rights, powers and obligations of the Issuer Trustee, the Trust Manager and
the Approved Sellers in relation to the Trust. The Master Trust Deed and a form
of the Series Notice have been filed as exhibits to the Registration Statement
of which this Prospectus is a part. The summaries herein do not purport to be
complete and are subject to the provisions of such documents.
The issuance of the Offered Notes will fund the purchase by the Trust of a
pool of residential housing loans originated by Westpac, which will be specified
in a Sale Notice from each of Westpac in its capacity as originator of the
Housing Loans or Westpac Securities Administration Limited in its capacity as
trustee of any other WST trusts established under the Master Trust Deed (in that
capacity, the "Seller Trustee"). The Seller Trustee owes a fiduciary duty to
Westpac, the entity which is the beneficiary of each "warehouse" trust
established under the Master Trust Deed.
In addition, the Trust may issue certain additional debt securities as
discussed herein under "DESCRIPTION OF THE OFFERED NOTES--Description of the
Redraw Facility, the Redraw Funding Securities and the RFS Class A Notes."
TRUST ASSETS
The Trust Assets will include:
1. a pool of Housing Loans, including all monies at any time paid or
payable thereon or in respect thereof from and after the Cut-Off Date with
respect to payments of principal and after the Closing Date with respect to
payments of interest;
2. rights under certain insurance policies with respect to the Housing
Loans;
3. amounts on deposit in certain accounts established pursuant to the
Master Trust Deed, including the Collections Account and amounts invested in
Authorized Investments; and
4. the Issuer Trustee's rights under the Transaction Documents.
SECURITY FOR THE NOTES
CHARGE
Pursuant to the Security Trust Deed, dated on or about , 1998 among
the Issuer Trustee, the Trust Manager, the Note Trustee and the Security
Trustee, the Issuer Trustee will grant a first ranking floating charge, to be
registered with the Australian Securities Commission, over all of the Trust
Assets in favor of Perpetual Trustee Company Limited (ACN 000 001 007) (the
"Security Trustee"), a company within the Perpetual group with its holding
company being Perpetual Trustees Australia Limited (ACN 000 431 827), in order
to secure the Issuer Trustee's obligations to the Offered Noteholders, the Note
Trustee, the Trust Manager, the Interest Rate Swap Provider, the Currency Swap
Providers, the Security Trustee, each Paying Agent, each other provider of a
Support Facility (other than any provider of a Mortgage Insurance Policy), the
Approved Sellers in respect of any Accrued Interest Adjustment (as defined
herein), to Westpac in respect of Redraws, to the holders of the RFSs (if any)
and the holders of the RFS Class A Notes (if any) (such creditors, together the
"Mortgagees").
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SECURITY TRUSTEE
The Security Trustee is appointed to act as trustee on behalf of the
Mortgagees on the terms and conditions of the Security Trust Deed. It holds the
benefit of the charge over the Trust Assets in trust for each Mortgagee in
accordance with the terms and conditions of the Security Trust Deed.
Subject to the provisions of the Security Trust Deed, if there is a conflict
between the duties owed by the Security Trustee to any Mortgagees or class of
Mortgagees, the Security Trustee must give priority to the interests of the
holders of the RFSs (if any), the RFS Class A Notes (if any), the Class A
Noteholders and the Class B Noteholders (which in the case of the Class A
Noteholders and the Class B Noteholders shall be determined by the Note Trustee
acting on their behalf). Subject to the provisions of the Security Trust Deed
(other than the provision in the previous sentence), the Security Trustee must
give priority to the interests only of the Class A Noteholders, the holders of
the RFSs (if any) and the holders of the RFS Class A Notes (if any) if, in the
Security Trustee's opinion, there is a conflict between the interests of Class A
Noteholders, the holders of the RFSs (if any) and the holders of the RFS Class A
Notes (if any) and the interests of the Class B Noteholders or other Mortgagees.
Provided that the Security Trustee acts in good faith, it shall not incur any
liability to any Mortgagee for giving effect or seeking to give effect to the
preceding provisions of this paragraph.
The Security Trustee has had no involvement in the preparation of any part
of this Prospectus, other than the particular reference to the Security Trustee
in this section and the disclosure of additional provisions of the Security
Trust Deed set forth herein. The Security Trustee makes no statement or
representation in this Prospectus, has not authorized or caused the issue of any
part of it and takes no responsibility for any part of it.
The Security Trustee does not guarantee the success of the Offered Notes nor
the payment of principal or Interest on the Offered Notes.
NATURE OF SECURITY
If a company grants a fixed security over any of its assets, those assets
may not be dealt with by such company without the consent of the relevant
mortgagee. In this way, the security is said to "fix" over the specific assets.
Fixed securities are usually given over real property, marketable securities and
other assets which will not be dealt with by the company.
Unlike fixed securities, floating charges do not attach to specific assets
but instead "float" over a class of assets which may change from time to time,
allowing the person or entity granting the charge (the "chargor") to deal with
those assets and to give third parties title to those assets free from any
encumbrance in the event of sale, discharge or modification, provided such
dealings and transfers of title are in the ordinary course of a chargor's
business. The security created by the Security Trust Deed is a floating charge
over the Trust Assets. The Security Trust Deed provides that the Issuer Trustee
may not deal with the assets of the Trust subject to the floating charge, except
in the ordinary course of its business. It is common in Australia for special
purpose securitization vehicles to give floating charges rather than fixed
charges. If the Issuer Trustee disposes of any of the Trust Assets (including
any Housing Loan) in the ordinary course of its business, the acquirer of that
property will take them free of the floating charge.
The floating charge created by the Security Trust Deed may "crystallize" and
become a fixed charge over the relevant class of assets owned by the Issuer
Trustee at the time of crystallization. Crystallization will occur automatically
following the occurrence of specific events set out in the Security Trust Deed,
including, among other events, notice to the Issuer Trustee from the Security
Trustee following an event of default. See "CERTAIN LEGAL ASPECTS OF THE HOUSING
LOANS" and "APPENDIX I-- GLOSSARY OF AUSTRALIAN LEGAL TERMS" herein.
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ENFORCEMENT
The Security Trustee must promptly convene a meeting of the Voting
Mortgagees (as defined herein) after it receives notice, or has actual knowledge
of, an Event of Default (as defined herein). See "DESCRIPTION OF THE OFFERED
NOTES--Events of Default; Rights Upon Event of Default." The Security Trustee
may waive (such waiver, being subject to the prior written consent of the Note
Trustee in accordance with the provisions of the Security Trust Deed), an Event
of Default before it is required to convene a meeting of Mortgagees if that
Event of Default is not (in the opinion of the Security Trustee) materially
prejudicial to the Mortgagees' interests.
At the meeting, the Voting Mortgagees must vote by Extraordinary Resolution
(being a resolution passed at a duly convened meeting by a majority consisting
of not less than 75% of the votes capable of being cast by Voting Mortgagees
present in person or by proxy or by written resolution signed by all of the
Voting Mortgagees) on whether to direct the Security Trustee to:
(1) declare the charge to be enforceable;
(2) declare the Secured Moneys (as defined herein) (including amounts
outstanding under the Notes, plus accrued and unpaid interest) immediately
due and payable;
(3) crystallize the floating charge created under the Security Trust
Deed in relation to any or all of the Secured Property (for a description of
the crystallization process, see "--Nature of Security" above); and/or
(4) appoint a receiver over the Trust's assets or itself exercise the
powers that a receiver would otherwise have under the Security Trust Deed.
"Secured Moneys" means all money which the Issuer Trustee (whether alone or
with another person) is or at any time may become actually or contingently
liable to pay to or for the account of any Mortgagee (whether alone or with
another person) for any reason whatever under or in connection with a
Transaction Document.
Every question submitted to a meeting shall be decided in the first instance
by a show of hands and in case of equality of votes the chairman shall both on a
show of hands and on a poll have a casting vote in addition to the vote or votes
(if any) to which he may be entitled as Voting Mortgagee or as a Representative
(as defined herein). On a show of hands, every person holding, or being a
Representative holding or representing other persons who hold, Secured Moneys
shall have one vote except that the Note Trustee shall represent each Noteholder
who has directed the Note Trustee to vote on its behalf under the Note Trust
Deed. On a poll, every person who is present shall have one vote for US $10,000
(but not part thereof) of the Secured Moneys that he holds or in which he is a
Representative. A "Representative" is in the case of any Noteholder, a person or
body corporate appointed as a proxy for that Noteholder.
A resolution of all the Voting Mortgagees (including an Extraordinary
Resolution) may be passed, without any meeting or previous notice being
required, by an instrument or notes in writing which have been signed by all of
the Voting Mortgagees.
The Security Trustee cannot exercise the powers referred to above unless
directed by an Extraordinary Resolution in the manner outlined above. The
Security Trustee is not obligated to act unless it obtains an indemnity from the
Voting Mortgagees and funds have been deposited on behalf of the Security
Trustee to the extent to which it may become liable for the relevant enforcement
actions. For so long as the Note Trustee is the only Voting Mortgagee it may
direct the Security Trustee to do any act which the Security Trustee is required
to do, or may only do, at the direction of an Extraordinary Resolution of Voting
Mortgagees. Neither the Security Trustee nor the Trust Manager may call a
meeting of Voting Mortgagees while the Note Trustee is the only Voting
Mortgagee, unless the Note Trustee otherwise consents.
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The Note Trustee will be the only Voting Mortgagee for so long as the
amounts outstanding under the Offered Notes are 75% or more of all Secured
Moneys.
No Mortgagee is entitled to enforce the charge under the Security Trust
Deed, or appoint a receiver or otherwise exercise any power conferred by any
applicable law on charges, other than in accordance with the Security Trust
Deed.
PRIORITIES UNDER THE SECURITY TRUST DEED
The proceeds from the enforcement of the Security Trust Deed (which will not
include amounts required by law to be paid to the holder of any prior ranking
security interest, the proceeds of or amounts credited to the collateral account
under the Liquidity Facility and payable to the Liquidity Facility Provider and
the proceeds of cash collateral lodged with and payable to a provider of a Swap
Agreement or provider of another Support Facility to the Issuer Trustee) are to
be applied in the order of priority set forth below, subject to any other
priority which may be required by statute or law. Priority of proceeds in
enforcement over secured creditors includes certain federal taxes, unpaid wages,
long service leave, annual leave and similar employee benefits and certain
auditor's fees.
(1) first, to pay all costs, charges, expenses and disbursements
properly incurred in the exercise of any power by the Security Trustee, the
Note Trustee, a receiver or an attorney or other amounts (other than those
referred to in paragraph (4) below) payable to the Security Trustee or the
Note Trustee under the Security Trust Deed;
(2) second, to pay PARI PASSU and rateably:
(i) any fees and other expenses (including Trust Expenses) due to the
Security Trustee, the Note Trustee or the Principal Paying Agent;
(ii) any fees and unpaid expenses, due to the Issuer Trustee; and
(iii) the receiver's remuneration;
(3) third, to pay PARI PASSU and rateably any unpaid Accrued Interest
Adjustment due to an Approved Seller;
(4) fourth, to pay PARI PASSU and rateably:
(i) all Secured Moneys (as defined herein) owing to the providers of
each Support Facility (other than the Currency Swap Providers);
(ii) all Secured Moneys owing to the holders of RFSs (if any);
(iii) all Secured Moneys owing to the holders of RFS Class A Notes (if
any);
(iv) all Secured Moneys owing to the Class A Noteholders (as at the date
of payment);
(v) all Secured Moneys owed by the Issuer Trustee as trustee of the
Trust to a WST trust other than the Trust;
(vi) all Secured Moneys owing in relation to any Redraws made by Westpac
for which it has not been reimbursed under the Transaction Documents; and
(vii) all Secured Moneys owing to the Currency Swap Providers under a
confirmation relating to the Class A Notes (but without double counting with
payments under sub-paragraph (iv));
(5) fifth, all Secured Moneys owing to the Class B Noteholders (as at
the date of payment) and to the Currency Swap Providers under a confirmation
relating to the Class B Notes, but without double counting;
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<PAGE>
(6) sixth, to pay PARI PASSU and rateably any amounts not covered above
owing to any Mortgagee under any Transaction Document;
(7) seventh, to pay the holder of any subsequent security interest over
the assets charged by the Security Trust Deed of which the Security Trustee
has notice of the amount properly secured by the security interest; and
(8) eighth, to pay any surplus to the Issuer Trustee to be distributed
in accordance with the Master Trust Deed.
The surplus will not carry interest. If the Security Trustee pays the
surplus to the credit of an account in the name of the Issuer Trustee with any
bank carrying on business in Australia, the Security Trustee, receiver,
Mortgagee or attorney (as the case may be) will be under no further liability in
respect of it.
The "Accrued Interest Adjustment" represents interest and fees which have
accrued on the relevant Housing Loans but which are unpaid as at (and excluding)
the Closing Date, and all amounts received by the relevant Approved Seller under
those Housing Loans applied by the Servicer to payment of interest and fees
under those Housing Loans for the period from (but excluding) the Cut-Off Date
to (but excluding) the Closing Date. During the period between the Cut-Off Date
and the Closing Date, the Housing Loans continue to be owned by the Approved
Sellers. However, any Collections with respect to the period from the Cut-Off
Date through the Closing Date will not be paid back to Westpac until after the
assignment of the Housing Loans to the Trust. The purchase price for the Housing
Loans excludes any such accrual. Therefore, an amount equal to that accrued
interest and fees and Collections in respect of interest and fees for the period
between the Cut-Off Date and the Closing Date will be paid to the Approved
Sellers on the first Payment Date as a priority payment from Total Available
Funds.
SECURITY TRUSTEE'S FEES AND EXPENSES
The Issuer Trustee shall reimburse the Security Trustee for all costs and
expenses of the Security Trustee properly incurred in acting as Security
Trustee. The Security Trustee shall be entitled to a fee payable quarterly (the
"Security Trustee Fee") in the amount agreed from time to time by the Issuer
Trustee, the Security Trustee and the Trust Manager. The Issuer Trustee has
agreed to indemnify the Security Trustee against any loss, cost, charge,
liability, expense or damage under or in relation to the Transaction Documents,
except where arising from the Security Trustee's fraud, negligence or willful
default.
RETIREMENT AND REMOVAL
Subject to the appointment of a successor Security Trustee, the Security
Trustee may retire on three months' notice in writing to the Issuer Trustee, the
Trust Manager, the Note Trustee and the Rating Agencies. The Security Trustee
may resign in favor of a successor Security Trustee only if the Rating Agencies
confirm that such resignation will not cause a withdrawal, downgrade or
qualification of the ratings of the Offered Notes.
Subject to the appointment of a successor Security Trustee and prior notice
being given to each of the Rating Agencies, an Extraordinary Resolution of the
Voting Mortgagees may at any time remove the Security Trustee.
Subject to the appointment of a successor Security Trustee and prior notice
being given to each of the Rating Agencies, the Trust Manager may remove the
Security Trustee if any of the following occurs in relation to the Security
Trustee: (i) an Insolvency Event occurs in relation to the Security Trustee in
its personal capacity; (ii) the cessation by the Security Trustee of its
business; (iii) the failure by the Security Trustee to remedy within 14 days
after written notice by the Trust Manager any material breach of duty on the
part of the Security Trustee; or (iv) if without the prior written consent of
the Trust Manager there occur certain changes in the control or management of
the Security Trustee.
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<PAGE>
Upon notice of resignation or removal of the Security Trustee, the Trust
Manager has the right to appoint a successor Security Trustee who has been
previously approved by an Extraordinary Resolution of the Voting Mortgagees and
who accepts the appointment. If no successor Security Trustee is appointed
within 30 days after notice, the retiring Security Trustee may on behalf of the
Mortgagees appoint a successor Security Trustee (other than Westpac or a related
corporation of Westpac) who accepts the appointment. There are currently several
third party security trustee organizations in Australia which may be available
to replace a resigning or removed security trustee.
ADDITIONAL PROVISIONS OF THE SECURITY TRUST DEED
The Security Trust Deed may be amended by the Issuer Trustee and the
Security Trustee with the written approval of the Trust Manager and the Note
Trustee in the manner (and subject to the restrictions) set out in the Security
Trust Deed.
The Security Trust Deed contains a range of provisions regulating the scope
of the Security Trustee's duties and liability. These include the following:
(1) The Security Trustee is not responsible for the adequacy or
enforceability of the Security Trust Deed or other Transaction Documents.
(2) The Security Trustee is not required to exercise its powers under
the Security Trust Deed without being directed to do so by the Note Trustee
or by an Extraordinary Resolution (as referred to above) of the Voting
Mortgagees.
(3) The Security Trustee may rely on documents provided by the Issuer
Trustee or Trust Manager and the advice of consultants and advisors.
(4) The Security Trustee is not required to monitor whether an event of
default has occurred or compliance by the Issuer Trustee or Trust Manager
with the Transaction Documents or their other activities.
(5) The Security Trustee is not required to do anything unless its
liability is limited in a manner satisfactory to it.
(6) The Security Trustee need not give Mortgagees information concerning
the Issuer Trustee which comes into the possession of the Security Trustee.
(7) The rights, remedies and discretion of the Noteholders including all
rights to vote or give instructions or consents to the Security Trustee and
to enforce its undertakings and warranties may only be exercised by the Note
Trustee on behalf of the Class A and Class B Noteholders and the Security
Trustee may rely on any instructions or directions given to it by the Note
Trustee as being given on behalf of the Noteholders without inquiry about
compliance with the Note Trust Deed.
(8) The Security Trustee has no duties or responsibilities except those
expressly set out in the Security Trust Deed or any collateral security.
(9) Any action taken by the Security Trustee under the Security Trust
Deed or any collateral security binds all the Mortgagees.
(10) Each Mortgagee must make its own independent investigations,
without reliance on the Security Trustee, as to the affairs of the Issuer
Trustee and whether or not to take action under any Transaction Document.
(11) The Security Trustee in its capacity as a Mortgagee can exercise
its rights and powers as such as if it were not acting as the Security
Trustee. It and its affiliates may engage in any kind of business with the
Issuer Trustee, the Trust Manager, Mortgagees and others as if it were not
Security Trustee and may receive consideration for services in connection
with any Transaction Document or otherwise without having to account to the
Mortgagees.
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<PAGE>
THE TRUST FUND
GENERAL
The Housing Loans are expected to include 21,132 Housing Loans secured by
registered first ranking mortgages (collectively, the "Mortgages") on Mortgaged
Properties located in Australia. This subsection describes generally the
characteristics of the Housing Loans. The Mortgaged Properties consist of owner-
occupied properties and investment properties. The Mortgaged Properties do not
include mobile homes which are not permanently affixed to the ground, commercial
properties or unimproved land. With respect to each Housing Loan, the "Cut-Off
Date Balance Outstanding" is the unpaid principal balance of such Housing Loan
as of the close of business on the Cut-Off Date. Housing Loans included in the
Trust Fund consist of variable and fixed rate loans originated by Westpac.
TRANSFER AND ASSIGNMENT OF HOUSING LOANS
On the Closing Date, the Housing Loans purchased by the Trust will be those
specified in a Sale Notice from each of the Approved Sellers to the Issuer
Trustee. The Housing Loans to be sold by either the Seller Trustee or Westpac
from Westpac's general portfolio of residential Housing Loans have been in both
cases originated by Westpac in the ordinary course of its business. Each Housing
Loan may have some or all of the product features set out in "WESTPAC
RESIDENTIAL LOAN PROGRAM--Housing Loan Features" below. Generally each Housing
Loan is secured by a registered first ranking mortgage over the related
Mortgaged Property or, if the Housing Loan is not secured by a first ranking
mortgage, the Approved Seller will assign the Issuer Trustee all prior ranking
Registered Mortgages in relation to that Housing Loan. For more information on
the Housing Loans, see "WESTPAC RESIDENTIAL LOAN PROGRAM" below.
On the Closing Date, the Approved Sellers will equitably assign the Housing
Loans, the Mortgages and the Related Securities (as defined herein) securing
those Housing Loans to the Issuer Trustee, pursuant to the Sale Notices, after
which the Issuer Trustee will be entitled to receive (with the assistance of TMC
in its capacity as servicer (the "Servicer") of the Housing Loans and custodian
of Related Documents (as defined herein), including the mortgage documents
relating to the Housing Loans) Collections on the Housing Loans. If a Title
Perfection Event occurs, the Issuer Trustee must, with the assistance of the
Trust Manager and Westpac, take certain actions to perfect its legal title in
the Housing Loans pursuant to an irrevocable power of attorney granted by
Westpac.
"Related Security" in relation to a Housing Loan means: (a) any Relevant
Document for that Housing Loan, (b) any insurance policy or insurance proceeds
with respect to the Housing Loan, (c) any Mortgage Insurance Policy or Mortgage
Insurance Proceeds with respect to the Housing Loan, or (d) any other agreement
specified as "Related Security" for the Housing Loan in the Series Notice.
"Relevant Document" means, with respect to a Housing Loan, (a) the loan
agreement relating to that Housing Loan, (b) the mortgage document in relation
to such Housing Loan, (c) the certificate of title for the Mortgaged Property
secured by such mortgage, (d) any amendment or replacement of such documents and
any other document which is entered into by or executed in favor of the Approved
Seller or Issuer Trustee in connection with that Housing Loan after the Cut-Off
Date, or (e) any other document specified as a "Relevant Document" in the Series
Notice.
An Approved Seller may in some instances assign to the Issuer Trustee a
Housing Loan secured by an "all moneys" Mortgage, which may also secure
financial indebtedness that has not been sold into the Mortgage Pool and is
instead retained by Westpac. The Issuer Trustee will hold the benefit of the
relevant Mortgage as bare trustee in relation to that other financial
indebtedness, although the Mortgage will secure the assigned Housing Loan in
priority to that other financial indebtedness.
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<PAGE>
REPRESENTATIONS AND WARRANTIES
Westpac will make certain representations and warranties to the Issuer
Trustee in relation to the Housing Loans to be assigned by it to the Issuer
Trustee. Westpac also made representations and warranties in relation to the
Housing Loans to be sold by the Seller Trustee at the time those Housing Loans
were first transferred by Westpac to each relevant Seller Trustee, and the
benefit of those prior representations and warranties will be passed on to the
Issuer Trustee. The Servicer will make certain representations and warranties to
the Issuer Trustee in relation to the servicing of the Housing Loans to be sold
by the Seller Trustee to the Issuer Trustee. These representations and
warranties cover the period from when those Housing Loans were first transferred
by Westpac to other Seller Trusts until the Cut-Off Date. The Seller Trustee
will make certain limited representations and warranties in relation to the
Housing Loans to be assigned by it (e.g., as to title) to the Issuer Trustee.
The Issuer Trustee has not investigated or made any inquiries regarding the
accuracy of these representations and warranties, and under the Master Trust
Deed is under no obligation to do so. The Issuer Trustee is entitled to rely
entirely upon the representations and warranties being correct (unless it has
actual notice of any event to the contrary). The rights of the Issuer Trustee in
the event that any representation or warranty is incorrect are described in
"--Breach of Representations and Warranties" below.
WESTPAC REPRESENTATIONS
Westpac will make representations and warranties with respect to each
Housing Loan as of the date the Housing Loan is offered to the Issuer Trustee
(except as specified below) and the Closing Date, and in relation to paragraph
(3) below, as of the Cut-Off Date, including that:
(1) it is subject to a Mortgage Insurance Policy (in the case of the
Mortgage Pool Insurance Policy, at the Closing Date);
(2) it is the sole legal and beneficial owner of each Housing Loan, free
and clear of any security interest (unless arising solely as a result of
action by the Issuer Trustee);
(3) in relation to the Housing Loans to be sold by Westpac to the Issuer
Trustee, each Housing Loan satisfies the following eligibility criteria
("Eligibility Criteria"):
(i) it was approved and originated in the ordinary course of its
business;
(ii) the Mortgage securing each Housing Loan constitutes (a) a
registered first ranking mortgage over residential property, or (b) where
the Mortgage is not, or will not be when registered, a first ranking
mortgage, Westpac has made an offer to the Issuer Trustee in relation to all
prior ranking registered mortgages to sell such mortgages to the Issuer
Trustee;
(iii) it is denominated and payable only in Australian dollars in
Australia;
(iv) it has an LVR less than or equal to 95%;
(v) it has less than A$750,000.00 outstanding under it;
(vi) it is repayable within 30 years of the Cut-Off Date;
(vii) it is not Delinquent for more than 30 consecutive days;
(viii) it is subject to the terms and conditions of a Premium Option Home
Loan, a First Option Home Loan, a Fixed Options Home Loan, a Special Offer
Fixed Option Home Loan, a Fixed Rate Investment Property Loan, an Investment
Property Loan earning a variable rate of interest, a Special Offer Fixed
Rate Investment Property Loan or any other similar loan product, however
named, with some or all of the features referred to under "WESTPAC
RESIDENTIAL LOAN PROGRAM-- Housing Loan Features";
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<PAGE>
(ix) it is secured by a Mortgage over a Mortgaged Property which has
erected on it a residential dwelling;
(x) the sale of an equitable interest in the Housing Loan, or the sale
of an equitable interest in any related Mortgage for the Housing Loan, does
not contravene or conflict with any law;
(xi) together with the related Mortgage, it has been or will be stamped,
or has been taken by the relevant stamp duties authority to be stamped, with
all applicable duty;
(xii) it is not governed or regulated by the Credit Act 1984 (NSW) (or
the corresponding legislation for any other Australian jurisdiction) or any
rural, primary production, moratorium or mediation legislation, other than
the Consumer Credit Legislation;
(xiii) it is not a loan with an interest only payment type and a bullet
principal repayment at the end of the interest only period as set out in the
letter of offer relating to that Housing Loan; and
(xiv) the Borrower is a resident of Australia; and
(4) at the time each Housing Loan and Mortgage which is specified in the
Sale Notice and each Related Security was entered into it complied in all
material respects with applicable laws, including, without limitation, where
the Consumer Credit Legislation applies, the Consumer Credit Legislation.
SERVICER REPRESENTATIONS
In relation to the Housing Loans to be sold by the Seller Trustee to the
Issuer Trustee, the Servicer has made representations and warranties for the
benefit of the Issuer Trustee including that:
(1) as of the Cut-Off Date, each Housing Loan meets the Eligibility
Criteria;
(2) as of the Closing Date, each Housing Loan is the subject of a
Mortgage Insurance Policy; and
(3) each Housing Loan originally sold to the Seller Trustee has been
serviced by the Servicer in accordance with the Servicing Agreement, in some
cases as the Servicing Agreement has been amended, until the Closing Date.
That servicing includes, without limitation, ensuring compliance with the
Consumer Credit Legislation in connection with servicing the Housing Loans
where failure to do so would have an Adverse Effect.
SELLER TRUSTEE REPRESENTATIONS
In relation to the Housing Loans to be sold by the Seller Trustee to the
Issuer Trustee, the Seller Trustee will make representations and warranties for
the benefit of the Issuer Trustee including that:
(1) It has good equitable title to the Housing Loans free and clear of
any security interest other than under the security trust deed given by the
Seller Trustee in favor of the Security Trustee in respect of the warehouse
trust.
(2) The sale, transfer and assignment of the Seller Trustee's interest
in the Housing Loans will not constitute a breach of any documents binding
on the Seller Trustee.
BREACH OF REPRESENTATIONS AND WARRANTIES
If Westpac, the Trust Manager or the Issuer Trustee becomes aware within 120
days after the Closing Date that a representation or warranty from Westpac
relating to any Housing Loan or Mortgage is incorrect, it must notify the other
parties and the Rating Agencies within five Business Days of becoming so aware.
If such a notice in relation to a breach is given not later than five Business
Days before 120 days after the Closing Date and the breach is not waived or
remedied to the satisfaction of the Issuer Trustee within five Business Days
then, without any action being required by either party, Westpac shall be
53
<PAGE>
obligated to repurchase the affected Housing Loan and Mortgage for an amount
equal to its Unpaid Balance.
On payment of that amount the Issuer Trustee shall cease to have any
interest in the affected Housing Loan and Mortgage, and Westpac shall hold both
the legal and beneficial interest in such Housing Loan and Mortgage and be
entitled to all interest and fees that accrue in respect of them from (and
including) the date of repurchase.
In any other case, the Issuer Trustee's rights in relation to a breach of a
representation or warranty shall give rise only to a claim for damages, limited
to an amount equal to the Unpaid Balance of that Housing Loan at the time
Westpac pays the damages.
HOUSING LOAN STATISTICS
The Housing Loans will consist of 21,132 Housing Loans secured by Mortgages
on Mortgaged Properties located in the six states and two territories in
Australia, New South Wales ("NSW"), Victoria ("Vic"), Queensland ("QLD"), South
Australia ("SA"), Western Australia ("WA"), Tasmania ("TAS"), Northern Territory
("NT") and the Australian Capital Territory ("ACT"). The aggregate Cut-Off Date
Balances Outstanding of the Housing Loans (the "Cut-Off Date Pool Balance")
totaled approximately A$2,252,766,010. The Housing Loans bear interest at
variable and fixed rates. As of the Cut-Off Date, 74.70% of the Housing Loans by
Cut-Off Date Loan Balance are variable rate loans (the "Variable Rate Housing
Loans") and 25.30% of the Housing Loans by Cut-Off Date Loan Balance are fixed
rate loans (the "Fixed Rate Housing Loans"). The weighted average Mortgage Rate
for the Fixed Rate Housing Loans as of the Cut-Off Date was approximately 7.01%
per annum. The weighted average Mortgage Rate for the Variable Rate Housing
Loans as of the Cut-Off Date was approximately 6.42% per annum. The lowest
Cut-Off Date Balance Outstanding of any Housing Loan was approximately A$10,027
and the highest was approximately A$735,606. The average Cut-Off Date Balance
Outstanding of the Housing Loans was approximately A$106,604. The weighted
average original term to stated maturity of the Housing Loans was approximately
297.11 months. The weighted average remaining term to stated maturity of the
Housing Loans was approximately 288.41 months. As of the Cut-Off Date, the
weighted average number of months that have elapsed since origination of the
Housing Loans was approximately 8.7 months. The lowest and highest LVR of the
Housing Loans at Cut-Off Date were approximately 1.99% and 94.96%, respectively.
The weighted average LVR of the Housing Loans was approximately 70.00%.
Housing Loans representing approximately 18.92% of the Cut-Off Date Pool
Balance are secured by Mortgaged Properties which are investment properties
(based solely upon statements made by the related Mortgagors at the time of
origination of the related Housing Loans).
As of the Cut-Off Date, no Housing Loans were more than 30 days Delinquent.
Set forth below is a description of certain additional characteristics with
respect to the Housing Loans held by the Trust and are not indicative of
Westpac's entire portfolio of housing loans. All percentages are approximate and
may not total 100% due to rounding.
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(ALL AMOUNTS EXPRESSED IN AUSTRALIAN DOLLARS)
(ALL %'S ARE APPROXIMATE AND MAY NOT TOTAL 100% DUE TO ROUNDING)
BALANCE OUTSTANDING DISTRIBUTION
<TABLE>
<CAPTION>
TOTAL CURRENT WEIGHTED
NUMBER SECURITY BALANCE WEIGHTED AVERAGE % BY % BY
BALANCE OF LOANS VALUE A$* OUTSTANDING A$ BALANCE A$ LVR (%) NUMBER BALANCE
- ---------------------------- ----------- ------------- -------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
A$10,001-A$20,000........... 587 $ 91,974,265 $ 9,504,786 $ 16,192 32.48% 2.78% 0.42%
A$20,001-A$30,000........... 920 $ 140,684,160 $ 23,801,100 $ 25,871 37.39% 4.35% 1.06%
A$30,001-A$40,000........... 960 $ 136,104,051 $ 34,354,280 $ 35,786 44.03% 4.54% 1.52%
A$40,001-A$50,000........... 1,203 $ 176,790,559 $ 55,353,616 $ 46,013 49.59% 5.69% 2.46%
A$50,001-A$100,000.......... 8,000 $1,174,664,070 $614,042,705 $ 76,755 66.86% 37.86% 27.26%
A$100,001-A$150,000......... 5,622 $1,050,842,110 $689,801,706 $ 122,697 74.75% 26.60% 30.62%
A$150,001-A$200,000......... 2,188 $ 579,406,236 $376,851,732 $ 172,236 73.26% 10.35% 16.73%
A$200,001-A$250,000......... 877 $ 297,866,879 $196,224,863 $ 223,746 72.68% 4.15% 8.71%
A$250,001-A$300,000......... 398 $ 168,465,800 $109,211,798 $ 274,402 71.93% 1.88% 4.85%
A$300,001-A$350,000......... 191 $ 98,384,650 $ 62,324,802 $ 326,308 70.66% 0.90% 2.77%
A$350,001-A$400,000......... 96 $ 62,744,000 $ 35,976,814 $ 374,758 67.67% 0.45% 1.60%
A$400,001-A$450,000......... 30 $ 19,387,000 $ 12,813,651 $ 427,122 69.27% 0.14% 0.57%
A$450,001-A$500,000......... 24 $ 18,857,000 $ 11,514,778 $ 479,782 66.65% 0.11% 0.51%
Above A$500,000............. 36 $ 33,666,000 $ 20,989,379 $ 583,038 67.01% 0.17% 0.93%
----------- ------------- -------------- ----------- ----- ----------- -----------
Total................... 21,132 $4,049,836,780 2$,252,766,010 $ 106,604 70.00% 100.00% 100.00%
----------- ------------- -------------- ----------- ----- ----------- -----------
----------- ------------- -------------- ----------- ----- ----------- -----------
</TABLE>
- ------------------------
* Total Security Value is the mortgage property value determined by either
contract of sale, valuation by a registered panel valuer or in remote areas,
a Manager's Assessment as reported on the system as of the Cut-Off Date. See
"WESTPAC RESIDENTIAL LOAN PROGRAM--Underwriting of Housing Loans."
MORTGAGE RATES OF THE FIXED RATE HOUSING LOANS AS OF THE CUT-OFF DATE*
<TABLE>
<CAPTION>
WEIGHTED
NUMBER CURRENT BALANCE MINIMUM MAXIMUM AVERAGE % BY % BY
CURRENT RATES OF LOANS OUTSTANDING A$ RATE (%) RATE (%) RATE (%) NUMBER BALANCE
- -------------------------------- ----------- --------------- ------------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
5.501% less than= 6%............ 979 $ 114,136,876 5.95% 5.99% 5.99% 19.79% 20.03%
6.001% less than= 6.5%.......... 997 $ 115,359,790 6.10% 6.50% 6.32% 20.15% 20.25%
6.501% less than= 7%............ 1,341 $ 153,512,624 6.53% 7.00% 6.92% 27.10% 26.94%
7.001% less than= 7.5%.......... 379 $ 46,970,964 7.10% 7.50% 7.30% 7.66% 8.24%
7.501% less than= 8%............ 501 $ 56,142,510 7.55% 8.00% 7.77% 10.13% 9.85%
8.001% less than= 8.5%.......... 185 $ 20,239,923 8.09% 8.50% 8.30% 3.74 3.55%
8.501% less than= 9%............ 458 $ 52,609,875 8.55% 9.00% 8.86% 9.26% 9.23%
9.001% less than= 9.5%.......... 66 $ 6,600,802 9.10% 9.50% 9.45% 1.33% 1.16%
9.501% less than= 10%........... 36 $ 3,278,831 9.55% 9.95% 9.80% 0.73% 0.58%
10.001% less than= 10.5%........ 6 $ 919,122 10.15% 10.15% 10.15% 0.12% 0.16%
----- --------------- ----- ----- ----- ----------- -----------
Total....................... 4,948 $ 569,771,317 5.95% 10.15% 7.01% 100.00% 100.00%
----- --------------- ----- ----- ----- ----------- -----------
----- --------------- ----- ----- ----- ----------- -----------
</TABLE>
- ------------------------
* Each Fixed Rate Housing Loan can convert to a Variable Rate Housing Loan
subject to certain related fees.
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<PAGE>
GEOGRAPHIC DISTRIBUTION BY REGION*
<TABLE>
<CAPTION>
TOTAL CURRENT WEIGHTED
NUMBER SECURITY BALANCE AVERAGE AVERAGE % BY % BY
REGION OF LOANS VALUE A$ OUTSTANDING A$ BALANCE A$ LVR (%) NUMBER BALANCE
- ---------------------------- ----------- ------------- -------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ACT-Metro................... 323 $ 56,647,925 $ 33,339,768 $ 103,219 70.23% 1.53% 1.48%
NSW-Metro................... 5,776 $1,598,098,242 $826,661,747 $ 143,120 67.63% 27.33% 36.70%
NSW-Other................... 2,113 $ 330,009,535 $187,927,168 $ 88,939 70.53% 10.00% 8.34%
NT-Metro.................... 181 $ 36,290,640 $ 22,263,454 $ 123,003 73.28% 0.86% 0.99%
NT-Other.................... 73 $ 13,300,300 $ 7,670,737 $ 105,079 69.53% 0.35% 0.34%
QLD-Metro................... 1,714 $ 298,029,360 $169,767,166 $ 99,047 70.68% 8.11% 7.54%
QLD-Other................... 2,348 $ 375,029,165 $219,185,727 $ 93,350 71.79% 11.11% 9.73%
SA-Metro.................... 641 $ 92,278,235 $ 53,804,486 $ 83,938 72.73% 3.03% 2.39%
SA-Other.................... 204 $ 22,394,341 $ 14,249,276 $ 69,849 76.04% 0.97% 0.63%
TAS-Metro................... 202 $ 24,043,200 $ 14,565,935 $ 72,109 72.61% 0.96% 0.65%
TAS-Other................... 216 $ 22,137,950 $ 13,949,957 $ 64,583 74.69% 1.02% 0.62%
Vic-Metro................... 3,475 $ 594,985,995 $353,468,032 $ 101,717 72.00% 16.44% 15.69%
Vic-Other................... 889 $ 99,227,589 $ 61,947,845 $ 69,683 74.03% 4.21% 2.75%
WA-Metro.................... 2,304 $ 393,365,683 $217,359,285 $ 94,340 69.59% 10.90% 9.65%
WA-Other.................... 673 $ 93,998,620 $ 56,605,427 $ 84,109 71.41% 3.18% 2.51%
----------- ------------- -------------- ----------- ----- ----------- -----------
Total................... 21,132 $4,049,836,780 2$,252,766,010 $ 106,604 70.00% 100.00% 100.00%
----------- ------------- -------------- ----------- ----- ----------- -----------
----------- ------------- -------------- ----------- ----- ----------- -----------
</TABLE>
- ------------------------
* Geographic distributions are split by State or Territory and by metropolitan
(Metro) or country (Other). The distributions are based on the post code of
the Mortgaged Property. "Metro" areas comprise the city and surrounding
suburbs of the capital city of each State or Territory and "Other" comprises
all other areas within the State or Territory.
LVR RATIO DISTRIBUTION
<TABLE>
<CAPTION>
TOTAL CURRENT WEIGHTED
NUMBER SECURITY BALANCE AVERAGE AVERAGE % BY % BY
LVR OF LOANS VALUE A$ OUTSTANDING A$ BALANCE A$ LVR (%) NUMBER BALANCE
- ---------------------------- ----------- ------------- -------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
0% less than = 5%.......... 28 $ 15,622,500 $ 592,330 $ 21,155 3.98% 0.13% 0.03%
5% less than = 10%.......... 246 $ 81,727,975 $ 6,257,035 $ 25,435 7.99% 1.16% 0.28%
10% less than = 15%......... 363 $ 99,686,709 $ 12,421,688 $ 34,220 12.73% 1.72% 0.55%
15% less than = 20%......... 451 $ 122,617,355 $ 21,201,758 $ 47,011 17.74% 2.13% 0.94%
20% less than = 25%......... 521 $ 131,188,000 $ 28,646,694 $ 54,984 22.66% 2.47% 1.27%
25% less than = 30%......... 596 $ 151,298,125 $ 39,301,097 $ 65,941 27.61% 2.82% 1.74%
30% less than = 35%......... 739 $ 181,158,395 $ 55,278,315 $ 74,802 32.60% 3.50% 2.45%
35% less than = 40%......... 720 $ 169,348,725 $ 59,936,005 $ 83,244 37.54% 3.41% 2.66%
40% less than = 45%......... 794 $ 184,166,503 $ 73,846,018 $ 93,005 42.57% 3.76% 3.28%
45% less than = 50%......... 949 $ 217,989,841 $ 97,226,070 $ 102,451 47.54% 4.49% 4.32%
50% less than = 55%......... 1,038 $ 233,095,165 $110,851,723 $ 106,794 52.54% 4.91% 4.92%
55% less than = 60%......... 1,098 $ 239,325,924 $123,928,280 $ 112,867 57.57% 5.20% 5.50%
60% less than = 65%......... 1,189 $ 239,681,752 $138,300,525 $ 116,317 62.52% 5.63% 6.14%
65% less than = 70%......... 1,317 $ 264,538,292 $158,376,843 $ 120,256 67.52% 6.23% 7.03%
70% less than = 75%......... 1,536 $ 280,735,956 $183,035,201 $ 119,164 72.67% 7.27% 8.12%
75% less than = 80%......... 3,305 $ 560,328,525 $404,894,736 $ 122,510 78.18% 15.64% 17.97%
80% less than = 85%......... 838 $ 127,706,401 $ 96,554,022 $ 115,220 83.01% 3.97% 4.29%
85% less than = 90%......... 2,518 $ 360,548,045 $296,022,850 $ 117,563 88.13% 11.92% 13.14%
90% less than = 95%......... 2,886 $ 389,072,592 $346,094,820 $ 119,922 93.06% 13.66% 15.36%
----------- ------------- -------------- ----------- ----- ----------- -----------
Total:.................. 21,132 $4,049,836,780 2$,252,766,010 $ 106,604 70.00% 100.00% 100.00%
----------- ------------- -------------- ----------- ----- ----------- -----------
----------- ------------- -------------- ----------- ----- ----------- -----------
</TABLE>
56
<PAGE>
MORTGAGE INSURER DISTRIBUTION
<TABLE>
<CAPTION>
TOTAL CURRENT WEIGHTED
NUMBER SECURITY BALANCE AVERAGE AVERAGE % BY % BY
INSURER OF LOANS VALUE A$ OUTSTANDING A$ BALANCE A$ LVR (%) NUMBER BALANCE
- ---------------------------- ----------- ------------- -------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
None........................ 14,024 $3,015,459,932 1$,435,976,814 $ 102,394 60.27% 66.36% 63.74%
HLIC........................ 2,913 $ 441,692,118 $360,687,571 $ 123,820 86.71% 13.78% 16.01%
MGI......................... 14 $ 2,288,900 $ 1,814,056 $ 129,575 86.74% 0.07% 0.08%
SUN/WLMI.................... 4,181 $ 590,395,830 $454,287,569 $ 108,655 87.45% 19.79% 20.17%
----------- ------------- -------------- ----------- ----- ----------- -----------
----------- ------------- -------------- ----------- ----- ----------- -----------
Total................... 21,132 $4,049,836,780 2$,252,766,010 $ 106,604 70.00% 100.00% 100.00%
----------- ------------- -------------- ----------- ----- ----------- -----------
----------- ------------- -------------- ----------- ----- ----------- -----------
</TABLE>
HLIC INSURANCE DISTRIBUTION
<TABLE>
<CAPTION>
TOTAL CURRENT WEIGHTED
NUMBER SECURITY BALANCE AVERAGE AVERAGE % BY % BY
INSURER OF LOANS VALUE A$ OUTSTANDING A$ BALANCE A$ LVR (%) NUMBER BALANCE
- ---------------------------- ----------- ------------- -------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
HLIC Govt Guarantee - PMI... 827 $ 118,205,692 $104,238,357 $ 126,044 89.01% 4.88% 5.80%
HLIC Govt Guarantee - Pool.. 3,636 $ 770,003,112 $367,776,930 $ 101,149 59.93% 21.47% 20.47%
HLIC Ltd - PMI.............. 2,086 $ 323,486,426 $256,449,214 $ 122,938 85.78% 12.32% 14.27%
HLIC Ltd - Pool............. 10,388 $2,245,456,820 1$,068,199,884 $ 102,830 60.38% 61.33% 59.45%
----------- ------------- -------------- ----------- ----- ----------- -----------
----------- ------------- -------------- ----------- ----- ----------- -----------
Total................... 16,937 $3,457,152,050 1$,796,664,385 $ 106,079 65.58% 100.00% 100.00%
----------- ------------- -------------- ----------- ----- ----------- -----------
----------- ------------- -------------- ----------- ----- ----------- -----------
</TABLE>
PRODUCT DISTRIBUTION
<TABLE>
<CAPTION>
TOTAL CURRENT WEIGHTED
NUMBER SECURITY BALANCE AVERAGE AVERAGE % BY % BY
PRODUCT OF LOANS VALUE A$ OUTSTANDING A$ BALANCE A$ LVR (%) NUMBER BALANCE
- ---------------------------- ----------- ------------- -------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
First Option................ 6,106 $1,204,333,176 $756,987,955 $ 123,974 72.69% 28.89% 33.60%
Fixed Options............... 1,981 $ 418,751,153 $215,083,526 $ 108,573 70.27% 9.37% 9.55%
IPL--First Option........... 1,110 $ 231,963,825 $144,007,886 $ 129,737 68.77% 5.25% 6.39%
IPL--Fixed Rate............. 1,107 $ 254,206,326 $143,974,231 $ 130,058 67.49% 5.24% 6.39%
IPL--Special Fixed Rate..... 488 $ 102,235,873 $ 59,408,680 $ 121,739 67.57% 2.31% 2.64%
IPL--Variable Rate.......... 866 $ 162,332,250 $ 78,916,977 $ 91,128 64.56% 4.10% 3.50%
Premium Option.............. 8,102 $1,453,541,837 $703,081,874 $ 86,779 67.06% 38.34% 31.21%
Special Options Fixed
Rate...................... 1,372 $ 222,472,340 $151,304,881 $ 110,281 77.24% 6.49% 6.72%
----------- ------------- -------------- ----------- ----- ----------- -----------
----------- ------------- -------------- ----------- ----- ----------- -----------
Total................... 21,132 $4,049,836,780 2$,252,766,010 $ 106,604 70.00% 100.00% 100.00%
----------- ------------- -------------- ----------- ----- ----------- -----------
----------- ------------- -------------- ----------- ----- ----------- -----------
</TABLE>
SETTLEMENT PERIOD DISTRIBUTION
<TABLE>
<CAPTION>
TOTAL CURRENT WEIGHTED
NUMBER SECURITY BALANCE AVERAGE AVERAGE % BY
SETTLEMENT PERIOD OF LOANS VALUE A$ OUTSTANDING A$ BALANCE A$ LVR (%) NUMBER
- -------------------------------------- ----------- ------------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Prior 01/11/1996...................... 1,794 $ 336,203,423 $172,893,311 $ 96,373 66.89% 8.49%
After 01/11/1996...................... 19,338 $3,713,633,357 2$,079,872,699 $ 107,554 70.26% 91.51%
----------- ------------- -------------- ----------- ----- -----------
Total............................. 21,132 $4,049,836,780 2$,252,766,010 $ 106,604 70.00% 100.00%
----------- ------------- -------------- ----------- ----- -----------
----------- ------------- -------------- ----------- ----- -----------
<CAPTION>
% BY
SETTLEMENT PERIOD BALANCE
- -------------------------------------- -----------
<S> <C>
Prior 01/11/1996...................... 7.67%
After 01/11/1996...................... 92.33%
-----------
Total............................. 100.00%
-----------
-----------
</TABLE>
57
<PAGE>
FIXED RATE HOUSING LOAN REPRICING DISTRIBUTION
<TABLE>
<CAPTION>
MONTH/YEAR
CONVERSION FROM TOTAL CURRENT WEIGHTED
FIXED RATE HOUSING LOAN TO NUMBER SECURITY BALANCE AVERAGE AVERAGE % BY
VARIABLE RATE HOUSING LOAN OF LOANS VALUE A$ OUTSTANDING A$ BALANCE A$ LVR (%) NUMBER
- ---------------------------------------- ----------- ----------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
May-1998................................ 221 $39,034,000 $ 23,841,573 $ 107,880 72.18% 4.47%
Jun-1998................................ 246 $46,358,239 $ 26,874,471 $ 109,246 71.81% 4.97%
Jul-1998................................ 247 $46,379,137 $ 27,014,197 $ 109,369 70.29% 4.99%
Aug-1998................................ 335 $61,472,788 $ 36,969,442 $ 110,357 72.22% 6.77%
Sep-1998................................ 335 $63,802,997 $ 39,053,228 $ 116,577 74.09% 6.77%
Oct-1998................................ 338 $61,963,360 $ 37,858,340 $ 112,007 73.53% 6.83%
Nov-1998................................ 300 $54,323,100 $ 34,756,953 $ 115,857 75.31% 6.06%
Dec-1998................................ 327 $57,075,200 $ 37,376,721 $ 114,302 76.78% 6.61%
Jan-1999................................ 218 $37,529,688 $ 24,258,029 $ 111,275 75.48% 4.41%
Feb-1999................................ 148 $25,363,065 $ 16,130,469 $ 108,990 74.00% 2.99%
Mar-1999................................ 83 $18,286,500 $ 10,325,729 $ 124,406 72.56% 1.68%
Apr-1999................................ 49 $10,063,540 $ 4,756,630 $ 97,074 69.31% 0.99%
May-1999................................ 61 $11,141,575 $ 6,271,921 $ 102,818 68.31% 1.23%
Jun-1999................................ 48 $10,550,300 $ 4,994,348 $ 104,049 63.50% 0.97%
Jul-1999................................ 32 $ 7,595,300 $ 4,112,846 $ 128,526 67.36% 0.65%
Aug-1999................................ 67 $15,049,400 $ 7,950,766 $ 118,668 68.98% 1.35%
Sep-1999................................ 61 $11,925,150 $ 6,401,393 $ 104,941 68.60% 1.23%
Oct-1999................................ 65 $11,334,210 $ 6,499,444 $ 99,991 71.74% 1.31%
Nov-1999................................ 47 $ 9,808,750 $ 5,614,660 $ 119,461 71.10% 0.95%
Dec-1999................................ 60 $13,055,400 $ 7,041,634 $ 117,361 68.12% 1.21%
Jan-2000................................ 57 $14,032,263 $ 7,448,740 $ 130,680 69.94% 1.15%
Feb-2000................................ 147 $33,437,888 $ 18,816,682 $ 128,005 68.68% 2.97%
Mar-2000................................ 104 $21,319,300 $ 11,532,572 $ 110,890 68.62% 2.10%
Apr-2000................................ 38 $ 7,984,300 $ 4,214,844 $ 110,917 70.08% 0.77%
May-2000................................ 36 $ 8,517,800 $ 4,524,690 $ 125,686 60.43% 0.73%
Jun-2000................................ 25 $ 5,749,000 $ 2,757,757 $ 110,310 64.93% 0.51%
Jul-2000................................ 30 $ 6,917,400 $ 3,164,235 $ 105,475 65.81% 0.61%
Aug-2000................................ 57 $13,395,350 $ 6,570,405 $ 115,270 64.24% 1.15%
Sep-2000................................ 67 $17,013,200 $ 7,961,090 $ 118,822 62.77% 1.35%
Oct-2000................................ 87 $22,310,000 $ 10,950,218 $ 125,865 67.13% 1.76%
Nov-2000................................ 87 $18,349,700 $ 10,747,200 $ 123,531 73.50% 1.76%
Dec-2000................................ 127 $27,698,900 $ 14,420,139 $ 113,544 67.41% 2.57%
Jan-2001................................ 93 $23,533,428 $ 12,934,078 $ 139,076 69.19% 1.88%
Feb-2001................................ 43 $ 9,835,250 $ 5,595,200 $ 130,121 72.48% 0.87%
Mar-2001................................ 27 $ 5,148,400 $ 3,121,402 $ 115,607 72.49% 0.55%
Apr-2001................................ 19 $ 2,701,775 $ 2,006,103 $ 105,584 80.10% 0.38%
May-2001................................ 14 $ 3,318,600 $ 1,815,992 $ 129,714 71.10% 0.28%
Jun-2001................................ 11 $ 2,258,500 $ 1,525,363 $ 138,669 72.59% 0.22%
Jul-2001................................ 6 $ 666,500 $ 407,484 $ 67,914 69.03% 0.12%
Aug-2001................................ 13 $ 3,229,000 $ 1,587,544 $ 122,119 62.40% 0.26%
Sep-2001................................ 15 $ 4,016,658 $ 1,889,931 $ 125,995 71.19% 0.30%
Oct-2001................................ 14 $ 3,175,000 $ 2,003,204 $ 143,086 70.60% 0.28%
Nov-2001................................ 12 $ 2,624,000 $ 1,015,043 $ 84,587 55.11% 0.24%
Dec-2001................................ 12 $ 3,026,000 $ 1,345,503 $ 112,125 61.24% 0.24%
Jan-2002................................ 15 $ 3,873,500 $ 2,158,915 $ 143,928 70.66% 0.30%
Feb-2002................................ 5 $ 1,378,500 $ 549,948 $ 109,990 60.43% 0.10%
Mar-2002................................ 17 $ 3,043,200 $ 1,708,286 $ 100,487 68.36% 0.34%
Apr-2002................................ 27 $ 6,057,000 $ 3,140,461 $ 116,313 68.86% 0.55%
May-2002................................ 34 $ 9,858,000 $ 4,566,824 $ 134,318 58.61% 0.69%
Jun-2002................................ 23 $ 6,261,900 $ 3,125,354 $ 135,885 64.51% 0.46%
Jul-2002................................ 20 $ 3,286,500 $ 1,786,658 $ 89,333 71.22% 0.40%
Aug-2002................................ 35 $ 7,809,500 $ 3,999,203 $ 114,263 65.08% 0.71%
Sep-2002................................ 53 $14,278,000 $ 6,632,451 $ 125,141 65.90% 1.07%
Oct-2002................................ 47 $10,232,100 $ 4,776,529 $ 101,628 66.53% 0.95%
Nov-2002................................ 45 $12,830,500 $ 6,347,283 $ 141,051 65.82% 0.91%
<CAPTION>
MONTH/YEAR
CONVERSION FROM
FIXED RATE HOUSING LOAN TO % BY
VARIABLE RATE HOUSING LOAN BALANCE
- ---------------------------------------- -----------
<S> <C>
May-1998................................ 4.18%
Jun-1998................................ 4.72%
Jul-1998................................ 4.74%
Aug-1998................................ 6.49%
Sep-1998................................ 6.85%
Oct-1998................................ 6.64%
Nov-1998................................ 6.10%
Dec-1998................................ 6.56%
Jan-1999................................ 4.26%
Feb-1999................................ 2.83%
Mar-1999................................ 1.81%
Apr-1999................................ 0.83%
May-1999................................ 1.10%
Jun-1999................................ 0.88%
Jul-1999................................ 0.72%
Aug-1999................................ 1.40%
Sep-1999................................ 1.12%
Oct-1999................................ 1.14%
Nov-1999................................ 0.99%
Dec-1999................................ 1.24%
Jan-2000................................ 1.31%
Feb-2000................................ 3.30%
Mar-2000................................ 2.02%
Apr-2000................................ 0.74%
May-2000................................ 0.79%
Jun-2000................................ 0.48%
Jul-2000................................ 0.56%
Aug-2000................................ 1.15%
Sep-2000................................ 1.40%
Oct-2000................................ 1.92%
Nov-2000................................ 1.89%
Dec-2000................................ 2.53%
Jan-2001................................ 2.27%
Feb-2001................................ 0.98%
Mar-2001................................ 0.55%
Apr-2001................................ 0.35%
May-2001................................ 0.32%
Jun-2001................................ 0.27%
Jul-2001................................ 0.07%
Aug-2001................................ 0.28%
Sep-2001................................ 0.33%
Oct-2001................................ 0.35%
Nov-2001................................ 0.18%
Dec-2001................................ 0.24%
Jan-2002................................ 0.38%
Feb-2002................................ 0.10%
Mar-2002................................ 0.30%
Apr-2002................................ 0.55%
May-2002................................ 0.80%
Jun-2002................................ 0.55%
Jul-2002................................ 0.31%
Aug-2002................................ 0.70%
Sep-2002................................ 1.16%
Oct-2002................................ 0.84%
Nov-2002................................ 1.11%
</TABLE>
58
<PAGE>
<TABLE>
<CAPTION>
MONTH/YEAR
CONVERSION FROM TOTAL CURRENT WEIGHTED
FIXED RATE HOUSING LOAN TO NUMBER SECURITY BALANCE AVERAGE AVERAGE % BY
VARIABLE RATE HOUSING LOAN OF LOANS VALUE A$ OUTSTANDING A$ BALANCE A$ LVR (%) NUMBER
- ---------------------------------------- ----------- ----------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Dec-2002................................ 72 $18,460,927 $ 8,954,701 $ 124,371 69.15% 1.46%
Jan-2003................................ 43 $ 9,639,250 $ 4,837,804 $ 112,507 68.55% 0.87%
Feb-2003................................ 48 $10,266,904 $ 6,033,078 $ 125,689 67.69% 0.97%
Mar-2003................................ 28 $ 7,079,500 $ 4,029,327 $ 143,905 69.10% 0.57%
Apr-2003................................ 6 $ 852,000 $ 596,984 $ 99,497 81.31% 0.12%
May-2003................................ 1 $ 88,500 $ 69,298 $ 69,296 78.30% 0.02%
----- ----------- -------------- ----------- ----- -----------
Total............................... 4,948 $997,665,692 $569,771,317 $ 115,152 71.14% 100.00%
----- ----------- -------------- ----------- ----- -----------
----- ----------- -------------- ----------- ----- -----------
<CAPTION>
MONTH/YEAR
CONVERSION FROM
FIXED RATE HOUSING LOAN TO % BY
VARIABLE RATE HOUSING LOAN BALANCE
- ---------------------------------------- -----------
<S> <C>
Dec-2002................................ 1.57%
Jan-2003................................ 0.85%
Feb-2003................................ 1.06%
Mar-2003................................ 0.71%
Apr-2003................................ 0.10%
May-2003................................ 0.01%
-----------
Total............................... 100.00%
-----------
-----------
</TABLE>
MORTGAGES BY YEAR OF MATURITY
<TABLE>
<CAPTION>
TOTAL CURRENT WEIGHTED
NUMBER SECURITY BALANCE AVERAGE AVERAGE % BY % BY
YEAR OF MATURITY OF LOANS VALUE A$ OUTSTANDING A$ BALANCE A$ LVR (%) NUMBER BALANCE
- ---------------------------- ----------- ------------- -------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
2000........................ 17 $ 3,180,500 $ 423,799 $ 24,929 27.31% 0.08% 0.02%
2001........................ 24 $ 4,056,950 $ 711,675 $ 29,653 25.71% 0.11% 0.03%
2002........................ 75 $ 12,734,950 $ 3,022,978 $ 40,306 38.13% 0.35% 0.13%
2003........................ 44 $ 7,187,463 $ 1,710,886 $ 38,884 37.33% 0.21% 0.08%
2004........................ 65 $ 8,716,500 $ 2,871,863 $ 44,183 48.85% 0.31% 0.13%
2005........................ 53 $ 7,836,500 $ 3,032,471 $ 57,216 53.00% 0.25% 0.13%
2006........................ 75 $ 11,378,100 $ 3,678,382 $ 49,045 46.16% 0.35% 0.16%
2007........................ 491 $ 84,819,700 $ 25,963,195 $ 52,878 45.72% 2.32% 1.15%
2008........................ 142 $ 24,569,850 $ 8,590,508 $ 60,497 49.35% 0.67% 0.38%
2009........................ 73 $ 13,777,500 $ 5,119,645 $ 70,132 49.87% 0.35% 0.23%
2010........................ 51 $ 10,415,000 $ 4,687,252 $ 91,907 55.66% 0.24% 0.21%
2011........................ 139 $ 25,956,941 $ 9,836,944 $ 70,769 54.59% 0.66% 0.44%
2012........................ 673 $ 117,930,797 $ 49,892,099 $ 74,134 55.76% 3.18% 2.21%
2013........................ 163 $ 28,372,650 $ 12,860,771 $ 78,900 58.85% 0.77% 0.57%
2014........................ 81 $ 14,825,705 $ 7,180,887 $ 88,653 62.82% 0.38% 0.32%
2015........................ 97 $ 15,950,600 $ 7,362,932 $ 75,907 60.91% 0.46% 0.33%
2016........................ 253 $ 46,430,625 $ 21,041,587 $ 83,168 61.79% 1.20% 0.93%
2017........................ 1,042 $ 200,530,410 $ 92,453,248 $ 88,727 60.53% 4.93% 4.10%
2018........................ 246 $ 47,119,815 $ 21,131,249 $ 85,899 59.34% 1.16% 0.94%
2019........................ 126 $ 20,564,000 $ 11,871,985 $ 94,222 67.87% 0.60% 0.53%
2020........................ 162 $ 30,407,600 $ 16,226,139 $ 100,161 63.76% 0.77% 0.72%
2021........................ 988 $ 193,108,640 $103,168,878 $ 104,422 66.64% 4.68% 4.58%
2022........................ 10,314 $2,032,632,220 1$,201,440,827 $ 116,486 71.49% 48.81% 53.33%
2023........................ 2,132 $ 422,319,527 $253,425,420 $ 118,867 71.96% 10.09% 11.25%
2024........................ 34 $ 5,928,500 $ 3,038,243 $ 89,360 68.59% 0.16% 0.13%
2025........................ 58 $ 13,087,000 $ 6,402,700 $ 110,391 64.05% 0.27% 0.28%
2026........................ 519 $ 102,831,558 $ 56,754,406 $ 109,353 72.45% 2.46% 2.52%
2027........................ 2,343 $ 419,976,201 $246,316,864 $ 105,129 76.00% 11.09% 10.93%
2028........................ 652 $ 123,190,978 $ 72,548,177 $ 111,270 75.44% 3.09% 3.22%
----------- ------------- -------------- ----------- ----- ----------- -----------
Total................... 21,132 $4,049,836,780 2$,252,766,010 $ 106,604 70.00% 100.00% 100.00%
----------- ------------- -------------- ----------- ----- ----------- -----------
----------- ------------- -------------- ----------- ----- ----------- -----------
</TABLE>
59
<PAGE>
YEAR OF ORIGINATION (QUARTERLY)
<TABLE>
<CAPTION>
TOTAL CURRENT WEIGHTED
NUMBER SECURITY BALANCE AVERAGE AVERAGE % BY % BY
YEAR OF ORIGINATION OF LOANS VALUE A$ OUTSTANDING A$ BALANCE A$ LVR (%) NUMBER BALANCE
- ---------------------------- ----------- ------------- -------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1996 Q2 724 $ 135,149,738 $ 67,535,421 $ 93,281 67.73% 3.43% 3.00%
1996 Q3 878 $ 162,263,317 $ 84,063,313 $ 95,744 66.13% 4.15% 3.73%
1996 Q4 512 $ 103,190,610 $ 55,452,493 $ 108,306 68.30% 2.42% 2.46%
1997 Q1 1,049 $ 201,466,749 $105,340,356 $ 100,420 68.20% 4.96% 4.68%
1997 Q2 2,351 $ 462,049,368 $241,017,478 $ 102,517 67.44% 11.13% 10.70%
1997 Q3 5,238 $ 998,449,718 $561,702,881 $ 107,236 69.99% 24.79% 24.93%
1997 Q4 7,115 $1,350,350,155 $784,215,023 $ 110,220 71.75% 33.67% 34.81%
1998 Q1 3,265 $ 636,917,125 $353,439,045 $ 108,251 70.06% 15.45% 15.69%
----------- ------------- -------------- ----------- ----- ----------- -----------
Total 21,132 $4,049,836,780 2$,252,766,010 $ 106,604 70.00% 100.00% 100.00%
----------- ------------- -------------- ----------- ----- ----------- -----------
----------- ------------- -------------- ----------- ----- ----------- -----------
</TABLE>
OCCUPANCY OF MORTGAGE PROPERTY DISTRIBUTION*
<TABLE>
<CAPTION>
TOTAL CURRENT WEIGHTED
NUMBER SECURITY BALANCE AVERAGE AVERAGE % BY % BY
LOAN TYPE OF LOANS VALUE A$ OUTSTANDING A$ BALANCE A$ LVR (%) NUMBER BALANCE
- ---------------------------- ----------- ------------- -------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment.................. 3,571 $ 750,738,274 $426,307,775 $ 119,381 67.39% 16.90% 18.92%
Owner Occupied.............. 17,561 $3,299,098,506 1$,826,458,235 $ 104,007 70.61% 83.10% 81.08%
----------- ------------- -------------- ----------- ----- ----------- -----------
Total................... 21,132 $4,049,836,780 2$,252,766,010 $ 106,604 70.00% 100.00% 100.00%
----------- ------------- -------------- ----------- ----- ----------- -----------
----------- ------------- -------------- ----------- ----- ----------- -----------
</TABLE>
- ------------------------------
* Based solely on statements of Borrowers at time of origination.
PAYMENT TYPE DISTRIBUTION
<TABLE>
<CAPTION>
TOTAL CURRENT WEIGHTED
NUMBER SECURITY BALANCE AVERAGE AVERAGE % BY % BY
PAYMENT TYPE OF LOANS VALUE A$ OUTSTANDING A$ BALANCE A$ LVR (%) NUMBER BALANCE
- ---------------------------- ----------- ------------- -------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest Only............... 586 $ 179,833,335 $ 94,059,058 $ 160,510 64.66% 2.77% 4.18%
Principal & Interest........ 20,546 $3,870,003,445 2$,158,706,952 $ 105,067 70.24% 97.23% 95.82%
----------- ------------- -------------- ----------- ----- ----------- -----------
Total................... 21,132 $4,049,836,780 2$,252,760,010 $ 106,604 70.00% 100.00% 100.00%
----------- ------------- -------------- ----------- ----- ----------- -----------
----------- ------------- -------------- ----------- ----- ----------- -----------
</TABLE>
HOUSING LOANS PROPERTY TYPES
<TABLE>
<CAPTION>
TOTAL CURRENT AVERAGE WEIGHTED
NUMBER SECURITY BALANCE % BY AVERAGE % BY % BY
PROPERTY TYPE OF LOANS VALUE A$ OUTSTANDING A$ BALANCE LVR (%) NUMBER BALANCE
- ------------------------------ ----------- ------------- -------------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Detached houses............... 18,022 $3,453,719,263 1$,890,447,279 $ 104,897 69.63% 85.28% 83.92%
Semi-detached houses.......... 306 $ 64,331,711 $ 38,988,018 $ 127,412 71.83% 1.45% 1.73%
Townhouses.................... 99 $ 17,686,300 $ 13,655,446 $ 137,934 87.49% 0.47% 0.61%
Strata title units............ 2,705 $ 514,099,506 $309,675,267 $ 114,483 71.28% 12.80% 13.75%
----------- ------------- -------------- --------- ----- ----------- -----------
Total......................... 21,132 $4,049,836,780 2$,252,766,010 $ 106,604 70.00% 100.00% 100.00%
----------- ------------- -------------- --------- ----- ----------- -----------
----------- ------------- -------------- --------- ----- ----------- -----------
</TABLE>
60
<PAGE>
THE ISSUER TRUSTEE
Westpac Securities Administration Limited (the "Issuer Trustee") will act as
trustee under the Trust and, in such capacity, as issuer of the Notes on the
terms set out in the Transaction Documents.
INCORPORATION
The Issuer Trustee was incorporated on 11th July 1944 as, and continues to
exist and operate as, a limited liability public company under the Corporations
Law of New South Wales, Australia. The Australian Company Number ("ACN") of the
Issuer Trustee is 000 049 472, and its registered office is at Level 36, 50
Margaret Street, Sydney with its principal office at Level 10, 130 Pitt Street,
Sydney.
The Issuer Trustee will issue Notes in its capacity as trustee of the Trust.
SHARE CAPITAL
The authorized share capital of the Issuer Trustee is A$10,000,000 divided
into 5,000,000 shares of A$2.00 each. The issued share capital of the Issuer
Trustee is 92,000 fully paid shares of A$2.00 each. Those shares are held by
Westpac Financial Services Group Limited (ACN 000 326 312), a wholly owned
subsidiary of Westpac.
BUSINESS
The Issuer Trustee is indirectly a wholly owned subsidiary of Westpac and is
dedicated to supporting core bank activities of Westpac by providing trustee and
custody services. The Issuer Trustee currently holds funds under administration
of A$6.4 billion in this capacity and has been servicing Westpac and Westpac's
clients since 1944.
The Issuer Trustee is an Authorized Trustee Corporation under the
Corporations Law; is an approved trustee for the purposes of the Superannuation
Industry (Supervision) Act 1993; and holds a Securities Dealers License No.
11123 under the Corporations Law of New South Wales, Australia.
The Issuer Trustee has five subsidiaries incorporated in New South Wales.
EXPERIENCE
Currently, the Issuer Trustee is the trustee for superannuation trusts with
assets exceeding A$3.9 billion. In total the Issuer Trustee acts as trustee or
custodian (through its subsidiary company Westpac Custodian Nominees Limited)
for clients with assets exceeding A$97.4 billion.
The Issuer Trustee's experience in trusteeship began in the 1940's. The
Issuer Trustee is associated with leading investment managers and in addition,
the Issuer Trustee's experience with administrators, consultants and industry
specialists complements its capacity to service the diversified requirements of
corporate trust schemes.
The Issuer Trustee's balance sheet for the year ended September 30, 1997
showed Total Shareholder's Equity as A$40.7 million.
61
<PAGE>
DIRECTORS
The directors of the Issuer Trustee are as follows:
<TABLE>
<CAPTION>
NAME OFFICE ADDRESS PRINCIPAL ACTIVITIES
- ------------------------------------ ------------------------------------ ------------------------------------
<S> <C> <C>
Martyn John Berry Level 36, Westpac Plaza Investment Fund Executive
50 Margaret Street
Sydney NSW 2000, Australia
David Matthew Fite Level 36, Westpac Plaza Bank Executive
50 Margaret Street
Sydney NSW 2000, Australia
John Charles Lawson Level 36, Westpac Plaza Banker
50 Margaret Street
Sydney NSW 2000, Australia
Robert McDonald Level 36, Westpac Plaza Finance Executive
50 Margaret Street
Sydney NSW 2000, Australia
Michael Anthony Migro Level 36, Westpac Plaza Manager
50 Margaret Street
Sydney NSW 2000, Australia
</TABLE>
POWERS
Subject to the Master Trust Deed and the Series Notice, the Issuer Trustee
has all the rights, powers and discretion over and in respect of the Trust
Assets which it could exercise as if it were the beneficial owner of those
assets. These powers include the ability to invest in Authorized Investments, to
issue Notes and to enter into Support Facilities.
The Master Trust Deed expressly permits the Issuer Trustee to appoint the
Servicer to retain custody of the mortgage documents for the Trust in accordance
with the Servicing Agreement, and for the Issuer Trustee to lodge documents with
the Servicer.
Full details of the powers of the Issuer Trustee are set out in the Master
Trust Deed.
DUTIES
The Issuer Trustee is required to act honestly and in good faith and to
exercise such diligence and prudence as a prudent person of business would
exercise in performing its express functions and in exercising its discretion
under the Master Trust Deed. It must keep each WST trust separate from the
others and do everything necessary to ensure it can comply with its obligations
under the Transaction Documents.
In particular the Issuer Trustee has the duty to maintain a register of
Authorized Investments (other than the Housing Loans) and to ensure that the
Trust Manager keeps accounting records which correctly record and explain all
amounts paid and received by the Issuer Trustee.
The Issuer Trustee is required to act continuously as trustee of the Trust
until the Trust is terminated as provided by the Master Trust Deed or the Issuer
Trustee has retired or been removed from office in the manner detailed below.
Each Noteholder acknowledges that:
(1) In the absence of fraud, negligence or breach of trust on its part
or on the part of any of its officers, employees, agents or delegates, the
Issuer Trustee shall not be liable personally in the event of failure to
make payments on the Payment Date for payment to any Noteholder, any
Beneficiary, the Trust Manager or any other person or for any loss howsoever
caused in respect of any of the trusts or to any Noteholder, any
Beneficiary, the Trust Manager or any other person.
62
<PAGE>
(2) The Issuer Trustee acts as trustee only in its capacity as trustee
of the Trust and in no other capacity. Any liability arising under or in
connection with a Transaction Document (including, without limitation, the
Offered Notes) can be enforced against the Issuer Trustee only to the extent
to which it can be satisfied out of property of the Trust out of which the
Issuer Trustee is actually indemnified for the liability. This limitation of
the Issuer Trustee's liability applies despite any other provision of the
Transaction Documents and extends to all liabilities and obligations of the
Issuer Trustee in any way connected with any representation, warranty,
conduct, omission, agreement or transaction related to the Transaction
Documents or the Trust. The limitation will not apply if there is a
reduction in the Issuer Trustee's indemnification out of trust assets as a
result of the Issuer Trustee's fraud, negligence or breach of trust.
(3) The Issuer Trustee has no duty, and is under no obligation, to
investigate whether a Trust Manager's Default, Servicer Transfer Event or
Title Perfection Event has occurred in relation to the Trust other than
where it has actual notice.
(4) The Issuer Trustee is required to provide the notices referred to in
the Master Trust Deed in respect of a determination of Adverse Effect only
if it is actually aware of the facts giving rise to the Adverse Effect.
(5) In making any such determination, the Issuer Trustee will seek and
rely on advice given to it by its advisors in a manner contemplated by the
Master Trust Deed.
The Issuer Trustee is entitled to rely conclusively on, and is not required
to investigate the accuracy of:
(i) the contents of a Sale Notice given to it by an Approved Seller;
(ii) the contents of any report given to it by the Trust Manager or the
Servicer;
(iii) any calculations made by an Approved Seller, a Servicer or the
Trust Manager including the calculation of payments due to, or to be charged
against, the Noteholders, the Beneficiary or the Approved Seller on
specified dates;
(iv) the amount of, or allocation of, Collections; or
(v) the contents of any certificate provided to the Issuer Trustee under
the Master Trust Deed or any certificate given by the Trust Manager or the
Servicer, unless the Issuer Trustee is actually aware to the contrary. The
Issuer Trustee is not liable to any person in any manner whatsoever in
respect of these matters.
DELEGATION
In exercising its powers and performing its obligations and duties under the
Master Trust Deed, the Issuer Trustee may, with the approval of the Trust
Manager, delegate any or all of the duties, powers, discretion or other
functions of the Issuer Trustee under the Master Trust Deed or otherwise in
relation to the Trust, to a related company of the Issuer Trustee which is a
trustee company or trustee corporation for the purposes of any State or
Territory legislation governing the operation of trustee companies.
ISSUER TRUSTEE FEES AND EXPENSES
The Issuer Trustee is entitled to a quarterly fee (the "Issuer Trustee Fee")
based on the average daily balance of the aggregate Housing Loan principal
during each Collection Period, payable in arrears on the relevant Payment Date.
The Issuer Trustee is entitled to be reimbursed out of the assets of the
Trust for all expenses incurred in connection with the performance of its
obligations in respect of the Trust (other than general overhead costs and
expenses).
REMOVAL OF THE ISSUER TRUSTEE
The Issuer Trustee is required to retire as trustee after a direction from
the Trust Manager in writing following an "Issuer Trustee's Default." An Issuer
Trustee's Default occurs if:
63
<PAGE>
(1) an Insolvency Event has occurred and is continuing in relation to
the Issuer Trustee;
(2) any action is taken or any event occurs by or in relation to the
Issuer Trustee which causes the rating of any Notes to be downgraded;
(3) the Issuer Trustee, or any employee, delegate, agent or officer of
the Issuer Trustee, breaches any obligation or duty imposed on the Issuer
Trustee under the Master Trust Deed or any other Transaction Document in
relation to the Trust where the Trust Manager reasonably believes it may
have an Adverse Effect and the Issuer Trustee fails or neglects after 30
days' notice from the Trust Manager to remedy that breach;
(4) the Issuer Trustee merges or consolidates with another entity
without obtaining the consent of the Trust Manager and ensuring that the
resulting merged or consolidated entity assumes the Issuer Trustee's
obligations under the Transaction Documents; or
(5) there is a change in effective control of the Issuer Trustee from
that subsisting as at the date of the Master Trust Deed unless approved by
the Trust Manager.
Where the Issuer Trustee is removed because of its default, it shall bear
the costs of such removal. The Issuer Trustee will indemnify the Trust Manager
and the Trust for such costs.
On the removal of the Issuer Trustee, the Trust Manager, subject to giving
prior notice to the Rating Agencies, shall be entitled to appoint in writing
some other statutory trustee to be the Issuer Trustee under the Master Trust
Deed provided that appointment will not in the reasonable opinion of the Trust
Manager materially prejudice the interests of Noteholders. Until the appointment
is completed the Trust Manager shall act as Issuer Trustee and will be entitled
to the trustee's fee for the period it so acts as Issuer Trustee.
VOLUNTARY RETIREMENT OF THE ISSUER TRUSTEE
The Issuer Trustee may resign on giving to the Trust Manager (with a copy to
the Rating Agencies) not less than 3 months' notice in writing (or such other
period as the Trust Manager and the Issuer Trustee may agree) of its intention
to do so.
Before retirement, the Issuer Trustee must appoint a successor trustee who
is approved by the Trust Manager, or who may be the Trust Manager, and whose
appointment will not materially prejudice the interests of Noteholders. If a
successor trustee has not been appointed by the end of the 3 months' notice
period the Trust Manager shall act as trustee until a successor trustee is
appointed.
LIMITATION OF ISSUER TRUSTEE'S LIABILITY
In the absence of fraud, negligence or breach of trust on its part, or on
the part of any of its officers, employees, agents or delegates, the Issuer
Trustee shall not be liable personally in the event of failure to pay moneys on
the Payment Date for payment to any Noteholder, any Beneficiary, the Trust
Manager or any other person or for any loss howsoever caused in respect of any
of the trusts or to any Noteholder, any Beneficiary, the Trust Manager or any
other person.
The Issuer Trustee acts as trustee only in its capacity as trustee of the
Trust and in no other capacity. A Noteholder cannot sue the Issuer Trustee
personally except in the case of fraud, negligence or breach of trust on the
part of the Issuer Trustee. Any liability arising under or in connection with a
Transaction Document (including, without limitation, any Offered Note) can be
enforced against the Issuer Trustee only to the extent to which it can be
satisfied out of property of the Trust out of which the Issuer Trustee is
actually indemnified for the liability. This limitation of the Issuer Trustee's
liability applies despite any other provision of the Transaction Documents and
extends to all liabilities and obligations of the Issuer Trustee in any way
connected with any representation, warranty, conduct, omission, agreement or
transaction related to the Transaction Documents or the Trust. The limitation
will not apply to the extent that there is a reduction in the Issuer Trustee's
indemnification out of trust assets as a result of the Issuer Trustee's fraud,
negligence or breach of trust.
The Issuer Trustee is also indemnified out of the Trust assets against
certain payments which it may be liable to make under the Consumer Credit
Legislation. The Approved Sellers have also indemnified the
64
<PAGE>
Issuer Trustee in relation to such payments and the Issuer Trustee is required
to first call on the indemnity from the Approved Sellers.
The Master Trust Deed also contains other provisions which regulate the
Issuer Trustee's liability to Noteholders, other creditors and any Beneficiary.
The Issuer Trustee is not liable to any person for any losses, costs,
liabilities or expenses arising out of the exercise or non exercise of its
discretion (or by the Trust Manager of its discretion) or for any instructions
or directions given to it by the Trust Manager, the Servicer or either of the
Approved Sellers except to the extent that it is caused by the Issuer Trustee's
or its officer's, employee's, agent's or delegate's fraud, negligence or breach
of trust. The Issuer Trustee is also not liable for any Trust Manager's Default,
Servicer Transfer Event or Title Perfection Event. The Issuer Trustee is not
liable for any act, omission or default of the Servicer in relation to its
custodian duties or its obligations under the Servicing Agreement.
RIGHTS OF INDEMNITY OF ISSUER TRUSTEE
Except where the Issuer Trustee fails to exercise due care or is otherwise
disentitled (including, without limitation, because of fraud, negligence or
breach of trust on its part) the Issuer Trustee will be indemnified out of the
Trust Assets against all losses and liabilities incurred by the Issuer Trustee
in properly performing any of its duties or exercising any of its powers under
the Transaction Documents in relation to the Trust.
LIMITATION OF SELLER TRUSTEE'S LIABILITY AND RIGHTS OF INDEMNITY
In the absence of fraud, negligence or breach of trust on its part, the
Seller Trustee shall not be liable personally in the event of failure to pay
moneys on the Payment Date for payment to any Noteholder, any Beneficiary, the
Trust Manager or any other person or for any loss howsoever caused in respect of
any of the trusts or to any Noteholder, any Beneficiary, the Trust Manager or
any other person.
The Seller Trustee acts as Seller Trustee only in its capacity as seller
trustee of the relevant Seller Trust and in no other capacity. A liability
arising under or in connection with a Transaction Document can be enforced
against the Seller Trustee only to the extent to which it can be satisfied out
of property of the relevant Seller Trust out of which the Seller Trustee is
actually indemnified for the liability. This limitation of the Seller Trustee's
liability applies despite any other provision of the Transaction Documents and
extends to all liabilities and obligations of the Seller Trustee in any way
connected with any representation, warranty, conduct, omission, agreement or
transaction related to the Transaction Documents, the Trust or the relevant
Seller Trust. The limitation will not apply to the extent that there is a
reduction in the Seller Trustee's indemnification out of trust assets or the
relevant Seller Trust as a result of the Seller Trustee's fraud, negligence or
willful default.
The Seller Trustee is also indemnified out of the assets of the relevant
Seller Trust against certain payments which it may be liable to make under the
Consumer Credit Legislation. Westpac has also indemnified the Seller Trustee in
relation to such payments and the Seller Trustee is required to first call on
the indemnity from Westpac.
RIGHTS OF INDEMNITY OF SELLER TRUSTEE
Except where the Seller Trustee fails to exercise due care or is otherwise
disentitled (including, without limitation, because of fraud, negligence or
breach of trust on its part) the Seller Trustee will be indemnified out of each
relevant Seller Trust against all losses and liabilities incurred by the Seller
Trustee in properly performing any of its duties or exercising any of its powers
under the Transaction Documents in relation to the Trust or any Seller Trust.
The Seller Trustee has not been involved in the preparation of, and does not
accept responsibility for, this Prospectus.
65
<PAGE>
THE NOTE TRUSTEE
Morgan Guaranty Trust Company of New York, London Branch (the "Note
Trustee"), in its capacity as note trustee under the Note Trust Deed among the
Issuer Trustee, the Trust Manager and the Note Trustee dated on or about ,
1998, as amended from time to time (the "Note Trust Deed"). Morgan Guaranty is a
wholly owned subsidiary and the principal asset of J.P. Morgan & Co.
Incorporated, a Delaware corporation whose principal office is located in New
York, New York. Morgan Guaranty Trust Company of New York is a commercial bank
offering a wide range of banking services to its customers both domestically and
internationally. Its business is subject to examination and regulation by
federal and New York State banking authorities. Citibank, N.A. of 47-49 Tooley
Street, London, is in the process of finalizing the purchase of the Global Trust
and Agency Services group of Morgan Guaranty Trust Company of New York. It
expects to finalize its acquisition in June, 1998. Upon the completion of such
acquisition, Citibank, N.A. will act as Note Trustee.
ORIGINATOR OF THE HOUSING LOANS
Westpac Banking Corporation ("Westpac"), Level 4, 60 Martin Place, Sydney,
NSW 2000, Australia, was the first bank to be established in Australia. Westpac
was founded in 1817 and was incorporated in 1850 as Bank of New South Wales by
an Act of the New South Wales Parliament. In 1982, the Bank acquired The
Commercial Bank of Australia Limited, and the Bank changed its name to Westpac
Banking Corporation.
Today Westpac is one of the four major commercial banks in Australia and is
the largest commercial bank in New Zealand. The Westpac Group undertakes a wide
range of banking and financial activities including commercial and investment
banking, personal and small business banking, retail and wholesale funds
management, financial services and finance company operations.
The Australian banking activities of Westpac come under the supervision of
the Reserve Bank of Australia.
YEAR 2000
The origin of the Year 2000 "millennium bug" problem lies in the way
information in computer systems relating to calendar dates has been stored.
Computer systems, built when data storage was expensive, saved only the last two
digits of a year for date calculations in order to reduce data storage
requirements. These systems are therefore unable to differentiate, for example,
between the years 1900 and 2000. This inability to differentiate between the
different centuries could result in discrepancies such as erroneous interest
rate calculations and inaccurate statement reporting.
In recognition of the seriousness of the problem, work within the Westpac
Group began in 1996 when a Year 2000 project was initiated. The conversion plan
for making the Westpac Group's applications Year 2000 compliant is estimated to
cost approximately A$60 million, of which A$24 million has been spent as of the
end of March 1998. To the maximum extent possible, the project will utilize
existing Westpac Group resources. The objective is that all systems will be
materially Year 2000 compliant by December 31, 1998, to allow adequate time for
testing and to minimize resource requirements in later years. Management of
Westpac currently estimates that the balance of the Year 2000 project conversion
will be completed by December 1998.
THE SERVICER
GENERAL
In 1996, Westpac established a wholly owned subsidiary, The Mortgage Company
Pty Limited ("TMC") of Level 6, 228 Pitt Street, Sydney 2000, Australia, to
provide mortgage servicing capability to both Westpac and to third parties. TMC
operates from a new servicing center in Adelaide, known as the Mortgage
Processing Centre ("MPC"). The MPC employs over 1,000 staff, and processes
approximately 1400 new applications per day.
66
<PAGE>
The MPC performs the following functions for Westpac: application
processing, telephone support, pre-settlement, settlement, post-settlement,
servicing and account maintenance, collections and enforcement and document
custody.
SERVICING OF HOUSING LOANS
Under the Servicing Agreement, the ongoing servicing of the Housing Loans
will be performed by TMC, as the Servicer at the MPC. Servicing procedures
include responding to customer inquiries, managing and servicing the features
and facilities available under the Housing Loans and the management of
delinquent Housing Loans. The servicing functions performed by the MPC support,
and are supported by, the activities of Westpac's branches, telemarketing and
telebanking centers. In addition, the MPC services housing loans for third
parties.
The Servicer is contractually obligated to administer the Housing Loans: (i)
in accordance with the Servicing Agreement; (ii) in accordance with Westpac's
policies, which are under regular review and may change from time to time in
accordance with business judgment and changes to legislation and guidelines
established by relevant regulatory bodies; and (iii) to the extent not covered
by paragraphs (i) and (ii), by exercising the degree of diligence and care
expected of an appropriately qualified Servicer of the relevant Housing Loans.
See "DESCRIPTION OF THE SERVICING AGREEMENT."
DOCUMENT CUSTODY
The Servicer is responsible for custody of the mortgage title documents on
behalf of the Issuer Trustee and has custody of the Relevant Documents in
accordance with the Servicing Agreement. See "DESCRIPTION OF THE SERVICING
AGREEMENT--Document Custody."
COLLECTION AND ENFORCEMENT PROCEDURES
Borrowers must make the minimum payment due under the terms and conditions
of the Housing Loan on or before the due date for that installment under the
relevant loan documents. Payments are credited to the Housing Loan on the day of
receipt. Interest is calculated daily and can be charged monthly or when a
payment is made. Any payments not received by the due date will produce a
compounding interest effect.
A housing loan is considered delinquent ("Delinquent") whenever the minimum
installment amount is not met. The collections system inspects all accounts
which are delinquent and records those housing loans for action and follow-up.
Borrowers are notified by telephone and/or by mail when their housing loan
becomes Delinquent. Housing loans are allocated to collections officers who take
action depending on the delinquency history of the Borrower, equity in the
property and the ability of the Borrower to meet future installments. Where a
housing loan that is Delinquent is subject to a Mortgage Insurance Policy, the
relevant Mortgage Insurer is notified of the housing loan's progress and all
follow-up actions are taken by Westpac and the Servicer.
When a housing loan is 10 days delinquent, it is identified in the Mortgage
Servicing System and transferred to the collection system of the MPC. Generally,
once a housing loan is 15 days delinquent, a computer generated letter is sent
to the borrower advising of the arrears and requesting that the borrower make
payments so that his account is current. When the account reaches between 23 and
29 days delinquent, the borrower will be contacted by telephone or, if not
contacted, a second letter will be sent by day 30. Between day 30 and day 45
generally the borrower will again be contacted by telephone. When the account
reaches between 45 and 58 days delinquent, a third letter is generally issued
which requests that the account be made current within 15 days of the date
thereof. Generally, after an account is between 62 and 73 days overdue, a demand
for full arrears is issued. Between 97 and 110 days, if the account continues to
be in arrears, a demand notice will generally be issued to the borrower and the
process of contract enforcement and loss recovery begins. The time periods
specified herein assume the borrower has either taken no action or has not
honored any commitments made in relation to the arrears.
67
<PAGE>
After a default by a borrower a mortgagee can exercise its power of sale of
the mortgaged property. To exercise this power, a mortgagee must comply with the
statutory restrictions of the relevant state or territory as to notice
requirements (see "CERTAIN LEGAL ASPECTS OF THE HOUSING LOANS - Enforcement of
Housing Loans"). The length of time between the decision to exercise its power
of sale and final completion of the sale will be dependent on factors outside
the control of the Servicer, such as whether the relevant mortgagor contests the
sale and the market conditions at the time.
Under some Housing Loans which are subject to a variable rate of interest, a
Borrower may prepay amounts which are additional to their minimum payments to
build up a buffer of funds, which is the difference between the total amount
paid by them and the total of the minimum payments required to have been made by
them. If the Borrower subsequently fails to make some or all of a minimum
payment, the collection system will apply the amount of that buffer of funds
against that missed payment. The relevant Housing Loan will not be considered to
be Delinquent until the total amount of missed payments exceeds the "credit
buffer."
Under a Housing Loan which is charged a variable rate of interest, a
Borrower who is on maternity or paternity leave and who meets specific
eligibility criteria may apply to reduce their monthly home loan repayment by up
to 50% for a maximum of six months. During the reduced repayments period, if the
payment is not sufficient to meet the interest due, the unpaid interest payment
will capitalize on the loan balance and the loan may negatively amortize.
Repayments are adjusted at the end of the parental leave period to ensure that
the loan will be repaid within its original contracted maturity.
The collection and enforcement procedures may change from time to time in
accordance with business judgment and changes to legislation and guidelines
established by the relevant regulatory bodies.
DELINQUENCIES AND MORTGAGEE IN POSSESSION WITH RESPECT TO THE SECURITIZED
PORTFOLIOS
The following tables set forth delinquency and MIP information for each of
the Securitized Portfolios (as defined herein) serviced by the Servicer in its
capacity as Servicer of securitized loans as of December 1997 and March 1998.
"Mortgagee in Possession" or "MIP" means a mortgagee in possession of the
related Mortgaged Property who, following an enforcement of the relevant
mortgage, is able to deal with the Mortgaged Property without becoming the
absolute owner of the Mortgaged Property. The portfolios of securitized housing
loans (the "Securitized Portfolios") consist of the Housing Loans relating to
the Series 1997-2 WST Trust, Series 1997-3 WST Trust and the Series 1997-4E WST
Trust. The indicated periods of delinquency are based on the number of days past
due on a contractual basis. Similar information with respect to the Series
1998-1G WST Trust will be contained in the reports presented through Reuters for
access by investors. Such reports will be compiled using the same methodology as
that used to compile the information contained in the table below.
DELINQUENCIES AND MIP
SERIES 1997-2 WST TRUST
<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 14, 1997 MARCH 14, 1998
------------------------------------------------------------------------------
---------------------------------------
PERCENT
BY PERCENT BY BY PERCENT
BY NO. DOLLAR BY NO. DOLLAR BY NO. DOLLAR BY NO.
OF LOANS AMOUNT OF LOANS AMOUNT OF LOANS AMOUNT OF LOANS
------------- --------- ------------- ----------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Series 1997-2 Portfolio
Period of Delinquency:
30-59 Days.................. 44 4,086,266 0.74 0.79 38 3,846,360 0.67
60-89 Days.................. 10 1,151,603 0.17 0.22 15 1,631,217 0.27
90 Days or more............. 3 466,842 0.05 0.09 4 463,744 0.08
Total Delinquent Loans
Housing Loans in MIP(1)
<CAPTION>
PERCENT
BY
DOLLAR
AMOUNT
-----------
<S> <C>
Series 1997-2 Portfolio
Period of Delinquency:
30-59 Days.................. 0.80
60-89 Days.................. 0.34
90 Days or more............. 0.10
Total Delinquent Loans
Housing Loans in MIP(1)
</TABLE>
- ------------------------
(1) Housing Loans in MIP are also included under the heading "Total Delinquent
Loans."
68
<PAGE>
DELINQUENCIES AND MIP
SERIES 1997-3 WST TRUST
<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 14, 1997 MARCH 14, 1998
------------------------------------------------------------------------------
---------------------------------------
PERCENT
BY PERCENT BY BY PERCENT
BY NO. DOLLAR BY NO. DOLLAR BY NO. DOLLAR BY NO.
OF LOANS AMOUNT OF LOANS AMOUNT OF LOANS AMOUNT OF LOANS
------------- --------- ------------- ----------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Series 1997-3 Portfolio
Period of Delinquency:
30-59 Days.................. 36 3,153,716 0.53 0.50 49 5,052,285 0.75
60-89 Days.................. 15 1,274,948 0.22 0.20 13 1,201,231 0.20
90 Days or more............. 7 846,185 0.10 0.13 11 1,393,831 0.17
Total Delinquent Loans
Housing Loans in MIP(1)
<CAPTION>
PERCENT
BY
DOLLAR
AMOUNT
-----------
<S> <C>
Series 1997-3 Portfolio
Period of Delinquency:
30-59 Days.................. 0.85
60-89 Days.................. 0.20
90 Days or more............. 0.23
Total Delinquent Loans
Housing Loans in MIP(1)
</TABLE>
- ------------------------
(1) Housing Loans in MIP are also included under the heading "Total Delinquent
Loans."
DELINQUENCIES AND MIP
SERIES 1997-4E WST TRUST
<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 9, 1997 MARCH 9, 1998
------------------------------------------------------------------------------
---------------------------------------
PERCENT
BY PERCENT BY BY PERCENT
BY NO. DOLLAR BY NO. DOLLAR BY NO. DOLLAR BY NO.
OF LOANS AMOUNT OF LOANS AMOUNT OF LOANS AMOUNT OF LOANS
------------- --------- ------------- ----------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Series 1997-4E Portfolio
Period of Delinquency:
30-59 Days.................. 16 1,805,138 0.25 0.27 30 3,299,468 0.48
60-89 Days.................. 6 727,943 0.09 0.11 7 824,236 0.11
90 Days or more............. 2 172,916 0.03 0.02 6 328,043 0.09
Total Delinquent Loans
Housing Loans in MIP(1)
<CAPTION>
PERCENT
BY
DOLLAR
AMOUNT
-----------
<S> <C>
Series 1997-4E Portfolio
Period of Delinquency:
30-59 Days.................. 0.51
60-89 Days.................. 0.13
90 Days or more............. 0.05
Total Delinquent Loans
Housing Loans in MIP(1)
</TABLE>
- ------------------------
(1) Housing Loans in MIP are also included under the heading "Total Delinquent
Loans."
As of the date hereof, there have been no gains or losses with respect to
the Securitized Portfolios. Accordingly, no gain/loss tables are presented
herein.
It is unlikely that the delinquency experience of the Housing Loans
comprising the Series 1998-1G WST Trust will correspond to the delinquency
experience of the Securitized Portfolios set forth in the foregoing tables. The
statistics shown above represent the delinquency experience for the Securitized
Portfolios only for the periods presented, whereas the aggregate delinquency
experience on the Housing Loans comprising the Securitized Portfolios will
depend on the results obtained over the life of the Securitized Portfolios.
There can be no assurance that the Housing Loans comprising the Series 1998-1G
WST Trust will perform consistently with the delinquency or foreclosure
experience described herein. It should be noted that if the residential real
estate market in Australia should experience an overall decline in property
values, the actual rates of delinquencies and foreclosures could be higher than
those previously experienced by the Servicer with respect to the Securitized
Portfolios. In addition, adverse economic conditions may affect the timely
payment by Borrowers of scheduled payments of principal and interest on the
Housing Loans and, accordingly, the actual rates of delinquencies and
foreclosures with respect to the Series 1998-1G WST Trust.
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THE TRUST MANAGER
GENERAL
Westpac Securitisation Management Pty Limited (ACN 081 709 211) is appointed
as trust manager (the "Trust Manager" or "WSML") of the Trust on the terms set
out in the Master Trust Deed and the Series Notice. WSML is a wholly owned
indirect subsidiary of Westpac and located at Level 4, 60 Martin Place, Sydney,
NSW 2000, Australia. The subsidiary was formed to provide specialized trust
management services for securitization programs for the Westpac Group.
INCORPORATION
The Trust Manager was incorporated on February 19, 1998 in the Australian
Capital Territory under the Corporations Law of the Commonwealth of Australia.
SHARE CAPITAL
The authorized share capital of the Trust Manager is A$100,000,000 shares.
The issued share capital of the Trust Manager is one fully paid share of A$1.00.
Such share is held by Westpac Equity Holdings Pty Ltd.
DIRECTORS
The directors of the Trust Manager are as follows:
<TABLE>
<CAPTION>
NAME BUSINESS ADDRESS PRINCIPAL ACTIVITIES
- ------------------------------ --------------------------------------- ---------------------------------------
<S> <C> <C>
R. Patrick Handley Level 4, 60 Martin Place Bank Executive
Sydney, NSW 2000
Australia
Philip Chronican Level 4, 60 Martin Place Bank Executive
Sydney, NSW 2000
Australia
Lewis E. Love, Jr. 575 Fifth Avenue Legal Counsel
39th Floor
New York, New York 10017-2422
Marten Touw Level 4, 60 Martin Place Group Treasurer
Sydney, NSW 2000
Australia
Kimberley Gire Level 4, 60 Martin Place Head of Group Securitization
Sydney, NSW 2000
Australia
</TABLE>
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DUTIES AND ROLE OF THE TRUST MANAGER
POWERS
The Trust Manager will carry out and perform the duties and obligations
contained in the Master Trust Deed and will have full and complete powers of
management of the Trust, including without limitation in relation to the conduct
of the day to day operation of the Trust and the administration and servicing of
the assets (which are not serviced by the Servicer), borrowings and other
liabilities of the Trusts. The Issuer Trustee has no duty to supervise the Trust
Manager in the performance of its functions and duties or the exercise of its
discretion.
The Trust Manager has the absolute discretion to recommend Authorized
Investments to the Issuer Trustee and direct the Issuer Trustee in relation to
those Authorized Investments. The Issuer Trustee's role is to give effect to all
such recommendations or directions.
DELEGATION
The Trust Manager may in carrying out and performing its duties and
obligations contained in the Master Trust Deed delegate to Westpac, or any of
the Trust Manager's or Westpac's officers and employees, all acts, matters and
things (whether or not requiring or involving the Trust Manager's judgment or
discretion), or appoint any person to be its attorney, agent, delegate or
sub-contractor for such purposes and with such powers as the Trust Manager
thinks fit.
TRUST MANAGER'S FEES AND EXPENSES
The Trust Manager is entitled to a quarterly fee (the "Trust Manager Fee")
on the average daily balance of the aggregate principal balance of Housing Loans
outstanding during the Collection Period payable in arrears on the relevant
Payment Date.
The Trust Manager is entitled to be reimbursed out of the Trust Assets for
all expenses incurred in connection with the performance of its obligations in
respect of the Trust (other than general overhead costs and expenses).
REMOVAL OF THE TRUST MANAGER
The Trust Manager shall retire as trust manager if so directed by the Issuer
Trustee in writing following a Trust Manager's Default. A "Trust Manager's
Default" occurs if:
(1) the Trust Manager fails to make any payment required by it within
the time period specified in a Transaction Document, and that failure is not
remedied within 10 Business Days of receipt from the Issuer Trustee of
notice of that failure;
(2) an Insolvency Event has occurred and is continuing in relation to
the Trust Manager;
(3) the Trust Manager breaches any obligation or duty imposed on the
Trust Manager under the Master Trust Deed, any other Transaction Document or
any other deed, agreement or arrangement entered into by the Trust Manager
under the Master Trust Deed in relation to the Trust, the Issuer Trustee
reasonably believes that such breach has an Adverse Effect and the breach is
not remedied within 30 days' notice being given by the Issuer Trustee
(except in the case of reliance by the Trust Manager on the information
provided by, or action taken by, the Servicer, or if the Trust Manager has
not received information from the Servicer which the Trust Manager requires
to comply with the obligation or duty); or
(4) a representation, warranty or statement by or on behalf of the Trust
Manager in a Transaction Document or a document provided under or in
connection with a Transaction Document is not true in a material respect or
is misleading when repeated and is not remedied to the Issuer Trustee's
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reasonable satisfaction within 90 days after notice from the Issuer Trustee
where (as determined by the Issuer Trustee) it has an Adverse Effect.
The costs of removal of the Trust Manager after a Trust Manager's Default
shall be borne by the Trust Manager. The Trust Manager has agreed to indemnify
the Issuer Trustee and the Trust for those costs.
On retirement or removal of the Trust Manager, the Issuer Trustee may
appoint another trust manager, provided the appointment will not materially
prejudice the interests of Noteholders. Until a replacement Trust Manager is
appointed, the Trust Manager must continue as Trust Manager. If a replacement
Trust Manager is not appointed within 120 days of the Issuer Trustee electing to
appoint a new Trust Manager, the Issuer Trustee will be the new Trust Manager.
VOLUNTARY RETIREMENT OF THE TRUST MANAGER
The Trust Manager may resign on giving to the Issuer Trustee (with a copy to
the Rating Agencies) not less than 3 months' notice in writing (or such other
period as the Trust Manager and the Issuer Trustee may agree) of its intention
to do so.
Before retirement, the Trust Manager must appoint a successor Trust Manager
who is approved by the Issuer Trustee, or who may be the Issuer Trustee, and
whose appointment will not materially prejudice the interests of Noteholders. If
a successor Trust Manager has not been appointed by the end of the 3 months'
notice period the Issuer Trustee shall act as Trust Manager until a successor
trust manager is appointed.
LIMITATION OF TRUST MANAGER'S LIABILITY
The principal limitations on the Trust Manager's liability are set out in
full in the Master Trust Deed. These include the following limitations:
(1) in the absence of fraud, negligence or wilful default on its part or
on the part of any of its officers, employees, agents or delegates, the
Trust Manager shall not be liable personally in the event of failure to pay
moneys on the due date for payment to any Noteholder, any Beneficiary, the
Issuer Trustee or any other person or for any loss howsoever caused in
respect of any of the Trusts or to any Noteholder, any Beneficiary, the
Issuer Trustee or other person;
(2) the Trust Manager will not be personally liable to indemnify the
Issuer Trustee or make any payments to any other person in relation to the
Trust except that there will be no limit on the Trust Manager's liability
for any fraud, negligence or wilful default by it in its capacity as the
Trust Manager of the Trust;
(3) the Trust Manager will be indemnified out of the Trust in respect of
any liability, cost or expense properly incurred by it in its capacity as
Trust Manager of the Trust or so incurred by any of its delegates,
sub-delegates or agents; and
(4) subject to the Master Trust Deed, the Trust Manager is not
responsible for any act, omission, misconduct, mistake, oversight, error of
judgment, forgetfulness or want of prudence on the part of the Issuer
Trustee, the Servicer or any agent appointed by the Issuer Trustee or the
Trust Manager or on whom the Issuer Trustee or the Trust Manager is entitled
to rely under this deed (other than a related company), attorney, banker,
receiver, barrister, solicitor, agent or other person acting as agent or
adviser to the Issuer Trustee or the Trust Manager.
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<PAGE>
WESTPAC RESIDENTIAL LOAN PROGRAM
ORIGINATION OF HOUSING LOANS
The following are the primary sources for the origination of housing loans
for Westpac: the Westpac branch network, mobile finance managers, accredited
brokers and national telemarketing centers. Inquiries are also often generated
by advertising and direct mail campaigns.
The origination process for housing loans is carried out initially within
the appropriate Westpac branch or broker office. The origination process for all
housing loans is completed within the MPC.
UNDERWRITING OF HOUSING LOANS
The following is a description of the underwriting processes employed by
Westpac in evaluating whether to fund a particular housing loan. When an
application is received, it is processed in accordance with Westpac's credit
policy and procedures. Credit assessment is undertaken initially using Westpac's
centrally controlled credit scoring system. The scoring system is based on
proprietary information, such as Westpac's own historical credit underwriting
experience and product policy rules. The process also includes a reference from
the Credit Reference Association of Australia. Housing loans passing through the
credit scoring system will either be approved, declined or referred to a credit
specialist. Westpac's criteria do not seek to segment borrowers who pass the
credit scoring system into groups of differing credit quality. All borrowers
must meet Westpac's standard underwriting criteria and therefore are not charged
different rates of interest based on their credit quality. Where a housing loan
is referred to a credit specialist, it is generally because the application is
more complex (for example, where the Housing Loan principal is over A$750,000 or
because the application is from a self-employed individual). An assessment is
carried out by either credit officers within the Credit Unit at the MPC or, in
some cases, by State based Credit Centers, in accordance with designated Westpac
credit policy and their credit approval limits. Each housing loan is considered
on its merits within Westpac's credit policy and procedures.
Central to the approval process is the verification of the information
provided by the applicant(s), valuation of the proposed security property and
confirmation of the ability of the applicant to make payments on the housing
loan. The verification process involves conducting an independent check as to
the accuracy and correctness of the information provided by the potential
Borrower, particularly the documentation provided by the prospective borrower
and the employment and income details of the prospective borrower. Verification
relating to the income of self-employed applicants involves checking annual
accounts and other financial information.
All applicants are required to have a minimum monthly income net of taxes in
excess of all monthly expenditures (including the housing loan being applied
for) with consideration given to likely increases in future interest rates.
Westpac policy requires substantiation of the property value either by
contract of sale or valuation by a registered panel valuer. A valuation of the
security property is required where lender's mortgage insurance is required,
where the Housing Loan Principal is greater than A$250,000 or the LVR is greater
than 80% (although the LVR and Housing Loan Principal may be lower if the
relevant Mortgaged Property is in a particular geographic area). Valuations must
be performed by registered valuers who are members of the Australian Institute
of Valuers and Land Economists. In some remote centers, assessment of the
security value is undertaken by the local branch manager. In addition, housing
loans may be secured by more than one property and in such cases the combined
values of all relevant security properties is considered.
Following pre-approval of a housing loan, a terms and conditions letter is
sent to the applicant from the MPC. When Westpac has verified details relating
to the Housing Loan to its satisfaction and acceptance of the loan offer is
received, the housing loan can proceed through to settlement and
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<PAGE>
disbursement. Once all documentation is completed to Westpac's satisfaction and
settlement or disbursement has occurred, the security documents are stamped and
registered. It is a condition of Westpac's standard mortgage documentation that
the mortgagor must maintain full replacement value property insurance at all
times. Westpac currently maintains a blanket insurance policy with Cigna
Insurance Asia Pacific Pty Limited which covers loss from a mortgage default
which follows from physical loss, destruction or damage to a Mortgaged Property
which is not otherwise covered by adequate property insurance.
Approval policies are under regular review and may change from time to time
in accordance with business judgment and changes to legislation and guidelines
established by the relevant regulatory bodies.
SERVICING OF HOUSING LOANS
Under the Servicing Agreement, the ongoing servicing of the Housing Loans
will be performed by the Servicer. See "THE SERVICER" and "DESCRIPTION OF THE
SERVICING AGREEMENT."
HOUSING LOAN PRODUCTS
Westpac originates loans for both owner-occupied and investment housing. The
products within the housing loan portfolio are the following: Premium Option
Home Loan, Premium Option Home Loan with 1 Year Guaranteed Rate, Special Offer
Fixed Option Home Loan, First Option Home Loan, Fixed Options Home Loan,
Variable Rate Investment Property Loan, Fixed Rate Investment Property Loan,
First Option Investment Property Loan and Special Fixed Rate Investment Property
Loan or any other similar loan product, however named, with some or all the
features referred to under "Housing Loan Features." During the term of any
Housing Loan, Westpac may from time to time or at the request of the related
Borrower change any of the features of such Housing Loans.
The following provides a general description of some of the Housing Loan
products detailed above. The Housing Loans comprising the Mortgage Pool must
satisfy certain eligibility criteria as specified under "THE TRUST
FUND--Representations and Warranties."
OWNER OCCUPIED HOME LOANS
First Option Home Loans: These loans are low variable rate owner-occupied
home loans for borrowers motivated by price. The product was developed to
compete with products offered by non-bank originators. Additional loan features
(as described below) can be activated on request by the borrower for a fee. The
current maximum term for this product is 25 years, although it may be changed to
30 years in the future.
Premium Option Home Loans: These loans are variable rate owner-occupied
home loans. These loans have a maximum term to maturity of 30 years and a higher
rate of interest than the First Option Home Loan and as a result, borrowers are
allowed access to the various loan features at no or reduced additional cost.
Premium Option Home Loans with 1 Year Guaranteed Rate: These loans have an
introductory discounted fixed rate for 12 months and then convert to a Premium
Option Home Loan. Apart from the introductory fixed rate period, the loan has
the same features as the Premium Option Home Loan.
Special Offer Fixed Option Home Loans: These loans have a fixed rate period
of one or two years that converts to a Premium Option Home Loan. Apart from the
fixed rate period, the loan has the same features as the Premium Option Home
Loan. In 1996, this product was replaced by the Premium Option Home Loan with 1
Year Guaranteed Rate product described above.
Fixed Options Home Loans: These loans are fixed rate owner-occupied home
loans. Loan terms are to a maximum of 30 years with a maximum fixed rate term of
10 years. On maturity of the fixed rate term,
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<PAGE>
the loan converts to the Premium Option Home Loan unless the borrower requests a
further fixed rate period. Certain product features (E.G., redraw) are not
available during the fixed rate period.
INVESTMENT PROPERTY LOANS
An investment property loan is a loan which assists with the purchase or
refinancing of residential property for investment purposes such as rental
income or capital gain. The primary security for the loan is a registered first
party first ranking mortgage over residential property.
Investment property loans can be either fixed rate or variable rate loans
with a maximum term of 25 years. The loans may provide for interest only
payments for a maximum term of 5 years and then must convert to required payment
of principal and interest. Loans may have fixed rate terms for up to a maximum
of 10 years which will convert at such time to a variable rate unless the
borrower requests another fixed rate term.
The First Option Investment Property Loan is a low variable rate loan which
is similar to the First Option Home Loan and the Variable Investment Property
Loan is similar to the Premium Option Home Loan, the major difference being the
loan purpose.
HOUSING LOAN FEATURES
GENERAL
Housing Loans originated by Westpac may have some or all of the features
described below. In addition, during the term of any Housing Loan, Westpac may
change any of the features of such Housing Loan from time to time at the request
of the related Borrower. For the risks associated with the change in features,
see "RISK FACTORS--Ability to Change Housing Loan Features May Result in Changes
to the Mortgage Pool and Higher Principal Prepayment on the Offered Notes."
SUBSTITUTION OF SECURITY
A Borrower may apply to substitute a new Mortgage over a residential
property for an existing Mortgage, to add a further Mortgage as security for a
Housing Loan or to release a security property under a Mortgage. Provided that
the application meets certain credit criteria, the Mortgage which secures a loan
may be portable and may be discharged without full repayment of the Housing Loan
provided another acceptable Mortgage is substituted in its place.
Where the substitute property meets the Eligibility Criteria and is
acceptable to the relevant Mortgage Insurer, and settlement on the substitute
property can occur simultaneously with the discharge of the current property,
the Housing Loan will remain in the Mortgage Pool. Where the substitute property
does not meet the Eligibility Criteria or is not acceptable to the Mortgage
Insurer, or the settlement does not occur simultaneously with discharge, the
Housing Loan will be transferred out of the Mortgage Pool for a corresponding
cash payment in the amount of the Unpaid Balance.
REDRAW
Certain Housing Loans in the Mortgage Pool which are charged a variable rate
of interest have the benefit of a redraw facility which allows the Borrower to
draw on repayments made in excess of scheduled repayments (a "Redraw").
Borrowers may request a redraw at any time. In certain circumstances, Westpac
has a contractual obligation under the loan document to provide the redraw
should the Borrower be entitled to a redraw because of prepayments and if the
Housing Loan is not delinquent.
A Redraw will not result in the Housing Loan being removed from the Mortgage
Pool.
See "DESCRIPTION OF THE OFFERED NOTES--Description of the Redraw Facility,
Redraw Funding Securities and RFS Class A Notes."
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<PAGE>
REPAYMENT HOLIDAY
The terms of the Mortgage securing a Housing Loan which is charged a
variable rate of interest may provide for a "payment holiday." A payment holiday
can occur where the Borrower has prepaid amounts of principal, creating a buffer
of funds between the current principal balance and the amortization scheduled
balance. In such a case, the Borrower may cease to make payments until the
outstanding balance of the Housing Loan plus unpaid interest equals the balance
of the theoretical amortization schedule. Where the Housing Loan allows for a
"payment holiday", the Housing Loan payment will be taken from the buffer of
funds between the current principal balance and the amortization scheduled
balance at that payment date. If a buffer of funds is available, the system will
recognize this as an installment received. Housing Loans are not considered
Delinquent during a payment holiday and remain in the Mortgage Pool.
EARLY REPAYMENT
Early repayment and partial prepayment of any Housing Loan is permitted
while such Housing Loan is subject to a variable rate of interest. Housing Loans
which are charged a fixed rate of interest, if repaid within their fixed rate
term, may be subject to an economic break cost or benefit in accordance with the
terms of the Housing Loan. For Housing Loans not regulated by the Consumer
Credit Legislation, an early termination fee may be payable.
TOP UP
The loan agreement and/or Mortgage relating to a Housing Loan may allow for
the relevant Borrower to request from Westpac additional funds such that the
resulting principal balance will exceed the amortization scheduled balance at
that time. These are "top ups." Top ups will only be provided by Westpac in
accordance with its then current underwriting and credit policies. Any Housing
Loan for which Westpac provides a top up will be removed from the Mortgage Pool.
PARENTAL LEAVE
Under a Housing Loan which is charged a variable rate of interest, any
Borrower who is on maternity or paternity leave and who meets specific
eligibility criteria may apply to reduce the related monthly home loan repayment
by up to 50% of such payment amount for a maximum of six months. During the
reduced repayment period, if the payment is not sufficient to meet the interest
due, the unpaid interest payment will capitalize on the loan balance and the
loan may negatively amortize. Scheduled repayments are adjusted at the end of
the parental leave period to ensure that the loan will be repaid within its
original contracted maturity.
INTEREST RATE SWITCHING
The interest rate charged on Housing Loans may be either fixed rate or
variable rate. Fixed rate loans will automatically convert to variable rate at
the end of the fixed rate period (as specified in the related loan agreement)
unless the relevant Borrower elects another fixed rate period. Some loans have
an introductory fixed rate of interest which converts to a variable rate of
interest at the end of such introductory period. Some loans allow the Borrower
the option to convert from a variable rate to a fixed rate (or vice versa).
ACCOUNT MANAGEMENT FACILITY
A Borrower may elect to have his/her regular salary paid in full or part
into their Housing Loan account. If this amount exceeds the amortized scheduled
balance at that time, surplus funds are created therein that may be redrawn.
This feature will allow the customer in the aggregate up to fifteen automatic
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<PAGE>
disbursements in each payment cycle against these surplus funds to other
accounts. These disbursements will be treated as Redraws.
PAYMENT TYPE
On the Cut-Off Date, the payment types under the Housing Loans will be
interest only or principal, interest and fees ("P & I"). Interest only periods
can be for terms of one to five years. At the end of any interest only period,
the payment type under the relevant Housing Loan will convert to P & I payments
such that the scheduled payments will result in the Housing Loan being repaid on
an amortizing schedule within the contractual term of the Housing Loan.
SWITCHING TO AN INVESTMENT OR OWNER-OCCUPIED LOAN
The Borrower may elect to switch the purpose of a Housing Loan from
owner/occupied property finance to investment property finance or vice versa.
Any such switch will not require the relevant Housing Loan to be removed from
the Mortgage Pool. The Borrower is required to notify Westpac of such switch and
the Mortgage Rate with respect to such Housing Loan may be changed accordingly.
CAPITALIZED FEES
Westpac may offer Borrowers the ability to choose certain product features
without paying an up-front fee. Instead, the fee may be capitalized under the
Housing Loan and would constitute part of the principal to be amortized over the
life of the Housing Loan.
COMBINATION HOUSING LOANS
A Borrower may split his/her Housing Loan into different portions which may
(among other things) be subject to different interest rate options. This could
occur, for example, where a Borrower elects to have one part of their Housing
Loan at a fixed rate and the other at a variable rate. Each loan is effectively
a separate loan which operates independently of the other loans in the combined
product and is governed by its own policy and procedures.
If a Housing Loan is "split" into more than one loan, any newly created
loans will not form part of the pool. In the event that the original loan is
retained (potentially at a reduced balance) in certain circumstances (E.G., it
satisfies all Eligibility Criteria and does not have any feature that would
require it to be removed from the pool) it will remain in the pool.
ADDITIONAL FEATURES
Westpac may, in relation to a Housing Loan in the Mortgage Pool, from time
to time seek to offer additional features which are not referred to above.
Before doing so, Westpac must satisfy the Trust Manager that the additional
features would not affect any relevant Mortgage Insurance Policy and would not
cause the rating of any Offered Notes to be downgraded or withdrawn.
THE MORTGAGE INSURANCE POLICIES
MORTGAGE INSURANCE POLICIES--GENERAL
On or before the Closing Date, the Mortgage Pool Insurance Policy will be
provided by Housing Loans Insurance Corporation Limited of 31 Market Street,
Sydney NSW 2000, Australia ("HLIC") to the Issuer Trustee to cover losses in
respect of each Housing Loan that is not subject to a PMI Policy. The Mortgage
Pool Insurance Policy generally applies to loans with an LVR of 80% or less at
the Cut-Off Date. The Mortgage Pool Insurance Policy will cover losses up to a
maximum aggregate amount of A$82,000,000.
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Each Housing Loan with an LVR of greater than 80% at the time of origination
(or a lower LVR where required by Westpac's standard credit policy) will have
been insured under a PMI Policy issued by Royal & Sun Alliance Lenders Mortgage
Insurance Limited (ACN 001 825 725) of Level 9, 465 Victoria Avenue, Chatswood
NSW ("Royal & Sun"), MGICA Limited (ACN 000 511 071) of Level 23 AMP Centre, 50
Bridge Street, Sydney NSW ("MGICA"), Westpac Lenders Mortgage Insurance Limited
(ACN 074 042 934) of Level 11, 50 Pitt Street, Sydney NSW ("WLMI") or HLIC. Each
Approved Seller will equitably assign its interest in each PMI Policy to the
Issuer Trustee on the Closing Date.
THE HLIC MORTGAGE POOL INSURANCE POLICY
GENERAL
The HLIC Mortgage Pool Insurance Policy (the "Mortgage Pool Insurance
Policy") is an insurance policy put in place to cover Housing Loans that were
not insured prior to the Cut-Off Date and which had an LVR of less than or equal
to 80% as of the Cut-Off Date. Under the Mortgage Pool Insurance Policy, HLIC
will insure the Issuer Trustee with effect from the Closing Date for Finance
Charge Losses and Principal Losses in respect of the Housing Loans (other than
those Housing Loans which are individually covered by an HLIC, Royal & Sun, WLMI
or an MGICA Insurance Policy) (see "--Primary Mortgage Insurance Policies"
below).
PERIOD OF COVER
The Issuer Trustee has the benefit of the Mortgage Pool Insurance Policy in
respect of each relevant Housing Loan from the date the Housing Loan and the
relevant Mortgage are beneficially assigned to it until the earliest of:
(i) other than with respect to the assignment to the Security Trustee
under the Security Trust Deed, the date the Housing Loan or the relevant
Mortgage is assigned, transferred or mortgaged to a person other than a
person who is or becomes insured under the Mortgage Pool Insurance Policy;
(ii) the date the Housing Loan is repaid in full;
(iii) the date the Housing Loan ceases to be secured by the relevant
Mortgage (other than in the case where the Mortgage is discharged by the
operation of a compulsory acquisition or sale by a government for public
purposes);
(iv) the maturity date set out in the "Certificate of Insurance" (as
defined in the Mortgage Pool Insurance Policy), or as extended with the
consent of the Mortgage Insurer or as varied by a court under the Consumer
Credit Legislation; and
(v) the date the Mortgage Pool Insurance Policy is cancelled in respect
of the Housing Loan in accordance with the Mortgage Pool Insurance Policy.
COVER FOR LOSSES
HLIC is obliged to pay to the Issuer Trustee the loss as at the Loss Date
(as defined herein) in respect of a Housing Loan, equal to the aggregate of:
(i) the principal amount outstanding under such Housing Loan together
with any interest, fees or charges (whether capitalized or not), that are
outstanding at the Loss Date;
(ii) fees and charges paid or incurred by the Issuer Trustee; and
(iii) such other amounts (including fines or penalties) which HLIC
approves in its absolute discretion;
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which the Issuer Trustee is entitled to recover under the relevant Housing
Loan contract and Mortgage LESS deductions including:
(iv) any sale proceeds or compensation for compulsory acquisition of the
Mortgaged Property;
(v) in the event of foreclosure, the value of the Issuer Trustee's
interest in the Mortgaged Property;
(vi) any amount received by the Issuer Trustee under any collateral
security;
(vii) amounts paid to the Issuer Trustee by way of rents, profits or
proceeds in relation to the Mortgaged Property or under any policy of
insurance relating to the Mortgaged Property not applied in restoration or
repair;
(viii) any interest whether capitalized or not that exceeds interest at
the (non-default) interest rate (in accordance with the Consumer Credit
Legislation, if applicable) payable in relation to that Housing Loan;
(ix) any fees or charges, whether capitalized or not, that are not of a
type, or which exceed certain maximum amounts, as specified in the Mortgage
Pool Insurance Policy;
(x) losses directly arising out of physical damage to the Mortgaged
Property (other than from fair wear and tear or losses recovered and applied
in the restoration or repair of the Mortgaged Property prior to the Loss
Date or which were recovered under a policy of insurance and applied to
reduce the amount outstanding under the Housing Loan; and
(xi) any amounts by which a claim may be reduced under the Mortgage Pool
Insurance Policy.
"Loss Date" means, in respect of a Housing Loan:
(a) where, following an event on or following which the Approved Seller
or the Issuer Trustee's power of sale in relation to the relevant Mortgaged
Property becomes exercisable whether immediately or at the option of the
Approved Seller or the Issuer Trustee or upon the expiration of any notice
or period of time and whether or not the power of sale only arises if before
the expiration of the notice or period of time the default remains
unremedied (a "Mortgage Default"), the Approved Seller or the Issuer Trustee
or a prior mortgagee in respect of the Mortgaged Property sells the
Mortgaged Property, the date on which the sale is completed;
(b) where, following a Mortgage Default, the Approved Seller or the
Issuer Trustee or an approved prior mortgagee in respect of the Mortgaged
Property becomes the absolute owner by foreclosure, the date on which that
event occurs;
(c) where, following a Mortgage Default, the Borrower sells the
Mortgaged Property with the prior approval of the Approved Seller, the
Issuer Trustee and HLIC, the date on which the sale is completed;
(d) where the Mortgaged Property is compulsorily acquired or sold by a
government for public purposes and there is a Mortgage Default (or where the
Mortgage has been discharged by the operation of the compulsory acquisition
or sale and there is a default in repayment of the loan secured by the
Mortgage which would have been a Mortgage Default but for the occurrence of
that event), the date being the later of the date of the completion of the
acquisition or sale or the date twenty-eight days after the date of the
Mortgage Default; and
(e) where the HLIC has agreed or determined to pay a claim under the
Mortgage Pool Insurance Policy, the date specified in that agreement or
determination.
79
<PAGE>
If the Consumer Credit Legislation applies to a Mortgage, HLIC's liability
is limited to the amount required to discharge the mortgage under the Consumer
Credit Legislation.
AGGREGATE LIMIT
The Mortgage Pool Insurance Policy will be subject to an aggregate limit of
loss of A$82,000,000.
ISSUER TRUSTEE'S INTEREST EXTINGUISHED
If the Issuer Trustee's interest in a Housing Loan is extinguished in favor
of Westpac as a result of:
(1) a breach of Westpac's representations and warranties in relation to the
Housing Loan which is discovered within 120 days of the Closing Date (or, in
relation to Housing Loans assigned to the Issuer Trustee from the assets of
another Seller Trust, 120 days after the date on which those Housing Loans were
first sold by Westpac to the Issuer Trustee in its capacity as trustee of other
Seller Trusts) and which breach was not remedied within that period (see
"WESTPAC RESIDENTIAL LOAN PROGRAM--Eligibility Criteria"); or
(2) a repurchase of a Housing Loan in accordance with Westpac's right of
first refusal,
then Westpac will be entitled to the benefit of the Mortgage Pool Insurance
Policy in so far as it applies to that Housing Loan.
REFUSAL OR REDUCTION IN CLAIM
The amount of a claim may be reduced or cancelled by HLIC in the following
circumstances:
(i) any premium is not paid within twenty-eight days of the due date
therefor;
(ii) the Housing Loan contract for the relevant Mortgaged Property does
not require the Mortgaged Property to be insured under a general insurance
policy;
(iii) there ceases to be a Servicer approved by HLIC to service the
Housing Loans for the Issuer Trustee;
(iv) a claim is not lodged within twenty-eight days of the relevant Loss
Date;
(v) there is any representation or statement (deemed or otherwise) in a
proposal for a Mortgage Pool Insurance Policy that is incorrect or the duty
of disclosure under the Mortgage Pool Insurance Policy is breached;
(vi) the Issuer Trustee or the Servicer does not comply with the
reporting obligations under the Mortgage Pool Insurance Policy;
(vii) the relevant Mortgage has not been duly registered with the land
titles office in the jurisdiction where the related Mortgaged Property is
located; and
(viii) the Housing Loan contract, the Mortgage or any collateral security
for the relevant Mortgaged Property has not been duly stamped in each
relevant jurisdiction.
Under the Servicing Agreement, the Servicer undertakes to perform (and
indemnifies the Issuer Trustee against) certain obligations of the Issuer
Trustee, including the Issuer Trustee's duties of disclosure and its reporting
obligations under the Mortgage Pool Insurance Policy. See "--Servicer
Undertakings with Respect to Insurance Policies". This arrangement is
acknowledged in the Mortgage Pool Insurance Policy.
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<PAGE>
Circumstances in which claims under the Mortgage Pool Insurance Policy may
be reduced or cancelled also include the following events occurring in relation
to the Issuer Trustee without the approval of the Mortgage Insurer:
(i) the making of any additional advance (other than Redraws) upon the
security of a Mortgaged Property that ranks for payment ahead of the Housing
Loan;
(ii) materially altering the terms of a Housing Loan contract, any
related Mortgage or any collateral security other than an alteration made in
accordance with the Consumer Credit Legislation;
(iii) allowing its rights to be reduced against the Borrower, the
relevant mortgagor, any mortgage guarantor, any provider of any collateral
security or the Mortgaged Property by compromise, postponement, partial
discharge or otherwise;
(iv) approving any transfer or assignment of the Mortgaged Property
without full discharge of the Housing Loan;
(v) a violation by the Issuer Trustee of any provision of such Mortgage
Pool Insurance Policy; and
(vi) consenting to a further advance by a prior mortgagee previously
approved by HLIC upon the security of an approved prior mortgage.
EXCLUSIONS
The Mortgage Pool Insurance Policy does not cover any loss arising from: (i)
any war or warlike activities; (ii) nuclear contamination; (iii) the existence
or escape of any pollution or environmentally hazardous material; (iv) the fact
that the Housing Loan contract, the relevant Mortgage or any collateral security
is void or unenforceable; or (v) where the Consumer Credit Legislation applies,
any failure of the Housing Loan contract, the relevant Mortgage or any
collateral security to comply with the requirements of the Consumer Credit
Legislation. See "CERTAIN LEGAL ASPECTS OF THE HOUSING LOANS-- Consumer Credit
Legislation."
CLAIMS
A claim may only be made under the Mortgage Pool Insurance Policy following
the Loss Date for the relevant Mortgage. If a Housing Loan has been in default
for at least 6 months HLIC may in its absolute discretion pay the claim for the
loss even if the Loss Date has not occurred. Claims are payable within 14 days
of receipt by HLIC of the completed claim form.
HLIC may, as a condition to payment of a claim, require an assignment to it
by the Issuer Trustee (at the Issuer Trustee's expense) of rights against the
Borrower or any mortgagor or require the Issuer Trustee to take action, or
empower HLIC to take action, in relation to the relevant Housing Loan or related
Mortgage.
VARIATIONS
HLIC may not vary the Mortgage Pool Insurance Policy for any Housing Loan
except where the variation is generally applied to all insured customers of the
same type in relation to the same type of insurance and where the variation is
necessitated to ensure that, as a consequence of a change in law after the date
of the Mortgage Pool Insurance Policy, HLIC is not in breach of the law.
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<PAGE>
HOUSING LOAN INSURANCE CORPORATION LTD (HLIC)
HLIC was established in 1965 by the Commonwealth Government of Australia
("Government") and is Australia's leading lenders' mortgage insurer ("LMI") with
approximately 50% of the Australian LMI market. In December 1997, the Government
sold HLIC to GE Capital Australia ("GECA") which is a wholly owned subsidiary of
GE Capital Services Inc. ("GE").
GE is a diversified industrial and financial services company with
operations in over 100 countries. It is rated AAA by Standard & Poor's, Aaa by
Moody's and AAA by Fitch. It has significant LMI business around the world,
operating in the United States, United Kingdom, Canada and now Australia and has
over US$165 billion of loans insured globally.
HLIC has been given a AAA claims paying rating in its own right by Standard
& Poor's, a Aa1 rating by Moody's and a AAA rating by Fitch. Loans insured prior
to the sale to GECA will also have the benefit of a guarantee by the Government.
That proportion that has the benefit of the Government guarantee is $472,015,286
as of the Cut-Off Date.
PRIMARY MORTGAGE INSURANCE POLICIES
GENERAL
Each Borrower under a Housing Loan which had an LVR of greater than 80% at
the date of origination (or a lower LVR where required by Westpac's standard
credit policy) was required to effect a mortgage insurance policy with either
Royal & Sun, MGICA, WLMI or HLIC (a "PMI Policy"). Westpac is required to
equitably assign its interest in each PMI Policy to the Issuer Trustee on the
Closing Date. The consent of Royal & Sun, MGICA, WLMI and HLIC is required for
the assignment of the relevant Mortgages and the PMI Policies, and for the
Servicer to service the insured Housing Loans. Westpac must ensure that these
consents are obtained on or prior to the Closing Date.
RESTRICTIONS AND CANCELLATION
The amount recoverable under each PMI Policy will generally be the amount
owing in relation to the relevant Mortgage (including unpaid principal, accrued
interest at any non-default rate, proper tax and reasonable enforcement costs
(subject in certain instances to insurer's consent)) less all amounts recovered
from enforcement of the Mortgage. However, there are a number of requirements
and restrictions imposed on the insured under each PMI Policy which may entitle
the Mortgage Insurer to cancel the PMI Policy or reduce the amount of a claim;
including:
(1) the existence of an encumbrance or other interest which affects or
has priority over the Mortgage;
(2) the relevant Mortgage, or a guarantee or indemnity relating to the
Mortgage, ceasing to be effective;
(3) that there is a material omission or misstatement by the insured in
relation to the PMI Policy;
(4) that any premium is not paid when due or within the relevant grace
period (if any);
(5) termination by the insurer upon the giving of a set period of
notice;
(6) a breach by the insured of the PMI Policy; and
(7) certain circumstances which affect the insured's rights or
recoveries under the relevant Housing Loan or Mortgage.
Each PMI Policy has different provisions. The above is a summary of certain
provisions--some may not relate to, or may differ from, a particular PMI Policy.
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<PAGE>
SERVICER UNDERTAKINGS WITH RESPECT TO INSURANCE POLICIES
Under the Servicing Agreement, the Servicer undertakes to:
(1) act in accordance with the terms of any Mortgage Insurance Policy;
(2) not do anything that would prejudicially affect the rights of the
Issuer Trustee under a Mortgage Insurance Policy; and
(3) promptly make claims and notify the Trust Manager when claims are
made.
DESCRIPTION OF ROYAL & SUN, MGICA AND WLMI
The Royal & Sun Alliance Group entered into the lenders mortgage insurance
market in Australia in 1989. Royal & Sun's Mortgage Insurance Division operates
as one of the major divisions of the Royal & Sun Alliance Group. Royal & Sun is
a subsidiary of Royal & Sun Alliance Insurance Australia Limited, which is one
of the five largest insurers in Australia with premium revenue of some A$1.1
billion, assets in excess of A$1.8 billion and a net asset position at December
31, 1997 of over A$373 million. Royal & Sun Alliance Lenders Mortgage Insurance
Limited is rated AA- by Standard & Poor's for its claim paying ability and A2 by
Moody's for its claim paying ability, and is owned by the Royal & Sun Alliance
group. Under a deed of indemnity, Royal & Sun is explicitly indemnified for
past, present and future obligations arising from insurance contracts net of
reinsurance by the Australian holding company for the group, Royal & Sun
Alliance Insurance Australia Holdings Limited. The business address of Royal &
Sun is Level 9, 465 Victoria Avenue, Chatswood, New South Wales, Australia.
MGICA has been operating in the Australian housing market since 1965 and is
a specialist insurer of residential mortgage loans. MGICA is owned and
explicitly supported by, AMP Limited ("AMP"), Australia's largest insurance
company. MGICA is rated AA- by Standard & Poor's for its claim paying ability
and A1 by Moody's for its claims paying ability. MGICA is strongly capitalized
after receiving an injection of A$50 million of capital from its parent, AMP, in
1995. Moody's indicates the geographic diversity of MGICA's insurance risk
profile is good and underwriting standards are considered appropriately
conservative. The business address of MGICA is Level 23 AMP Centre, 50 Bridge
Street, Sydney, New South Wales, Australia.
WLMI is an unrated insurance company authorized under the Insurance Act 1973
to carry on insurance business in Australia. WLMI is a wholly owned subsidiary
of Westpac Insurance Services (Brokers) Limited. The ultimate parent entity is
Westpac Banking Corporation. Under a Management Agreement and Quota Share
Reinsurance Agreement between WLMI and Royal & Sun Alliance Lenders Mortgage
Insurance Limited both dated August 27, 1996 Royal & Sun agrees to provide
management and administration services to WLMI and accepts 65% of the obligation
on each and every policy issued by WLMI. WLMI retains the remaining 35% of the
obligation. Under a Deed of Guarantee, Royal & Sun will unconditionally and
irrevocably guarantee the obligations of WLMI arising under policies issued by
WLMI prior to the termination of the deed, and to the extent that those
obligations are not recovered or met by contracts of reinsurance. The business
address of WLMI is 50 Pitt Street, Sydney, New South Wales, Australia.
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PREPAYMENT AND YIELD CONSIDERATIONS
The following information is given solely to illustrate the effect of
prepayments of the Housing Loans on the weighted average life of the Offered
Notes under the stated assumptions and is not a prediction of the prepayment
rate that might actually be experienced by the Housing Loans.
GENERAL
The rate of principal payments on the Offered Notes, the aggregate amount of
distributions on the Offered Notes and the yield to maturity of the Offered
Notes will be related to the rate and timing of payments of principal on the
Housing Loans. The rate of principal payments on the Housing Loans will in turn
be affected by the amortization schedules of the Housing Loans and by the rate
of principal prepayments (including for this purpose prepayments resulting from
refinancing, liquidations of the Housing Loans due to defaults, casualties,
condemnations and repurchases by an Approved Seller). The Housing Loans may be
prepaid by the Mortgagors at any time (subject, in the case of fixed rate
Housing Loans, to the payment of any applicable fees).
PREPAYMENTS
Prepayments, liquidations and purchases of the Housing Loans (including
optional purchase of the remaining Housing Loans in connection with the
termination of the Trust) will result in distributions on the Offered Notes of
principal amounts which would otherwise be distributed over the remaining terms
of such Housing Loans. Since the rate of payment of principal of the Housing
Loans will depend on future events and a variety of factors, no assurance can be
given as to such rate or the rate of principal prepayments. The extent to which
the yield to maturity of any Offered Note may vary from the anticipated yield
will depend upon the degree to which an Offered Note is purchased at a discount
or premium, and the degree to which the timing of payments thereon is sensitive
to prepayments, liquidations and purchases of such Housing Loans. The rate of
prepayment on the Housing Loans cannot be predicted. The prepayment experience
of the Trust with respect to the Housing Loans may be affected by a wide variety
of factors, including economic conditions, the availability of alternative
financing and homeowner mobility.
WEIGHTED AVERAGE LIVES
Generally, greater than anticipated prepayments of principal will increase
the yield on Offered Notes purchased at a price less than par and will decrease
the yield on Offered Notes purchased at a price greater than par. The effect on
an investor's yield due to principal prepayments on the Housing Loans occurring
at a rate that is faster (or slower) than the rate anticipated by the investor
in the period immediately following the issuance of the Offered Notes will not
be entirely offset by a subsequent like reduction (or increase) in the rate of
principal payments. The weighted average life of the Offered Notes will also be
affected by the amount and timing of delinquencies and defaults on the Housing
Loans and the recoveries, if any, on defaulted Housing Loans and foreclosed
properties.
The "weighted average life" of a note refers to the average amount of time
that will elapse from the date of issuance of the note to the date each dollar
in respect of principal repayable under such note is reduced to zero. The
weighted average life of the Offered Notes will be influenced by, among other
factors, the rate at which principal payments are made on the Housing Loans.
The following tables are based on a constant prepayment rate model ("CPR").
CPR represents an assumed constant rate of prepayment each month, expressed as a
per annum percentage of the principal balance of the pool of mortgage loans for
that month. CPR does not purport to be a historical description of prepayment
experience or a prediction of the anticipated rate of prepayment of any pool of
housing loans, including the Housing Loans. None of the Approved Sellers, the
Trust Manager nor the Issuer Trustee believes that any existing statistics of
which it is aware provide a reliable basis for holders of Offered Notes to
predict the amount or the timing of receipt of prepayments on the Housing Loans.
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Since the following tables were prepared on the basis of the assumptions in
the following paragraph, there are discrepancies between characteristics of the
actual Housing Loans and the characteristics of the Housing Loans assumed in
preparing the tables. Any such discrepancy may have an effect upon the
percentages of the principal balances outstanding and weighted average lives of
the Offered Notes set forth in the tables. In addition, since the actual Housing
Loans in the Trust have characteristics which differ from those assumed in
preparing the tables set forth below, the distributions of principal on the
Offered Notes may be made earlier or later than as indicated in the tables.
For the purpose of the tables below, it is assumed that: (i) the Closing
Date for the Offered Notes is June 9, 1998, (ii) payments on the Offered Notes
are made on the 19th day of each Quarter regardless of the day on which the
Payment Date actually occurs, commencing in July 1998 and are made in accordance
with the priorities described herein, (iii) the scheduled monthly payments of
principal and interest on the Housing Loans will be timely delivered on the
first day of each month commencing in July 1998 (with no defaults), (iv) all
prepayments are prepayments in full received on the last day of each month and
include 30 days' interest thereon, (v) Principal Collections are distributed
according to the rules of distribution set forth in "DESCRIPTION OF THE OFFERED
NOTES--Payments of Principal on the Notes"; and (vi) no optional termination is
exercised. The preceding clauses are the assumptions used in preparing the
following tables and are not necessarily expected to be predictive of the
Mortgage Pool's actual performance.
It is not likely that the Housing Loans will pay at any assumed CPR to
maturity or that all Housing Loans will prepay at the same rate. The assumed CPR
for this transaction is 22.5%. In addition, the diverse remaining terms to
maturity of the Housing Loans (which include recently originated Housing Loans)
could produce slower distributions of principal than as indicated in the tables
at the assumed CPRs specified, even if the weighted average remaining term to
maturity of the Housing Loans is the same as the weighted average remaining term
to maturity of the assumptions described above. Investors are urged to make
their investment decisions on a basis that includes their determination as to
anticipated prepayment rates under a variety of the assumptions discussed herein
as well as other relevant assumptions.
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PERCENT OF ORIGINAL INVESTED AMOUNT OUTSTANDING AT THE FOLLOWING PERCENTAGES OF
CPR(1)
<TABLE>
<CAPTION>
CLASS A NOTES: US$
---------------------------------------------------------------------------
DATE 0% 10% 15% 20% 22.5% 25% 35% 45%
- -------------------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percent............................. 100 100 100 100 100 100 100 100
April 19, 1999.............................. 98 90 86 81 79 77 68 59
April 19, 2000.............................. 97 79 71 63 60 56 43 31
April 19, 2001.............................. 95 70 59 49 45 41 27 16
April 19, 2002.............................. 92 61 48 38 34 30 17 9
April 19, 2003.............................. 90 53 40 30 26 22 11 4
April 19, 2004.............................. 88 46 33 23 19 16 7 2
April 19, 2005.............................. 85 40 27 18 15 12 4 1
April 19, 2006.............................. 82 35 23 14 11 8 2 0
April 19, 2007.............................. 79 31 18 11 8 6 1 0
April 19, 2008.............................. 76 26 15 8 6 4 1 0
April 19, 2009.............................. 72 23 12 6 4 3 0 0
April 19, 2010.............................. 69 19 10 5 3 2 0 0
April 19, 2011.............................. 65 17 8 3 2 1 0 0
April 19, 2012.............................. 60 14 6 2 1 1 0 0
April 19, 2013.............................. 56 12 5 2 1 0 0 0
April 19, 2014.............................. 51 10 4 1 0 0 0 0
April 19, 2015.............................. 46 8 3 1 0 0 0 0
April 19, 2016.............................. 41 6 2 0 0 0 0 0
April 19, 2017.............................. 35 5 1 0 0 0 0 0
April 19, 2018.............................. 29 3 1 0 0 0 0 0
April 19, 2019.............................. 23 2 0 0 0 0 0 0
April 19, 2020.............................. 16 1 0 0 0 0 0 0
April 19, 2021.............................. 9 0 0 0 0 0 0 0
April 19, 2022.............................. 1 0 0 0 0 0 0 0
April 19, 2023.............................. 0 0 0 0 0 0 0 0
Weighted Average Life(2)--
To Maturity (Years)....................... 15.045 6.997 5.208 4.048 3.623 3.263 2.281 1.693
To Call (Years)........................... 14.981 6.682 4.878 3.750 3.348 3.021 2.119 1.573
</TABLE>
- ------------------------
(1) The percentages in this table have been rounded to the nearest whole number.
(2) The weighted average life of a Class is determined by (a) multiplying the
amount of each payment of principal thereof by the number of years from the
date of issuance to the related Payment Date, (b) summing the results and
(c) dividing the sum by the aggregate distributions of principal referred to
in clause (a) and rounding to three decimal places.
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PERCENT OF ORIGINAL INVESTED AMOUNT OUTSTANDING AT THE FOLLOWING PERCENTAGES OF
CPR(1)
<TABLE>
<CAPTION>
CLASS B NOTES: $
---------------------------------------------------------------------------
DATE 0% 10% 15% 20% 22.5% 25% 35% 45%
- ------------------------------------------ --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percent........................... 100 100 100 100 100 100 100 100
April 19, 1999............................ 100 100 100 100 100 100 100 100
April 19, 2000............................ 100 100 100 100 100 100 95 86
April 19, 2001............................ 100 100 100 100 97 93 76 64
April 19, 2002............................ 100 100 100 83 73 68 48 34
April 19, 2003............................ 100 100 83 65 55 50 31 34
April 19, 2004............................ 100 97 69 50 42 36 24 34
April 19, 2005............................ 100 84 57 39 31 26 24 34
April 19, 2006............................ 100 74 47 30 24 21 24 33
April 19, 2007............................ 100 64 38 23 20 21 24 18
April 19, 2008............................ 100 55 31 21 20 21 24 9
April 19, 2009............................ 100 47 25 21 20 21 24 5
April 19, 2010............................ 100 41 20 21 20 21 18 3
April 19, 2011............................ 100 34 19 21 20 21 11 1
April 19, 2012............................ 100 29 19 21 20 21 7 1
April 19, 2013............................ 100 24 19 21 20 21 4 0
April 19, 2014............................ 100 20 19 21 20 21 2 0
April 19, 2015............................ 95 20 19 21 20 16 1 0
April 19, 2016............................ 84 20 19 21 19 11 1 0
April 19, 2017............................ 73 20 19 21 13 7 0 0
April 19, 2018............................ 61 20 19 16 8 4 0 0
April 19, 2019............................ 47 20 19 10 5 3 0 0
April 19, 2020............................ 34 20 19 6 3 1 0 0
April 19, 2021............................ 19 20 10 2 1 1 0 0
April 19, 2022............................ 19 5 1 0 0 0 0 0
April 19, 2023............................ 0 0 0 0 0 0 0 0
Weighted Average Life(2)--
To Maturity (Years)..................... 20.738 12.662 10.208 8.795 8.022 7.511 5.898 5.070
To Call (Years)......................... 20.505 11.063 8.093 6.376 5.669 5.237 3.937 3.132
</TABLE>
- ------------------------
(1) The percentages in this table have been rounded to the nearest whole number.
(2) The weighted average life of a Class is determined by (a) multiplying the
amount of each payment of principal thereof by the number of years from the
date of issuance to the related Payment Date, (b) summing the results and
(c) dividing the sum by the aggregate distributions of principal referred to
in clause (a) and rounding to three decimal places.
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DESCRIPTION OF THE OFFERED NOTES
GENERAL
The Notes will be issued pursuant to the terms of the Transaction Documents.
The following section contains summaries of the material terms of the
Transaction Documents. The summaries do not purport to be complete and are
subject to the provisions of the Transaction Documents. A copy of the Master
Trust Deed, and a form of each of the Series Notice, the Note Trust Deed and the
Security Trust Deed has been filed with the Commission as an Exhibit to the
Registration Statement of which this Prospectus is a part.
Pursuant to the Transaction Documents, on the Closing Date the Issuer
Trustee will issue two classes of notes (the "Offered Notes"), consisting of one
class of senior notes, designated as the Class A Mortgage Backed Floating Rate
Notes due July 19, 2029, in the original principal amount of US$1,372,700,000
(the "Class A Notes") and one class of subordinated notes, designated as the
Class B Mortgage Backed Floating Rate Notes, due July 19, 2029, in the original
principal amount of US$32,300,000 (the "Class B Notes"). In addition to the
Class A Notes and the Class B Notes, the Issuer Trustee may from time to time
issue RFSs, which may convert to RFS Class A Notes in certain circumstances. The
Offered Notes, the RFSs and the RFS Class A Notes are referred to herein as the
"Notes." See "--Description of the Redraw Facility, the Redraw Funding
Securities and the RFS Class A Notes" herein.
Payments on the Offered Notes will be made by the Principal Paying Agent on
each Payment Date to persons in whose names the Notes are registered as of the
related Record Date (the "Holders" or "Offered Noteholders"). The Payment Date
for the Notes will be the 19th day of each Quarter. A "Quarter" is each
three-month period in a year which period begins on July 1, October 1, January 1
and April 1. If any Payment Date would otherwise fall on a day which is not a
Business Day, it shall be postponed to the next day which is a Business Day
unless it would thereby fall into the next calendar month in which event it
shall be brought forward to the immediately preceding Business Day. The first
Payment Date will be July 20, 1998 in respect of the period from (and including)
the Closing Date to (but excluding) that date. The Record Date for any Payment
Date will be the second Business Day immediately preceding the Payment Date (so
long as the Offered Notes are held in book-entry form), or the last day of the
prior calendar month (if Definitive Notes have been issued).
A "Business Day" means (1) in relation to the Note Trust Deed, the Agency
Agreement and any Note, any day, other than a Saturday, Sunday or public
holiday, on which banks are open for business in Sydney, London and New York
City; (2) in relation to US$ payments under a Currency Swap, any day, other than
a Saturday, Sunday or public holiday, on which banks are open for business in
London and New York City; and (3) in relation to A$ payments under the Currency
Swap and any other Transaction Document, any day, other than a Saturday, Sunday
or public holiday, on which banks are open for business in Sydney. If a public
holiday is occurring in any of the referenced locales, then such day is not a
Business Day, and no scheduled payments will be made on such day.
A "Collection Period" commences on and includes the 10th day of each Quarter
and runs until (and includes) the 9th day of the following Quarter with the
exception of the first Collection Period, which will commence on (and include)
the day after the Cut-Off Date and end on (and include) July 9, 1998. The last
Collection Period is the period from the last day of the previous Collection
Period to the Termination Date of the Trust.
The first Interest Period in relation to the Notes commences on (and
includes) the Closing Date and ends on (but excludes) the first Payment Date
(being July 20, 1998). Each succeeding Interest Period, commences on (and
includes) a Payment Date and ends on (but excludes) the next Payment Date. The
final Interest Period ends on (but excludes) the Maturity Date.
For any Interest Period other than the initial Interest Period, the
"Interest Determination Date" is the second Business Day prior to the
commencement of that Interest Period. The first Interest Determination Date,
which relates to the Interest Period beginning July 20, 1998, is July 16, 1998.
The "Collection
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<PAGE>
Determination Date" is four Business Days prior to each Payment Date with the
exception of the first Collection Determination Date, which will be July 9,
1998.
Each Class of Offered Notes initially will be represented by one or more
global notes (the "Book-Entry Notes") registered in the name of the nominee of
DTC (together with any successor depository, the "Depository"), except as set
forth below. Beneficial interests in each Class of Offered Notes will be
available for purchase in minimum denominations of US$100,000. The Issuer
Trustee has been informed by DTC that DTC's nominee will be Cede & Co.
Accordingly, Cede & Co. is expected to be the Noteholder of record of the
Offered Notes. Unless and until Definitive Notes are issued under the limited
circumstances described herein, no Note Owner (as defined herein) acquiring an
interest in any Class of Offered Notes will be entitled to receive a certificate
representing such Note Owner's interest in such Notes. Until such time, all
references herein to actions by Noteholders of any Class of Offered Notes will
refer to actions taken by the Depository upon instructions from its
participating organizations and all references herein to distributions, notices,
reports and statements to Noteholders of any Class of Offered Notes will refer
to distributions, notices, reports and statements to the Depository or its
nominee, as the registered Noteholder of such Class, for distribution to Note
Owners of such Class in accordance with the Depository's procedures. See
"--Book-Entry Registration" and "--Definitive Notes."
The Issuer Trustee will maintain a Paying Agent in London until the date the
Offered Notes are redeemed.
COLLECTIONS AND PAYMENT
With respect to each Collection Period and on or prior to the Collection
Determination Date, the Trust Manager will determine the Collections (as defined
below) received and reconcile such receipts against expenses, including Interest
payable to Noteholders, that have accrued during such Collection Period. To the
extent necessary, the Trust Manager must direct the Issuer Trustee to draw on or
claim against the Liquidity Facility where available to make up shortfalls in
Collections. Various amounts will also be swapped under the Swap Agreements.
On the Collection Determination Date, the Trust Manager shall advise the
Issuer Trustee of the amounts to be paid. The Issuer Trustee will arrange for
the relevant payments to occur on the Payment Date.
Set out below is an example of relevant dates and periods for the allocation
of cashflows and their payments. All dates are assumed to be Business Days.
<TABLE>
<S> <C>
Collection Period 10th April to (and including) 9th
July
Collection Determination Date 15th July
Remittance Date 17th July
Interest Determination Date 17th July
Notice Date 18th July
Payment Date 19th July
Interest Period 19th April to (but excluding) 19th
July
</TABLE>
COLLECTIONS
With respect to any Collection Period, "Collections" shall consist of
interest and principal receipts from the Housing Loans, the proceeds of
enforcement of Mortgages, the proceeds of claims under Mortgage Insurance
Policies and payments by the Approved Sellers or the Servicer in respect of
breaches of representations or warranties with respect to the Housing Loans.
Westpac or the Servicer, as a delegate
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of Westpac under the Servicing Agreement, will receive the Collections in
respect of the Housing Loans in the Mortgage Pool.
So long as both (a) Westpac has a short term rating of at least A-1+ from
Standard & Poor's, P-1 from Moody's and F-1+ from Fitch and (b) the Collections
Account is maintained with Westpac or a subsidiary of Westpac, each of Westpac
and the Servicer shall deposit the amount equal to the Collections it receives
during the related Collection Period into the relevant Collections Account two
Business Days prior to the relevant Payment Date (the "Remittance Date")
together with an amount equivalent to the interest that would have accrued at
the Bank Bill Rate on such amounts if such receipts had been deposited into the
Collections Account five Business Days following receipt by Westpac or the
Servicer (less any relevant tax).
If Westpac has a short term rating of less than A-1+ from Standard & Poor's,
less than P-1 from Moody's or less than F-1+ from Fitch, then Westpac and the
Servicer shall pay all Collections in its possession or control into the
Collections Account no later than five Business Days following receipt.
Notwithstanding the foregoing, the Collections Account may continue to be
maintained with Westpac for so long as it is an Approved Bank. An "Approved
Bank" means: (a) a bank which has a short term rating of at least A-1+ from
Standard & Poor's, P-1 from Moody's and F-1+ from Fitch; or (b) any bank or
financial institution which is specified to be an Approved Bank in the Series
Notice, but means Westpac for so long as it has a short term rating of A-1 or
better from Standard & Poor's, P-1 or better from Moody's and F-1 or better from
Fitch.
If, however, the Collections Account is not maintained with Westpac, or a
subsidiary of Westpac, all Collections in relation to the Trust must be
deposited into the Collections Account no later than two Business Days following
receipt thereof by Westpac or the Servicer (as the case may be).
CALCULATION OF TOTAL AVAILABLE FUNDS
On each Collection Determination Date the Trust Manager will, for the
immediately preceding Collection Period, calculate the total of the Available
Income, plus Principal Draws, plus Liquidity Draws (the sum of such amounts, the
"Total Available Funds"), all as further described below.
AVAILABLE INCOME
"Available Income" for a Collection Period equals the aggregate of:
(1) Finance Charge Collections;
plus to the extent not included in paragraph (1):
(2) any amount received or due to be received by or on behalf of the
Issuer Trustee with respect to net receipts under any Swap Agreement (other
than the Currency Swaps);
(3) any amount received by or on behalf of the Issuer Trustee under any
Support Facility (other than the Currency Swaps), including under a Mortgage
Insurance Policy, which the Trust Manager determines should be accounted for
to reduce a Finance Charge Loss;
(4) any interest income received by or on behalf of the Issuer Trustee
in respect of moneys credited to the Collections Account in relation to the
Trust;
(5) amounts in the nature of interest otherwise paid by Westpac, the
Servicer or the Trust Manager to the Issuer Trustee in respect of
Collections held by it;
(6) any net amount attributable to income from another WST trust
established under the Master Trust Deed with respect to the substitution of
a Housing Loan ("Substitution Net Transfer Amount (Income)"); and
(7) all other amounts received by or on behalf of the Issuer Trustee in
respect of the Trust assets in the nature of income,
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excluding
(8) any interest credited to a Collateral Account for a Support
Facility; and
(9) any amount received by the Issuer Trustee on entry into a
replacement Currency Swaps which is payable to the prior Currency Swap
Providers.
"Finance Charge Collections" shall equal:
(1) all amounts received by or on behalf of the Issuer Trustee in
respect of interest, fees and other income payable under Housing Loans in
the Mortgage Pool, including:
(i) Liquidation Proceeds received on account of interest;
(ii) any payments by Westpac to the Issuer Trustee on the repurchase of
a Housing Loan which are attributable to interest;
(iii) any interest adjustments received by the Trust in relation to the
transfer of Housing Loans or related Mortgages from the Trust to
another WST trust; and
(iv) the Prepayment Cost Surplus for that Collection Period (if any);
and
(2) all amounts in respect of interest, fees and other amounts in the
nature of income, received by or on behalf of the Issuer Trustee during that
Collection Period including:
(i) from an Approved Seller or the Servicer in respect of any breach of
a representation, warranty or undertaking contained in the Master
Trust Deed, Servicing Agreement or Series Notice;
(ii) from an Approved Seller or the Servicer under any obligation under
the Master Trust Deed, Servicing Agreement or Series Notice to
indemnify or reimburse or pay damages to the Issuer Trustee for any
amount, in each case which are determined by the Trust Manager to
be in respect of interest; and
(3) any amount received in respect of a Housing Loan in the Mortgage
Pool, or a related Mortgage, after a Finance Charge Loss has occurred, which
has not been received under a Mortgage Insurance Policy and which is not
payable to an insurer under a Mortgage Insurance Policy; less
(4) any amount debited in respect of the Housing Loans in the Mortgage
Pool representing government charges collected by or on behalf of the Issuer
Trustee, financial institutions duty, bank accounts debit tax or similar
taxes and fees or charges due to the Servicer or Westpac under the Housing
Loans and the Prepayment Cost Surplus due to Westpac and collected by
Westpac or the Servicer.
With respect to any Housing Loan, a "Finance Charge Loss" means Liquidation
Losses which are attributable to interest, fees and expenses in relation to the
relevant Housing Loan, including on the early discharge of Housing Loans which
bear a fixed rate of interest (other than a Housing Loan subject to an
introductory rate of interest for 12 months or less) the amount, if any, owed by
the relevant Borrower in accordance with the Relevant Documents. With respect to
any Housing Loan, "Liquidation Losses" for a Collection Period, means the amount
(if any) by which the Unpaid Balance of a Housing Loan (together with the
enforcement expenses relating to the Housing Loan and the related Mortgage)
exceeds the Liquidation Proceeds in relation to the Housing Loan. "Liquidation
Proceeds" means all amounts recovered from the enforcement of a Mortgage
(excluding proceeds of a Mortgage Insurance Policy).
With respect to any Housing Loan, a "Prepayment Cost Surplus" means, in
relation to a Collection Period, the amount by which the total of all Prepayment
Costs (as defined below) for that Collection Period exceeds the total of all
Prepayment Benefits (as defined herein) for that Collection Period. With respect
to any Housing Loan, a "Prepayment Benefit Shortfall" means, in relation to a
Collection Period,
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the amount by which the total of all Prepayment Benefits for that Collection
Period exceeds the total of all Prepayment Costs for that Collection Period.
With respect to any Housing Loan which is a Fixed Option Home Loan or
otherwise bears a fixed rate of interest (other than a Housing Loan subject to
an introductory rate of interest for 12 months or less), "Prepayment Cost"
means, on the early discharge of such Housing Loan, the amount (if any) owed by
the relevant Borrower and collected by Westpac or the Servicer, in accordance
with the relevant Housing Loan agreement with respect to such early discharge.
With respect to any Housing Loan which is a Fixed Option Home Loan or otherwise
bears a fixed rate of interest (other than a Housing Loan subject to an
introductory rate of interest for 12 months or less), a "Prepayment Benefit"
means, on the early discharge of such Housing Loan, the amount (if any) credited
to the relevant Borrower's loan account by Westpac by means of a reduction in
the Housing Loan Principal of that Housing Loan, in accordance with the relevant
Housing Loan agreement.
With respect to a Collection Period and any Housing Loan, "Principal Loss"
means the amount of any Liquidation Loss for that Collection Period which is
attributable to principal in relation to the relevant Housing Loan.
PRINCIPAL DRAWS
If the Trust Manager determines on any Collection Determination Date that
the Available Income of the Trust for the Collection Period ending immediately
prior to that Collection Determination Date is insufficient to meet Total
Payments (as defined herein under "--Distribution of Total Available Funds") of
the Trust for that Collection Period (a "Payment Shortfall"), then Principal
Collections collected during that Collection Period will be applied to the
Payment Shortfall (a "Principal Draw") to the extent available for this purpose.
Principal Draws will be reimbursed out of any Excess Available Income
available for this purpose on subsequent Payment Dates.
LIQUIDITY DRAWS
If, on any Collection Determination Date, the Trust Manager determines that
the related Payment Shortfall, if any, will not be covered fully by a Principal
Draw, the Trust Manager must direct the Issuer Trustee to draw on the Liquidity
Facility in an amount equal to the lesser of the remaining Payment Shortfall or
the Available Liquidity Amount. Any direction by the Trust Manager to the Issuer
Trustee to draw on the Liquidity Facility is subject to there being available
funds under the Liquidity Facility.
REMAINING LIQUIDITY SHORTFALL
If the amount available to be drawn under the Liquidity Facility is not
sufficient to satisfy the remaining Payment Shortfall in full, the amount of
such shortfall will be a "Remaining Liquidity Shortfall." If the Trust Manager
determines that a Remaining Liquidity Shortfall exists, then the Trust Manager
must reduce the Interest payable in respect of the Notes as follows:
(1) first, reduce the A$ Class B Interest Amount payable to the Currency
Swap Provider under the swap confirmation relating to the Class B Notes;
(2) second, if the A$ Class B Interest Amount has been reduced to zero,
any excess Remaining Liquidity Shortfall shall reduce PRO RATA, based on
their applicable entitlements:
(i) the A$ Class A Interest Amount payable to the Currency Swap
Providers under the swap confirmation relating to the Class A Notes;
(ii) the RFS Interest for all RFSs (if any);
(iii) interest payable for all RFS Class A Notes (if any); and
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(iv) any fee payable by the Issuer Trustee under the Redraw Facility.
If there is a reduction in the A$ Class B Interest Amount under (1) above,
the Interest entitlement of the Class B Noteholders shall be reduced by the same
proportion as the reduction in the A$ Class B Interest Amount. If there is a
reduction in the A$ Class A Interest Amount under (2)(i) above, the Interest
entitlement of the Class A Noteholders shall be reduced by the same proportion
as the reduction in the A$ Class A Interest Amount.
With respect to any Payment Date, the "A$ Class A Interest Amount" means the
amount in A$ which is calculated:
(1) on a daily basis at the applicable rate set out in the swap
confirmation relating to the Class A Notes (being AUD- BBR-BBSW, as defined
in the ISDA Definitions, as at the first day of the Interest Period ending
on (but excluding) that Payment Date with a designated maturity of 90 days
plus the spread set out in the Currency Swaps);
(2) on the A$ Equivalent (with respect to an amount denominated or to be
denominated in U.S. dollars, the amount converted to (and denominated in)
Australian dollars at the applicable exchange rate set forth in the Currency
Swaps) of the aggregate of the Invested Amount of the Class A Notes as at
the first day of the Interest Period ending on (but excluding) that Payment
Date; and
(3) on the basis of the actual number of days in that Interest Period
and a year of 365 days.
With respect to any Payment Date, the "A$ Class B Interest Amount" means,
for any Payment Date, the amount in A$ which is calculated:
(1) on a daily basis at the applicable rate set out in the swap
confirmation relating to the Class B Notes (being AUD- BBR-BBSW, as defined
in the ISDA Definitions, as at the first day of the Interest Period ending
on (but excluding) that Payment Date with a designated maturity of 90 days
plus the spread set forth in the Currency Swaps);
(2) on the A$ Equivalent of the aggregate of the Invested Amount of the
Class B Notes as at the first day of the Interest Period ending on (but
excluding) that Payment Date; and
(3) on the basis of the actual number of days in that Interest Period
and a year of 365 days.
With respect to any Payment Date, "RFS Interest" means all interest on the
outstanding RFSs in respect of an Interest Period. With respect to any Payment
Date, "RFS Class A Interest" means all interest on the outstanding RFS Class A
Notes in respect of an Interest Period.
DISTRIBUTION OF TOTAL AVAILABLE FUNDS
GENERAL
On each Payment Date, the Trust Manager shall instruct the Issuer Trustee to
apply the Total Available Funds in making the following payments in respect of
the preceding Collection Period in the following order of priority:
(1) in relation to the first Payment Date only, the Accrued Interest
Adjustment;
(2) unpaid or unreimbursed Trust Expenses;
(3) amounts payable under any Support Facility (other than the Currency
Swaps), PARI PASSU, based on their respective entitlements, including:
(i) the net amount (if any) payable by the Issuer Trustee under the
Variable Rate Basis Swap;
(ii) the net amount (if any) payable by the Issuer Trustee under each
Fixed Rate Basis Swap; and
(iii) any interest or fees payable by the Issuer Trustee under the
Liquidity Facility,
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but not including amounts due under paragraph (4), (5) or (6) below;
(4) repayment of any Liquidity Draw made on or prior to the previous
Payment Date;
(5) PARI PASSU, to each of the following, based on their respective
entitlements:
(i) any interest payable on all RFSs (if any);
(ii) the payment to the Currency Swap Providers under the swap
confirmation relating to the Class A Notes of the A$ Class A
Interest Amount at that date;
(iii) the interest payable on all RFS Class A Notes (if any); and
(iv) any fee payable by the Issuer Trustee under the Redraw Facility;
and
(6) the payment to the Currency Swap Providers under the swap
confirmation relating to the Class B Notes of the A$ Class B Interest Amount
as at that date.
The sum of paragraphs (1) to (6) above represents "Total Payments" for a
Collection Period.
The Issuer Trustee shall only make a payment described in paragraphs (1)
through (6) above to the extent that Total Available Funds remain available to
do so after each payment is made in accordance with the above priority in
accordance with the Series Notice.
TRUST EXPENSES
On each Collection Determination Date the Trust Manager will determine the
following payments to be made for the relevant Collection Period (together, the
"Trust Expenses") in the following order of priority (as between themselves) on
the next Payment Date:
(1) taxes payable in relation to the Trust;
(2) the Issuer Trustee Fee;
(3) the Trust Manager Fee;
(4) any fee payable to the Security Trustee under the Security Trust
Deed;
(5) the Servicing Fee;
(6) any fee payable to the Note Trustee under the Note Trust Deed;
(7) any fees payable to the Principal Paying Agent, the Agent Bank and
any other agents under the Agency Agreement;
(8) PARI PASSU based on their respective entitlements any costs, charges
or expenses (other than fees) incurred by, and any liabilities owing under
any indemnity granted to, the Security Trustee, the Servicer, the Note
Trustee and a Paying Agent and any other agents or the Agent Bank in
relation to the Trust under the Transaction Documents, for that Collection
Period; and
(9) PARI PASSU based on their respective entitlements any other costs,
charges or expenses incurred by the Issuer Trustee or the Trust Manager in
the administration or operation of the Trust.
CALCULATION OF INTEREST PAYABLE ON THE NOTES
The "Interest Rate" for the Class A Notes for a particular Interest Period
is equal to USD-LIBOR-BBA on the related Interest Determination Date (as defined
herein) plus %. The Interest Rate on the Class A Notes for the first Interest
Period will be equal to %. The "Interest Rate" for the Class B Notes for a
particular Interest Period is equal to USD- LIBOR-BBA on the related Interest
Determination Date plus %. The Interest Rate on the Class B Notes for the
first Interest Period will be equal to %. See "--Calculation of
USD-LIBOR-BBA" below.
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With respect to any Payment Date, interest on a Class of Notes will be
calculated as the product of (a) the Invested Amount of such Class as of the
first day of that Interest Period after giving effect to any payments of
principal made with respect to such Class on such day, (b) the Interest Rate for
such Class for that Interest Period; and (c) a fraction, the numerator of which
is the actual number of days in that Interest Period and the denominator of
which is 360 days (such product, "Interest"). No Noteholder will be entitled to
payments of Interest after the related Stated Amount is reduced to zero.
CALCULATION OF USD-LIBOR-BBA
On the second London banking day before the beginning of each Interest
Period (each an "Interest Determination Date"), the Agent Bank will determine
the "USD-LIBOR-BBA" as the applicable Floating Rate Option under the Definitions
of the International Swaps and Derivatives Association, Inc. ("ISDA") (the "ISDA
Definitions") being the rate applicable to any Interest Period for three-month
deposits in U.S. dollars which appears on the Telerate Page 3750 as of 11:00
A.M., London time, on the Interest Determination Date. If such rate does not
appear on the Telerate Page 3750, the rate for that Interest Period will be
determined as if the Issuer Trustee and Agent Bank had specified
"USD-LIBOR-Reference Banks" as the applicable Floating Rate Option under the
ISDA Definitions. "USD-LIBOR-Reference Banks" means that the rate for an
Interest Period will be determined on the basis of the rates at which deposits
in U.S. Dollars are offered by the Reference Banks (being four major banks in
the London interbank market) at approximately 11:00 A.M., London time, on the
Interest Determination Date to prime banks in the London interbank market for a
period of three months commencing on the first day of the Interest Period and in
a Representative Amount (as defined in the ISDA Definitions). The Agent Bank
will request the principal London office of each of the Reference Banks to
provide a quotation of its rate. If at least two such quotations are provided,
the rate for that Interest Period will be the arithmetic mean of the quotations.
If fewer than two quotations are provided as requested, the rate for that
Interest Period will be the arithmetic mean of the rates quoted by major banks
in New York City, selected by the Agent Bank, at approximately 11:00 A.M., New
York City time, on that Interest Determination Date for loans in U.S. dollars to
leading European banks for a period of three months commencing on the first day
of the Interest Period and in a Representative Amount, provided that on the
first day of the first Interest Period USD-LIBOR-BBA shall be an interpolated
rate calculated with reference to the period from (and including) the Closing
Date to (but excluding) the first Payment Date.
EXCESS AVAILABLE INCOME
GENERAL
On each Collection Determination Date, the Trust Manager must determine the
amount (if any) by which the Total Available Funds for the Collection Period
ending immediately prior to that Collection Determination Date exceeds the Total
Payments for that same Collection Period (such amount, the "Excess Available
Income").
DISTRIBUTION OF EXCESS AVAILABLE INCOME
On each Collection Determination Date, the Trust Manager must apply such
Excess Available Income for the Collection Period relating to that Collection
Determination Date in the following order of priority:
(1) to reimburse Principal Charge Offs for that Collection Period;
(2) PARI PASSU and rateably, based on the Stated Amount of the RFSs (if
any), the Stated Amount of the RFS Class A Notes (if any), the Principal
Outstanding under the Redraw Facility and the A$ Equivalent of the Stated
Amount of the Class A Notes:
(i) as a payment to the holders of the RFSs (if any) in or towards
reinstating the Stated Amount of such RFSs, to the extent of any
Carryover RFS Charge Offs;
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(ii) as a payment to the holders of the RFS Class A Notes (if any) in
or towards reinstating the Stated Amount of such RFS Class A Notes, to
the extent of any Carryover RFS Class A Charge Offs;
(iii) as a repayment under the Redraw Facility Agreement, as a
reduction of, and to the extent of, any Carryover Redraw Charge Offs;
(iv) as a payment to the Currency Swap Providers under the swap
confirmations relating to the Class A Notes, of the A$ Equivalent of any
Carryover Class A Charge Offs; and
(3) as a payment, denominated in A$, to the Currency Swap Providers
under the swap confirmation relating to the Class B Notes of the A$
Equivalent of any Carryover Class B Charge Offs;
(4) to all Principal Draws which have not been repaid as at that date;
and
(5) as a distribution to any Beneficiaries (an "Excess Collections
Distribution").
All amounts to be paid pursuant to paragraphs (2), (3) and (5) will be paid
on the Payment Date immediately following the Collection Determination Date.
Once distributed to a Beneficiary, an Excess Collections Distribution will
not be available to the Issuer Trustee to meet its obligations in respect of the
Trust in subsequent periods unless there has been an error in the relevant
calculation of the Excess Collections Distribution. A "Beneficiary" is any party
which holds a residual income unit in the Trust. The Issuer Trustee does not
intend and is not permitted to accumulate any surpluses.
GROSS PRINCIPAL COLLECTIONS
On each Collection Determination Date, the Trust Manager must determine
Gross Principal Collections for the Collection Period ending immediately prior
to that Collection Determination Date. With respect to any Collection
Determination Date, "Gross Principal Collections" are the sum of:
(1) all amounts received by or on behalf of the Issuer Trustee from or
on behalf of Borrowers under or in respect of the Housing Loans during the
Collection Period in respect of principal, including principal prepayments;
(2) all other amounts received under or in respect of the Housing Loans
during the Collection Period in respect of principal, including:
(i) Liquidation Proceeds received on account of principal;
(ii) any payments by Westpac to the Issuer Trustee on the repurchase
of a Housing Loan in respect of principal;
(iii) any amounts in the nature of principal received by or on behalf
of the Issuer Trustee from the sale of any Trust Asset, including any
amount received on the issue of Notes and which was not used to purchase
a Housing Loan or Mortgage and which the Trust Manager determines is
surplus to the requirements of the Trust;
(iv) any Prepayment Costs applied towards Prepayment Benefit; and
(v) any Prepayment Benefit Shortfall paid by Westpac to the Trust;
(3) all amounts received by or on behalf of the Issuer Trustee during
that Collection Period under any Support Facility (other than the Currency
Swaps) which the Trust Manager determines should be accounted for to reduce
a Principal Loss;
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(4) all amounts received by or on behalf of the Issuer Trustee during
that Collection Period:
(i) from an Approved Seller or the Servicer in respect of any breach
of a representation, warranty or undertaking contained in the Master
Trust Deed, Series Notice or Servicing Agreement determined by the Trust
Manager to be in respect of principal; and
(ii) from an Approved Seller or the Servicer under any obligation
under the Master Trust Deed, Series Notice or Servicing Agreement to
indemnify, reimburse or pay damages to the Issuer Trustee for any amount
determined by the Trust Manager to be in respect of principal;
(5) any amount of Excess Available Income to be applied to meet a
Principal Charge Off or a Carryover Charge Off;
(6) any amount received by or on behalf of the Issuer Trustee during
that Collection Period as proceeds from the issue of any RFS to the extent
not applied to reimburse amounts drawn under the Redraw Facility;
(7) any Excess Available Income to be applied to Principal Draws made on
a previous Payment Date;
(8) any Prepayment Calculation Adjustment for that Collection Period;
and
(9) any net amount attributable to principal received by the Trust from
another trust established under the Master Trust Deed with respect to any
substitution of a Housing Loan during that Collection Period ("Substitution
Net Transfer Amount (Principal)");
but excluding a premium receivable by the Issuer Trustee on entry into a
replacement Currency Swaps.
On the Closing Date, the A$ Equivalent of the total Initial Invested Amount
of the Notes issued by the Issuer Trustee may exceed the Housing Loan Principal
as of the Cut-Off Date. The amount of this difference, if any, will be treated
as a Gross Principal Collection and the US$ Equivalent will be passed through to
Noteholders on the first Payment Date.
With respect to any Collection Period and a Housing Loan, a "Prepayment
Calculation Adjustment" is any amount credited to the related Borrower by
Westpac to reflect an interest adjustment resulting from a change in computer
systems.
PRINCIPAL COLLECTIONS
On each Collection Determination Date the Trust Manager must calculate
Principal Collections for the preceding Collection Period. With respect to any
Collection Determination Date, "Principal Collections" shall be equal to:
(1) the Gross Principal Collections for that Collection Period; less
(2) any amounts deducted by or paid to Westpac to reimburse Redraws
funded by Westpac during that Collection Period for which Westpac has not
been reimbursed previously.
DISTRIBUTION OF PRINCIPAL COLLECTIONS
INITIAL PRINCIPAL DISTRIBUTIONS
On each Payment Date, Principal Collections will be distributed in the
following order of priority:
(1) to repay any Redraws provided by Westpac to the extent not
previously reimbursed;
(2) to repay any Principal Outstanding under the Redraw Facility;
(3) to allocate to Total Available Funds any Principal Draw; and
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(4) to repay all amounts outstanding under each RFS Series (if any), in
chronological order of issue, until repaid in full,
(together, "Initial Principal Distributions").
Only after Initial Principal Distributions have been distributed will
Principal Collections be available to be paid to the Currency Swap Providers to
enable the Issuer Trustee to make payments to the Class A Noteholders and the
Class B Noteholders in US$ in accordance with the appropriate principal
allocation methodology set forth below. With respect to any Payment Date, "Net
Principal Collections" shall equal the amount of Principal Collections remaining
after the distribution of Initial Principal Distributions.
PAYMENTS OF PRINCIPAL ON THE NOTES
With respect to any Collection Determination Date, the Trust Manager shall
determine the appropriate principal allocation methodology as set forth below.
On each Payment Date, the Trust Manager shall instruct the Issuer Trustee to pay
principal to the Noteholders in the manner and subject to the priority set forth
below.
SERIAL METHOD 1
If, on the related Collection Determination Date, the Serial Method 1
Distribution Test has been met, then the Issuer Trustee will pay out of any Net
Principal Collections, on the immediately following Payment Date the following
amounts in the following order of priority:
(1) first, PARI PASSU and rateably, based on their respective
entitlements:
(i) as a payment, denominated in A$, to the Currency Swap Providers
under the swap confirmations relating to the Class A Notes of an amount
equal to the lesser of:
(a) the Class A Forex Percentage of the sum of: (1) the Class A
Percentage of Net Principal Collections; and (2) 50% of the Class B
Percentage of Net Principal Collections; and
(b) the A$ Equivalent of the Class A Stated Amounts for all Class
A Notes; and
(ii) as a payment denominated in A$ to the holders of the RFS Class A
Notes (if any) of an amount equal to the lesser of:
(a) the RFS Class A Forex Percentage of the sum of: (1) the Class
A Percentage of Net Principal Collections; and (2) 50% of the Class B
Percentage of Net Principal Collections; and
(b) the RFS Class A Stated Amounts for all RFS Class A Notes (if
any); and
(2) second, as a payment, denominated in A$, to the Currency Swap
Providers under the swap confirmations relating to the Class B Notes of an
amount equal to 50% of the Class B Percentage of Net Principal Collections.
The "Serial Method 1 Distribution Test" is met if, on any Collection
Determination Date the following conditions are all satisfied:
(i) the Subordinated Percentage at the previous Collection
Determination Date was greater than or equal to twice the Initial
Subordinated Percentage;
(ii) that Collection Determination Date occurs on or before April 19,
2001;
(iii) the fraction, expressed as a percentage, the numerator of which
is the Total Invested Amount on such Collection Determination Date and
the denominator of which is the Total Initial Invested Amount, is greater
than or equal to 10%; and
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(iv) the Average Quarterly Percentage on such Collection
Determination Date:
(a) does not exceed 2% and the Total Carryover Charge Off on that
Collection Determination Date does not exceed 30% of the Class B
Initial Invested Amount; or
(b) does not exceed 4% and the Total Carryover Charge Off on such
Collection Determination Date does not exceed 10% of the Class B
Initial Invested Amount; and
(v) the Stated Amount of the Class B Notes on such Collection
Determination Date exceeds 0.25% of the sum of the Class A Initial
Invested Amount and the Class B Initial Invested Amount.
SERIAL METHOD 2
If, on the related Collection Determination Date, the Serial Method 2
Distribution Test has been met, then the Issuer Trustee will pay out of any Net
Principal Collections, on the immediately following Payment Date the following
amounts in the following order of priority:
(1) first, PARI PASSU and rateably, based on their respective
entitlements:
(i) as a payment, denominated in A$, to the Currency Swap Providers
under the swap confirmations relating to the Class A Notes of an amount
equal to the lesser of:
(a) the Class A Forex Percentage of the Class A Percentage of Net
Principal Collections; and
(b) the A$ Equivalent of the Class A Stated Amounts for all Class
A Notes; and
(ii) as a payment denominated in A$ to the holders of the RFS Class A
Notes (if any) of an amount equal to the lesser of:
(a) the RFS Class A Forex Percentage of the Class A Percentage of
Net Principal Collections; and
(b) the RFS Class A Stated Amounts for all RFS Class A Notes (if
any); and
(2) second, as a payment, denominated in A$, to the Currency Swap
Providers under the swap confirmations relating to the Class B Notes of an
amount equal to the Class B Percentage of Net Principal Collections.
The "Serial Method 2 Distribution Test" is met if, on any Collection
Determination Date the following conditions are all satisfied:
(i) the Subordinated Percentage at the previous Collection
Determination Date was greater than or equal to twice the Initial
Subordinated Percentage;
(ii) that Collection Determination Date occurs after April 19, 2001;
(iii) the fraction, expressed as a percentage, the numerator of which
is the Total Invested Amount on such Collection Determination Date and
the denominator of which is the Total Initial Invested Amount, is greater
than or equal to 10%;
(iv) the Average Quarterly Percentage as at the Collection
Determination Date:
(a) does not exceed 2% and the Total Carryover Charge Off on that
Collection Determination Date does not exceed 30% of the Class B
Initial Invested Amount; or
(b) does not exceed 4% and the Total Carryover Charge Off on that
Collection Determination Date does not exceed 10% of the Class B
Initial Invested Amount; and
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(v) the Stated Amount of the Class B Notes on such Collection
Determination Date exceeds 0.25% of the sum of (x) the Class A Initial
Invested Amount, (y) the Class B Initial Invested Amount and (z) the US$
Equivalent of the Invested Amounts of all RFS Class A Notes (if any).
SEQUENTIAL METHOD
If neither the Serial Method 1 Distribution Test nor the Serial Method 2
Distribution Test has been met, then the Issuer Trustee will pay out of any Net
Principal Collections, on the immediately following Payment Date the following
amounts in the following order of priority:
(1) first, PARI PASSU and rateably, based on their respective
entitlements:
(i) as a payment, denominated in A$, to the Currency Swap Providers
under the swap confirmations relating to the Class A Notes of an amount
equal to the lesser of:
(a) the Class A Forex Percentage of the Net Principal
Collections; and
(b) the A$ Equivalent of the Class A Stated Amounts for all Class
A Notes; and
(ii) as a payment denominated in A$ to the holders of the RFS Class A
Notes (if any) of an amount equal to the lesser of:
(a) the RFS Class A Forex Percentage of the Net Principal
Collections; and
(b) the RFS Class A Stated Amounts for all RFS Class A Notes (if
any); and
(2) second, as a payment, denominated in A$, to the Currency Swap
Providers under the swap confirmations relating to the Class B Notes of an
amount equal to the lesser of (i) the amount remaining after all
distributions in (1) above and (ii) the A$ Equivalent of the Class B Stated
Amounts for all Class B Notes.
CERTAIN RELATED DEFINITIONS
With respect to any date, the "Average Quarterly Percentage" is the sum of
the Quarterly Percentages for the four full Quarters preceding that date,
divided by four. With respect to any Collection Period, the "Quarterly
Percentage" equals a fraction, expressed as a percentage, the numerator of which
is the aggregate Housing Loan Principal of all Housing Loans which are
Delinquent for more than 60 consecutive days as of the close of business on the
last day of that Collection Period, and the denominator of which is the
aggregate Housing Loan Principal of all Housing Loans as of the close of
business on the last day of that Collection Period. With respect to any Housing
Loan and date, "Housing Loan Principal" shall be the unpaid principal amount of
that Housing Loan on such date.
The "Class A Forex Percentage" equals a fraction, expressed as a percentage,
the numerator of which is the A$ Equivalent of the Class A Stated Amounts at
that date and the denominator of which is the sum of the A$ Equivalent of the
Class A Stated Amounts and the RFS Class A Stated Amounts at that date.
The "Class A Percentage" means, on a Collection Determination Date, the sum
of the aggregate of the A$ Equivalent of the Class A Stated Amounts, the RFS
Class A Stated Amounts and the Redraw Limit (as defined herein) for the
preceding Collection Determination Date as a percentage of the sum of the
aggregate of the A$ Equivalent of the Class A Stated Amounts, the RFS Class A
Stated Amounts, the A$ Equivalent of the Class B Stated Amounts and the Redraw
Limit calculated as at the preceding Collection Determination Date. The "Class B
Percentage" means, on a Collection Determination Date, the aggregate of the A$
Equivalent of the Class B Stated Amounts for the preceding Collection
Determination Date as a percentage of the sum of the aggregate A$ Equivalent of
the Class A Stated Amounts, the RFS Class A Stated Amounts, the A$ Equivalent of
the Class B Stated Amounts and the Redraw Limit calculated as at the preceding
Collection Determination Date.
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The "Initial Subordinated Percentage" shall be 2.3%.
With respect to any date, the "RFS Class A Forex Percentage" shall be 100%
minus the Class A Forex Percentage as of that date.
The "Subordinated Percentage" means the fraction, expressed as a percentage,
calculated on each Collection Determination Date by the Trust Manager, the
numerator of which is the A$ Equivalent of the aggregate of the Class B Stated
Amounts and the denominator of which is the sum of (i) the A$ Equivalent of the
aggregate of the Class A Stated Amounts and the Class B Stated Amounts at that
time, (ii) the Redraw Limit at that time, (iii) the aggregate of the RFS Stated
Amounts at that time, and (iv) the aggregate of the RFS Class A Stated Amounts
at that time.
APPLICATION OF PRINCIPAL CHARGE OFFS
GENERAL
If there is any Liquidation Loss under a Housing Loan, the Trust Manager
will direct the Servicer to make a claim under the relevant Mortgage Insurance
Policy for the aggregate amount of that Liquidation Loss if the Servicer has not
already done so. If a claim on account of a Principal Loss may not be made (or
is reduced) under the Mortgage Insurance Policy for any reason (including
because the maximum amount available under the Mortgage Pool Insurance Policy
has been exhausted, the Mortgage Insurance Policy has been terminated in respect
of that Housing Loan, the Mortgage Insurer is entitled to reduce the amount of
the claim or the Mortgage Insurer defaults in payment of a claim) then a
"Mortgage Shortfall" will arise if:
(1) the total amount recovered and recoverable under the Mortgage
Insurance Policy attributable to principal; plus
(2) any damages or other amounts payable by an Approved Seller or the
Servicer under or in respect of the Master Trust Deed, the Series Notice or
Servicing Agreement relating to the Housing Loan which the Trust Manager
determines to be on account of principal, is insufficient to meet the full
amount of the Principal Loss. In that case, the aggregate amount of all
Mortgage Shortfalls for that Collection Period (a "Principal Charge Off")
will be applied to reduce the Stated Amounts of the Notes as described
below.
CHARGE OFFS
On any Collection Determination Date, the Excess Available Income (if any)
will be applied to meet Principal Charge Offs calculated on that Collection
Determination Date for the Collection Period ending immediately prior to that
Collection Determination Date. If the amount of Excess Available Income is less
than the amount of those Principal Charge Offs, then the balance of the
Principal Charge Offs will be:
(1) applied to reduce the Stated Amounts of the Class B Notes by the US$
Equivalent of that balance (a "Class B Charge Off"), until the Class B
Stated Amount is zero; and
(2) to the extent that balance cannot be applied under paragraph (1)
because the Class B Stated Amount is zero, applied PARI PASSU and rateably,
based on their respective Stated Amounts or Principal Outstanding, as
applicable, to the reduction of the RFSs (if any) (an "RFS Charge Off"), the
RFS Class A Notes (if any) (an "RFS Class A Charge Off") and the Class A
Notes (a "Class A Charge Off") until the respective Stated Amounts of the
Class A Notes, the RFSs (if any) and the RFS Class A Notes (if any) are zero
and the Principal Outstanding under the Redraw Facility until the Principal
Outstanding is zero (a "Redraw Facility Charge Off") (using A$ Equivalent
amounts in the case of the Class A Notes).
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With respect to any date, the "Total Carryover Charge Off" means the sum of:
(1) all Carryover Class A Charge Offs for all Class A Notes (other
than RFS Class A Notes) as at that date;
(2) all Carryover Class B Charge Offs for all Class B Notes as at
that date;
(3) the US$ Equivalent of all Carryover RFS Charge Offs for all RFSs
as at that date; and
(4) the US$ Equivalent of all Carryover RFS Class A Charge Offs for
all RFS Class A Charge Offs as at that date.
REIMBURSEMENT OF CHARGE OFFS
On any Collection Determination Date, if there is Excess Available Income in
respect of the Collection Period ending immediately prior to that Collection
Determination Date remaining after the reimbursement of any Principal Charge
Offs for that Collection Period, then the remaining Excess Available Income will
be used to reinstate the Stated Amounts of the Notes in the following priority:
(1) first, the Carryover Redraw Charge Offs, Carryover RFS Charge Offs,
Carryover RFS Class A Charge Offs and Carryover Class A Charge Offs, PARI
PASSU and rateably based on the amount of their respective Charge Offs
(using A$ Equivalent amounts in the case of Carryover Class A Charge Offs);
and
(2) second, the A$ Equivalent of any Carryover Class B Charge Offs.
On any Collection Determination Date in relation to a Class A Note,
"Carryover Class A Charge Offs" means the aggregate of Class A Charge Offs in
relation to that Class A Note prior to that Collection Determination Date which
have not been reinstated as provided for herein. On any Collection Determination
Date in relation to a Class B Note, "Carryover Class B Charge Offs" means on any
Collection Determination Date in relation to a Class B Note, the aggregate of
Class B Charge Offs in relation to that Class B Note prior to that Collection
Determination Date which have not been reinstated as provided for herein. On any
Collection Determination Date in relation to the Redraw Facility, "Carryover
Redraw Charge Offs" means, the aggregate of Redraw Charge Offs prior to that
Collection Determination Date which have not been reinstated as provided for
herein. On any Collection Determination Date in relation to the RFSs, the
aggregate of RFS Charge Offs in relation to that RFS prior to that Collection
Determination Date which have not been reinstated as provided for herein. On any
Collection Determination Date in relation to an RFS Class A Note, "Carryover RFS
Class A Charge Offs" means the aggregate of RFS Class A Charge Offs in relation
to that RFS Class A Note prior to that Collection Determination Date which have
not been reinstated as provided for herein.
PAYMENTS INTO US$ ACCOUNT
The Principal Paying Agent shall open and maintain, or cause to be opened
and maintained, an account (the "US$ Account") into which the Currency Swap
Providers shall deposit amounts denominated in US$.
(1) The Issuer Trustee shall direct the Currency Swap Providers to pay
all amounts denominated in US$ payable to the Issuer Trustee by the Currency
Swap Providers under the Currency Swaps into the US$ Account or to the
Principal Paying Agent under the Agency Agreement on behalf of the Issuer
Trustee.
(2) If any of the Issuer Trustee, the Trust Manager or the Servicer
receives any amount denominated in US$ from the Currency Swap Providers
under the Currency Swaps they will promptly pay that amount to the credit of
the US$ Account.
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PAYMENTS OUT OF US$ ACCOUNT
The Issuer Trustee shall, or shall require that the Paying Agents shall on
its behalf, pay all amounts credited to the US$ Account or otherwise referred to
above to meet its US$ obligations under the Series Notice and the Notes, and in
accordance with the Note Trust Deed and the Agency Agreement.
PREPAYMENT COSTS AND PREPAYMENT BENEFITS
(1) On each Collection Determination Date the Trust Manager will determine
total Prepayment Benefits and total Prepayment Costs for the relevant Collection
Period and will apply an amount equal to those total Prepayment Costs in payment
of those total Prepayment Benefits. If:
(i) there is a Prepayment Cost Surplus, it will be applied under
paragraph (2) below; and
(ii) there is a Prepayment Benefit Shortfall, it will be funded under
paragraph (3) below.
(2) On each Payment Date, based on calculations provided to it by the Trust
Manager, the Issuer Trustee will pay to Westpac an amount equal to the
Prepayment Cost Surplus (if any) for the Collection Period on that Payment Date
to the extent received by or on behalf of the Issuer Trustee.
(3) If, on any Collection Determination Date, the Trust Manager calculates
that there is a Prepayment Benefit Shortfall, the Trust Manager must by the
close of business on that Collection Determination Date notify Westpac of the
amount of that Prepayment Benefit Shortfall. Westpac must, by 4:00 p.m. (Sydney
time) on the Remittance Date, deposit in the Collections Account for the credit
of the Issuer Trustee an amount equal to that Prepayment Benefit Shortfall. That
amount will be treated as a Gross Principal Collection.
DESCRIPTION OF THE REDRAW FACILITY, THE REDRAW FUNDING SECURITIES AND THE RFS
CLASS A NOTES
Certain Housing Loans in the Mortgage Pool which are charged a variable rate
of interest have a feature which allows the borrower to draw on repayments made
by the Borrower in excess of scheduled repayments on the related Housing Loan
(any such draw, a "Redraw"). Under a Redraw, Borrowers may require Westpac to
re-advance to them previously prepaid principal. In certain circumstances,
Westpac has a contractual obligation under the related loan document to provide
the Redraw if the Borrower has made prepayments on the related Housing Loan and
such Borrower is not delinquent. A Redraw will not result in the Housing Loan
being removed from the Mortgage Pool.
Westpac is entitled to be reimbursed by the Issuer Trustee for Redraws
funded by Westpac first, from Gross Principal Collections as described under
"--Principal Collections" herein, second, from drawings under the Redraw
Facility and third, from the proceeds of the issuance of RFSs, to the extent
each is available.
If Westpac is not fully reimbursed in relation to a Redraw, it will bear the
cost of funding that Redraw until such time as it can be reimbursed by the
Issuer Trustee.
REDRAW FACILITY
GENERAL
On or prior to the Closing Date, Westpac will enter into a Redraw Facility
Agreement (the "Redraw Facility Agreement") in its capacity as "Redraw Facility
Provider" with the Issuer Trustee and the Trust Manager. Pursuant to the terms
of the Redraw Facility Agreement, the Redraw Facility Provider shall be
obligated, subject to the limitations set forth below, to fund the amount of any
Redraws not funded with Gross Principal Collections. To the extent that Gross
Principal Collections are insufficient to fund Redraws (a "Redraw Shortfall")
and amounts are available under the Redraw Facility, the Trust Manager must
direct the Issuer Trustee to draw on the Redraw Facility. Under the Redraw
Facility, the Redraw Facility
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Provider agrees to make advances to the Issuer Trustee up to the limit from time
to time (the "Redraw Limit") or any lesser amount as agreed between the Redraw
Facility Provider, the Issuer Trustee and the Trust Manager. At the Closing
Date, the Redraw Limit is expected to be A$30,000,000. The Redraw Limit may not
be increased without written confirmation from the Rating Agencies that the
increase would not result in a downgrading or withdrawal of the rating for the
Offered Notes then outstanding.
The Redraw Facility Provider may revoke the Redraw Facility at any time
immediately on giving notice to the Issuer Trustee and the Trust Manager.
DRAWINGS
In the event of a Redraw Shortfall on any Collection Determination Date, the
Trust Manager must direct the Issuer Trustee to draw down on the Redraw Facility
for an amount (a "Redraw Advance") equal to the lesser of the Redraw Shortfall
and the Available Redraw Amount (as defined herein). A drawing may only be made
under the Redraw Facility on account of a Redraw Shortfall.
"Available Redraw Amount" means at any time the greater of: (a) the Redraw
Limit at such time less (i) the Principal Outstanding at that time; and (ii) the
Carryover Redraw Charge Offs at that time; and (b) zero. The sum of all Redraw
Advances outstanding on any particular date less the Carryover Redraw Charge
Offs at that time shall be the "Principal Outstanding."
A drawing may only be made by the Issuer Trustee delivering to the Redraw
Facility Provider a duly completed drawdown notice signed by the Issuer Trustee;
provided, however, that each of the following conditions precedent to drawing
are met.
CONDITIONS PRECEDENT TO DRAWING
The obligations of the Redraw Facility Provider to make available each
Redraw Advance are subject to the conditions precedent that:
(1) no event of default has occurred and is continuing under the Redraw
Facility at the date of the relevant drawdown notice and the relevant drawdown
date or will result from the provision of the Redraw Advance; and
(2) the representations and warranties by the Issuer Trustee in the Redraw
Facility are true as at the date of the relevant drawdown notice and the
relevant drawdown date as though they had been made at that date in respect of
the facts and circumstances then subsisting.
DRAW FEE
With respect to any Redraw Advance made by the Redraw Facility Provider, a
fee (the "Draw Fee") will accrue from day to day on the amount of each such
Redraw Advance from the date of its advance at a rate equal to the Bank Bill
Rate plus a margin (which varies depending on how long the Redraw Advance is
outstanding), calculated on the basis of the actual number of days elapsed since
the advance and a year of 365 days. The Draw Fee shall be payable on each
Payment Date and on termination of the Redraw Facility. To the extent any Draw
Fee is not paid, the amount of such unpaid Draw Fee will be capitalized and
interest will accrue on any such unpaid Draw Fee. On any date, the "Bank Bill
Rate" shall be the rate calculated by taking the rates quoted on the Reuters
Screen BBSW Page at approximately 10:00 am, Sydney time, on that date for each
Reference Bank so quoting (but not fewer than five) as being the mean buying and
selling rate for a bill (which for the purpose of this definition means a bill
of exchange of the type specified for the purpose of quoting on the Reuters
Screen BBSW Page) having a tenor of 90 days eliminating the highest and lowest
mean rates and taking the average of the remaining mean rates and then (if
necessary) rounding the resultant figure upwards to four decimal places. If on
any date fewer than five Reference Banks have quoted rates on the Reuters Screen
BBSW Page, the rate for that date shall be calculated as above by taking the
rates otherwise quoted by five of the Reference Banks on application by
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the parties for such a bill of the same tenor. If in respect of any date the
rate for that date cannot be determined in accordance with the foregoing
procedures then the rate for that date shall mean such rate as is agreed between
the Trust Manager and Westpac having regard to comparable indices then
available, provided that on the first day of any first Interest Period as it
relates to a Class of Notes the Bank Bill Rate shall be an interpolated rate
calculated with reference to the tenor of the relevant period.
AVAILABILITY FEE
For so long as the Redraw Facility exists, a fee (the "Availability Fee")
shall accrue daily from the date of the Redraw Facility on the Available Redraw
Amount, which Availability Fee is payable on each Payment Date and on
termination of the Redraw Facility. The Availability Fee is calculated on the
actual number of days elapsed and a year of 365 days.
REPAYMENT OF REDRAW ADVANCES
To the extent a Redraw Advance has been made and has not been repaid to the
Redraw Facility Provider, the amount of such unreimbursed Redraw Advance is
repayable on the following Payment Date and on the date of termination of the
Redraw Facility, to the extent that there are funds available for such payment.
It is not an event of default if the Issuer Trustee does not have funds
available to repay the full amount of the unreimbursed Redraw Advance on the
following Payment Date.
EVENTS OF DEFAULT UNDER THE REDRAW FACILITY
It is an event of default under the Redraw Facility (whether or not such
event is within the control of the Issuer Trustee) if:
(1) an amount is available for payment to the Redraw Facility Provider
under the Redraw Facility, and the Issuer Trustee does not pay that amount
within 10 Business Days of its due date;
(2) an Insolvency Event occurs in relation to the Trust;
(3) an Insolvency Event occurs in relation to the Issuer Trustee, and a
successor trustee of the Trust is not appointed within 30 days of that
Insolvency Event;
(4) the Termination Date occurs in relation to the Trust; or
(5) an event of default (as defined in the Security Trust Deed) occurs
and any action is taken to enforce the security interest under the Security
Trust Deed over the assets of the Trust (including appointing a receiver or
receiver and manager or selling any of those assets).
With respect to the Issuer Trustee (in its personal capacity and as trustee
of a Trust), the Trust Manager, the Servicer, Westpac or a Mortgage Insurer
(each a "relevant corporation"), an "Insolvency Event" will occur upon the
happening of any of the following events:
(1) an administrator of the relevant corporation is appointed;
(2) except for the purpose of a solvent reconstruction or amalgamation:
(i) an application or an order is made, proceedings are commenced, a
resolution is passed or proposed in a notice of proceedings or an
application to a court or other steps (other than frivolous or vexatious
applications, proceedings, notices and steps) are taken for:
(a) the winding up, dissolution or administration of the relevant
corporation; or
(b) the relevant corporation to enter into an arrangement,
compromise or composition with or assignment for the benefit of its
creditors or a class of them; or
(ii) the relevant corporation ceases, suspends or threatens to cease
or suspend the conduct of all or substantially all of its business or
disposes of or threatens to dispose of substantially all of its assets;
or
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(3) the relevant corporation is, or under applicable legislation is
taken to be, unable to pay its debts (other than as the result of a failure
to pay a debt or claim the subject of a good faith dispute) or stops or
suspends or threatens to stop or suspend payment of all or a class of its
debts (except, in the case of the Issuer Trustee where this occurs in
relation to another trust of which it is the trustee);
(4) a receiver, receiver and manager or administrator is appointed (by
the relevant corporation or by any other person) to all or substantially all
of the assets and undertaking of the relevant corporation or any part
thereof (except, in the case of the Issuer Trustee where this occurs in
relation to another trust of which it is the trustee); or
(5) anything analogous to an event referred to in paragraphs (1) to (4)
(inclusive) or having substantially similar effect, occurs with respect to
the relevant corporation.
The "Termination Date" with respect to the Trust shall be the earlier to
occur of:
(1) the date which is 80 years after the date of creation of the Trust;
(2) the termination of the Trust under statute or general law;
(3) full and final enforcement by the Security Trustee of its rights
under the Security Trust Deed after the occurrence of an Event of Default;
or
(4) at any time after all creditors of the Trust have been repaid in
full and the Issuer Trustee and the Trust Manager agree that no further
Notes are proposed to be issued by the Issuer Trustee in relation to the
Trust, the Business Day immediately following that date.
CONSEQUENCES OF OCCURRENCE OF EVENTS OF DEFAULT
At any time after an event of default (whether or not it is continuing) the
Redraw Facility Provider may do all or any of the following:
(1) by notice to the Issuer Trustee and the Trust Manager declare all
moneys actually or contingently owing under the Redraw Facility immediately
due and payable, and the Issuer Trustee must immediately pay the Principal
Outstanding together with accrued interest and fees and all such other
moneys; and
(2) by notice to the Issuer Trustee and the Trust Manager cancel the
Redraw Limit with effect from any date specified in that notice.
TERMINATION OF THE REDRAW FACILITY
The Redraw Facility will terminate on the earliest of the following:
(1) the date on which the Issuer Trustee enters into a replacement
Redraw Facility;
(2) one month after the Class A Notes, the Class B Notes, the RFSs and
the Class A RFS Notes have been redeemed in full in accordance with the
Master Trust Deed and the Series Notice;
(3) following an event of default under the Redraw Facility, the date on
which the Redraw Facility Provider declares the Redraw Facility terminated;
(4) the date on which the Issuer Trustee has cancelled the Redraw Limit
in full. The Issuer Trustee may cancel all or part of the Redraw Limit on
not less than five Business Days irrevocable notice to the Redraw Facility
Provider;
(5) the date which is one year after the Maturity Date;
(6) the date on which the Redraw Limit is cancelled in full by the
Redraw Facility Provider; or
(7) the date on which Westpac Securitisation Management Pty Limited
retires or is removed as Trust Manager under the Master Trust Deed.
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The Redraw Limit may be also be reduced in part by the Redraw Facility
Provider by giving notice to the Issuer Trustee and the Trust Manager. Such a
reduction will not result in a termination of the Redraw Facility.
ISSUANCE OF REDRAW FUNDING SECURITIES ("RFS")
If on a Collection Determination Date:
(1) Gross Principal Collections for the Collection Period preceding that
Collection Determination Date and all amounts available to be drawn under
the Redraw Facility are insufficient to fund Redraws made during that
Collection Period; or
(2) the Principal Outstanding under the Redraw Facility divided by the
Redraw Limit, expressed as a percentage, is equal to or greater than 90% of
the Redraw Limit;
then the Trust Manager may give the Issuer Trustee a direction to issue a
series of RFSs (the "RFS Series").
CONDITION PRECEDENT TO THE ISSUE OF RFSS
Notwithstanding the requirements referred to above, before giving a
direction for the issue of an RFS Series the Trust Manager must confirm with the
Rating Agencies that the issue will not result in the downgrading or withdrawal
of the rating of any Offered Note.
RFS CLASS A NOTES
If, on the fifth Collection Determination Date following the date on which
an RFS Series was issued, the RFS Stated Amount for all RFSs in that RFS Series
has not been reduced to zero, each of those outstanding RFSs will convert to an
"RFS Class A Note." Such RFS Class A Note will:
(1) have an Initial Invested Amount equal to the RFS Initial Invested
Amount of the converted RFS;
(2) have an Invested Amount equal to the RFS Invested Amount of that
Note when it was an RFS at the date of conversion;
(3) have a Stated Amount equal to the RFS Stated Amount of the RFS at
the date of conversion;
(4) be denominated in Australian dollars;
(5) receive all payments of principal and interest denominated in
Australian dollars;
(6) have an Interest Rate calculated by reference to the Bank Bill Rate,
not "USD-LIBOR-BBA";
(7) be evidenced by a notation in a register maintained by the Issuer
Trustee; and
(8) have a Margin equal to the margin under the Class A Notes.
"Margin" means: (1) in the case of Class A Notes, % and in the case of
the Class B Notes, %; (2) in the case of any RFSs, the margin inscribed in
the register maintained by the Issuer Trustee in relation to those RFSs on their
issue date; and (3) in the case of any RFS Class A Note, the Margin for the
Class A Notes plus the spread under the Currency Swaps.
FORM OF THE RFSS AND THE RFS CLASS A NOTES
The RFSs and the RFS Class A Notes will be evidenced by a notation in a
register maintained by the Issuer Trustee, denominated in Australian dollars and
will be issued in Australia to Australian resident investors only. The total
issue amount of RFS Class A Notes (if any) will be determined by the amount of
RFSs (if any) issued during the term of the Offered Notes. The RFSs and RFS
Class A Notes are not offered hereby.
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INTEREST PAYABLE ON THE RFSS AND THE RFS CLASS A NOTES
Commencing on the issue date of an RFS or the conversion date of an RFS
Class A Note, Interest is payable monthly in arrears on each RFS and RFS Class A
Note to the person whose name is registered under the Master Trust Deed and the
Series Notice as the holder of the RFS or RFS Class A Note, until the Maturity
Date or until the Stated Amount of the RFS or RFS Class A Note is reduced to
zero (whichever is earlier). "Interest", with respect to an RFS or an RFS Class
A Note, shall be equal to the interest accrued on the Invested Amount for such
RFS or RFS Class A Note at a rate equal to the Bank Bill Rate on the first day
of that Interest Period plus the Margin for the RFS or RFS Class A Note, during
the period from the subsequent Payment Date to the day preceding the Payment
Date, calculated on the actual number of days in the related Interest Period
over 365.
Payments to the holders of RFSs and the holders of RFS Class A Notes will be
in Australian dollars. Payments of Interest on the RFSs and the RFS Class A
Notes are PARI PASSU with respect to Interest payable on the Class A Notes and
rank ahead of Interest payable on the Class B Notes.
SUBORDINATION OF CLASS B NOTES; PRIORITY OF PAYMENT OF PRINCIPAL TO RFSS
The Class A Noteholders, the holders of RFSs (if any), the holders of RFS
Class A Notes (if any) and the Redraw Facility Provider will have the benefit of
the subordination of the Class B Notes. That is, to the extent that there is a
loss on a Housing Loan which is not satisfied by a claim (or deemed claim) under
a Mortgage Insurance Policy, by amounts recoverable by the Issuer Trustee from
an Approved Seller or the Servicer, or by the application of Excess Available
Income, the amount of that loss will be allocated to the Class B Notes, reducing
the Stated Amount of the Class B Notes until their Stated Amount is zero. The
amount of any remaining loss will then be allocated PARI PASSU, between the
Class A Notes, the RFSs (if any), the RFS Class A Notes (if any) and the Redraw
Facility, reducing the Stated Amount of the Class A Notes, the RFSs (if any) and
the RFS Class A Notes (if any) until their Stated Amount is zero and reducing
the Principal Outstanding under the Redraw Facility until it is zero. For
further details see "-- Application of Principal Charge Offs" above. Payments of
principal on the RFSs will be made prior to payments of principal to the Offered
Noteholders and the holders of the RFS Class A Notes.
SUBSTITUTION OF HOUSING LOANS
The Trust Manager may substitute a housing loan from a WST warehouse trust
for a Housing Loan in the Trust. For a housing loan in a WST trust to be
eligible for substitution for a Housing Loan, the housing loan in the other WST
trust must have a maturity date not later than the date which is one year before
the Maturity Date of the Notes, have similar product features to one or more of
the Housing Loans, have an Unpaid Balance within A$30,000 of the Unpaid Balance
of the Housing Loan for which it is being substituted and must otherwise be
suitable for substitution in the Trust Manager's sole and absolute discretion.
The Trust Manager may take into account the geographic location of the
properties securing the Housing Loan and the substituted housing loan. In
addition, the Unpaid Balance of all housing loans acquired by the Trust must be
less than the Unpaid Balance of the Housing Loans transferred to the WST
warehouse trust. The Trust Manager may not substitute a housing loan unless it
has received written confirmation from the Rating Agencies that the substitution
will not result in the downgrade or withdrawal of the rating given to the
Offered Notes. In addition, if the Unpaid Balance of the Housing Loan removed
from the Trust is greater than the Unpaid Balance of the substituted housing
loan, the WST warehouse trust must pay the Issuer Trustee the Substitution Net
Transfer Amount (Principal) and Substitution Net Transfer Amount (Income) with
respect to such Housing Loan.
PRESCRIPTION
An Offered Note shall become void in its entirety unless surrendered for
payment within ten years of the Relevant Date in respect of any payment thereon
the effect of which would be to reduce the Stated
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Amount of such Offered Note to zero. After the date on which an Offered Note
becomes void in its entirety, no claim may be made in respect of it.
The "Relevant Date" means the date on which a payment first becomes due but,
if the full amount of the money payable has not been received in New York City
by the Principal Paying Agent or the Note Trustee on or prior to that date, it
means the date on which, the full amount of such money having been so received,
notice to that effect is duly given in accordance with the terms of the Offered
Notes.
CLEAN-UP OFFER
If at any time the aggregate Housing Loan Principal, expressed as a
percentage of the aggregate Housing Loan Principal as of the Cut-Off Date, is
less than 10%, then, if instructed by the Trust Manager, the Seller Trustee may
repurchase, on the following Payment Date, the equitable title to the Housing
Loans held by the Trust for an amount equal to the Unpaid Balance (in the case
of performing Housing Loans) or the Fair Market Value (in the case of
non-performing Housing Loans). The proceeds of sale will be applied by the
Issuer Trustee to repay moneys owing to Noteholders at that time in accordance
with the priorities for applying payments of Interest and principal between the
Classes of Notes.
REDEMPTION OF THE NOTES
If an Event of Default occurs under the Security Trust Deed while the
Offered Notes are outstanding, the Security Trustee may (subject, in certain
circumstances, to the prior written consent of the Note Trustee in accordance
with the provisions of the Security Trust Deed), (and will if so directed by the
Note Trustee alone where it is the only Voting Mortgagee, or, otherwise by a
resolution of 75% of the Voting Mortgagees) enforce the security created by the
Security Trust Deed. That enforcement can include the sale of some or all of the
Housing Loans. There is no guarantee that the Security Trustee will be able to
sell the Housing Loans for their then Unpaid Balance. Accordingly, the Security
Trustee may not be able to realize the full value of the Housing Loans and this
may have an impact upon the Issuer Trustee's ability to repay all amounts
outstanding in relation to the Notes.
Any proceeds from the enforcement of the security will be applied in
accordance with the order of priority of payments as set out in the Security
Trust Deed. See "SECURITY FOR THE NOTES-- Priorities Under the Security Trust
Deed."
If the Trust terminates while Notes are outstanding, Westpac has a right of
first refusal to acquire the Housing Loans. The price to be paid by Westpac for
performing and non-performing Housing Loans must not be less than their Fair
Market Value. In the case of performing loans, the Issuer Trustee is required to
offer to sell them to Westpac under its right of first refusal for their then
Unpaid Balance. The "Unpaid Balance" of a Housing Loan, means the sum of (a) the
unpaid principal amount of that Housing Loan; and (b) the unpaid amount of all
finance charges, interest payments and other amounts accrued on or payable under
or in connection with that Housing Loan or the related Mortgage or other rights
relating to the Housing Loan. Where the Fair Market Value of a Housing Loan is
less than its then Unpaid Balance, its acquisition by Westpac will be subject to
prior approval by 75% of the votes of all Noteholders. This is because in such
circumstances there may be a shortfall in the amount available to the Issuer
Trustee to fully repay all amounts outstanding in relation to the Notes. The
Servicer will determine whether a Housing Loan is performing or non-performing.
WITHHOLDING OR TAX DEDUCTIONS
All payments in respect of the Offered Notes will be made without
withholding or tax deduction for, or on account of, any present or future taxes,
duties or charges of whatsoever nature unless the Issuer Trustee or any Paying
Agent is required by applicable law to make any such payment in respect of the
Offered Notes subject to any withholding or deduction for, or on account of, any
present or future taxes, duties or charges of whatsoever nature. In the event
that the Issuer Trustee or the Paying Agent (as the case may be) shall make such
payment after such withholding or deduction has been made, it shall account
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to the relevant authorities for the amount so required to be withheld or
deducted. Neither the Issuer Trustee nor any Paying Agent will be obliged to
make any additional payments to holders of the Offered Notes in respect to that
withholding or deduction.
REDEMPTION OF THE OFFERED NOTES FOR TAXATION OR OTHER REASONS
If the Trust Manager satisfies the Issuer Trustee and the Note Trustee
immediately prior to giving the notice referred to below that either (i) on the
next Payment Date the Issuer Trustee would be required to deduct or withhold
from any payment of principal or interest in respect of the Offered Notes any
amount for or on account of any present or future taxes, duties, assessments or
governmental charges of whatever nature imposed, levied, collected, withheld or
assessed by the Commonwealth of Australia or any of its political sub-divisions
or any of its authorities or (ii) the total amount payable in respect of
interest in relation to the Housing Loans for a Collection Period ceases to be
receivable (whether or not actually received) by the Issuer Trustee during such
Collection Period by reason of any present or future taxes, duties, assessments
or governmental charges of whatever nature imposed, levied, collected, withheld
or assessed by the Commonwealth of Australia or any of its political
sub-divisions or any of its authorities, the Issuer Trustee must, when so
directed by the Trust Manager (at any time at the Trust Manager's option)
(provided that the Issuer Trustee will be in a position on such Payment Date to
discharge (and will so certify to the Issuer Trustee and the Note Trustee) all
its liabilities in respect of such Class and any amounts required under the
Security Trust Deed to be paid in priority to or PARI PASSU with such Class)
upon having given not more than 60 nor less than 30 days' notice to the
Noteholders of such Class redeem all, but not some, of such Class at their
Invested Amount (or at the option of the holders of 75% of the aggregate
Invested Amount of such Class, at their Stated Amount), together with accrued
interest to the date of redemption on any subsequent Payment Date, provided that
the holders of 75% of the aggregate Invested Amount of such Class may elect, and
shall notify the Issuer Trustee and the Trust Manager, that they do not require
the Issuer Trustee to redeem such Class of Notes in the circumstances described
above. All amounts ranking prior to or PARI PASSU with respect to a Class of
Notes must be redeemed concurrently with such Class. Thus the Class B Notes may
not be redeemed unless the Class A Notes are also redeemed.
TERMINATION OF THE TRUST
TERMINATION EVENTS
The Trust shall continue until, and shall terminate on the later of: (i) its
respective Termination Date; (ii) the date on which the Trust Assets have been
sold or realized upon (which such sale shall be completed within 180 days after
the Termination Date of the Trust so far as reasonably practicable and
reasonably commercially viable); and (iii) the date on which the Issuer Trustee
ceases to hold any Housing Loans or Mortgages in relation to the Trust.
REALIZATION UPON TRUST ASSETS
On the termination of the Trust, subject to Westpac's right of first refusal
outlined below, the Issuer Trustee must sell and realize the assets of the Trust
within 180 days. During the 180 day period, the Housing Loans, if performing,
must not be sold for less than their Unpaid Balance and in the case of non-
performing Housing Loans, for less than their Fair Market Value. The Issuer
Trustee may not sell any performing Housing Loan, within the 180 day period, for
less than its Fair Market Value without the consent of the holders of 75% of the
aggregate Invested Amount of the relevant Class of Notes. The Servicer will
determine whether a Housing Loan is performing or non-performing.
APPROVED SELLER'S RIGHT OF FIRST REFUSAL
As soon as practical after the Termination Date of the Trust, the Trust
Manager will direct the Issuer Trustee to offer (by written notice to Westpac)
irrevocably to extinguish in favor of Westpac, or if the Issuer Trustee has
perfected its title, to equitably assign to Westpac, its entire right, title and
interest in and to the
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Housing Loans, and related Mortgages (if any) for their Unpaid Balance (for
performing Housing Loans) and their Fair Market Value (for non-performing
Housing Loans). If the Fair Market Value of a Housing Loan is less than its
Unpaid Balance, the sale requires the approval of the holders of 75% of the
votes of all Noteholders.
The Issuer Trustee is not entitled to sell any Housing Loans unless Westpac
has failed to accept the offer within 180 days after the occurrence of the
Termination Date by paying to the Issuer Trustee, within 180 days, the purchase
price.
DISTRIBUTION
After deducting expenses, the Trust Manager shall direct the Issuer Trustee
to distribute the proceeds of realization of the assets of the Trust in
accordance with the cashflow allocation methodology set out above, and in
accordance with any directions given to it by the Trust Manager.
If all Notes relating to the Trust have been fully redeemed and the Trust's
creditors paid in full, the Issuer Trustee may distribute all or part of the
Trust Assets to the relevant Beneficiary.
TRUST ACCOUNTS
The Issuer Trustee will establish and maintain under the Master Trust Deed
bank accounts with an Approved Bank, consisting of the "Collection Account" and
the US$ Account (collectively, the "Trust Accounts"). Each bank account shall be
opened by the Issuer Trustee in its name and in its capacity as trustee of the
Trust. No bank account shall be used for any purpose other than for the Trust
and in accordance with the Master Trust Deed.
The Trust Manager shall have the discretion and duty to recommend or to
propose in writing to the Issuer Trustee, the manner in which any moneys forming
part of the Trust shall be invested in Authorized Investments and what
purchases, sales, transfers, exchanges, collections, realizations or alterations
of Trust Assets shall be effected and when and how the same should be effected.
It is the role of the Issuer Trustee to give effect to all such recommendations
or proposals of the Trust Manager. Each investment of moneys on deposit in the
Trust Accounts shall be in Authorized Investments that will mature not later
than the Business Day preceding the applicable monthly Payment Date. "Authorized
Investments" consist of the following: (a) Housing Loans, Mortgages and other
related securities, (b) cash, (c) bonds, debentures, stock or treasury bills of
the Commonwealth of Australia or the Government of any State or Territory of the
Commonwealth; (d) debentures or stock of any public statutory body constituted
under the law of the Commonwealth of Australia or of any State of the
Commonwealth where the repayment of the principal is secured and the interest
payable thereon is guaranteed by the Commonwealth or any State or Territory of
the Commonwealth; (e) notes or other securities of the Commonwealth of Australia
or the Government of any State or Territory of the Commonwealth; (f) (i)
deposits with, or the acquisition of certificates of deposit (whether
negotiable, convertible or otherwise), issued by, a bank which carries on
business in Victoria and New South Wales; (ii) bills of exchange which at the
time of acquisition have a remaining term to maturity of not more than 200 days,
accepted or endorsed by a bank which carries on business in Victoria and New
South Wales, which, in each case, has either: (A) the highest short-term rating
available to be given by the Rating Agencies; or (B) if such investment has a
maturity of 30 days or less and does not exceed 20% of the total Invested Amount
of all relevant Notes on the date of the investment, a short-term rating of
A-1+/P-1/F-1+ by S&P, Moody's and Fitch, respectively; and (g) any other assets
of a class of assets that are both: (i) prescribed for the purposes of
sub-paragraph (iv) of the definition of a "pool of mortgages" in section 84FA(1)
of the Stamp Duties Act, 1920 of New South Wales, or are otherwise included
within that definition of "pool of mortgages"; and (ii) declared by order of the
Governor in Council of Victoria and published in the Victorian Government
Gazette to be assets for purposes of Subdivision 17A of the Stamps Act, 1958 of
Victoria or are otherwise included within sub-paragraph (b)(ii) of the
definition of "pool of mortgages" in section 137NA of that Act. No Authorized
Investment may have a maturity which is later than the Maturity Date of the
outstanding Notes.
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GENERAL
Collections and other amounts credited to the Collection Account will be
allocated by the Trust Manager, and paid by the Issuer Trustee as directed by
the Trust Manager, as set forth herein.
DETERMINATION DATE--CALCULATIONS AND REPORTS TO NOTEHOLDERS
On each Determination Date, the Trust Manager will, in respect of the
Collection Period ending before that Determination Date, deliver to the
Principal Paying Agent on behalf of the Issuer Trustee, a report (the
"Noteholder's Report") containing the following information:
(i) the Invested Amount and the Stated Amount of each Class of Notes;
(ii) the Interest Payments and principal distributions on each Class of
Notes;
(iii) the Available Income;
(iv) the Total Available Funds;
(v) the aggregate of all Redraws made during that Collection Period;
(vi) the Redraw Shortfall;
(vii) the Subordinated Percentage;
(viii) the Initial Subordinated Percentage;
(ix) the Payment Shortfall (if any);
(x) the Principal Draw (if any) for that Collection Period, together
with all Principal Draws made before the start of that Collection Period and
not repaid;
(xi) the Gross Principal Collections;
(xii) the Principal Collections;
(xiii) the Liquidity Shortfall (if any);
(xiv) the Remaining Liquidity Shortfall (if any);
(xv) the Principal Charge Off (if any);
(xvi) the Class A Percentage and the Class B Percentage;
(xvii) the Class A Bond Factor, the Class B Bond Factor, the RFS Class A
Bond Factor and the RFS Bond Factor for each RFS Series (The "Bond Factor"
with respect to a Class of Notes is the Initial Invested Amount of such
Class less all principal payments on such Class divided by the Initial
Invested Amount of such Class);
(xxviii) the Class A Charge Offs, the Class B Charge Offs, the RFS Class A
Charge Offs, the RFS Charge Offs and the Redraw Charge Offs (if any);
(xix) all Carryover Charge Offs (if any);
(xx) if required, the Threshold Rate at that Collection Determination
Date;
(xxi) the Quarterly Percentage;
(xxii) LIBOR, as at the first day of the related Interest Period ending
immediately after that Collection Determination Date as calculated by the
Agent Bank;
(xxiii) scheduled and unscheduled payments of principal on the Housing
Loans;
(xxiv) aggregate Balances Outstanding of Fixed Rate Housing Loans and
aggregate Balances Outstanding of Variable Rate Housing Loans; and
(xxv) delinquency statistics with respect to the Housing Loans.
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The Notes will be registered in the name of a nominee of DTC and will not be
registered in the names of the beneficial owners or their nominees. As a result,
unless and until Definitive Notes are issued in the limited circumstances
described under "--Definitive Notes" below, beneficial owners will not be
recognized by the Issuer Trustee as Noteholders, as that term is used in the
Master Trust Deed. Hence, until such time, beneficial owners will receive
reports and other information provided for under the Transaction Documents only
if, when and to the extent provided by DTC and its participating organizations.
The Trust Manager will, on or promptly after each Notice Date, prepare and
arrange for the publication on Reuters Screen page WST/SEC9 to WST/SEC10 of
summary pool performance data for the Trust in a format as determined by the
Trust Manager.
BOOK-ENTRY REGISTRATION
Each Class of the Offered Notes will be represented by one or more
book-entry Notes (the "Book-Entry Notes"). Persons acquiring beneficial
ownership interests in the Offered Notes ("Note Owners") will hold their Notes
through the Depository Trust Company ("DTC") in the United States, or Cedel or
Euroclear (in Europe) if they are participants of such systems, or indirectly
through organizations which are participants in such systems. The Book-Entry
Notes will be issued in one or more certificates which equal the aggregate
principal balance of each Class of the Offered Notes and will initially be
registered in the name of Cede & Co., the nominee of DTC. Cedel and Euroclear
will hold omnibus positions on behalf of their participants through customers'
securities accounts in Cedel's and Euroclear's names on the books of their
respective depositaries which in turn will hold such positions in customers'
securities accounts in the depositaries' names on the books of DTC. Citibank,
N.A. will act as depositary for Cedel, and Morgan Guaranty Trust Company of New
York will act as depositary for Euroclear (in such capacities, individually, the
"Relevant Depositary" and collectively, the "European Depositaries"). Investors
may hold such beneficial interests in the Book-Entry Notes in minimum
denominations of US$100,000. Except as described below, no person acquiring a
Book-Entry Note (each, a "beneficial owner") will be entitled to receive a
physical certificate representing such Note (a "Definitive Note"). Unless and
until Definitive Notes are issued, it is anticipated that the only "Noteholder"
of each Class of Notes will be Cede & Co., as nominee of DTC. Note Owners will
not be considered holders of the Offered Notes in relation to the Master Trust
Deed. Note Owners are only permitted to exercise their rights indirectly through
participants and DTC.
The Note Owner's ownership of a Book-Entry Note will be recorded on the
records of the brokerage firm, bank, thrift institution or other financial
intermediary (each, a "Financial Intermediary") that maintains the beneficial
owner's account for such purpose. In turn, the Financial Intermediary's
ownership of such Book-Entry Note will be recorded on the records of DTC (or of
a participating firm that acts as agent for the Financial Intermediary, whose
interest will in turn be recorded on the records of DTC, if the beneficial
owner's Financial Intermediary is not a DTC participant and on the records of
Cedel or Euroclear, as appropriate).
Note Owners will receive all distributions of principal of, and interest on,
each Class of Offered Notes from the Issuer Trustee through DTC and DTC
Participants. While the Offered Notes are outstanding (except under the
circumstances described below), under the rules, regulations and procedures
creating and affecting DTC and its operations (the "Rules"), DTC is required to
make book-entry transfers among Participants on whose behalf it acts with
respect to the Offered Notes and is required to receive and transmit
distributions of principal of, and interest on, the Offered Notes. Participants
and indirect participants with whom Note Owners have accounts with respect to
Offered Notes are similarly required to make book-entry transfers and receive
and transmit such distributions on behalf of their respective Note Owners.
Accordingly, although Note Owners will not possess certificates, the Rules
provide a mechanism by which Note Owners will receive distributions and will be
able to transfer their interest.
Note Owners will not receive or be entitled to receive certificates
representing their respective interests (i.e., Definitive Notes) in the Offered
Notes, except under the limited circumstances described
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below. Unless and until Definitive Notes are issued, Note Owners who are not
Participants may transfer ownership of Offered Notes only through Participants
and indirect participants by instructing such Participants and indirect
participants to transfer Offered Notes, by book-entry transfer, through DTC for
the account of the purchasers of such Offered Notes, which account is maintained
with their respective Participants. Under the Rules and in accordance with DTC's
normal procedures, transfers of ownership of Offered Notes will be executed
through DTC and the accounts of the respective Participants at DTC will be
debited and credited. Similarly, the Participants and indirect participants will
make debits or credits, as the case may be, on their records on behalf of the
selling and purchasing Note Owners.
Because of time zone differences, credits of securities received in Cedel or
Euroclear as a result of a transaction with a Participant will be made during
subsequent securities settlement processing and dated the Business Day following
the DTC settlement date. Such credits or any transactions in such securities
settled during such processing will be reported to the relevant Euroclear or
Cedel Participants on such Business Day. Cash received in Cedel or Euroclear as
a result of sales of securities by or through a Cedel Participant (as defined
below) or Euroclear Participant (as defined below) to a DTC Participant will be
received with value on the DTC settlement date but will be available in the
relevant Cedel or Euroclear cash account only as of the Business Day following
settlement in DTC.
Transfers between Participants will occur in accordance with DTC Rules.
Transfers between Cedel Participants and Euroclear Participants will occur in
accordance with their respective rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedel
Participants or Euroclear Participants, on the other, will be effected in DTC in
accordance with DTC Rules on behalf of the relevant European international
clearing system by the Relevant Depositary; however, such cross market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in such system in accordance
with its rules and procedures and within its established deadlines (European
time). The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to the
Relevant Depositary to take action to effect final settlement on its behalf by
delivering or receiving securities in DTC, and making or receiving payment in
accordance with normal procedures for same day funds settlement applicable to
DTC. Cedel Participants and Euroclear Participants may not deliver instructions
directly to the European Depositaries.
DTC, which is a New York-chartered limited purpose trust company, performs
services for its participants, some of which (and/or their representatives) own
DTC. In accordance with its normal procedures, DTC is expected to record the
positions held by each DTC participant in the Book-Entry Notes, whether held for
its own account or as a nominee for another person. In general, beneficial
ownership of Book-Entry Notes will be subject to the rules, regulations and
procedures governing DTC and DTC participants as in effect from time to time.
Cedel is incorporated under the laws of Luxembourg as a professional
depository. Cedel holds securities for its participating organizations ("Cedel
Participants") and facilitates the clearance and settlement of securities
transactions between Cedel Participants through electronic book-entry changes in
accounts of Cedel Participants, thereby eliminating the need for physical
movement of certificates. Transactions may be settled in Cedel in any of 28
currencies, including United States dollars. Cedel provides to its Cedel
Participants, among other things, services for safekeeping, administration,
clearance and settlement of internationally-traded securities and securities
lending and borrowing. Cedel interfaces with domestic markets in several
countries. As a professional depository, Cedel is subject to regulation by the
Luxembourg Monetary Institute. Cedel participants are recognized financial
institutions around the world, including underwriters, securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Indirect access to Cedel is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Cedel Participant, either directly or indirectly.
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Euroclear was created in 1968 to hold securities for its participants
("Euroclear Participants") and to clear and settle transactions between
Euroclear Participants through simultaneous electronic book-entry delivery
against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities and
cash. Transactions may be settled in any of 32 currencies, including United
States dollars. Euroclear includes various other services, including securities
lending and borrowing and interfaces with domestic markets in several countries
generally similar to the arrangements for cross-market transfers with DTC
described above. Euroclear is operated by the Brussels, Belgium office of Morgan
Guaranty Trust Company of New York (the "Euroclear Operator"), under contract
with Euroclear Clearance Systems S.C., a Belgian cooperative corporation (the
"Cooperative"). All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are accounts
with the Euroclear Operator, not the Cooperative. The Cooperative establishes
policy for Euroclear on behalf of Euroclear Participants. Euroclear Participants
include banks (including central banks), securities brokers and dealers and
other professional financial intermediaries. Indirect access to Euroclear is
also available to other firms that clear through or maintain a custodial
relationship with a Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants, and has no record of or relationship with persons
holding through Euroclear Participants.
Distributions on the Book-Entry Notes will be made on each Payment Date by
the Principal Paying Agent to DTC. DTC will be responsible for crediting the
amount of such payments to the accounts of the applicable DTC participants in
accordance with DTC's normal procedures. Each DTC participant will be
responsible for disbursing such payments to the beneficial owners of the
Book-Entry Notes that it represents and to each Financial Intermediary for which
it acts as agent. Each such Financial Intermediary will be responsible for
disbursing funds to the beneficial owners of the Book-Entry Notes that it
represents.
Under a book-entry format, beneficial owners of the Book-Entry Notes may
experience some delay in their receipt of payments, since such payments will be
forwarded by the Principal Paying Agent to Cede & Co. Distributions with respect
to the Offered Notes held through Cedel or Euroclear will be credited to the
cash accounts of Cedel Participants or Euroclear Participants in accordance with
the relevant system's rules and procedures, to the extent received by the
Relevant Depositary. Such distributions will be subject to tax reporting in
accordance with relevant United States tax laws and regulations. Because DTC can
only act on behalf of Financial Intermediaries, the ability of a beneficial
owner to pledge Book-Entry Notes to persons or entities that do not participate
in the Depository system, or otherwise take actions in respect of such
Book-Entry Notes, may be limited due to the lack of physical certificates for
such Book-Entry Notes. In addition, issuance of the Book-Entry Notes in
book-entry form may reduce the liquidity of such Offered Notes in the secondary
market since certain potential investors may be unwilling to purchase the
Offered Notes for which they cannot obtain physical certificates.
Quarterly and annual reports on the Trust will be provided to Cede & Co., as
nominee of DTC, and may be made available by Cede & Co. to beneficial owners
upon request, in accordance with the rules, regulations and procedures creating
and affecting the Depository, and to the Financial Intermediaries to whose DTC
accounts the Book-Entry Notes of such beneficial owners are credited.
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DTC has advised the Note Trustee that, unless and until Definitive Notes are
issued, DTC will take any action permitted to be taken by the holders of the
Book-Entry Notes under the Note Trust Deed only at the direction of one or more
Financial Intermediaries to whose DTC accounts the Book-Entry Notes are
credited, to the extent that such actions are taken on behalf of Financial
Intermediaries whose holdings include such Book-Entry Notes. Cedel or the
Euroclear Operator, as the case may be, will take any other action permitted to
be taken by an Offered Noteholder under the Transaction Documents on behalf of a
Cedel Participant or Euroclear Participant only in accordance with its relevant
rules and procedures and subject to the ability of the Relevant Depositary to
effect such actions on its behalf through DTC. DTC may take actions, at the
direction of the related Participants, with respect to some Offered Notes which
conflict with actions taken with respect to other Offered Notes.
Although DTC, Cedel and Euroclear have agreed to the foregoing procedures in
order to facilitate transfers of Offered Notes among participants of DTC, Cedel
and Euroclear, they are under no obligation to perform or continue to perform
such procedures and such procedures may be discontinued at any time.
Neither the Issuer Trustee, the Servicer nor the Note Trustee will have any
responsibility for any aspect of the records relating to or payments made on
account of beneficial ownership interests of the Book-Entry Notes held by Cede &
Co., as nominee for DTC, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
DEFINITIVE NOTES
The Offered Notes of each Class will be issued in definitive form to the
Note Owners of such Class or their nominees ("Definitive Notes"), rather than to
the Depository or its nominee, only if (i) the Trust Manager advises the
Principal Paying Agent in writing that the Depository is no longer willing or
able to discharge properly its responsibilities as Depository with respect to
the Offered Notes of such Class, or the Depository or its successor ceases to
carry on business and the Trust Manager is unable to locate a qualified
successor, (ii) the Issuer Trustee, at the direction of the Trust Manager
advises the Principal Paying Agent in writing that the book-entry system through
the Depository is or is to be terminated or (iii) an Event of Default has
occurred, and Note Owners representing not less than a majority of the aggregate
Invested Amount of such Class advise the Principal Paying Agent and the Issuer
Trustee through the Participants and the Depository in writing that the
continuation of a book-entry system through the Depository is no longer in the
best interest of the Note Owners of such Class.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, the Depository is required to notify all Participants of
the availability through the Depository of Definitive Notes. Upon surrender by
the Depository of the definitive certificate representing the Offered Notes of
the affected Class and instructions for registration, the Trustee will execute
and the Principal Paying Agent will authenticate the Offered Notes of such Class
as Definitive Notes, and thereafter the Trustee will recognize the Note Owners
of such Definitive Notes as Offered Noteholders under the Transaction Documents.
Distributions of principal and interest on the Offered Notes will be made by
the Principal Paying Agent directly to Offered Noteholders in accordance with
the procedures set forth herein and in the Master Trust Deed, Series Notice, the
Note Trust Deed and Agency Agreement. Interest payments and any principal
payments on each Payment Date will be made to Offered Noteholders in whose names
the Definitive Notes were registered at the close of business on the related
Record Date. Distributions will be made by check mailed to the address of such
Noteholder as it appears on the register maintained by the Principal Paying
Agent. The final payment, on any Offered Note, however, will be made only upon
presentation and surrender of such Note at the office or agency specified in the
notice of final distribution to Offered Noteholders. The Trustee will provide
such notice to registered Noteholders.
Definitive Notes will be transferable and exchangeable at the offices of the
transfer agent and registrar, which initially will be the Principal Paying Agent
(in such capacity, the "Transfer Agent and Registrar"). No service charge will
be imposed for any registration of transfer or exchange, but the Transfer
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Agent and Registrar may require payment of a sum sufficient to cover any tax or
other governmental charge imposed in connection therewith. The Transfer Agent
and Registrar will not be required to register the transfer or exchange of
Definitive Notes for the period from the Record Date preceding the due date for
any payment to the Payment Date with respect to such Definitive Notes.
MODIFICATION OF MASTER TRUST DEED, SERIES NOTICE AND THE NOTE TRUST DEED WITHOUT
NOTEHOLDER CONSENT
The Issuer Trustee, the Trust Manager, the Servicer (with respect to the
Master Trust Deed and the Series Notice) and the Note Trustee (with respect to
the Note Trust Deed) may by way of supplemental deed alter, add to or modify the
Master Trust Deed, the Series Notice and the Note Trust Deed so long as such
alteration, addition or modification was effected upon consent of the
Noteholders or Beneficiaries (see "--Modification of Master Trust Deed, Series
Notice and the Note Trust Deed With Noteholder Consent" below) or is:
(a) to correct a manifest error or ambiguity or is of a formal,
technical or administrative nature only;
(b) necessary to comply with the provisions of any law or regulation or
with the requirements of any Australian governmental agency;
(c) appropriate or expedient as a consequence of an amendment to any law
or regulation or altered requirements of any Government Agency (including,
without limitation, an alteration, addition or modification which is
appropriate or expedient as a consequence of the enactment of a statute or
regulation or an amendment to any statute or regulation or ruling by the
Australian Commissioner or Deputy Commissioner of Taxation or any
governmental announcement or statement, in any case which has or may have
the effect of altering the manner or basis of taxation of trusts generally
or of trusts similar to any of the Trusts); or
(d) in the opinion of the Issuer Trustee desirable to enable the
provisions of the Master Trust Deed to be more conveniently, advantageously,
profitably or economically administered or is otherwise desirable for any
reason (including to give effect, in the Trust Manager's reasonable opinion,
to an allocation of expenses).
MODIFICATION OF MASTER TRUST DEED, SERIES NOTICE AND THE NOTE TRUST DEED WITH
NOTEHOLDER CONSENT
Where in the reasonable opinion of the Issuer Trustee a proposed alteration,
addition or modification to the Master Trust Deed, the Series Notice and the
Note Trust Deed (except an alteration, addition or modification referred to in
"--Modification of Master Trust Deed, Series Notice and the Note Trust Deed
Without Noteholder Consent" above) is prejudicial or likely to be prejudicial to
the interests of the Noteholders or a Class of Noteholders or the Beneficiaries
such alteration, addition or modification may only be effected by the Issuer
Trustee with the prior consent of the holders of 75% of the aggregate Invested
Amount of the Notes, the Class A Notes or the Class B Notes (as the case may be)
or with the prior written consent of the Beneficiaries (as the case may be).
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MEETINGS OF VOTING MORTGAGEES
The Security Trust Deed contains provisions for convening meetings of the
Voting Mortgagees to, INTER ALIA, enable the Voting Mortgagees to direct or
consent to the Security Trustee taking or not taking certain actions under the
Security Trust Deed, for example, to enable the Voting Mortgagees to direct the
Security Trustee to enforce the Security Trust Deed.
For so long as the amounts outstanding under the Offered Notes are 75% or
more of all amounts secured by the Security Trust Deed, the Note Trustee may
direct the Security Trustee to do any act or thing which the Security Trustee is
required to do, or may only do, at the direction of an Extraordinary Resolution
of the Voting Mortgagees.
Neither the Security Trustee nor the Trust Manager may call a meeting of
Voting Mortgagees without the Note Trustee's consent, if the amounts outstanding
under the Notes are 75% or more of all amounts secured by the Security Trust
Deed.
VOTING OF CLASS A NOTEHOLDERS; MODIFICATION; CONSENTS; WAIVER
The Note Trust Deed contains provisions for the Class A Noteholders to
consider any matter affecting their interests. In general, the holders of a
majority of the aggregate Invested Amount of the Class A Notes may take or
consent to any action permitted to be taken by Class A Noteholders under the
Note Trust Deed. Notwithstanding the foregoing, the consent of holders of 75% of
the aggregate Invested Amount of the Class A Notes shall be required to (i)
direct the Note Trustee to direct the Security Trustee to enforce the security
under the Note Trust Deed, (ii) override any waiver by the Note Trustee of a
breach of any provisions of the Transaction Documents or an Event of Default,
(iii) alter, add, or modify the terms and conditions of the Class A Notes or the
provisions of any of the Transaction Documents if such alteration, addition or
modification is, in the opinion of the Note Trustee, materially prejudicial or
likely to be materially prejudicial to the Offered Noteholders as a whole or the
Class A Noteholders, which shall include any modification to the date of
maturity of the Class A Notes, or a modification which would have the effect of
postponing any day for payment of interest in respect of any Class A Notes,
reducing or cancelling the amount of principal payable in respect of any Class A
Notes or the rate of interest applicable to any Class A Notes or altering the
percentage of the aggregate Invested Amount required to consent to any action or
altering the currency of payment of any Class A Notes or an alteration of the
date or priority of redemption of the Class A Notes (any such modification being
referred to below as a "Basic Terms Modification"). The Note Trust Deed contains
provisions limiting the powers of the Class B Noteholders, INTER ALIA, to
request or direct the Note Trustee to take any action that would be materially
prejudicial to the interests of the Class A Noteholders. Except in certain
circumstances, the Note Trust Deed imposes no such limitations on the powers of
the Class A Noteholders, the exercise of which will be binding on the Class B
Noteholders, irrespective of the effect on the Class B Noteholders' interests.
Any action taken by the requisite percentage of the Invested Amount of the Class
A Noteholders shall be binding on all Class A Noteholders (both present and
future).
Pursuant to the terms of the Note Trust Deed, the Note Trustee may agree,
without the consent of the Class A Noteholders, among other things, (i) to any
modification (except a Basic Terms Modification) of, or to the waiver or
authorization of any breach or proposed breach of the Class A Notes (including
the Conditions), or any of the Transaction Documents which is not, in the
opinion of the Note Trustee materially prejudicial to the interests of the Class
A Noteholders or (ii) to any modification of the Class A Notes (including the
Conditions, or any of the Transaction Documents which, in the Note Trustee's
opinion, is to correct a manifest error or is of a formal, minor or technical
nature or necessary to comply with any law or regulation. The Note Trustee may
also, without the consent of the Class A Noteholders, determine that any Event
of Default or any condition, event or act which with the giving of notice and/or
lapse of time and/or the issue of a certificate would constitute an Event of
Default shall not, or shall not subject to specified conditions, be treated as
such. Any such modification, waiver, authorization or determination shall be
binding on the Class A Noteholders and, unless the Note Trustee agrees
otherwise,
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any such modification shall be notified to the Class A Noteholders as specified
in the Transaction Documents as soon as practicable thereafter.
VOTING OF CLASS B NOTEHOLDERS; MODIFICATIONS; CONSENTS; WAIVER
The Note Trust Deed contains provisions for the Class B Noteholders to
consider any matter affecting their interests. In general, the holders of a
majority of the aggregate Invested Amount of the Class B Notes may take or
consent to any action permitted to be taken by Class B Noteholders under the
Note Trust Deed. Notwithstanding the foregoing, the consent of holders of 75% of
the aggregate Invested Amount of the Class B Notes shall be required to (i)
direct the Note Trustee to direct the Security Trustee to enforce the security
under the Note Trust Deed, (ii) override any waiver by the Note Trustee of a
breach of any provisions of the Transaction Documents or an Event of Default,
(iii) alter, add, or modify the terms and conditions of the Class B Notes or the
provisions of any of the Transaction Documents if such alteration, addition or
modification is, in the opinion of the Note Trustee, materially prejudicial or
likely to be materially prejudicial to the Offered Noteholders as a whole or the
Class B Noteholders, which shall include any modification to the date of
maturity of the Class B Notes, or a modification which would have the effect of
postponing any day for payment of interest in respect of any Class B Notes,
reducing or cancelling the amount of principal payable in respect of any Class B
Notes or the rate of interest applicable to any Class B Notes or altering the
percentage of the aggregate Invested Amount required to consent to any action or
altering the currency of payment of any Class B Notes or an alteration of the
date or priority of redemption of the Class B Notes (any such modification being
referred to below as a "Basic Terms Modification"). The Note Trust Deed contains
provisions limiting the powers of the Class B Noteholders, INTER ALIA, to
request or direct the Note Trustee to take any action that would be materially
prejudicial to the interests of the Class A Noteholders. Except in certain
circumstances, the Note Trust Deed imposes no such limitations on the powers of
the Class A Noteholders, the exercise of which will be binding on the Class B
Noteholders, irrespective of the effect on their interests. Any action taken by
the requisite percentage of Invested Amount of the Class B Noteholders shall be
binding on all Class B Noteholders (both present and future).
Pursuant to the terms of the Note Trust Deed, the Note Trustee may agree,
without the consent of the Class B Noteholders; among other things (i) to any
modification (except a Basic Terms Modification) of; or to the waiver or
authorization of any breach or proposed breach of the Class B Notes (including
the Conditions with respect to the Class B Notes), or any of the Transaction
Documents which is not, in the opinion of the Note Trustee materially
prejudicial to the interests of the Class B Noteholders or (ii) to any
modification of the Class B Notes (including the Conditions with respect to the
Class B Notes, or any of the Transaction Documents which, in the Note Trustee's
opinion, is to correct a manifest error or is of a formal, minor or technical
nature or necessary to comply with any law or regulation. The Note Trustee may
also, without the consent of the Class B Noteholders, determine that any Event
of Default or any condition, event or act which with the giving of notice and/or
lapse of time and/or the issue of a certificate would constitute an Event of
Default shall not, or shall not subject to specified conditions, be treated as
such. Any such modification, waiver, authorization or determination shall be
binding on the Class B Noteholders and, unless the Note Trustee agrees
otherwise, any such modification shall be notified to the Class B Noteholders as
specified in the Transaction Documents as soon as practicable thereafter.
EVENTS OF DEFAULT; RIGHTS UPON EVENT OF DEFAULT
An "Event of Default" under the Security Trust Deed will occur if:
(1) the Issuer Trustee fails to pay any Interest within 10 Business Days
of the Payment Date on which the Interest was due to be paid to Class A
Noteholders, Class B Noteholders, holders of RFSs or holders of RFS Class A
Notes;
(2) the Issuer Trustee fails to pay any other amount owing to Class A
Noteholders, Class B Noteholders, holders of RFSs, holders of RFS Class A
Notes or any other Mortgagee (as defined in
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the Security Trust Deed) within 10 Business Days of the due date for payment
(or within any applicable grace period agreed with the relevant Mortgagee or
where the Mortgagee is a Noteholder with the Note Trustee);
(3) the Issuer Trustee fails to perform or observe any other provisions
(other than the obligations referred to in paragraphs (1) and (2)) of a
Transaction Document where such failure will have a material and adverse
effect on the amount of any payment to be made to any Noteholder or will
materially and adversely affect the timing of such payment, and that default
(if in the opinion of the Security Trustee capable of remedy (that opinion,
being subject in certain circumstances to the approval of the Note Trustee
in accordance with the provisions of the Security Trust Deed)) is not
remedied within 30 days (or such longer period as may be specified in the
notice, that longer period having been approved by the Note Trustee, for so
long as amounts outstanding under the Offered Notes are 75% or more of the
Secured Moneys) after written notice from the Security Trustee requiring the
failure to be remedied;
(4) an Insolvency Event occurs relating to the Issuer Trustee (in its
personal capacity or as trustee of the Trust);
(5) the charge created by the Security Trust Deed is not or ceases to be
a first ranking charge over the Trust Assets, or any other obligation of the
Issuer Trustee (other than as mandatorily preferred by law) ranks ahead of
or PARI PASSU with any of the moneys secured by the Security Trust Deed;
(6) any security interest over the Trust Assets is enforced;
(7) all or any part of any Transaction Document (other than the Redraw
Facility or the Swap Agreements) is terminated or is or becomes void,
illegal, invalid, unenforceable or of limited force and effect, or a party
becomes entitled to terminate, rescind or avoid all or part of any
Transaction Document (other than the Underwriting Agreement, the Redraw
Facility or the Swap Agreements); or
(8) without the prior consent of the Security Trustee (that consent
being subject in certain circumstances to the prior written consent of the
Note Trustee in accordance with the provisions of the Security Trust Deed),
(i) the Trust is wound up, or the Issuer Trustee is required to wind up the
Trust under the Master Trust Deed or applicable law, or the winding up of
the Trust commences; (ii) the Trust is held or is conceded by the Issuer
Trustee not to have been constituted or to have been imperfectly
constituted; or (iii) unless another trustee is appointed to the Trust under
the Transaction Documents, the Issuer Trustee ceases to be authorized under
the Trust to hold the property of the Trust in its name and to perform its
obligations under the Transaction Documents.
If an Event of Default occurs and is continuing, the Note Trustee shall
deliver to each Offered Noteholder notice of such Event of Default within 90
days of the date that the Note Trustee became aware of such Event of Default,
provided that, except in the case of a default in payment of Interest and
principal on the Offered Notes, the Note Trustee may withhold such notice if and
so long as it determines in good faith that withholding the notice is in the
interests of the Offered Noteholders.
ENFORCEMENT OF THE SECURITY TRUST DEED
The Security Trustee must promptly convene a meeting of the Voting
Mortgagees after it receives notice, or has actual knowledge of, an Event of
Default. The Security Trustee may waive (such waiver, being subject to the prior
written consent of the Note Trustee in accordance with the provisions of the
Security Trust Deed), an Event of Default before it is required to convene a
meeting of Mortgagees if that Event of Default is not (in the opinion of the
Security Trustee) materially prejudicial to the Mortgagees' interests.
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At the meeting, the Voting Mortgagees must vote by Extraordinary Resolution
(being a resolution passed at a duly convened meeting by a majority consisting
of not less than 75% of the votes capable of being cast by Voting Mortgagees
present in person or by proxy or by written resolution signed by all of the
Voting Mortgagees) on whether to direct the Security Trustee to:
(1) declare the charge to be enforceable;
(2) declare all Secured Moneys (including amounts outstanding under the
Notes plus accrued and unpaid interest) to be immediately due and payable;
(3) crystalize the floating charge created under the Security Trust Deed
in relation to any or all of the Mortgaged Property; and/or
(4) appoint a receiver over the Trust Assets or itself exercise the
powers that a receiver would otherwise have under the Security Trust Deed.
The Security Trustee cannot exercise the powers referred to above unless
directed by an Extraordinary Resolution in the manner outlined above. The
Security Trustee is not obligated to act unless it obtains an indemnity from the
Voting Mortgagees, and is put in funds to the extent to which it may become
liable for the relevant enforcement actions.
For so long as the Note Trustee is the only Voting Mortgagee it may direct
the Security Trustee to do any act which the Security Trustee is required to do,
or may only do, at the direction of an Extraordinary Resolution of Voting
Mortgagees. Neither the Security Trustee nor the Trust Manager may call a
meeting of Voting Mortgagees while the Note Trustee is the only Voting
Mortgagee, unless the Note Trustee otherwise consents. The Note Trustee will be
the only Voting Mortgagee for so long as the amounts outstanding under the
Offered Notes are 75% or more of all amounts secured by the Security Trust Deed.
Upon the occurrence of an Event of Default: (i) if the Note Trustee is the
only Voting Mortgagee; and (ii) if the Note Trustee directs the Security Trustee
to enforce the charge (whether directed to do so by Class A Noteholders or as
the Note Trustee determines on behalf of the Class A Noteholders), the Security
Trustee shall enforce the charge as if directed to do so by an Extraordinary
Resolution of Voting Mortgagees.
No Mortgagee is entitled to enforce the charge under the Security Trust
Deed, or appoint a receiver or otherwise exercise any power conferred by any
applicable law on charges, otherwise than in accordance with the Security Trust
Deed.
"Voting Mortgagee" means:
(1) for so long as the amounts outstanding under the Class A Notes and the
Class B Notes are 75% or more of all Secured Moneys, the Note Trustee alone; and
(2) at any other time: (i) the Note Trustee, acting on behalf of the Offered
Noteholders under the Note Trust Deed and the Security Trust Deed; and (ii) each
other Mortgagee under the Security Trust Deed (other than the Offered
Noteholders).
Subject to being indemnified in accordance with the Security Trust Deed, the
Security Trustee shall take all action necessary to give effect to any direction
by the Note Trustee where it is the only Voting Mortgagee or to any
Extraordinary Resolution of the Voting Mortgagees and shall comply with all
directions given by the Note Trustee where it is the only Voting Mortgagee or
contained in or given pursuant to any Extraordinary Resolution of the Voting
Mortgagees in accordance with the Security Trust Deed.
No Noteholder is entitled to enforce the Security Trust Deed or to appoint
or cause to be appointed a receiver to any of the assets secured by the Security
Trust Deed or otherwise to exercise any power conferred by the terms of any
applicable law on charges except as provided in the Security Trust Deed.
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If any of the Class A Notes remains outstanding and are due and payable
otherwise than by reason of a default in payment of any amount due on the Class
A Notes, the Note Trustee must not vote under the Security Trust Deed to, or
otherwise direct the Security Trustee to, dispose of the Mortgaged Property
unless either:
(i) a sufficient amount would be realized to discharge in full all
amounts owing to the Class A Noteholders, and any other amounts payable by
the Issuer Trustee ranking in priority to or PARI PASSU with the Class A
Notes; or
(ii) the Note Trustee is of the opinion, reached after considering at any
time and from time to time the advice of a merchant bank or other financial
adviser selected by the Note Trustee, that the cash flow receivable by the
Issuer Trustee (or the Security Trustee under the Security Trust Deed) will
not (or that there is a significant risk that it will not) be sufficient,
having regard to any other relevant actual, contingent or prospective
liabilities of the Issuer Trustee, to discharge in full in due course all
the amounts referred to in paragraph (i). The Class B Notes are subject to
similar constraints.
Neither the Note Trustee nor the Security Trustee will be liable for any
decline in the value, nor any loss realized upon any sale or other dispositions
made under the Security Trust Deed, of any Mortgaged Property or any other
property which is charged to the Security Trustee by any other person in respect
of or relating to the obligations of the Issuer Trustee or any third party in
respect of the Issuer Trustee or the Notes or relating in any way to the
Mortgaged Property. Without limitation, neither the Note Trustee nor the
Security Trustee shall be liable for any such decline or loss directly or
indirectly arising from its acting, or failing to act, as a consequence of an
opinion reached by it.
The Note Trustee shall not be bound to vote under the Security Trust Deed,
or otherwise direct the Security Trustee under the Security Trust Deed or to
take any proceedings, actions or steps under, or any other proceedings pursuant
to or in connection with the Security Trust Deed, the Note Trust Deed, any Class
A Notes, unless directed or requested to do so (i) by an Extraordinary
Resolution of the Class A Noteholders or the Class B Noteholders, as
appropriate; or (ii) in writing by the holders of at least one-quarter of the
aggregate Invested Amount of the Class A Notes and then only if the Note Trustee
is indemnified to its satisfaction against all action, proceedings, claims and
demands to which it may render itself liable and all costs, charges, damages and
expenses which it may incur by so doing.
Only the Security Trustee may enforce the provisions of the Security Trust
Deed and neither the Note Trustee nor any holder of an Offered Note, is entitled
to proceed directly against the Issuer Trustee to enforce the performance of any
of the provisions of the Security Trust Deed or the Offered Notes (including the
Conditions).
The rights, remedies and discretion of the Class A Noteholders and the Class
B Noteholders under the Security Trust Deed including all rights to vote or give
instructions or consent can only be exercised by the Note Trustee on behalf of
the Class A Noteholders or the Class B Noteholders, as applicable, in accordance
with the Security Trust Deed. The Security Trustee may rely on any instructions
or directions given to it by the Note Trustee as being given on behalf of the
Class A Noteholders, from time to time and need not enquire whether the Note
Trustee or the Noteholders from time to time have complied with any requirements
under the Note Trust Deed or as to the reasonableness or otherwise of the Note
Trustee. The Security Trustee is not obliged to take any action, give any
consent or waiver or make any determination under the Security Trust Deed
without being directed to do so by the Note Trustee or by Extraordinary
Resolution of the Voting Mortgagees in accordance with the Security Trust Deed.
Upon enforcement of the security created by the Security Trust Deed, the net
proceeds thereof may be insufficient to pay all amounts due on redemption to the
Noteholders. The proceeds from enforcement (which will not include amounts
required by law to be paid to the holder of any prior ranking security interest,
the proceeds of or amounts credited to the collateral account under the
Liquidity Facility Agreement and payable to the Liquidity Facility Provider and
the proceeds of cash collateral lodged with and payable to a Swap Provider or
other provider of a Support Facility) will be applied in the order of
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priority as set out in the Security Trust Deed (see "SECURITY FOR THE
NOTES--Priorities under the Security Trust Deed"). Any claims of the Noteholders
remaining after realization of the security and application of the proceeds as
aforesaid shall, except in certain limited circumstances, be extinguished.
See "SECURITY FOR THE NOTES" for a description of the Security Trust Deed
and the order of priorities for the proceeds from the enforcement of the
Security Trust Deed.
CERTAIN COVENANTS
So long as any of the Class A Notes or the Class B Notes remains
outstanding, the Issuer Trustee has made the following covenants for the benefit
of Class A Noteholders and the Class B Noteholders which are set out in the
Master Trust Deed, including the following:
(1) The Issuer Trustee shall act continuously as trustee of the Trust until
the Trust is terminated as provided by the Master Trust Deed or the Issuer
Trustee has retired or been removed from office in the manner provided under the
Master Trust Deed.
(2) The Issuer Trustee shall:
(i) act honestly and in good faith in the performance of its duties and
in the exercise of its discretion under the Master Trust Deed;
(ii) subject to the Master Trust Deed, exercise such diligence and
prudence as a prudent person of business would exercise in performing its
express functions and in exercising its discretion under the Master Trust
Deed, having regard to the interests of the Class A Noteholders and the
Class B Noteholders and other creditors and beneficiaries of the Trust;
(iii) use its best endeavors to carry on and conduct its business in so
far as it relates to the Master Trust Deed in a proper and efficient manner;
(iv) keep, or ensure that the Trust Manager keeps, accounting records
which correctly record and explain all amounts paid and received by the
Issuer Trustee;
(v) keep the Trust separate from each other trust which is constituted
under the Master Trust Deed and account for assets and liabilities of the
Trust separately from those of other trusts constituted under the Master
Trust Deed; and
(vi) do everything and take all such actions which are necessary
(including obtaining all appropriate authorizations) to ensure that it is
able to exercise all its powers and remedies and perform all its obligations
under the Transaction Documents and all other deeds, agreements and other
arrangements entered into by the Issuer Trustee under the Master Trust Deed.
(3) Except as provided in the Master Trust Deed, the Issuer Trustee shall
not, nor shall it permit any of its officers to, sell, mortgage, charge or
otherwise encumber or part with possession of any Trust Assets.
(4) The Issuer Trustee's officers, employees, agents, attorneys, delegates
and sub-delegates shall duly observe and perform the covenants and obligations
of the Master Trust Deed in the same manner as is required of the Issuer
Trustee, and the Issuer Trustee agrees to indemnify the Trust Manager for its
own benefit or for the benefit of the Trust against any loss or damage that the
Trust, the Trust Manager, the Servicer, the Class A Noteholders, the Class B
Noteholders, the Beneficiaries (as defined in the Master Trust Deed) the holders
of RFSs (if any) and the holders of RFS Class A Notes (if any) or other
creditors incur or sustain in connection with, or arising out of, any breach or
default by such officers, employees, agents, delegates and persons in the
observance or performance of any such covenant or obligation, to the extent that
the Issuer Trustee would have been liable if that breach or default had been the
Issuer Trustee's own act or omission.
(5) The Issuer Trustee will open and operate certain bank accounts in
accordance with the Master Trust Deed and the Series Notice.
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(6) Subject to the Master Trust Deed and any Transaction Document to which
it is a party, the Issuer Trustee shall act on all directions given to it by the
Trust Manager in accordance with the terms of the Master Trust Deed.
(7) The Issuer Trustee shall properly perform the functions which are
necessary for it to perform under all Transaction Documents in respect of the
Trust.
ANNUAL COMPLIANCE STATEMENT
The Trustee will deliver to the Note Trustee annually a written statement as
to the fulfillment of its obligations under the Transaction Documents.
THE NOTE TRUSTEE
Morgan Guaranty Trust Company of New York, London Branch, will be the Note
Trustee. The Note Trustee may resign after giving three months written notice,
in which event the Issuer Trustee will be obligated to appoint a successor
trustee. The Issuer Trustee may also remove the Note Trustee if the Note Trustee
ceases to be eligible to continue as such under the Note Trust Deed or if the
Note Trustee becomes insolvent or ceases its business. In addition, holders of
75% of the aggregate Invested Amount of the Class A Notes or, if the Class A
Notes are no longer outstanding, the Class B Notes may require the Issuer
Trustee to remove the Note Trustee. In such circumstances and others set forth
in the Note Trust Deed, the Issuer Trustee will be obligated to appoint a
successor note trustee. Any resignation or removal of the Note Trustee and
appointment of a successor note trustee will not become effective until
acceptance of the appointment by a successor note trustee and confirmation by
the Rating Agencies that such appointment will not cause a downgrading,
qualification or withdrawal of the then current ratings of the Offered Notes.
The Note Trustee shall, with respect to all the powers, trusts, authorities,
duties and discretions vested in it by the Transaction Documents, except where
expressly provided otherwise, have regard to the interests of the Class A
Noteholders and the Class B Noteholders subject to the proviso in the following
sentence. If the Note Trustee is required by the Transaction Documents or
Offered Notes to have regard to the interests of the Class A Noteholders and the
Class B Noteholders and where, in the opinion of the Note Trustee, there is a
conflict between the interests of the Class A Noteholders and the interests of
the Class B Noteholders, the Note Trustee shall have regard only to the
interests of the Class A Noteholders despite anything to the contrary in the
Transaction Documents. In such an event, the Class B Noteholders shall have no
claim against the Note Trustee for doing so.
GOVERNING LAW
The Notes and the Transaction Documents (other than the Security Trust Deed
and certain of the swap agreements) are governed by, and shall be construed in
accordance with, the laws of New South Wales, Australia. The Security Trust Deed
is governed by, and shall be construed in accordance with the laws of the
Australian Capital Territory.
LONDON STOCK EXCHANGE LISTING
For purposes of the listing of the Offered Notes on the London Stock
Exchange, attached hereto as Annex II and Annex III are the terms and conditions
of the Class A Notes and Class B Notes, respectively.
DESCRIPTION OF THE SERVICING AGREEMENT
GENERAL
Under the Servicing Agreement, TMC will be appointed as the initial Servicer
of the Housing Loans and custodian of the Relevant Documents relating to the
Housing Loans and Mortgages. The following section contains a summary of the
material terms of the Servicing Agreement. The summary does not
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purport to be complete and is subject to the provisions of the Servicing
Agreement, which has been filed as an exhibit to the Registration Statement.
SERVICING
The Servicer manages and services the Housing Loans in accordance with the
Servicing Agreement. To the extent not provided in the Servicing Agreement, the
Servicer shall manage and service the Housing Loans in accordance with the
Procedures Manual as that is interpreted and applied by the Servicer in the
ordinary course of its business. "Procedures Manual" means, in relation to the
Housing Loans, those policies and procedures of Westpac or the Servicer (as the
case may be) relating to the origination, management and enforcement of the
Housing Loans as those policies and procedures are amended in accordance with
the Servicing Agreement and applied from time to time in Westpac's or the
Servicer's ordinary course of business (as the case may be). To the extent not
covered by the Servicing Agreement or the Procedures Manual, the Servicer
manages and services the Housing Loans by exercising the degree of diligence and
care expected of an appropriately qualified servicer of the relevant financial
products and custodian of documents. All acts of the Servicer in servicing the
Housing Loans in accordance with the relevant procedures manual are binding on
the Issuer Trustee.
POWERS
Subject to the servicing standards set forth above and the limitations set
forth below, the Servicer has the express power, among other things, to the
extent such action will not cause an Adverse Effect (that is, an event which
will materially and adversely affect the amount of any payment to be made to any
Noteholder, or will materially and adversely affect the timing of such payment):
(1) to waive any fees and break costs which may be collected in the
ordinary course of servicing the Housing Loans or arrange the rescheduling
of interest due and unpaid following a default under any Housing Loans;
(2) in its discretion, to waive any right in respect of any Housing
Loans and Mortgages in the ordinary course of servicing the Housing Loans
and Mortgages (including in accordance with its normal collection
procedures); and
(3) to grant an extension of maturity beyond 30 years from the date any
Housing Loan that relates to a Mortgage was made, when required to do so by
law or a government agency. The restriction on granting extensions that will
not have an Adverse Effect shall not apply where the extension is required
by law or a governmental agency.
DELEGATION BY THE SERVICER
The Servicer is entitled to delegate its duties under the Servicing
Agreement. The Servicer at all times remains liable for servicing the Housing
Loans and the acts or omissions of any delegate.
SERVICER UNDERTAKINGS
The Servicer has undertaken, among other things, the following:
(1) If so directed by the Issuer Trustee following a Title Perfection
Event, it will promptly take action to perfect the Issuer Trustee's
equitable title to the Housing Loans and related Mortgages in the Mortgage
Pool to full legal title by notifying the Issuer Trustee's interests to
Borrowers and mortgagors, registering transfers, delivering documents to the
Issuer Trustee and taking other action required to perfect title.
(2) In relation to Housing Loans of which Westpac is the legal owner, on
request from Westpac it will assist Westpac in collecting all moneys due
under those Housing Loans and Mortgages and pay them into the Collections
Account not later than the time Westpac would be required to do so.
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(3) In relation to Housing Loans of which the Issuer Trustee is the
legal owner, it will collect all moneys due under those Housing Loans and
Mortgages and pay them into the Collections Account not later than the time
Westpac would be required to do so.
(4) If a material default occurs in respect of a Housing Loan, it will
take action in accordance with its normal enforcement procedures to enforce
the relevant Housing Loan and the related Mortgage to the extent it
determines to be appropriate.
(5) Act in accordance with the terms of any Mortgage Insurance Policies,
not do or omit to do anything which could be reasonably expected to
prejudicially affect or limit its rights or the rights of the Issuer Trustee
under or in respect of a Mortgage Insurance Policy, and promptly make a
claim under any Mortgage Insurance Policy when it is entitled to do so and
notify the Trust Manager when each such claim is made.
(6) It will not consent to the creation or existence of any security
interest in favor of a third party in relation to any Mortgaged Property
which would rank before or PARI PASSU with the relevant Housing Loan and
Mortgage or allow the creation or existence of any other security interest
in the Mortgaged Property unless priority arrangements are entered into with
such third party under which the third party acknowledges that the Housing
Loan and the Mortgage ranks ahead in priority to the third party's security
interest on enforcement for an amount not less than the Unpaid Balance of
the Housing Loan plus such other amount as the Servicer determines in
accordance with the Procedures Manual or its ordinary course of business.
(7) It will not, except as required by law, release a Borrower or
otherwise vary or discharge any Housing Loan or Mortgage where it would have
an Adverse Effect.
(8) It will set the interest rate on the Housing Loans in accordance
with the requirements of the Series Notice.
(9) If directed by the Issuer Trustee following a Title Perfection
Event, it will take action to perfect the Issuer Trustee's legal title to
the Housing Loans and related Mortgages.
(10) It will give notice in writing to the Issuer Trustee and the Rating
Agencies of it becoming aware of the occurrence of any Servicer Transfer
Event.
(11) It will maintain in effect all qualifications, consents, licenses,
permits, approvals, exemptions, filings and registrations as may be required
under any applicable law in order properly to service the Housing Loans and
Mortgages and to perform or comply with its obligations under the Servicing
Agreement.
(12) It will notify: (i) the Issuer Trustee and the Trust Manager of any
event which it reasonably believes is likely to have an Adverse Effect
promptly after becoming aware of such event; and (ii) the Trust Manager of
anything else which the Trust Manager reasonably requires regarding any
proposed modification to any Housing Loan or Mortgage.
(13) It will provide information reasonably requested by the Issuer
Trustee or the Trust Manager, with respect to all matters relating to the
Trust and the assets of the Trust, and the Issuer Trustee or the Trust
Manager believes reasonably necessary for it to perform its obligations
under the Transaction Documents, and upon reasonable notice and at
reasonable times permit the Issuer Trustee to enter the premises and inspect
the data and records in relation to the Trust and the Relevant Documents.
WESTPAC UNDERTAKINGS
Westpac has undertaken, among other things, the following under the
Servicing Agreement:
(1) It will maintain in effect all qualifications, consents, licenses,
permits, approvals, exemptions, filings and registrations as may be required
under any applicable law in relation to its ownership of
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any Housing Loan or Mortgage and to perform or comply with its obligations
under the Servicing Agreement; and comply with all Laws in connection with
its ownership of any Housing Loans and Mortgages where failure to do so
would have an Adverse Effect.
(2) It will cooperate with the Servicer in relation to the performance
by the Servicer of its duties under the Servicing Agreement, including,
without limitation, in relation to the enforcement of any Housing Loan or
Mortgage.
(3) If a material default occurs in respect to a Mortgage, it will take
such action as the Servicer directs it to take in accordance with the
Servicing Agreement.
(4) It will act in accordance with the terms of any Mortgage Insurance
Policies, and not do or omit to do anything which could be reasonably
expected to prejudicially affect or limit the rights of the Issuer Trustee
under or in respect of a Mortgage Insurance Policy to the extent those
rights relate to a Housing Loan and the Mortgage.
(5) It will not consent to the creation or existence of any security
interest in favor of a third party in relation to any Mortgaged Property
which would rank before or PARI PASSU with the relevant Housing Loan and
Mortgage or allow the creation or existence of any other security interest
in the Mortgaged Property unless priority arrangements are entered into with
such third party under which the third party acknowledges that the Housing
Loan and the Mortgage ranks ahead in priority to the third party's security
interest on enforcement for an amount not less than the Unpaid Balance of
the Housing Loan plus such other amount as the Servicer determines in
accordance with the Procedures Manual or its ordinary course of business.
(6) It will not, except as required by law, release a Borrower from any
amount owing in respect of a Housing Loan or otherwise vary or discharge any
Housing Loan or Mortgage or enter into any agreement or arrangement which
has the effect of altering the amount payable in respect of a Housing Loan
or Mortgage where it would have an Adverse Effect.
(7) It will release any Housing Loan or Mortgage, reduce the amount
outstanding under or vary the terms of any Housing Loan or grant other
relief to a Borrower, if required to do so by any law or if ordered to do so
by a court, tribunal, authority, ombudsman or other entity whose decisions
are binding on Westpac. If the order is due to Westpac breaching any
applicable law then Westpac must indemnify the Issuer Trustee for any loss
the Issuer Trustee may suffer by reason of the order. The amount of the loss
is to be determined by agreement with the Issuer Trustee or failing this, by
Westpac's external auditors.
(8) It will notify the Servicer immediately of each request by a
Borrower to borrow further moneys under or in relation to a Housing Loan or
Mortgage.
PERFORMANCE OF SERVICES
In performing any services under the Servicing Agreement the Servicer shall
have regard to whether its performance of such services does or does not have
any Adverse Effect. The Servicer may ask the Issuer Trustee or the Trust Manager
if, and may rely upon any statement by the Issuer Trustee or the Trust Manager
that, any action or inaction on its part is reasonably likely to, or will, have
an Adverse Effect. The Servicer shall not be liable for a breach of the
Servicing Agreement, or be liable under any indemnity, in relation to any action
or inaction on its part, where it has been notified by the Issuer Trustee or the
Trust Manager that the action or inaction is not reasonably likely to, or will
not have, an Adverse Effect.
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SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicer is entitled to a fee (the "Servicing Fee") for servicing the
Housing Loans, payable in arrears on the Payment Date following the end of the
Collection Period. The Servicing Fee is based on the average daily balance of
Housing Loan Principal during the Collection Period and on the actual number of
days in that Collection Period divided by 365 days.
The Servicer must pay from such fee all expenses incurred in connection with
servicing the Housing Loans except for expenses relating to the enforcement of
any Housing Loan or its related securities, the recovery of any amounts owing
under any Housing Loan or any amount repaid to a liquidator or trustee in
bankruptcy pursuant to any applicable law, binding code, order or decision of
any court, tribunal or the like or based on advice of the Servicer's legal
advisers.
SERVICER TRANSFER EVENT AND REMOVAL
The Issuer Trustee may only terminate the Servicer's appointment if the
Issuer Trustee determines that a Servicer Transfer Event has occurred and is
continuing. A "Servicer Transfer Event" is any of the following:
(1) an Insolvency Event occurs with respect to the Servicer;
(2) the Servicer fails to pay any amount within five Business Days of
receipt of a notice to do so;
(3) the Servicer fails to comply with any of its other obligations under
any Transaction Document and such action has had, or, if continued will
have, an Adverse Effect (as determined by the Issuer Trustee) and that
failure is not remedied within 30 days after the Servicer becomes aware of
that failure by receipt of notice;
(4) any representation, warranty or certification made by the Servicer
is incorrect when made and is not waived by the Issuer Trustee or remedied
to the Issuer Trustee's reasonable satisfaction within 90 days after notice
from the Issuer Trustee, and the Issuer Trustee determines that breach would
have an Adverse Effect; or
(5) if it is unlawful for the Servicer to perform the services under the
Servicing Agreement.
In the event of a Servicer Transfer Event, the Issuer Trustee must, upon
notice to the Trust Manager, the Approved Sellers, Westpac, the Servicer and the
Rating Agencies, terminate the rights and obligations of the Servicer with
immediate effect and appoint an Eligible Servicer. Until an Eligible Servicer is
appointed and that Eligible Servicer agrees to act as the servicer, the Issuer
Trustee shall act as the Servicer and is entitled to the fee for so acting.
Subject to certain limitations, the Servicer has indemnified the Issuer
Trustee against any expense, loss, damage or liability incurred as a result of a
Servicer Transfer Event or a failure by the Servicer to perform its duties under
the Servicing Agreement.
RESIGNATION
The Servicer must not resign without first giving three months' notice to
the Rating Agencies, the Trust Manager and the Issuer Trustee. If an Eligible
Servicer has not agreed to act as Servicer by the expiration of that notice
period the Issuer Trustee shall act as Servicer and be entitled to the Servicing
Fee.
DOCUMENT CUSTODY
GENERAL
The Servicer will be responsible for custody of the Relevant Documents on
behalf of the Issuer Trustee. The Servicer must hold those documents as
custodian at the direction of the Issuer Trustee in
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accordance with its standard safekeeping practices and in the same manner and to
the same extent that it holds similar documents for Westpac. The Servicer will
hold custody of the Relevant Documents in accordance with procedures contained
in the Servicing Agreement. The procedures include the following: (i) keeping
the Relevant Documents for Housing Loans in the Mortgage Pool separate from
other documents; (ii) maintaining reports on movements of the Relevant
Documents; and (iii) being able to locate security packets containing the
Relevant Documents.
The Servicer will be audited on an annual basis (or more regularly if any
audit gives an adverse finding) in relation to its custodial procedures,
identification of documents, security and tracking systems.
TERMINATION OF SERVICER AS DOCUMENT CUSTODIAN
If any of the following occurs:
(1) the Servicer does not comply with the requirements of the Servicing
Agreement to the satisfaction of the auditor, and a further audit also
results in an adverse finding by the auditor;
(2) the long term credit rating of the holding company of the Servicer
is downgraded:
(i) below BBB by Standard & Poor's;
(ii) below Baa2 by Moody's; or
(iii) below BBB by Fitch;
(3) the Servicer is in default under a servicing agreement between it
and any other person, and by reason of the default that other person removes
any documents in the Servicer's custody under the servicing agreement where
that person would otherwise not have been entitled to do so; or
(4) a Servicer Transfer Event occurs and is subsisting,
then the Servicer must deliver the Relevant Documents to, or at the direction
of, the Issuer Trustee. If the Servicer does not do so within 10 Business Days
(or such longer period as the Trustee permits), then the Issuer Trustee must
enter the premises where the Relevant Documents are kept, take possession of and
remove the Relevant Documents. If the Issuer Trustee does not have possession of
the documents within that period it must lodge caveats in relation to and/or
take all other action it considers necessary to protect its interests.
AMENDMENT
The Servicing Agreement may be amended by the parties thereto in writing and
provided that prior notice of any proposed amendment is given to the Rating
Agencies.
TERMINATION OF SERVICING AGREEMENT
The Servicing Agreement shall continue until the expiration of the Term. The
"Term" means the period from the date of the Servicing Agreement until the
earlier of:
(a) the date on which the Servicing Agreement is terminated pursuant to
a Servicer Transfer Event;
(b) the date which is one month after the Notes have been redeemed in
full in accordance with the Transaction Documents and the Trustee ceases to
have any obligation to any creditor in relation to any Trust;
(c) the date on which the Trustee replaces the Servicer with an Eligible
Servicer; and
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(d) the date on which the Servicer is replaced after resigning pursuant
to the Servicing Agreement.
THE LIQUIDITY FACILITY
The following section contains a summary of the material terms of the
Liquidity Facility. The summary does not purport to be complete and is subject
to the provisions of the Liquidity Facility, a form of which has been filed as
an exhibit to the Registration Statement.
GENERAL DESCRIPTION
Under the Liquidity Facility, the Liquidity Facility Provider agrees to make
advances to the Issuer Trustee for the purpose of funding certain income
shortfalls in the Trust, up to an aggregate amount being the lesser of:
(1) A$79,000,000;
(2) the Unpaid Balance of all Performing Loans at that date; and
(3) any lesser amount as is agreed in writing between the Liquidity
Facility Provider, the Issuer Trustee, the Trust Manager and the Rating
Agencies for each class of Notes,
as reduced or cancelled under the Liquidity Facility (the "Liquidity Limit").
A "Performing Loan" at any date is a Housing Loan which is not Delinquent or
has been Delinquent for less than 90 consecutive days, or if it has been
Delinquent for 90 or more consecutive days was insured under a Mortgage
Insurance Policy at the date of the Liquidity Facility on or before the Closing
Date.
A Housing Loan is "Delinquent" if the related Borrower fails to pay any
amount due on the related due date. Delayed payments arising from agreed payment
holidays based on early repayments, or from maternity or paternity leave
repayment reductions will not, by themselves, lead to a Housing Loan being
Delinquent.
LIQUIDITY DRAWS
If the Trust Manager determines on any Collection Determination Date that
the Available Income of the Trust plus Principal Draws for the Collection Period
relating to that Collection Determination Date is insufficient to meet Total
Payments of the Trust (a "Liquidity Shortfall"), then the Trust Manager must
direct the Issuer Trustee to request a drawing under the Liquidity Facility to
apply towards the Liquidity Shortfall. The drawing will (subject to certain
assumptions as to payment) be the lesser of the Liquidity Shortfall and the
difference between the Liquidity Limit and the aggregate of all outstanding
amounts under the Liquidity Facility (the "Available Liquidity Amount"). A
drawing may only be made by a duly completed drawdown notice signed by an
authorized signatory of the Issuer Trustee.
CONDITIONS PRECEDENT TO A LIQUIDITY DRAW
A drawing may only be made under the Liquidity Facility (a "Liquidity Draw")
if (among other things) no event of default (see "--Events of Default" below)
subsists at the date of the relevant drawdown notice and the relevant drawdown
date or will result from the provision of the Liquidity Draw.
DEPOSIT INTO A COLLATERAL ACCOUNT
If at any time the Liquidity Facility Provider's short term credit rating is
less than A-1+ from Standard & Poor's, P-1 from Moody's or F-1+ from Fitch, the
Liquidity Facility Provider must within five Business Days or such longer period
as the Rating Agencies confirm will not result in a downgrade, withdrawal or
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qualification of the Offered Notes, deposit into an account held in the name of
the Issuer Trustee (the "Collateral Account") an amount equal to the Available
Liquidity Amount at that time.
If and for so long as the Liquidity Facility Provider has a short term
credit rating of not lower than A-1 from Standard & Poor's, P-1 from Moody's and
F-1 from Fitch, the Collateral Account shall be maintained with the Liquidity
Facility Provider.
If at any time the short term credit rating of the bank holding the
Collateral Account is less than A-1 from Standard & Poor's, P-1 from Moody's or
F-1 from Fitch then the balance of the Collateral Account, and all amounts
standing to the credit of the Collateral Account, must (subject to certain
limited restrictions) within five Business Days (or such longer period as the
Rating Agencies agree) be transferred to a bank with a short term credit rating
from Standard & Poor's of not lower than A-1+, not lower than P-1 from Moody's
and not lower than F-1+ from Fitch.
If the short term credit rating of the Liquidity Facility Provider is not
less than A-1 from Standard & Poor's, P-1 from Moody's and F-1 from Fitch, and
the total of the credit balance of the Collateral Account with the Liquidity
Facility Provider plus the amount of all short term investments of the Issuer
Trustee is greater than 20% of the Total Invested Amount, then so much of the
credit balance of the Collateral Account as is necessary for the 20% threshold
not to be breached must (subject to certain limited restrictions) be deposited
with a bank with a short term credit rating from Standard & Poor's of not lower
than A-1+ and not lower than P-1 from Moody's and not lower than F-1+ from
Fitch.
Withdrawals from a Collateral Account are restricted to, among other things,
making a Liquidity Draw, paying financial institutions duty and bank account
debit tax (being taxes charged on account transactions) and investing in short
term investments.
All interest accrued on the moneys in the Collateral Account shall belong to
the Liquidity Facility Provider. If the Liquidity Facility Provider's short term
credit rating is upgraded to not lower than A-1+ from Standard & Poor's, P-1
from Moody's and F-1+ from Fitch, then the balance in the Collateral Account
must be repaid within five Business Days to the Liquidity Facility Provider and
any advances under the Liquidity Facility thereafter will be made directly from
the Liquidity Facility Provider in the normal course of business.
INTEREST ON LIQUIDITY DRAWS
Interest is payable to the Liquidity Facility Provider on the principal
amount drawn under the Liquidity Facility. This interest is payable at the Bank
Bill Rate plus a margin, calculated on days elapsed and a year of 365 days.
Interest is payable on each Payment Date and on repayment of a drawing. Unpaid
interest will capitalize, and interest accrues on any unpaid interest.
COMMITMENT FEE
A commitment fee accrues daily from the date of the Liquidity Facility on
the Available Liquidity Amount, and is payable on each Payment Date and on
termination of the facility.
The commitment fee is calculated on the actual number of days elapsed and a
year of 365 days.
REPAYMENT OF LIQUIDITY DRAWINGS
If an amount has been drawn down under the Liquidity Facility, the principal
amount is repayable on the following Payment Date, to the extent that amounts
are available for this purpose under the Series Notice; see "DESCRIPTION OF THE
OFFERED NOTES--Distribution of Total Available Funds" above. It is not an event
of default if the Issuer Trustee does not have funds available to repay the full
amount outstanding on the following Payment Date.
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EVENTS OF DEFAULT
It is an event of default under the Liquidity Facility (whether or not such
event is within the control of the Issuer Trustee) if:
(1) at any time the Available Liquidity Amount is zero, and the Issuer
Trustee fails to pay an amount payable by it under the Liquidity Facility
within 10 Business Days of its due date;
(2) an amount is available for payment to the Liquidity Facility
Provider under the Liquidity Facility and the Issuer Trustee does not pay
that amount;
(3) an Insolvency Event occurs in relation to the Trust;
(4) an Insolvency Event occurs in relation to the Issuer Trustee, and a
successor trustee of the Trust is not appointed within 30 days of that
Insolvency Event;
(5) the Termination Date occurs in relation to the Trust; or
(6) all or any part of the Liquidity Facility is terminated or is or
becomes void, illegal, invalid or unenforceable.
CONSEQUENCES OF DEFAULT
In addition to rights provided by law or any Transaction Document, at any
time after an event of default has occurred under the Liquidity Facility
(whether or not it is continuing), the Liquidity Facility Provider may do all or
any of the following by notice to the Issuer Trustee and the Trust Manager:
(1) declare all moneys actually or contingently owing at that time
immediately due and payable, and the Issuer Trustee must immediately pay the
total amount of all outstanding Liquidity Draws, together with accrued
interest and fees and all other such moneys; and
(2) cancel the Liquidity Limit with effect from any date specified in
that notice.
TERMINATION
The Liquidity Facility will terminate on the earliest of the following to
occur:
(1) the date on which the Issuer Trustee enters into a replacement
liquidity facility as previously notified to the Rating Agencies;
(2) one month after the Notes have been redeemed in full in accordance
with the Master Trust Deed;
(3) following an event of default under the Liquidity Facility, the date
on which the Liquidity Facility Provider declares the Liquidity Facility
terminated; and
(4) the date on which the Issuer Trustee has cancelled the Liquidity
Limit in full.
Cancellation of the Liquidity Limit is conditional on the Rating Agencies
confirming that such cancellation will not result in a downgrade, withdrawal or
qualification of the credit rating assigned by the Rating Agencies to the
Offered Notes.
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DESCRIPTION OF THE SWAP AGREEMENTS
DESCRIPTION OF INTEREST RATE SWAP AGREEMENTS
The following section contains a summary of the material terms of the Swap
Agreements, which the Issuer Trustee will enter into with the Interest Rate Swap
Provider. The summary does not purport to be complete and is subject to the
provisions of the Swap Agreements.
FIXED RATE AND VARIABLE RATE BASIS SWAPS
The Issuer Trustee will enter into a Variable Rate Basis Swap and two Fixed
Rate Basis Swaps with Westpac, in its capacity as the provider of the Variable
Rate Basis Swap and Westpac, in its capacity as the provider of the Fixed Rate
Basis Swaps (together the "Interest Rate Swap Provider"). Each swap will be
governed by an ISDA Master Agreement, as amended by a supplementary schedule and
confirmed by a written confirmation. All such documents will be governed by the
laws of the state of New South Wales. See "ORIGINATOR OF THE HOUSING LOANS" for
a description of the Interest Rate Swap Provider.
A Variable Rate Basis Swap will be used to hedge the basis risk between the
floating rate obligations of the Trust (including Interest payable on the Notes)
and the variable rate set, as permitted by the relevant Housing Loan agreements,
at the discretion of Westpac. The Variable Rate Basis Swap will include those
loans with a concessional fixed rate of interest for the first 12 months,
converting to the standard variable rate after that period. The Issuer Trustee
will pay an amount based on the applicable daily weighted average variable
interest rates on Housing Loans with a variable rate and receive the Bank Bill
Rate (as defined herein) plus a fixed margin. The margin is fixed for the life
of the swap and has been set having regard to the ongoing obligations of the
Trust.
Two Fixed Rate Basis Swaps will be used to hedge the basis risk between the
floating rate obligations of the Trust (including Interest payable on the Notes)
and the discretionary fixed rates set by Westpac on the Housing Loans which are
subject to a fixed rate of interest (not including those loans with a
concessional fixed rate of interest for the first 12 months, which converts to
the standard variable rate after that period).
The first Fixed Rate Basis Swap will be used to hedge the basis risk
occurring when Borrowers switch from a variable rate of interest to a Fixed Rate
of interest after the Cut-Off Date. The Issuer Trustee will pay the applicable
daily weighted average Fixed Rate on Housing Loans that have converted to a
Fixed Rate since the Cut-Off Date and the Interest Rate Swap Provider will pay
the Bank Bill Rate plus a fixed margin. The margin is fixed for the life of the
swap and has been set having regard to the ongoing obligations of the Trust.
The second Fixed Rate Basis Swap will be entered into as at the Closing Date
to hedge those Housing Loans subject to a Fixed Rate of interest as of the
Cut-Off Date. The Issuer Trustee will pay the applicable daily weighted average
Fixed Rate on Housing Loans that are Fixed Rate and the Interest Rate Swap
Provider will pay the Bank Bill Rate plus a fixed margin. The margin is fixed
for the life of the swap and has been set based on the actual margin on the
Fixed Rate Housing Loans and the prevailing wholesale market rate existing at or
about the Cut-Off Date.
All Housing Loans being charged a Fixed Rate of interest as of the Cut-Off
Date have a maximum Fixed Rate period of 5 years.
DOWNGRADE OF INTEREST SWAP PROVIDER
If there is a downgrading of the Interest Rate Swap Provider's short term
debt rating below A-1+, A2 or F-1+ by either Standard & Poor's, Moody's or
Fitch, respectively, the Interest Swap Provider will either:
(1) provide cash collateral security sufficient to enable Standard &
Poor's, Moody's and Fitch to confirm that the downgrade will not cause a
reduction in or a withdrawal of the rating of the Notes; or
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(2) arrange for a suitably rated counterparty to intermediate the swap
or act as substitute swap provider.
TERMINATION
The following events are events of default under the Interest Rate Swap
Agreements: (i) failure by Westpac or the Issuer Trustee to make, when due, any
payment or delivery required by the agreement and such failure is not remedied
by the tenth local business day; and (ii) an Insolvency Event has occurred in
respect of Westpac or the Issuer Trustee; provided, however, that an Insolvency
Event in relation to the Issuer Trustee in its personal capacity is not an event
of default if the relevant Swap is novated within 30 Business Days of that
Insolvency Event and the novation will not cause a reduction or withdrawal of
the rating of the Offered Notes. Upon novation of the Swap, the successor Issuer
Trustee will assume the rights and obligations of the Issuer Trustee under the
Interest Rate Swap.
An event which constitutes illegality will be a termination event under the
Interest Rate Swap Agreements. If there is a downgrading of the Interest Rate
Swap Provider's short term debt rating below A-l+, A2 or F-1+ by either Standard
& Poor's, Moody's or Fitch, respectively, and the Interest Rate Swap Provider
fails to act, as described in "--Downgrade of Interest Swap Provider" above, it
will be an "Additional Termination Event" under the Variable Rate Basis Swap. If
under similar circumstances the Interest Rate Swap Provider fails to establish
certain collateral arrangements it will be an "Additional Termination Event"
under each of the Fixed Rate Basis Swaps only at the discretion of the Issuer
Trustee. The "Automatic Early Termination" provisions under the Fixed and
Variable Rate Basis Swaps do not apply.
Upon the termination of an Interest Rate Basis Swap, a termination payment
calculated pursuant to the Loss Method (as defined in such Interest Rate Basis
Swap) will be due to be paid by the Issuer Trustee to the Interest Rate Swap
Provider or by the Interest Rate Swap Provider to the Issuer Trustee. The
termination payment with respect to the Variable Rate Basis Swap will be zero.
The Issuer Trustee may look to any cash collateral security posted by the
Interest Rate Swap Provider relating to the terminated Interest Rate Basis Swap
for satisfaction of the Interest Rate Swap Provider's termination payment.
NOVATION
Upon the novation of a Interest Rate Swap Agreement, either the Interest
Rate Swap Provider will pay to the substitute Interest Rate Swap Provider an
up-front premium or the substitute Interest Rate Swap Provider will pay to the
Interest Rate Swap Provider an up-front premium to preserve the economic
equivalent of the mark-to-market value of the swap transaction as of the date of
novation. The Issuer Trustee will not bear any risk with respect to the novation
of an Interest Rate Swap unless the Interest Rate Swap Provider is unable to pay
any required up-front premium and there is insufficient cash collateral security
posted with respect to such Interest Rate Swap to cover such premium.
THRESHOLD RATE
If at any time the Variable Rate Basis Swap is terminated, the Trust Manager
must, on each Collection Determination Date following that termination,
calculate the minimum rate of interest that must be set on the Housing Loans
which are subject to a discretionary variable rate, in order to cover (assuming
all counterparties to the Transaction Documents, the Housing Loans and any
Mortgages and other relevant documents meet their obligations), when aggregated
with the income produced by all other Housing Loans and taking into account the
other Swap Agreements, the obligations of the Trust (the "Threshold Rate"). If
the Servicer is notified of the Threshold Rate, it is required, subject to the
terms of the relevant Housing Loans, to ensure that the rate of interest on each
relevant discretionary variable rate Housing Loan is not less than the Threshold
Rate (see "DESCRIPTION OF THE SERVICING AGREEMENT" above).
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DESCRIPTION OF CURRENCY SWAPS
The following sections contain a summary of the material terms of the
Currency Swaps, which the Issuer Trustee will enter into with Morgan Guaranty
Trust Company of New York, acting through its London Branch ("Morgan Guaranty")
and Westpac (together, the "Currency Swap Providers" and together with the
Interest Rate Swap Provider, the "Swap Providers"). The summary does not purport
to be complete and is subject to the provisions of the Currency Swaps. The
Currency Swaps are provided on a "joint and several" basis by Westpac and Morgan
Guaranty Trust Company of New York, acting through its London Branch. See
"--Cross Support."
Collections in relation to the Housing Loans and related Mortgages and under
the Variable Rate Basis Swap and the Fixed Rate Basis Swaps will be denominated
in Australian dollars. However, the payment obligations of the Issuer Trustee in
relation to Interest and principal on the Offered Notes are denominated in
United States dollars. To hedge its currency exposure, the Issuer Trustee will
enter into four distinct swap transactions, relating to the Class A Notes and
the Class B Notes, respectively (together, the "Currency Swaps") with the
Currency Swap Providers. The Currency Swaps will be governed by an ISDA Master
Agreement dated on or about , 1998, by and between the Issuer Trustee
and Morgan Guaranty (governed by English law) and an ISDA Master Agreement dated
on or about , 1998, by and between the Issuer Trustee and Westpac
(governed by Australian law) respectively. Each ISDA Master Agreement will be
amended by a schedule thereto. Each swap transaction will be confirmed by a
written confirmation (such ISDA Master Agreements, the schedules thereto and the
related swap confirmations, the "Currency Swaps").
Under the Currency Swaps, the Issuer Trustee is required to pay to the
Currency Swap Providers on each Payment Date amounts in A$ equal to a certain
percentage of the amount of any Principal Collections to be paid to the Class A
and Class B Noteholders received by the Issuer Trustee (the percentage being
that which is described in the section entitled "DESCRIPTION OF THE OFFERED
NOTES--Payments of Principal on the Notes") and the Currency Swap Providers are
required to pay to or at the direction of the Issuer Trustee an amount
denominated in US$ which is equivalent to such A$ payment (calculated by
reference to an exchange rate which is fixed at the Closing Date and set forth
in the related swap confirmations). In addition, under the Currency Swaps on
each Payment Date the Issuer Trustee will make A$ floating rate payments to the
Currency Swap Providers and the Currency Swap Providers will make US$ floating
rate payments which are equivalent in amount to the Interest payable in US$ to
the Offered Noteholders. If on any Payment Date, the Issuer Trustee does not or
is unable to make the full floating payment, the US$ floating rate payment to be
made by the Currency Swap Providers on such Payment Date will be reduced by the
same proportion as the reduction in the payment from the Issuer Trustee.
Subscription amounts for the Offered Notes will be paid by investors in US$,
but the consideration for the purchase by the Issuer Trustee of equitable title
to the Housing Loans and related Mortgages will be in A$. Under the Currency
Swaps, an amount equal to the US$ subscription amounts will be paid to the
Currency Swap Providers, which will pay the A$ Equivalent of such amounts to the
Issuer Trustee.
On the Closing Date the Issuer Trustee will be obliged to pay to the
Currency Swap Providers an amount equal to the proceeds of the issue of the
Offered Notes in US$. In return the Issuer Trustee will be paid the A$
equivalent of that US$ amount (calculated by reference to an exchange rate which
is fixed by the Closing Date (in the swap confirmations)).
The Series Notice requires that the Issuer Trustee direct the Currency Swap
Providers to pay all US$ amounts to the Principal Paying Agent or the US$
Account. All US$ amounts shall be paid to the Offered Noteholders in accordance
with their entitlements and the priorities set out in "DESCRIPTION OF THE
OFFERED NOTES."
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TERMINATION OF THE CURRENCY SWAPS BY THE CURRENCY SWAP PROVIDERS
Under the Currency Swaps each Currency Swap Provider shall have the right to
terminate its currency swap in the following circumstances:
(1) If the Issuer Trustee fails to make a payment under the Currency
Swap within the 10 Business Days.
(2) If due to change in law it becomes illegal for the Issuer Trustee or
a Currency Swap Provider to make or receive payments or comply with any
other material provision of the Currency Swaps, the Currency Swap requires
such party to make certain efforts to transfer its rights and obligations to
another office or another affiliate to avoid this illegality (so long as the
transfer would not result in a downgrade of the rating of the Notes). If
those efforts are not successful then the applicable Currency
Swap Provider will have the right to terminate. These provisions relating to
termination following an illegality have been modified so that they are not
triggered by the introduction of certain exchange controls by any Australian
Government body.
(3) The Currency Swap Providers have the limited right to terminate
where it is required to gross-up or receive payments from which amounts have
been withheld if the Note Trustee is satisfied that the Noteholders will be
paid in full.
(4) An Insolvency Event with respect to the Issuer Trustee occurs.
(5) Any Event of Default occurs and an Extraordinary Resolution of the
Voting Mortgagees is passed directing the Security Trustee to take certain
actions.
TERMINATION OF THE CURRENCY SWAPS BY THE ISSUER TRUSTEE
There are a number of circumstances in which the Issuer Trustee has the
right to terminate the Currency Swaps with respect to a Swap Provider. In each
of these cases it is only permitted to exercise that right with the prior
written consent of the Note Trustee:
(1) Where the Currency Swap Providers fail to make a payment under the
Currency Swap within 10 Business Days or the Currency Swap Providers become
insolvent or merge into another entity without that entity properly assuming
responsibility for the obligations of the Currency Swap Providers under the
Currency Swaps.
(2) If it becomes illegal for either party to make or receive payments
under the Currency Swap or perform any of its other material obligations
under it, both the Issuer Trustee and the Currency Swap Providers are
obliged to make certain efforts to transfer their rights and obligations to
avoid that illegality. If those efforts fail the Currency Swaps may be
terminated.
(3) If the Issuer Trustee becomes obliged under the Currency Swaps to
receive payments from which amounts have been withheld or deducted
(including where this situation arises from a merger affecting the Currency
Swap Providers).
(4) If the Issuer Trustee becomes obliged to make a withholding or
deduction in respect of the Offered Notes and, as a result, the Offered
Notes are redeemed.
The Issuer Trustee (and the Note Trustee) may only terminate the Currency
Swaps following prior consultation by the Note Trustee with the Currency Swap
Providers as to the timing of termination. The Issuer Trustee will exercise such
right to terminate at the direction of the Trust Manager. The Currency Swap
Providers acknowledge that the Trust Manager will perform the day to day
management of the Trust and may exercise or satisfy any of the Issuer Trustee's
rights or obligations under the Currency Swap.
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TERMINATION PAYMENTS
On the Termination Date or the Early Termination Date (each as defined in
the Currency Swaps) in respect of the Currency Swaps, a termination payment will
be due to be paid by the Issuer Trustee to the Currency Swap Providers or to the
Issuer Trustee by the Currency Swap Providers in respect of the Currency Swaps.
The termination of a Currency Swap is an Event of Default under the Security
Trust Deed. If the Security Trust Deed is enforced after such Events of Default,
there is no guarantee that upon any such termination the funds realized from the
sale of the relevant Loans and Mortgages plus or minus (as the case may be) the
termination payment due in respect of the Currency Swaps will be sufficient to
pay in full amounts owing to the holders of the relevant Notes.
The termination payment in respect of a Currency Swap will be determined on
the basis of quotations from four leading dealers in the relevant market
(selected by the Currency Swap Providers) to enter into a replacement
transaction that would have the effect of preserving the economic equivalent of
any payment that would, but for the early termination, have been required under
the terms of the Currency Swap.
REPLACEMENT OF CURRENCY SWAPS
If the Currency Swaps are terminated with respect to a Currency Swap
Provider, the Issuer Trustee may (at the direction of the Trust Manager) enter
into one or more currency swaps which replaces the terminated Currency Swap
(other than by way of transfer to avoid termination of the swap) (a "Replacement
Currency Swap") but only on the condition that the Settlement Amount (as defined
in the ISDA Master Agreement) payable (if any) by the Issuer Trustee to the
Currency Swap Provider upon termination of the original Currency Swap will be
paid in full when due in accordance with the Series Notice and the Currency
Swap. If the condition in the previous sentence is satisfied, the Issuer Trustee
may enter into the Replacement Currency Swap and if it does so it must direct
the premium payable by the provider of the Replacement Currency Swap to be paid
directly to the applicable Currency Swap Provider in satisfaction of and to the
extent of the Issuer Trustee's obligation to pay the termination payment to such
Currency Swap Provider. If such premium paid by the Replacement Swap Provider is
less than the Settlement Amount due to the Currency Swap Provider, the balance
may be satisfied by the Issuer Trustee as a Trust Expense.
DOWNGRADE OF CURRENCY SWAP PROVIDERS
Each Currency Swap Provider, severally, will give a commitment to provide
collateral in respect of the Currency Swap to which it is a party in the event
that the rating that is given to senior debt which is jointly supported by the
two Currency Swap Providers is ever downgraded below a specified level, such
that Moody's would downgrade the rating on the Class A Notes.
CROSS SUPPORT
Each Currency Swap Provider has agreed to pay on demand of the Issuer
Trustee to or at the direction of the Issuer Trustee any amounts that the other
Currency Swap Provider is required to pay pursuant to the relevant Currency Swap
but has failed to pay. So long as a Currency Swap Provider pays such amounts,
the Issuer Trustee shall not be entitled to terminate the relevant Currency Swap
with respect to such default. In any case, a Currency Swap Provider may, in
certain circumstances, elect to replace the defaulting other Currency Swap
Provider with itself or another suitably rated party approved by the Issuer
Trustee, the Trust Manager and the Note Trustee.
CURRENCY SWAP PROVIDERS
Morgan Guaranty Trust Company of New York, acting through its London Branch,
and Westpac are joint providers of the Currency Swaps.
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Morgan Guaranty Trust Company of New York, a Delaware corporation whose
principal office is located in New York, New York ("Morgan Guaranty"), is a
wholly owned subsidiary and the principal asset of J.P. Morgan & Co.
Incorporated ("J.P. Morgan"). Morgan Guaranty is a commercial bank offering a
wide range of banking services to its customers both domestically and
internationally. Its business is subject to examination and regulation by
Federal and New York State banking authorities. As of December 31, 1997, Morgan
Guaranty and its subsidiaries had total assets of $196.4 billion, total net
loans of $30.9 billion, total deposits of $60.7 billion, and stockholder's
equity of $10.4 billion. As of December 31, 1996, the Currency Swap Provider and
its subsidiaries had total assets of $164.8 billion, total net loans of $27.4
billion, total deposits of $53.1 billion and stockholder's equity of $9.9
billion.
The Consolidated Statement of Condition of Morgan Guaranty as of December
31, 1997 is set forth on page 11 of Exhibit 99b to Form 8-K dated January 15,
1998, as filed by J.P. Morgan with the Commission. Morgan Guaranty will provide
without charge to each person to whom this Prospectus is delivered, on the
request of any such person, a copy of the Form 8-K referred to above. Written
requests should be directed to: Morgan Guaranty Trust Company of New York, 60
Wall Street, New York, New York 10260-0060, Attention: Office of the Secretary.
For a description of Westpac, see "ORIGINATOR OF THE HOUSING LOANS".
The information with respect to the Currency Swap Providers contained herein
has been obtained from the Currency Swap Providers. The delivery of this
Prospectus will not create any implication that there has been no change in the
affairs of the Currency Swap Providers since the date hereof or that the
information contained or referred to herein is correct as of any time subsequent
to its date. The Currency Swap Providers have not had any involvement in the
preparation of any part of this Prospectus, other than the information with
respect to the Currency Swap Providers set forth in this section and under the
heading "DESCRIPTION OF THE SWAP AGREEMENTS--Description of Currency Swap." The
Currency Swap Providers make no statement or representation in this Prospectus
(other than the information referred to above), have not authorized or caused
the issue of any part of it and take no responsibility for any part of it.
THE OFFERED NOTES DO NOT REPRESENT AN OBLIGATION OF THE CURRENCY SWAP
PROVIDERS, J.P. MORGAN SECURITIES INC., J.P. MORGAN OR ANY OF THEIR RESPECTIVE
AFFILIATES. HOLDERS OF THE OFFERED NOTES WILL NOT HAVE ANY RIGHT TO PROCEED
DIRECTLY AGAINST THE CURRENCY SWAP PROVIDERS IN RESPECT OF THE CURRENCY SWAP
PROVIDERS' OBLIGATIONS UNDER THE CURRENCY SWAPS.
CERTAIN LEGAL ASPECTS OF THE HOUSING LOANS
The following discussion contains summaries of legal aspects of Australian
retail housing loans and mortgages that are general in nature. The summaries do
not purport to be complete. In addition, certain of those legal aspects are
governed by the law of the applicable State or Territory (which laws may differ
substantially between States and Territories) and the summaries do not reflect
the particular laws of any particular state or encompass all relevant laws of
all states in which any Mortgaged Property may be situated. The summaries are
subject to the applicable Australian federal and state laws governing real
property and the granting and enforcement of security over real property.
GENERAL
Generally each Housing Loan will be secured by a mortgage which has a first
ranking priority over all other mortgages granted by the relevant Borrower and
over all unsecured creditors of the Borrower (except in respect of certain
statutory rights such as some rates and taxes, which are granted statutory
priority or if the Housing Loan is not secured by a first ranking mortgage the
Approved Seller will assign to the Issuer Trustee all prior ranking registered
mortgages in relation to that Housing Loan). The Borrower is prohibited under
its loan documents from creating another mortgage or other security interest
over the relevant Mortgaged Property without the consent of Westpac. There are
two parties to a mortgage, the
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mortgagor, who is the borrower and homeowner (or, where the relevant loan is
guaranteed and the guarantee is secured by a mortgage, the guarantor) and who
grants the mortgage over their property, and the mortgagee who is the lender.
NATURE OF HOUSING LOANS AS SECURITY
There are a number of different forms of title to land in Australia. The
most common forms of title in Australia, and the only form of title which may
constitute Mortgaged Property is "Torrens title."
TORRENS TITLE
"Torrens title" land is freehold or leasehold title, interests in which are
created by registration in one or more central land registries of the relevant
State or Territory. Each parcel of land is represented by a specific certificate
of title. The original certificate is retained by the registry, and in most
States a duplicate certificate is issued to the owner. Any dealing with the
relevant land is carried out by pro forma instruments which become effective on
registration.
Ordinarily the relevant certificate of title (or any registered plan
referred to in it) will reveal the position and dimensions of the land, the
present owner, and any leases, mortgages and registered easements to which it is
subject. The certificate is conclusive evidence (except in limited
circumstances, such as fraud) of the matters stated in it.
STRATA TITLE
"Strata title" was developed to facilitate the creation of, and dealings
with, apartment units (which are similar to condominiums in the United States)
and is governed by the legislation of the State or Territory in which the
property is situated. Under strata title, each proprietor has title to, and may
freely dispose of, their unit. All proprietors are members of a "body
corporate", which is vested with the control, management and administration of
the common property and the strata scheme generally, for the benefit of the
proprietors, including the rules governing the apartment block. Certain parts of
the property, such as the land on which the building is erected, the stairwells,
entrance lobbies and the like are known as "common property" and are held by the
body corporate for the benefit of the individual proprietors.
Only Torrens title land can be the subject of strata title in this way, and
so the provisions referred to in this section in relation to Torrens title apply
to the title in a unit held by a strata proprietor.
URBAN LEASEHOLD
All land in the Australian Capital Territory is owned by the Commonwealth of
Australia and is subject to a leasehold system of land tenure. Mortgaged
Property in that jurisdiction comprises a Crown lease and developments on the
land are subject to that lease. Any such lease:
(a) cannot have a term exceeding 99 years, although the term can be extended
under a straightforward administrative process in which the only
qualification to be considered is whether the land may be required for a
public purpose; and
(b) where they involve residential property are subject to a nominal rent of
5 cents per annum on demand.
As with other Torrens title land, the Borrower's leasehold interest in the
land is entered in a central register and the Borrower may deal with their
leasehold interest (including granting a mortgage over the property) without
consent from the government.
In all cases where Mortgaged Property consists of a leasehold interest, the
unexpired term of the lease exceeds the term of the Housing Loan secured by that
Mortgaged Property.
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Leasehold property may become subject to native title claims. Native title
has only quite recently been recognised by Australian courts. Native title to
particular property is based on the traditional laws and customs of indigenous
Australians and is not necessarily extinguished by grants of Crown leases over
that property. The extent to which native title exists over property (including
property subject to a Crown lease) depends on how that property was previously
used by the indigenous claimants asserting native title, and whether the native
title has been extinguished by the granting of the leasehold interest. If the
lease confers the right of exclusive possession over the property (which is
typically the case with residential leases), the current view is that native
title over the relevant property should be extinguished. Whether a lease confers
exclusive possession will depend on a construction of the lease and the
legislation under which the lease was granted.
Housing Loans secured by Mortgaged Property which is leasehold in the
Australian Capital Territory represents only approximately 1.5% (by value) of
all Housing Loans.
TAKING SECURITY OVER LAND
The law relating to the granting of securities over real property is made
complex by the fact that each State and Territory has separate governing
legislation. The following is a brief overview of general issues involved in
taking security over land.
Under Torrens title, registration of a mortgage using the prescribed form
executed by the mortgagor is required in order for the mortgagee to obtain the
remedies of a mortgagee granted by statute and the relevant priorities against
other secured creditors. To this extent the mortgagee is said to have a legal
(i.e., registered) title. However, registration does not transfer title in the
property--the mortgagor remains as legal owner. Rather, the Torrens mortgage
operates as a statutory charge. The mortgagee does not obtain an estate in the
property but does have an interest in the land which is marked on the register
and the "certificate of title" for the property. A search of the register by any
subsequent lender will reveal the existence of the prior mortgage.
In most States and Territories, a mortgagee will retain a duplicate
certificate of title (which mirrors the original certificate of title held at
the relevant land registry office). Although the certificate is not a document
of title as such, the procedure for replacement is sufficiently onerous to act
as a deterrent against most mortgagor fraud. Failure to retain the certificate
may in certain circumstances constitute negligent conduct resulting in a
postponement of the mortgagee's priority to a later secured creditor.
In Queensland, under the Land Title Act 1994, duplicate certificates of
title are no longer issued to mortgagees as a matter of practice. A record of
the title is stored on computer at the land registry office and the mortgage is
registered on that computerized title.
Once the mortgagor has repaid the debt, a discharge executed by the
mortgagee is lodged with the registrar by the mortgagor or the mortgagee and the
mortgage is noted as having been released.
WESTPAC AS MORTGAGEE
Westpac is, and until a Title Perfection Event occurs intends to remain, the
registered mortgagee of all the Mortgages. The relevant Borrowers will not be
aware of the equitable assignment of the Housing Loans and Mortgages to the
Issuer Trustee.
Prior to any Title Perfection Event Westpac, or the Servicer on its behalf,
will undertake any necessary enforcement action with respect to defaulted
Housing Loans and Mortgages. Following a Title Perfection Event, the Issuer
Trustee is entitled (under an irrevocable power of attorney granted to it by
Westpac) to be registered as mortgagee of the Mortgages. Until that registration
is achieved, the Issuer Trustee or the Trust Manager is entitled to lodge
caveats on the register to notify its interest publicly.
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ENFORCEMENT OF HOUSING LOANS
Subject to the discussion below, if a Borrower defaults under a Housing
Loan, the loan documents provide that all moneys under the loan may be declared
immediately due and payable. In Australia, a lender may sue to recover all
outstanding principal, interest and fees under the personal covenant of a
borrower contained in the loan documents to repay those amounts. In addition,
the lender may enforce a registered mortgage in relation to the defaulted loan.
Enforcement may occur in a number of ways, including the following:
(a) The mortgagee may enter into possession of the property. If it does
so, it does so in its own right and not as agent of the mortgagor, and so
may be personally liable for mismanagement of the property and to third
parties as occupier of the property;
(b) The mortgagee may, in limited circumstances, lease the property to
third parties;
(c) The mortgagee may foreclose on the property--that is, extinguish the
mortgagor's title to the property so that the mortgagee becomes the absolute
owner of the property (a remedy that is, because of procedural constraints,
rarely used). If the mortgagee forecloses on the property, it loses the
right to sue the borrower under the personal covenant to repay and can look
only to the value of the property for satisfaction of the debt;
(d) The mortgagee may appoint a receiver to deal with income from the
property or exercise certain other rights delegated to the receiver by the
mortgagee. Unlike a mortgagee in possession, a receiver is the agent of the
mortgagor and so in theory the mortgagee is not liable for the receiver's
acts or as occupier of the property. In practice, the receiver will require
indemnities from the mortgagee that appoints it; or
(e) The mortgagee may sell the property, subject to various duties to
ensure that the mortgagee exercises proper care in relation to the sale.
This power of sale is usually expressly contained in the mortgage documents,
and is also implied into registered mortgages under the relevant Torrens
title legislation. The Torrens title legislation prescribes forms and
periods of notice to be given to the mortgagor prior to enforcement.
A sale under a mortgage may be by public auction or private treaty. Once
registered, the purchaser of property sold pursuant to a mortgagee's power of
sale becomes absolute owner of the property.
A mortgagee's ability to call all amounts under a housing loan or enforce a
mortgage which is subject to the Consumer Credit Legislation is limited by
various demand and notice procedures which are required to be followed. For
example, as a general rule enforcement cannot occur unless the relevant default
is not remedied within 30 days after a default notice is given. Borrowers may
also be entitled to initiate negotiations with the mortgagee for a postponement
of enforcement proceedings.
PENALTIES AND PROHIBITED FEES
Australian courts will not enforce an obligation of a borrower to pay
default interest on delinquent required payments if the court determines that
the relevant default interest rate is a penalty. Certain jurisdictions prescribe
a maximum recoverable interest rate, although in most jurisdictions there is no
specified threshold rate to determine what is a penalty. In those circumstances,
whether a rate is a penalty or not will be determined by reference to such
factors as the prevailing market interest rates. The Consumer Credit Legislation
does not impose a limit on the rate of default interest, but a rate which is too
high may entitle the borrower to have the loan agreement re-opened on the ground
that it is unjust. Under the Corporations Law, the liquidator of a company may
avoid a loan under which an extortionate interest rate is levied.
The Consumer Credit Legislation requires that any fee or charge to be levied
by the lender must be provided for in the contract, otherwise it cannot be
levied. The regulations under the Consumer Credit
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Legislation may also from time to time prohibit certain fees and charges. The
Consumer Credit legislation also requires that establishment fees, termination
fees and prepayment fees must be reasonable otherwise they may be reduced or set
aside.
CONSUMER CREDIT LEGISLATION
Some of the Housing Loans are regulated by consumer credit legislation (the
"Consumer Credit Legislation"). Under that legislation, a Borrower has the right
to apply to a court to:
(1) vary the terms of his or her Housing Loan on the grounds of hardship
or that it is an unjust contract;
(2) reduce or cancel any interest rate payable on the Housing Loan which
is unconscionable;
(3)have certain provisions of the Housing Loan or relevant Mortgage
which are in breach of the legislation declared unenforceable; or
(4) obtain restitution or compensation from either Westpac or, following
a Title Perfection Event, the Issuer Trustee, in relation to any breaches of
the Consumer Credit Legislation in relation to the Housing Loan or relevant
Mortgage.
Any such order may affect the timing or amount of interest or principal
payments or repayments under the relevant Housing Loan (which might in turn
affect the timing or amount of Interest or principal payments or repayments
under the Offered Notes).
In addition, a mortgagee's ability to enforce a mortgage which is subject to
the Consumer Credit Legislation is limited by various demand and notice
procedures which are required to be followed. For example, as a general rule
enforcement cannot occur unless the relevant default is not remedied within 30
days after a default notice is given. Borrowers may also be entitled to initiate
negotiations with the mortgagee for a postponement of enforcement proceedings.
Such procedures and negotiations may also affect the timing or amount of
interest or principal payments or repayments under the Housing Loans.
Breaches of the Consumer Credit Legislation may also lead to civil penalties
or criminal fines being imposed on Westpac, for so long as it holds legal title
to the Housing Loans and the Mortgages. If the Issuer Trustee acquires legal
title, it will then become primarily responsible for compliance with the
Consumer Credit Legislation. The Issuer Trustee will (subject to limited
exceptions) be indemnified out of the assets of the Trust for its liabilities
under the Consumer Credit Legislation. If the Issuer Trustee is indemnified with
respect to such liabilities out of the assets of the Trust, proceeds of the
Trust may be insufficient to make all payments provided for under the Offered
Notes.
Westpac will give, or has given, certain representations and warranties that
the Housing Loans and related Mortgages comply in all material respects with the
Consumer Credit Legislation in force at the time documents were entered into.
The Servicer has undertaken to comply with the Consumer Credit Legislation in
connection with servicing the Housing Loans and related Mortgages where failure
to do so would have an Adverse Effect. An "Adverse Effect" is an event which
will materially and adversely affect the amount of any payment to be made to any
Noteholder, or will materially and adversely affect the timing of such payment.
In certain circumstances the Issuer Trustee may have the right to claim damages
from Westpac or the Servicer, as the case may be, where the Issuer Trustee
suffers a loss in connection with a breach of the Consumer Credit Legislation
which is caused by a breach of a relevant representation or undertaking.
BANKRUPTCY
The insolvency of a natural person is governed by the provisions of the
Bankruptcy Act 1966, which is a federal statute. Generally, secured creditors of
a natural person (such as mortgagees under real property mortgages) stand
outside the bankruptcy--that is, the property of the bankrupt which is available
for distribution by the trustee in bankruptcy does not include the secured
property. The secured creditor may, if it wishes, prove in the bankruptcy
proceeding as an unsecured creditor in a number of circumstances,
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including if they have realized the related mortgaged property and their debt
has not been fully repaid (in which case they can prove for the unpaid balance).
Certain dispositions of property by a bankrupt may be avoided by the trustee
in bankruptcy. These include where (a) the disposition was made to defraud
creditors; or (b) the disposition was made by an insolvent debtor within 6
months of the petition for bankruptcy and gave a preference to an existing
creditor over at least one other creditor.
The insolvency of a company is governed by the Corporations Law of the
relevant Australian jurisdiction. Again, secured creditors generally stand
outside the insolvency. However, a liquidator may avoid a mortgage which is
voidable under the Corporations Law because it is an uncommercial transaction,
or an unfair preference to a creditor or a transaction for the purpose of
defeating creditors, and that transaction occurred when the company was
insolvent (or an act is done to give effect to the transaction when the company
is insolvent, or the company becomes insolvent because of the transaction or the
doing of an act to give effect to the transaction), and the transaction occurred
within a prescribed period prior to the commencement of the winding up of the
company. The liquidator may also avoid a loan under which an extortionate
interest rate is levied.
ENVIRONMENTAL
Real property which is mortgaged to a lender may be subject to unforeseen
environmental problems, including land contamination. Environmental legislation
which deals with liability for such problems exists at both state and federal
levels, although the majority of relevant legislation is imposed by the states.
No Australian statute expressly imposes liability on "passive" lenders or
security holders for environmental matters, and some states expressly exclude
such liability. However, liability in respect of environmentally damaged land
(which liability may include the cost of rectifying the damage) may attach to a
person who is, for instance, an owner, occupier or person in control of the
relevant property. In some but not all states, lenders are expressly excluded
from the definitions of one or more of these categories.
Merely holding security over property will not convert a lender into an
occupier. However, a lender or receiver who goes into possession of contaminated
mortgaged property or otherwise enforces its security may be liable as an
occupier.
Some environmental legislation provides that security interests may be
created over contaminated or other affected property to secure payment of the
costs of any necessary rectification of the property. The security interests may
have priority over pre-existing mortgages.
INSOLVENCY CONSIDERATIONS
The current transaction is designed to minimize insolvency risk. For
example, the equitable assignment of the Housing Loans by Westpac to the Issuer
Trustee should ensure that the Housing Loans are not assets available to the
liquidator or creditors of Westpac in the event of an insolvency of Westpac.
Similarly, the assets in the Trust should not be available to other creditors of
the Issuer Trustee in its personal capacity or as trustee of any other trust in
the event of an insolvency of the Issuer Trustee.
If any Insolvency Event occurs with respect to the Issuer Trustee, the
Security Trust Deed may be enforced by the Security Trustee at the direction of
the Voting Mortgagees (see "SECURITY FOR THE NOTES--Enforcement"). The security
created by the Security Trust Deed will stand outside any liquidation of the
Issuer Trustee, and the assets the subject of that security will not be
available to the liquidator or any creditor of the Issuer Trustee (other than a
creditor which has the benefit of the Security Trust Deed) in priority to the
Security Trust Deed. The proceeds of enforcement of the Security Trust Deed are
to be applied by the Security Trustee as set out in "SECURITY FOR THE
NOTES--Priorities under the Security Trust Deed". If the proceeds from
enforcement of the Security Trust Deed are not sufficient to redeem the Notes in
full, some or all of the Noteholders will incur a loss.
TREATMENT OF INTEREST PAYMENTS WITH RESPECT TO AUSTRALIAN HOUSING LOANS
Under Australian law, interest on loans used to purchase a person's primary
place of residence is not ordinarily deductible for taxation purposes.
Conversely, interest payments on mortgage loans and other non-capital
expenditures relating to investment properties that generate taxable income are
generally allowable as tax deductions.
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USE OF PROCEEDS
The net proceeds from the sale of the Offered Notes will amount to
A$2,252,766,010 and will be used by the Issuer Trustee to acquire equitable
title to the Housing Loans and related Mortgages from the Approved Sellers and
for general expenses (including any premium payable to any Swap Provider) in
relation to the Trust.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of the anticipated material United
States federal income tax consequences of the purchase, ownership and
disposition of Offered Notes by Noteholders who are subject to United States
federal income tax. The summary is based on laws, regulations, rulings and
decisions now in effect, all of which are subject to change (possibly with
retroactive effect) or to different interpretation. The summary does not purport
to address federal income tax consequences applicable to particular categories
of investors, some of which (for example, insurance companies, dealers in
securities, financial institutions or foreign investors) may be subject to
special rules. In addition, this summary is generally limited to investors who
will hold the Notes as "capital assets" (generally, property held for
investment) within the meaning of Section 1221 of the Internal Revenue Code of
1986, as amended (the "Code"). Investors are urged to consult their own tax
advisors with regard to the application of the tax considerations discussed
below to their particular situations, as well as the consequences to them under,
state, local, non-United States and any other tax law of the purchase, ownership
and disposition of the Offered Notes, including the advisability of making any
election discussed below. Prospective investors should note that no rulings have
been or will be sought from the Internal Revenue Service (the "IRS" or the
"Service") with respect to any of the federal income tax consequences discussed
below, and no assurance can be given that the IRS will not take contrary
positions. It is anticipated that the Issuer Trustee will not be indemnified for
any United States federal income taxes that may be imposed upon it, and the
imposition of any such taxes on the Trust could result in a reduction in the
amounts available for distribution to the Noteholders.
In the opinion of Mayer, Brown & Platt, tax counsel to the Issuer Trustee
("Tax Counsel"), for United States federal income tax purposes, the Offered
Notes will be characterized as debt of the Issuer Trustee. Each Noteholder, by
the acceptance of an Offered Note, will agree to treat the Offered Notes as
indebtedness for federal income tax purposes.
GENERAL
Each Noteholder will be required to report on its federal income tax return
interest income on the Offered Notes held by it in accordance with such
Noteholder's method of accounting.
SALES OF NOTES
A Noteholder's tax basis in an Offered Note will equal its cost of such
Offered Note, reduced by any amortized premium (as described below) and any
payments other than interest made on such Offered Note and increased by any
market discount or original issue discount included in the Noteholder's income.
A Noteholder that sells an Offered Note will recognize gain or loss (in the
aggregate) in an amount equal to the difference between its adjusted tax basis
in the Offered Note and the amount realized on the sale (except to the extent
attributable to accrued interest, which should be taxable as interest income).
Subject to the market discount provisions of the Code (described below), any
such gain or loss will be capital gain or loss if the Offered Note was held as a
capital asset and, if the Offered Note was held for more than one year, will be
long-term capital gain or loss. In the case of an individual taxpayer, any
capital gain on the sale of an Offered Note will be taxed at a maximum rate of
39.6% if the Offered Note is held for not more than 12 months, at 28% if the
Offered Note is held for more than 12 months, but not more than 18 months, and
at 20% if the Offered Note is held for more than 18 months. Any capital losses
realized will be deductible by a corporate taxpayer only to the extent of
capital gains and by an individual taxpayer only to the extent of capital gains
plus U.S. $3,000 of other income.
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MARKET DISCOUNT
A purchaser of an Offered Note will be considered to have acquired such
Offered Note at a "market discount" to the extent the remaining principal amount
of such Offered Note exceeds the Noteholder's tax basis in such Offered Note,
unless the excess does not exceed a prescribed DE MINIMIS amount. In the event
such excess exceeds the DE MINIMIS amount, the Noteholder will be subject to the
market discount rules of Sections 1276 and 1278 of the Code with regard to such
Offered Note.
In the case of a sale or other disposition of an Offered Note subject to the
market discount rules, Section 1276 of the Code requires that gain, if any, from
such sale or disposition be treated as ordinary income to the extent such gain
represents market discount that has accrued during the period in which the Note
was held by such Noteholder. In addition, a disposition of an Offered Note by
gift (and in certain other circumstances), could result in the recognition of
market discount income, computed as if such Offered Note had been sold for its
fair market value.
In the case of a partial principal payment on an Offered Note subject to the
market discount rules, Section 1276 of the Code requires that such payment be
included in gross income as ordinary income to the extent such payment does not
exceed the market discount that has accrued during the period such Offered Note
was held by such Noteholder. The amount of any accrued market discount later
required to be included in income upon a disposition, or subsequent partial
principal payment, will be reduced by the amount of accrued market discount
previously included in income.
Generally, market discount accrues under a straight line method, or, at the
election of the taxpayer, under a constant interest rate method. However, in the
case of bonds the principal of which may be paid in two or more installments
(such as the Offered Notes), the manner in which market discount is to be
accrued will be described in Treasury regulations that have yet to be issued.
Until such Treasury regulations are issued, the explanatory conference committee
Report to the Tax Reform Act of 1986 (the "Conference Report") indicates that
holders of such obligations may elect to accrue market discount either on the
basis of a constant interest rate or as follows: (1) for those obligations that
have original issue discount ("OID"), market discount shall be deemed to accrue
in proportion to the accrual of OID for any accrual period, and (2) for those
obligations which do not have OID, the amount of market discount that is deemed
to accrue is the amount of market discount that bears the same ratio to the
total amount of remaining market discount that the amount of stated interest
paid in the accrual period bears to the total amount of stated interest
remaining to be paid on the obligation as of the beginning of such period.
Under Section 1277 of the Code, if in any taxable year interest paid or
accrued by a Noteholder on indebtedness incurred or continued to purchase or
carry an Offered Note subject to the market discount rules exceeds the interest
(including OID) currently includible in income with respect to such Offered
Note, deductions of such interest must be deferred to extent of the market
discount allocable to the taxable year. The deferred portion of any interest
expense will generally be deductible when such market discount is included in
income upon the sale or other disposition (including repayment) of the
indebtedness.
Section 1278 of the Code allows a taxpayer to make an election to include
market discount in its gross income currently. If such election is made, the
rules of Sections 1276 and 1277 of the Code (described above) will not apply to
the taxpayer.
Due to the complexity of the market discount rules, prospective Noteholders
are urged to consult their tax advisors as to the applicability and operation of
the market discount rules.
PREMIUM
A Noteholder will generally be considered to have acquired an Offered Note
at a premium to the extent the Noteholder's tax basis in such Offered Note
exceeds the remaining principal amount of such Offered Note. In that event, a
Noteholder who holds an Offered Note as a capital asset may amortize the premium
as an offset to interest income under Section 171 of the Code, with
corresponding reductions in
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the Noteholder's tax basis in the Offered Note if an election under Section 171
of the Code is or has been made with respect to all debt instruments held by the
taxpayer (including the Offered Notes). Generally, such amortization is on a
constant yield basis. However, in the case of bonds the principal of which may
be paid in two or more installments (such as the Offered Notes), the Conference
Report indicates a Congressional intent that amortization will be in accordance
with the same rules that will apply to the accrual of market discount on such
obligations (see the discussion of market discount above).
BACKUP WITHHOLDING
A Noteholder may be subject, under certain circumstances, to backup
withholding at a 31% rate with respect to "reportable payments" on the Offered
Notes. This withholding generally applies only if the Noteholder (i) fails to
provide the Noteholder's social security or other taxpayer identification number
("TIN"); (ii) furnishes an incorrect TIN; (iii) is notified by the Service that
the Noteholder has failed to report properly payments of interest and dividends
and the Service has notified the Issuer Trustee that the Noteholder is subject
to backup withholding; or (iv) fails, under certain circumstances, to provide a
certified statement, signed under penalty of perjury, that the TIN provided is
the Noteholder's correct number and that the Noteholder is not subject to backup
withholding. Any amount withheld from payment to a Noteholder under the backup
withholding rules is allowable as a credit against such Noteholder's federal
income tax liability, provided that the required information is furnished to the
Service. Certain Noteholders (including, among others, corporations and foreign
individuals who comply with certain certification requirements) are not subject
to backup withholding. Noteholders should consult their tax advisors as to their
qualifications for exemption from backup withholding and the procedure for
obtaining such an exemption.
ALL INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE FEDERAL,
STATE, LOCAL OR FOREIGN INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE NOTES.
CERTAIN AUSTRALIAN TAX MATTERS
THE FOLLOWING STATEMENTS WITH RESPECT TO AUSTRALIAN TAXATION ARE ONLY
GENERAL SUMMARIES AND ARE BASED ON ADVICE RECEIVED BY THE ISSUER TRUSTEE.
PURCHASERS OF OFFERED NOTES SHOULD CONSULT THEIR OWN TAX ADVISERS CONCERNING THE
CONSEQUENCES, IN THEIR PARTICULAR CIRCUMSTANCES, UNDER AUSTRALIAN TAX LAWS, AND
THE LAWS OF ANY OTHER TAXING JURISDICTION, OF THE OWNERSHIP OF OR ANY DEALING IN
THE OFFERED NOTES. ANY SUCH DEALING WOULD NEED TO COMPLY WITH THE SELLING
RESTRICTIONS AND SECURITIES LAW GENERALLY.
PAYMENTS OF PRINCIPAL, PREMIUMS AND INTEREST
Under existing Australian tax law, non-resident holders of the Offered Notes
or interests in any Global Note (other than persons holding such securities or
interest as part of a business carried on, at or through a permanent
establishment in Australia (an "Australian Establishment")) are not subject to
Australian income tax on payments of interest or amounts in the nature of
interest, other than interest withholding tax. Under Article 11 of the 1983
United States-Australia Tax Treaty, the maximum Australian withholding rate on
interest paid to United States residents who are entitled to the benefit of such
Treaty is 10%. Under Australian law, the withholding rates for payments to other
jurisdictions is currently 10% on interest or amounts in the nature of interest
paid on the Offered Notes. A premium on redemption would generally be treated as
an amount in the nature of interest for this purpose.
Pursuant to section 128F of the Australian Income Tax Assessment Act 1936
(the "Tax Act"), an exemption from Australian interest withholding tax applies
provided all prescribed conditions are met. Such conditions include the issue of
the Offered Notes in a way that satisfies an objective public offer test. The
Issuer Trustee will seek to issue the Offered Notes in a way that will satisfy
such test and otherwise meet the requirements of section 128F, including by
listing the Offered Notes.
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The test will not be satisfied if the Issuer Trustee knew, or had reasonable
grounds to suspect, that the Offered Notes were being or would later be acquired
either directly or indirectly by:
(1) a resident of Australia for the purpose of section 128F of the Tax Act;
or
(2) an associate of the Issuer Trustee within the meaning of section 128F of
the Tax Act, other than in the capacity of a dealer, manager or
underwriter in relation to the placement of an Offered Note.
The exemption from Australian withholding tax will also not apply to
interest paid by the Issuer Trustee to an associate of the Issuer Trustee within
the meaning of section 128F if, at the time of the payment, the Issuer Trustee
knows, or has reasonable grounds to suspect, that the person is an associate.
In a press release of the Federal Government of Australia late last year
entitled INVESTING FOR GROWTH, it was announced that "in order to encourage the
deepening and greater liquidity of the domestic corporate debt market, the
interest withholding tax exemption provided under section 128F of the Income Tax
Assessment Act 1936 will be widened by removing, for eligible debentures issued
by companies, the present requirement that such debentures be issued outside
Australia and that the interest be paid outside Australia . . . this measure
will remove a tax discrimination in favour of corporate debt issued in foreign
financial markets over corporate debt issued in Australia markets."
This amendment has not yet been enacted, therefore the effect, form and
timing of the proposed amendment is currently unclear.
PROFIT ON SALE
Under current Australian law, non-resident holders of Offered Notes will not
be subject to Australian income tax on profits derived from the sale or disposal
of Offered Notes (but see below for discussion of Australia's capital gains
provisions):
(1) if the profits do not have an Australian source; or
(2) where the profits do have an Australian source, if the holder is
resident in a country with which Australia has entered into a double tax
treaty, is entitled to the benefit of that treaty and the profits are
business profits for the purposes of the treaty which are not
attributable to a business carried on through an Australian
Establishment.
The source of any profit on the disposal of Offered Notes will depend on the
factual circumstances of the actual disposal. Where the Offered Notes are
acquired and disposed of pursuant to contractual arrangements entered into and
concluded outside Australia, and the seller and the purchaser are non-residents
of Australia and do not have an Australian Establishment, the profit should not
have an Australian source. There are, however, specific withholding tax rules
that can apply to treat a portion of the sale price of Offered Notes as interest
for withholding tax purposes (and which amounts are not covered by the exemption
conditions in section 128F). These rules can apply when:
(1) Offered Notes are sold for an amount in excess of their issue price
prior to maturity; or
(2) Offered Notes are sold to an Australian resident in connection with a
"washing arrangement" (as defined in the Tax Act).
Under provisions for the taxation of capital gains, non-resident holders of
Offered Notes would be subject to Australian tax on profits derived from the
sale or disposal of Offered Notes if the Offered Notes were at any time prior to
the sale or disposal held as part of a business carried on through an Australian
Establishment.
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OTHER TAXES
No stamp, issue, registration or similar taxes are payable in Australia in
connection with the issue of the Offered Notes. Furthermore, a transfer of, or
agreement to transfer, Offered Notes executed outside of Australia will not be
subject to Australian stamp duty.
ERISA CONSIDERATIONS
Subject to the considerations discussed below, the Offered Notes are
eligible for purchase by employee benefit plans.
Section 406 of the Employee Retirement Income Security Act ("ERISA"), and/or
Section 4975 of the Code, prohibits a pension, profit-sharing or other employee
benefit plan, as well as individual retirement accounts and certain types of
Keogh Plans (each a "Benefit Plan") from engaging in certain transactions with
persons that are "parties in interest" under ERISA or "disqualified persons"
under the Code with respect to such Benefit Plan. A violation of these
"prohibited transaction" rules may result in an excise tax or other penalties
and liabilities under ERISA and the Code for such persons. Title I of ERISA also
requires that fiduciaries of a Benefit Plan subject to ERISA make investments
that are prudent, diversified (except if prudent not to do so) and in accordance
with governing plan documents.
Certain transactions involving the purchase, holding or transfer of the
Offered Notes might be deemed to constitute prohibited transactions under ERISA
and the Code if assets of the Issuer Trustee were deemed to be assets of a
Benefit Plan. Under a regulation issued by the United States Department of Labor
(the "Plan Assets Regulation"), the assets of the Issuer Trustee would be
treated as plan assets of a Benefit Plan for the purposes of ERISA and the Code
only if the Benefit Plan acquires an "equity interest" in the Issuer Trustee and
none of the exceptions contained in the Plan Assets Regulation is applicable. An
equity interest is defined under the Plan Assets Regulation as an interest in an
entity other than an instrument which is treated as indebtedness under
applicable local law and which has no substantial equity features. Although
there can be no assurances in this regard, it appears that the Offered Notes
should be treated as debt without substantial equity features for purposes of
the Plan Assets Regulation and that the Offered Notes do not constitute equity
interests in the Issuer Trustee for purposes of the Plan Assets Regulation.
However, without regard to whether the Offered Notes are treated as an equity
interest for such purposes, the acquisition or holding of the Offered Notes by
or on behalf of a Benefit Plan could be considered to give rise to a prohibited
transaction if the Issuer Trustee, or any of its affiliates is or becomes a
party in interest or a disqualified person with respect to such Benefit Plan. In
such case, certain exemptions from the prohibited transaction rules could be
applicable depending on the type and circumstances of the plan fiduciary making
the decision to acquire an Offered Note. Included among these exemptions are:
Prohibited Transaction Class Exemption ("PTCE") 96-23, regarding transactions
effected by "in-house asset managers"; PTCE 90-1, regarding investments by
insurance company pooled separate accounts; PTCE 95-60, regarding transactions
effected by "insurance company general accounts"; PTCE 91-38, regarding
investments by bank collective investment funds; and PTCE 84-14, regarding
transactions effected by "qualified professional asset managers." By its
acquisition of an Offered Note, each purchaser shall be deemed to represent and
warrant that its purchase and holding of the Offered Note will not result in a
non-exempt prohibited transaction under ERISA or the Code.
Employee benefit plans that are governmental plans (as defined in Section
3(32) of ERISA) and certain church plans (as defined in Section 3(33) of ERISA)
are not subject to ERISA requirements.
A PLAN FIDUCIARY CONSIDERING THE PURCHASE OF ANY OF THE OFFERED NOTES SHOULD
CONSULT ITS TAX AND/OR LEGAL ADVISORS REGARDING WHETHER THE ASSETS OF THE ISSUER
TRUSTEE WOULD BE CONSIDERED PLAN ASSETS, THE POSSIBILITY OF EXEMPTIVE RELIEF
FROM THE PROHIBITED TRANSACTION RULES AND OTHER ISSUES AND THEIR POTENTIAL
CONSEQUENCES.
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RATINGS OF THE NOTES
It is a condition to the issuance of the Class A Notes that they be rated
"AAA" by Standard & Poor's, "Aaa" by Moody's and "AAA" by Fitch. It is a
condition to the issuance of the Class B Notes that they be rated "AA-" by
Standard & Poor's and "AA-" by Fitch. The security ratings of the Offered Notes
should be evaluated independently from similar ratings on other types of
securities. A security rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or withdrawal at any time by the
Rating Agencies. The Offered Notes are pass-through debt securities. The rating
does not address the expected schedule of principal repayments other than to say
that principal will be returned no later than the final maturity date.
LEGAL INVESTMENT CONSIDERATIONS
The Offered Notes will not constitute "mortgage related securities" for
purposes of the Secondary Mortgage Market Enhancement Act of 1984 ("SMMEA"),
because the originator of the Mortgage Loans was not subject to United States
State of Federal regulatory authority. Accordingly, many institutions with legal
authority to invest in comparably rated securities based on such mortgage loans
may not be legally authorized to invest in the Offered Notes, which, for the
reasons stated herein, do not constitute "mortgage related securities" under
SMMEA. No representation is made as to whether the Offered Notes constitute
legal investments under any applicable statute, law, rule, regulation or order
for any entity whose investment activities are subject to investment laws and
regulations or to review by certain regulatory authorities. Prospective
purchasers are urged to consult with their counsel concerning the status of the
Offered Notes as legal investments for such purchasers.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
by and among the underwriters named below (the "Underwriters"), Westpac, the
Issuer Trustee and Trust Manager, the Issuer Trustee has agreed to sell to the
Underwriters, and each of the Underwriters have severally agreed to purchase,
the principal amount of the Offered Notes set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PRINCIPAL AMOUNT
UNDERWRITER OF CLASS A NOTES OF CLASS B NOTES
- ----------------------------------------------------------------------------- ---------------- ----------------
<S> <C> <C>
J.P. Morgan Securities Inc...................................................
Morgan Stanley & Co. Incorporated............................................
Westpac Banking Corporation..................................................
Deutsche Morgan Grenfell Inc.................................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated...........................
Swiss Bank Corporation.......................................................
Nomura International plc.....................................................
---------------- ----------------
Total.................................................................. US$ US$
---------------- ----------------
---------------- ----------------
</TABLE>
In the Underwriting Agreement, the Underwriters named therein have agreed,
subject to the terms and conditions set forth therein, to purchase all of the
Offered Notes offered hereby if any Offered Notes are purchased. In the event of
default by an Underwriter, the Underwriting Agreement provides that, in certain
circumstances, the Underwriting Agreement may be terminated.
The Issuer Trustee has been advised by the Underwriters that they propose
initially to offer the Offered Notes to the public at the respective offering
prices set forth on the cover page hereof and to certain dealers at such prices
less concessions not to exceed % of the Initial Invested Amount of the Class
A Notes and % of the Initial Invested Amount of the Class B Notes.
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With respect to the Class A Notes, the Underwriters may allow and such
dealers may reallow, a concession not to exceed % of the aggregate of the
Initial Invested Amount of the Class A Notes. With respect to the Class B Notes,
the Underwriters may allow and such dealers may reallow, a concession not to
exceed % of the Initial Invested Amount of the Class B Notes.
In connection with the offering, the Underwriters may engage in transactions
that stabilize, maintain or otherwise affect the price of the Offered Notes.
Specifically, the Underwriters may overallot the offering, creating a syndicate
short position. In addition, the Underwriters may bid for, and purchase, the
Offered Notes in the open market to cover syndicate shorts or to stabilize the
price of the Offered Notes. Any of these activities may stabilize or maintain
the market price of the Offered Notes above independent market levels. The
Underwriters are not required to engage in these activities, and if commenced,
such activities may be discontinued at any time.
After the initial public offering of the Offered Notes, the public offering
price and such concessions may be changed.
Pursuant to the Underwriting Agreement, Westpac Securities Administration
Limited (in its capacity as trustee of the Trust only), Westpac Securitisation
Management Pty Limited and Westpac have agreed to indemnify the Underwriters
against certain liabilities, including civil liabilities under the Securities
Act, or contribute to payments which the Underwriters may be required to make in
respect thereof.
In the ordinary course of its business, certain of the Underwriters and
certain of their affiliates have in the past and may in the future engage in
commercial and investment banking activities with Westpac and its affiliates.
OFFERING RESTRICTIONS
UNITED KINGDOM
Each Underwriter has severally represented and agreed with the Issuer
Trustee that:
(i) it has not offered or sold and will not offer or sell any Offered Notes
to persons in the United Kingdom prior to admission of the Offered Notes to
listing in accordance with Part IV of the Financial Services Act 1986 (the
"Financial Services Act") except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments (as principal
or agent) for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities Regulations
1995 or the Financial Services Act;
(ii) it has complied and will comply with all applicable provisions of the
Financial Services Act with respect to anything done by it in relation to the
Offered Notes in, from or otherwise involving the United Kingdom; and
(iii) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issues of the
Offered Notes, other than any document which consists of or of any part of
listing particulars, supplementary listing particulars or any other document
required or permitted to be published by listing rules under Part IV of the
Financial Services Act, to a person who is of a kind described in Article 11(3)
of the Financial Services Act 1986 (Investment Advertisements) (Exemptions)
Order 1996 (as amended) or is a person to whom the document may otherwise
lawfully be issued or passed on.
AUSTRALIA
The Offered Notes may not, in connection with their initial distribution, be
offered or sold, directly or indirectly, in the Commonwealth of Australia, its
territories or possessions ("Australia"), or to any resident
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of Australia. Each Underwriter has severally represented and agreed that in
connection with the initial distribution of the Offered Notes it:
(i) has not (directly or indirectly) offered for subscription or purchase or
issue invitations to subscribe for or buy nor has it sold, the Offered Notes;
(ii) will not (directly or indirectly) offer for subscription or purchase or
issued invitations to subscribe for or buy nor will it sell the Offered Notes;
and
(iii) has not distributed and will not distribute any offering circular, or
any advertisement or other offering material,
in Australia, its territories or possessions or to any person who is (a)
actually known by the Underwriter (without an obligation on the Underwriter to
make any inquiry) to be a resident of Australia for the purposes of section 128F
of the Tax Act or (b) an associate of Westpac within the meaning of that section
(other than in the capacity of a dealer or underwriter in relation to a
placement of the Offered Notes) as identified on a list provided by Westpac.
LISTING AND GENERAL INFORMATION
LISTING
The listing of the Offered Notes on the London Stock Exchange will be
expressed as a percentage of their principal amount (exclusive of accrued
interest). It is expected that listing of the Offered Notes on the London Stock
Exchange will be granted on or about , subject to the issuance of
Global Notes. The Offered Notes will be issued in the form of one or more Global
Notes. There will be no temporary global notes.
AUTHORIZATION
The Issuer Trustee has obtained all necessary consents, approvals and
authorizations in connection with the issue and performance of the Notes. The
issue of the Notes has been authorized by the resolutions of the Board of
Directors of the Issuer Trustee passed on .
LITIGATION
The Issuer Trustee is not involved in any litigation or arbitration
proceedings which may have, or have had during the twelve months preceding the
date of this Prospectus, a significant effect on the Issuer Trustee's financial
position nor, so far as the Issuer Trustee is aware, are any such litigation or
arbitration proceedings pending or threatened.
EUROCLEAR AND CEDEL
The Offered Notes have been accepted for clearance through Euroclear and
Cedel Bank with a common code of for the Class A Notes and a common code
of for the Class B Notes. The ISIN for the Class A Notes is and the
ISIN for the Class B Notes is .
DOCUMENTS AVAILABLE FOR COLLECTION AND INSPECTION
Copies of the following documents may be inspected during normal business
hours on any weekday (excluding Saturdays, Sundays and public holidays) at the
offices of the Principal Paying Agent at 60 Victoria Embankment, London EC4Y
0JP, during the period of fourteen days from the date of this Prospectus (except
for (a) and (b) (xiii), together the "Transaction Documents"):
(a) the Memorandum and Articles of Association of the Issuer Trustee;
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(b) the Master Trust Deed between the Issuer Trustee and the Trust Manager
dated 14th February 1997;
(c) the following (which, prior to the Closing Date, will be in draft form):
(i) the Series Notice among the Issuer Trustee, the Trust Manager, the
Approved Seller, the Note Trustee and the Servicer dated on or about
, 1998;
(ii) the Servicing Agreement dated February 18, 1997 and the Servicing
Agreement Amendment Agreement dated on or about , 1998, each
among Westpac, the Servicer and the Issuer Trustee;
(iii) the Note Trust Deed among the Issuer Trustee, the Trust Manager and
the Note Trustee dated on or about , 1998;
(iv) the Agency Agreement among the Issuer Trustee, the Trust Manager,
the Note Trustee, the Principal Paying Agent and the Agent Bank dated on or
about , 1998;
(v) the Security Trust Deed among the Issuer Trustee, the Security
Trustee, the Note Trustee and the Trust Manager dated on or about
, 1998;
(vi) the Liquidity Facility Agreement among the Issuer Trustee, the
Liquidity Provider and the Trust Manager dated on or about ,
1998;
(vii) the Redraw Facility Agreement among the Issuer Trustee, the Redraw
Facility Provider and the Trust Manager dated on or about ,
1998;
(viii) the Interest Rate Swaps between the Issuer Trustee and Westpac
dated on or about , 1998;
(ix) the Currency Swap between Westpac, as a Currency Swap Provider and
the Issuer Trustee dated on or about , 1998;
(x) the Currency Swap between Morgan Guaranty & Trust Company, London
Branch as a Currency Swap Provider, and the Issuer Trustee dated on or about
, 1998;
(xi) the Mortgage Pool Insurance Policy between HLIC, Westpac and the
Issuer Trustee;
(xii) the PMI Policies issued by Royal & Sun, MGICA, WLMI and HLIC which
cover individual housing loans for principal and interest losses; and
(xiii) Underwriting Agreement among the Trust Manager, the Issuer Trustee,
Westpac and the Underwriters dated on or about , 1998.
TEMPORARY AUSTRALIAN FOREIGN EXCHANGE CONTROLS
Under temporary Australian foreign exchange controls, payments to, or on
behalf of:
(1) the Government of Iraq or to its agencies or nationals:
(2) the authorities of the Federal Republic of Yugoslavia (Serbia and
Montenegro); or
(3) the Government of Libya or any public authority or controlled entity of
the Government of Libya,
may only be made with the approval of the Reserve Bank of Australia.
CONSENTS TO OPINIONS
Mayer, Brown & Platt have given and not withdrawn their written consent to
the inclusion in this Prospectus of their opinion in the form and context in
which it is included on pages 27 and 144 and have
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authorized the content of their opinion for the purposes of section 152(1)(e) of
the Financial Services Act 1986.
Allen Allen & Hemsley have given and not withdrawn their written consent to
the inclusion in the Prospectus of their opinion in the form and context in
which it is included on page 7 and have authorized the content of their opinion
for the purposes of section 152(1)(e) of the Financial Services Act 1986.
LEGAL MATTERS
Certain legal matters with respect to the Offered Notes will be passed upon
for the Trust Manager and the Issuer Trustee by Mayer, Brown & Platt, Chicago,
Illinois, and for the Trust Manager by Allen Allen & Hemsley, Sydney, Australia
and for the Underwriters by Brown & Wood LLP, New York, New York. The material
U.S. federal income tax consequences of the Offered Notes will be passed upon
for the Trust Manager by Mayer, Brown & Platt, and certain Australian income tax
consequences will be passed upon for the Trust Manager by Allen Allen & Hemsley.
Certain legal matters with respect to the Note Trustee will be passed upon by
Brown & Wood, a multinational partnership, London, England.
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INDEX OF DEFINED TERMS
<TABLE>
<S> <C>
A$............................................................................ 7
A$ Class A Interest Amount.................................................... 93
A$ Class B Interest Amount.................................................... 93
Accrued Interest Adjustment................................................... 30, 49
ACN........................................................................... 61
ACT........................................................................... 54
Additional Termination Event.................................................. 134
Adverse Effect................................................................ 43, 142
Agent Bank.................................................................... 17
Agreement..................................................................... 136
AMP........................................................................... 83
Approved Bank................................................................. 90
Approved Sellers.............................................................. 13
Australian dollars............................................................ 7
Australian Establishment...................................................... 146
Authorized Investments........................................................ 111
Automatic Early Termination................................................... 134
Availability Fee.............................................................. 105
Available Income.............................................................. 29, 90
Available Liquidity Amount.................................................... 130
Available Redraw Amount....................................................... 104
Average Quarterly Percentage.................................................. 100
Bank Bill Rate................................................................ 104
Basic Terms Modification...................................................... 118, 119
beneficial owner.............................................................. 113
Beneficiary................................................................... 96
Benefit Plan.................................................................. 148
Bond Factor................................................................... 112
Book-Entry Notes.............................................................. 89, 113
Borrower...................................................................... 21
Business Day.................................................................. 16, 88
capital assets................................................................ 144
Carryover Charge Off.......................................................... 30
Carryover Class A Charge Offs................................................. 102
Carryover Class B Charge Offs................................................. 102
Carryover Redraw Charge Offs.................................................. 102
Carryover RFS Class A Charge Offs............................................. 102
Cede.......................................................................... 3
Cedel......................................................................... 1
Cedel Participants............................................................ 114
Certificate of Insurance...................................................... 78
charge........................................................................ 24
Chargor....................................................................... 24, 46
Class......................................................................... 16
Class A Charge Off............................................................ 101
Class A Forex Percentage...................................................... 100
Class A Notes................................................................. 1, 14, 88
Class A Percentage............................................................ 100
</TABLE>
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<TABLE>
<S> <C>
Class B Charge Off............................................................ 101
Class B Notes................................................................. 1, 14, 88
Class B Percentage............................................................ 100
Clean-up Offer................................................................ 25
Closing Date.................................................................. 15
Code.......................................................................... 144
Collateral Account............................................................ 131
Collection Account............................................................ 111
Collection Determination Date................................................. 88
Collection Period............................................................. 88
Collections................................................................... 29, 89
Collections Account........................................................... 22
Commission.................................................................... 3
Concessional Fixed Rate....................................................... 37
Conference Report............................................................. 145
Consumer Credit Legislation................................................... 42, 142
Cooperative................................................................... 115
CPR........................................................................... 84
Currency Swaps................................................................ 135
Currency Swap Providers....................................................... 135
Cut-Off Date.................................................................. 15
Cut-Off Date Balance Outstanding.............................................. 21, 51
Cut-Off Date Pool Balance..................................................... 54
Definitive Note............................................................... 113
Definitive Notes.............................................................. 116
Delinquent.................................................................... 23, 67, 130
Depository.................................................................... 89
Draw Fee...................................................................... 104
DTC........................................................................... 1, 113
Eligibility Criteria.......................................................... 52
Eligible Servicer............................................................. 40
ERISA......................................................................... 148
Euroclear..................................................................... 1
Euroclear Operator............................................................ 115
Euroclear Participants........................................................ 115
European Depositaries......................................................... 113
Event of Default.............................................................. 119
Excess Available Income....................................................... 31, 95
Excess Collections Distribution............................................... 31, 96
Exchange Act.................................................................. 3
Extraordinary Resolution...................................................... 47
Fair Market Value............................................................. 25
Finance Charge Collections.................................................... 91
Finance Charge Loss........................................................... 91
Financial Intermediary........................................................ 113
Financial Securities Act...................................................... 150
Fitch......................................................................... 27
Fixed Rate.................................................................... 37
Fixed Rate Housing Loans...................................................... 54
floating charge............................................................... 24
GE............................................................................ 82
</TABLE>
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<TABLE>
<S> <C>
GECA.......................................................................... 82
Government.................................................................... 82
Gross Principal Collections................................................... 29, 96
HLIC.......................................................................... 19, 77
Holders....................................................................... 88
Housing Loan Principal........................................................ 25, 100
Housing Loans................................................................. 2
Initial Invested Amount....................................................... 16
Initial Principal Distributions............................................... 98
Initial Subordinated Percentage............................................... 101
Insolvency Event.............................................................. 105
Interest...................................................................... 17, 95, 108
Interest Determination Date................................................... 16, 88, 95
Interest Period............................................................... 16
Interest Rate................................................................. 16, 94
Interest Rate Swap Provider................................................... 133
Invested Amount............................................................... 16, 30
IRS........................................................................... 144
ISDA.......................................................................... 17, 95
ISDA Definitions.............................................................. 17, 95
ISDA Master Agreement......................................................... 24
Issuer Trustee................................................................ 1, 13, 61
Issuer Trustee Fee............................................................ 63
Issuer Trustee's Default...................................................... 63
J.P. Morgan................................................................... 138
Liquidation Loss.............................................................. 30
Liquidation Losses............................................................ 91
Liquidation Proceeds.......................................................... 91
Liquidity Draw................................................................ 130
Liquidity Facility Provider................................................... 23
Liquidity Limit............................................................... 23, 130
Liquidity Shortfall........................................................... 130
LMI........................................................................... 82
London Stock Exchange......................................................... 1
Loss Date..................................................................... 79
LVR........................................................................... 19
Margin........................................................................ 107
Master Trust Deed............................................................. 13
Maturity Date................................................................. 15
MGICA......................................................................... 20, 78
MIP........................................................................... 68
Moody's....................................................................... 27
Morgan Guaranty............................................................... 135, 138
Mortgage Default.............................................................. 79
Mortgagee in Possession....................................................... 68
Mortgage Insurance Policies................................................... 19
Mortgage Insurers............................................................. 20
Mortgage Pool................................................................. 21
Mortgage Pool Insurance Policy................................................ 19, 78
Mortgage Rates................................................................ 22
Mortgage Servicing System..................................................... 22
</TABLE>
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<TABLE>
<S> <C>
Mortgage Shortfall............................................................ 30, 101
Mortgaged Property............................................................ 21
Mortgagees.................................................................... 24, 45
Mortgages..................................................................... 51
MPC........................................................................... 66
Net Principal Collections..................................................... 18, 98
Note Owners................................................................... 113
Note Trust Deed............................................................... 13, 66
Note Trustee.................................................................. 13, 66
Noteholder.................................................................... 112
Notes......................................................................... 15, 88
Notice of Creation of Trust................................................... 44
NSW........................................................................... 54
NT............................................................................ 54
Offered Noteholders........................................................... 16, 88
Offered Notes................................................................. 1, 14, 88
OID........................................................................... 145
P & I......................................................................... 77
Paying Agent.................................................................. 14
Paying Agents................................................................. 14
Payment Date.................................................................. 1, 16
payment holiday............................................................... 76
Payment Shortfall............................................................. 22, 92
Performing Loan............................................................... 23, 130
Plan Assets Regulation........................................................ 148
PMI Policy.................................................................... 19, 82
Prepayment Benefit............................................................ 92
Prepayment Benefit Shortfall.................................................. 91
Prepayment Calculation Adjustment............................................. 97
Prepayment Cost............................................................... 92
Prepayment Cost Surplus....................................................... 91
Principal Charge Off.......................................................... 30, 101
Principal Collections......................................................... 29, 97
23, 29, 31,
Principal Draw................................................................ 92
Principal Loss................................................................ 30, 92
Principal Outstanding......................................................... 104
Principal Paying Agent........................................................ 14
Procedures Manual............................................................. 125
PTCE.......................................................................... 148
QLD........................................................................... 54
Quarter....................................................................... 88
Quarterly Percentage.......................................................... 100
Rating Agencies............................................................... 27, 149
Record Date................................................................... 16
Redraw........................................................................ 36, 75, 103
redraws....................................................................... 14
Redraw Advance................................................................ 104
Redraw Facility Agreement..................................................... 25, 103
Redraw Facility Charge Off.................................................... 101
Redraw Facility Provider...................................................... 18, 103
Redraw Funding Securities..................................................... 15
</TABLE>
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<TABLE>
<S> <C>
Redraw Limit.................................................................. 104
Redraw Shortfall.............................................................. 103
Registered.................................................................... 21
Registration Statement........................................................ 5
Related Security.............................................................. 51
relevant corporation.......................................................... 105
Relevant Date................................................................. 109
Relevant Depositary........................................................... 113
Relevant Document............................................................. 51
Remaining Liquidity Shortfall................................................. 92
Remittance Date............................................................... 90
Replacement Currency Swap..................................................... 137
Representative................................................................ 47
RFS........................................................................... 107
RFS Charge Off................................................................ 101
RFS Class A Charge Off........................................................ 101
RFS Class A Forex Percentage.................................................. 101
RFS Class A Interest.......................................................... 93
RFS Class A Note.............................................................. 107
RFS Class A Notes............................................................. 2, 15
RFS Interest.................................................................. 93
RFS Series.................................................................... 107
RFSs.......................................................................... 2, 15
Royal & Sun................................................................... 20, 78
Rules......................................................................... 113
SA............................................................................ 54
Sale Notice................................................................... 13
Scheduled Payment............................................................. 21
Secured Moneys................................................................ 47
Securities Act................................................................ 5
Securitized Portfolios........................................................ 68
Security Trustee.............................................................. 13, 45
Security Trust Deed........................................................... 13
Security Trustee Fee.......................................................... 49
Seller Trustee................................................................ 14, 45
Serial Method 1 Distribution Test............................................. 30, 98
Serial Method 2 Distribution Test............................................. 30, 99
Series Notice................................................................. 23
Service....................................................................... 144
Servicer...................................................................... 6, 13, 51
Servicer Transfer Event....................................................... 128
Servicer's Security Undertaking............................................... 35
Servicing Agreement........................................................... 13
Servicing Fee................................................................. 128
SMMEA......................................................................... 26, 149
Standard & Poor's............................................................. 27
Stated Amount................................................................. 17, 30
Strata title.................................................................. 139
Subordinated Percentage....................................................... 101
Substitution Net Transfer Amount (Income)..................................... 90
Substitution Net Transfer Amount (Principal).................................. 97
</TABLE>
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<TABLE>
<S> <C>
Support Facility.............................................................. 24
Swap Agreements............................................................... 24
Swap Providers................................................................ 135
TAS........................................................................... 54
Tax Act....................................................................... 146
Tax Counsel................................................................... 144
Term.......................................................................... 129
Termination Date.............................................................. 106
Terms and Conditions.......................................................... 115
Threshold Rate................................................................ 37, 134
TIN........................................................................... 146
Title Perfection Event........................................................ 34
TMC........................................................................... 13, 66
top up........................................................................ 36
Torrens title................................................................. 138, 139
Total Available Funds......................................................... 90
Total Carryover Charge Off.................................................... 102
Total Payments................................................................ 31, 94
Transaction Documents......................................................... 25, 151
Transfer Agent and Registrar.................................................. 116
Trust......................................................................... 1, 13, 23
Trust Accounts................................................................ 111
Trust Assets.................................................................. 2
Trust Expenses................................................................ 94
Trust Manager................................................................. 2, 13, 70
Trust Manager Fee............................................................. 71
Trust Manager's Default....................................................... 71
Underwriters.................................................................. 149
Unpaid Balance................................................................ 23, 25, 109
U.S. dollars.................................................................. 7
US$........................................................................... 7
US$ Account................................................................... 102
USD-LIBOR-BBA................................................................. 17, 95, 107
USD-LIBOR-Reference Banks..................................................... 17, 95
Variable Rate Housing Loans................................................... 54
Vic........................................................................... 54
Voting Mortgagee.............................................................. 121
WA............................................................................ 54
weighted average life......................................................... 84
Westpac....................................................................... 2, 13, 66
Westpac Group................................................................. 44
Withholding Tax Event......................................................... 26
WLMI.......................................................................... 20, 78
WSML.......................................................................... 70
</TABLE>
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APPENDIX I--GLOSSARY OF AUSTRALIAN LEGAL TERMS
"CHARGE" means the charge created by the Security Trust Deed. A Charge is a
proprietary interest created over property.
"CHARGOR" means the person or entity granting a Charge.
MORTGAGEE IN POSSESSION ("MIP") means a mortgagee in possession of the
related Mortgaged Property who, following an enforcement of the relevant
mortgage, is able to deal with the Mortgaged Property without becoming the
absolute owner of the Mortgaged Property.
"REGISTERED" means the mortgage has been filed with lands office in the
relevant Australian State or Territory, granting certain rights with respect to
the applicable Mortgaged Property.
"SECURED MONEYS" means all money which the Issuer Trustee (whether alone or
with another person) is or at any time may become actually or contingently
liable to pay to or for the account of any Mortgagee (whether alone or with
another person) for any reason whatever under or in connection with a
Transaction Document.
"STRATA TITLE" means a system of title in which the relevant land is
divided into the relevant number of units. Each proprietor has title to, and may
freely dispose of, their unit. All proprietors are members of a "body
corporate", which monitors compliance with rules governing the apartment block.
Certain parts of the property, such as stairwells, entrance lobbies and the like
are known as "common property" and are owned by the body corporate as a whole
rather than by individual proprietors.
"TORRENS TITLE" means a system of title in which the relevant land is
freehold title, interests in which are created by registration in a central land
registry of the relevant State or Territory. Each parcel of land is represented
by a specific certificate of title. The original certificate is retained by the
registry, and in most States a duplicate certificate is issued to the owner. Any
dealing with the relevant land is carried out by pro forma instruments which
become effective on registration.
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APPENDIX II--TERMS AND CONDITIONS OF THE CLASS A NOTES
TERMS AND CONDITIONS OF THE CLASS A NOTES
THE FOLLOWING, SUBJECT TO AMENDMENTS, ARE THE TERMS AND CONDITIONS OF THE
CLASS A NOTES, SUBSTANTIALLY AS THEY WILL APPEAR ON THE REVERSE OF THE CLASS A
NOTES. CLASS A NOTES IN DEFINITIVE FORM WILL ONLY BE ISSUED IN CERTAIN
CIRCUMSTANCES. WHILE THE CLASS A NOTES REMAIN IN BOOK-ENTRY FORM, THE SAME TERMS
AND CONDITIONS GOVERN THEM, EXCEPT TO THE EXTENT THAT THEY ARE APPROPRIATE ONLY
TO THE CLASS A NOTES IN DEFINITIVE FORM. FOR A SUMMARY OF THE PROVISIONS
RELATING TO THE CLASS A NOTES IN BOOK-ENTRY FORM, SEE THE SUMMARY AT THE END OF
THIS SECTION.
The issue of US$1,372,700,000 Class A Mortgage Backed Floating Rate Notes
due 2029 (the "Class A Notes") of Westpac Securities Administration Limited in
its capacity as trustee of the Series 1998-1G WST Trust (the "Trust"), in such
capacity (the "Issuer Trustee") was authorised by resolution[s] of the Board of
Directors of the Issuer Trustee passed on [*]. These Notes, together with
US$32,300,000 Class B Mortgage Backed Floating Rate Notes due 2029 (the "Class B
Notes" and, together with the Class A Notes, the "Notes") of the Issuer Trustee
are (a) issued subject to a Master Trust Deed (the "Master Trust Deed") dated
14th February 1997 between the Issuer Trustee and The Mortgage Company Pty
Limited, acceded to by Westpac Securitisation Management Pty Limited (the "Trust
Manager"), by a Series Notice (the "Series Notice") dated [*] between (among
others) the Issuer Trustee, Morgan Guaranty Trust Company of New York, London
Branch (the note trustee for the time being referred to as the "Note Trustee")
as trustee for the holders for the time being of the Class A Notes (the "Class A
Noteholders") and the holders for the time being of the Class B Notes (the
"Class B Noteholders" and together with the Class A Noteholders, the
"Noteholders") and the Trust Manager, and by these terms and conditions (the
"Class A Conditions"); (b) issued subject to a note trust deed dated [*] (the
"Note Trust Deed") between the Issuer Trustee, the Trust Manager and the Note
Trustee; and (c) secured by a Security Trust Deed (the "Security Trust Deed")
dated [*] between the Issuer Trustee, the Trust Manager, the Note Trustee and
Perpetual Trustee Company Limited (ACN 000 001 007) (the security trustee for
the time being referred to as "Security Trustee").
The statements set out below include summaries of, and are subject to the
detailed provisions of the Master Trust Deed, the Series Notice, the Security
Trust Deed and the Note Trust Deed. Certain words and expressions used herein
have the meanings defined in those documents. In accordance with an agency
agreement (the "Agency Agreement") dated [*] between the Issuer Trustee, the
Trust Manager, the Note Trustee and Morgan Guaranty Trust Company of New York,
London Branch as principal paying agent (the "Principal Paying Agent", which
expression includes its successors as principal paying agent under the Agency
Agreement) and as agent bank (the "Agent Bank", which expression includes its
successors as Agent Bank under the Agency Agreement), and under which further
paying agents may be appointed (together with the Principal Paying Agent, the
"Paying Agents", which expression includes the successors of each paying agent
as such under the Agency Agreement and any additional paying agents appointed),
payments in respect of the Class A Notes will be made by the Paying Agents and
the Agent Bank will make the determinations specified in the Agency Agreement.
The Class A Noteholders will be entitled (directly or indirectly) to the benefit
of, will be bound by, and will be deemed to have notice of, all the provisions
of the Master Trust Deed, the Series Notice, the Security Trust Deed, the Note
Trust Deed and the Servicing Agreement as amended (the "Servicing Agreement
Amendment Agreement") dated [*] and made between the Issuer Trustee, Westpac
Banking Corporation ("Westpac") and The Mortgage Company Pty Limited as Servicer
(together with any substitute or successor, the "Servicer") (together with the
Currency Swap Agreements (as defined below), those documents the "Relevant
Documents" and, together with certain other transaction documents defined as
such in the Series Notice, the "Transaction Documents"). Copies of the
Transaction Documents are available for inspection at the principal office of
the Principal Paying Agent, being at the date hereof 60 Victoria Embankment,
London EC4Y 0JP.
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In connection with the issue of the Class A Notes, the Issuer Trustee has
entered into an ISDA master interest rate and currency exchange agreement dated
[*] with Westpac Banking Corporation (in such capacity, the "Interest Rate Swap
Provider") together with three confirmations relating thereto dated [*] (the
"Variable Rate Basis Swap" and the "Fixed Rate Basis Swap", respectively and,
together, the "Interest Rate Swaps"). The Issuer Trustee has also entered into
ISDA master interest rate and currency exchange agreements dated [*] with each
of Morgan Guaranty Trust Company of New York, London Branch and Westpac Banking
Corporation (each, in such capacity, a "Currency Swap Provider", and together
with the Interest Rate Swap Provider, the "Swap Providers") together with two
confirmations relating to each such agreement dated [*] in respect of two
distinct swap transactions relating to each of the Class A Notes and the Class B
Notes, respectively (each, a "Currency Swap", and together the "Currency
Swaps").
1. FORM, DENOMINATION AND TITLE
The Class A Notes will be issued in registered form, without interest
coupons, in minimum denominations of US$100,000 and integral multiples thereof.
The Class A Notes will be represented by one or more typewritten fully
registered book-entry notes (each, a "Book-Entry Note" and collectively, the
"Book-Entry Notes") registered in the name of Cede & Co. ("Cede") as nominee of
The Depository Trust Company ("DTC"). Beneficial interests in the Book-Entry
Notes will be shown on, and transfers thereof will be effected only through,
records maintained by DTC and its participants. Morgan Guaranty Trust Company of
New York, Brussels office, as operator of the Euroclear System ("Euroclear") and
Cedel
Bank, societe anonyme ("Cedel Bank"), may hold interests in the Book-Entry Notes
on behalf of persons who have accounts with Euroclear and Cedel Bank through
accounts maintained in the names of Euroclear or Cedel Bank, or in the names of
their respective depositories, with DTC.
If the Issuer Trustee is obliged to issue Definitive Notes under clause 3.3
of the Note Trust Deed, interests in the applicable Book-Entry Note will be
transferred to the beneficial owners thereof in the form of Definitive Notes,
without interest coupons, in the denominations set forth above. A Definitive
Note will be issued to each Noteholder in respect of its registered holding or
holdings of Class A Notes against delivery by such Noteholders of a written
order containing instructions and such other information as the Issuer Trustee
and Morgan Guaranty Trust Company of New York, London Branch acting as note
registrar (the "Note Registrar") may require to complete, execute and deliver
such Definitive Notes. In such circumstances, the Issuer Trustee will cause
sufficient Definitive Notes to be executed and delivered to the Note Registrar
for completion, authentication and dispatch to the relevant Noteholders.
2. STATUS, SECURITY AND RELATIONSHIP BETWEEN THE CLASS A NOTES, THE CLASS B
NOTES, THE RFSS AND THE RFS CLASS A NOTES
The Class A Notes are secured by a first ranking floating charge over all of
the assets of the Trust (which include, among other things, the Loans (as
defined below) and the Mortgages (as defined below) and related securities) (as
more particularly described in the Security Trust Deed) and rank PARI PASSU and
rateably without any preference or priority among themselves.
The Class A Notes are constituted by the Master Trust Deed and the Series
Notice and are secured by the same security as secures the Class B Notes but the
Class A Notes will rank in priority to the Class B Notes in the event of the
security being enforced and in respect of principal and interest (as set out in
Class A Condition 4 and 5).
The proceeds of the issue of the Class A Notes and the Class B Notes are to
be used by the Issuer Trustee to purchase an equitable interest in certain
housing loans (the "Loans") and certain related mortgages (the "Mortgages") from
Westpac or Westpac Securities Administration Limited in its capacity as trustee
of certain other trusts (each a "WST Seller").
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In the event that the security for the Class A Notes is enforced and the
proceeds of such enforcement are insufficient, after payment of all other claims
ranking in priority to or PARI PASSU with the Class A Notes under the Security
Trust Deed, to pay in full all principal and interest and other amounts
whatsoever due in respect of the Class A Notes, then the Class A Noteholders
shall have no further claim against the Issuer Trustee in respect of any such
unpaid amounts.
The net proceeds of realisation of the assets of the Trust may be
insufficient to pay all amounts due to the Noteholders. Save in certain limited
circumstances the other assets of the Issuer Trustee will not be available for
payment of any shortfall arising and all claims in respect of such shortfall
shall be extinguished (see further Class A Condition 15). None of the Servicer,
the Trust Manager, the Seller Trustee, Westpac, the Note Trustee or the Security
Trustee has any obligation to any Noteholder for payment of any amount by the
Issuer Trustee in respect of the Notes.
THE ISSUER TRUSTEE MAY FROM TIME TO TIME ISSUE DEBT SECURITIES ("RFSS")
CONSTITUTED UNDER THE MASTER TRUST DEED AND THE SERIES NOTICE TO FUND AMOUNTS
REDRAWN BY RELEVANT BORROWERS UNDER THE LOANS (UP TO THE SCHEDULED AMORTISED
PRINCIPAL OF THE LOANS) FROM TIME TO TIME ("REDRAWS"). RFSS WILL, ON ISSUE, RANK
PARI PASSU AND PRIOR TO ENFORCEMENT OF THE SECURITY RELATING TO THE RFSS AND THE
CLASS A NOTES RATEABLY WITHOUT ANY PREFERENCE OR PRIORITY WITH THE CLASS A NOTES
IN RELATION TO PAYMENT OF INTEREST, BUT AHEAD OF THE CLASS A NOTES IN RELATION
TO PRINCIPAL. UPON ENFORCEMENT OF THE SECURITY RELATING TO THE RFSS AND THE
CLASS A NOTES, ALL MONEYS OWING TO THE HOLDERS OF THE RFSS AND THE HOLDERS OF
THE CLASS A NOTES WILL (SUBJECT TO AMOUNTS BEING AVAILABLE FOR SUCH PAYMENT) BE
PAID PARI PASSU.
IF, BY THE FIFTH COLLECTION DETERMINATION DATE (AS DEFINED IN CLASS A
CONDITION 5) FOLLOWING THE ISSUE OF AN RFS, THE RFS HAS NOT BEEN REDEEMED, IT
SHALL CONVERT TO AN RFS CLASS A NOTE (EACH, AN "RFS CLASS A NOTE" AND, TOGETHER
THE "RFS CLASS A NOTES"). RFS CLASS A NOTES RANK PARI PASSU AND RATEABLY WITHOUT
PREFERENCE OR PRIORITY WITH CLASS A NOTES IN RELATION TO BOTH INTEREST AND
PRINCIPAL. RFSS AND RFS CLASS A NOTES ARE REGISTERED, AUSTRALIAN-TRADED
INSTRUMENTS DENOMINATED IN AUSTRALIAN DOLLARS ("A$") AND SOLD TO AUSTRALIAN
INVESTORS ONLY AND FOR THE AVOIDANCE OF DOUBT ARE NOT FUNGIBLE WITH THE CLASS A
NOTES.
THE NOTE TRUST DEED CONTAINS PROVISIONS REQUIRING THE NOTE TRUSTEE TO HAVE
REGARD TO THE INTERESTS OF THE CLASS A NOTEHOLDERS AND THE CLASS B NOTEHOLDERS
AS REGARDS ALL THE POWERS, TRUSTS, AUTHORITIES, DUTIES AND DISCRETIONS OF THE
NOTE TRUSTEE (EXCEPT WHERE EXPRESSLY PROVIDED OTHERWISE), BUT REQUIRING THE NOTE
TRUSTEE IN ANY SUCH CASE TO HAVE REGARD ONLY TO THE INTERESTS OF THE CLASS A
NOTEHOLDERS IF, IN THE NOTE TRUSTEE'S OPINION, THERE IS A CONFLICT BETWEEN THE
INTERESTS OF THE CLASS A NOTEHOLDERS AND THE INTERESTS OF THE CLASS B
NOTEHOLDERS.
THE SECURITY TRUST DEED CONTAINS PROVISIONS REQUIRING THE SECURITY TRUSTEE
TO GIVE PRIORITY TO THE INTERESTS OF THE CLASS A NOTEHOLDERS AND THE HOLDERS OF
RFSS (IF ANY) AND RFS CLASS A NOTES (IF ANY), IF THERE IS A CONFLICT BETWEEN THE
INTERESTS OF SUCH NOTEHOLDERS AND ANY OTHER VOTING MORTGAGEE (AS DEFINED BELOW).
3. COVENANTS OF THE ISSUER TRUSTEE
So long as any of the Class A Notes or the Class B Notes remains
outstanding, the Issuer Trustee has made certain covenants for the benefit of
Class A Noteholders and the Class B Noteholders which are set out in the Master
Trust Deed.
These covenants are as follows:
(a) The Issuer Trustee shall act continuously as trustee of the Trust until
the Trust is terminated as provided by the Master Trust Deed or the Issuer
Trustee has retired or been removed from office in the manner provided under the
Master Trust Deed.
(b) The Issuer Trustee shall:
(i) act honestly and in good faith in the performance of its duties and in
the exercise of its discretions under the Master Trust Deed;
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(ii) subject to the Master Trust Deed, exercise such diligence and prudence
as a prudent person of business would exercise in performing its express
functions and in exercising its discretions under the Master Trust Deed, having
regard to the interests of the Class A Noteholders and the Class B Noteholders
and other creditors and beneficiaries of the Trust;
(iii) use its best endeavours to carry on and conduct its business in so far
as it relates to the Master Trust Deed in a proper and efficient manner;
(iv) keep, or ensure that the Trust Manager keeps, accounting records which
correctly record and explain all amounts paid and received by the Issuer
Trustee;
(v) keep the Trust separate from each other trust which is constituted under
the Master Trust Deed and account for assets and liabilities of the Trust
separately from those of other trusts constituted under the Master Trust Deed;
and
(vi) do everything and take all such actions which are necessary (including
obtaining all appropriate authorisations) to ensure that it is able to exercise
all its powers and remedies and perform all its obligations under the Master
Trust Deed, the Transaction Documents and all other deeds, agreements and other
arrangements entered into by the Issuer Trustee under the Master Trust Deed.
(c) Except as provided in the Master Trust Deed, the Issuer Trustee shall
not, nor shall it permit any of its officers to, sell, mortgage, charge or
otherwise encumber or part with possession of any asset of the Trust (the "Trust
Assets").
(d) The Issuer Trustee's officers, employees, agents, attorneys, delegates
and sub-delegates shall duly observe and perform the covenants and obligations
of the Master Trust Deed in the same manner as is required of the Issuer
Trustee, and the Issuer Trustee agrees to indemnify the Trust Manager for its
own benefit or for the benefit of the Trust against any loss or damage that the
Trust, the Trust Manager, the Servicer, the Class A Noteholders, the Class B
Noteholders, the Beneficiaries (as defined in the Master Trust Deed) the holders
of RFSs (if any) and the holders of RFS Class A Notes (if any) or other
creditors incur or sustain in connection with, or arising out of, any breach or
default by such officers, employees, agents, delegates and persons in the
observance or performance of any such covenant or obligation, to the extent that
the Issuer Trustee would have been liable if that breach or default had been the
Issuer Trustee's own act or omission.
(e) The Issuer Trustee will open and operate certain bank accounts in
accordance with the Master Trust Deed and the Series Notice.
(f) Subject to the Master Trust Deed and any Transaction Document to which
it is a party, the Issuer Trustee shall act on all directions given to it by the
Trust Manager in accordance with the terms of the Master Trust Deed.
(g) The Issuer Trustee shall properly perform the functions which are
necessary for it to perform under all Transaction Documents in respect of the
Trust.
4. INTEREST
(A) PAYMENT DATES
Each Class A Note bears interest on its Invested Amount (as defined below)
from and including 9 June 1998 or such later date as may be agreed between the
Issuer Trustee and the Managers for the issue of the Class A Notes (the "Closing
Date"). Interest in respect of the Class A Notes will be payable quarterly in
arrear on the 19th day falling in July 1998 in respect of the period from (and
including) the Closing Date to (but excluding) that date, and thereafter on each
19 April, 19 July, 19 October and 19 January (each such date a "Payment Date"
and each such three month period beginning on each of 1 April, 1 July, 1 October
and 1 January a "Quarter"). If any Payment Date would otherwise fall on a day
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which is not a Business Day (as defined below), it shall be postponed to the
next day which is a Business Day (as defined below) unless it would thereby fall
into the next calendar month in which event it shall be brought forward to the
immediately preceding Business Day.
"Business Day" in this Class A Condition 4 and in Class A Conditions 5 and 9
below means any day (London time) other than a Saturday, Sunday or public
holiday on which banks are open for business in Sydney, London and New York
City.
The period beginning on (and including) the Closing Date and ending on (but
excluding) the first Payment Date and each successive period beginning on (and
including) a Payment Date and ending on (but excluding) the next Payment Date is
called an "Interest Period". Interest payable on a Class A Note in respect of
any Interest Period or any other period will be calculated on the basis of the
actual number of days elapsed and a 360 day year.
Interest shall cease to accrue on any Class A Note from (and including):
(i) the date on which the Stated Amount (as defined in Class A Condition
5(a)) of that Class A Note is reduced to zero; or
(ii) if the Stated Amount on the due date for redemption is not zero, the
due date for redemption of the Class A Note, unless, upon due presentation,
payment of principal due is improperly withheld or refused, following which
interest shall continue to accrue on the Invested Amount of the Class A Note at
the rate from time to time applicable to the Class A Notes until the moneys in
respect of that Class A Note have been received by the Note Trustee or the
Principal Paying Agent and notice to that effect is given in accordance with
Class A Condition 12, or the Stated Amount of that Class A Note has been reduced
to zero.
(B) INTEREST RATE
The rate of interest applicable from time to time to the Class A Notes (the
"Interest Rate") will be determined by the Agent Bank on the basis of the
following paragraphs.
On the second London banking day before the beginning of each Interest
Period (each an "Interest Determination Date"), the Agent Bank will determine
the rate "USD-LIBOR-BBA" as an applicable Floating Rate Option under the
Definitions of the International Swaps and Derivatives Association, Inc.
("ISDA") (the "ISDA Definitions") being the rate applicable to any Interest
Period for three-month deposits in US Dollars which appears on the Telerate Page
3750 as of 11am London time, on the Interest Determination Date. If such rate
does not appear on the Telerate Page 3750, the rate for the Interest Period will
be determined as if the Issuer Trustee and Agent Bank had specified
"USD-LIBOR-Reference Banks" as the applicable Floating Rate Option under the
ISDA Definitions. "USD-LIBOR-Reference Banks" means that the rate for an
Interest Period will be determined on the basis of the rates at which deposits
in US Dollars are offered by the Reference Banks (being four major banks in the
London interbank market) at approximately 11.00 am, London time, on the Interest
Determination Date to prime banks in the London interbank market for a period of
three months commencing on the first day of the Interest Period and in a
Representative Amount (as defined in the ISDA Definitions). The Agent Bank will
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that Interest Period will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for that Interest Period
will be the arithmetic mean of the rates quoted by major banks in New York City,
selected by the Agent Bank, at approximately 11.00 am, New York City time, on
that Interest Determination Date for loans in US Dollars to leading European
banks for a period of three months commencing on the first day of the Interest
Period and in a Representative Amount, provided that on the first day of the
first Interest Period USD-LIBOR-BBA shall be an interpolated rate calculated
with reference to the period from (and including) the Closing Date to (but
excluding) the first Interest Payment Date.
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The Interest Rate applicable to the Class A Notes for such Interest Period
shall be the aggregate of (i) such Interest Rate or arithmetic mean as
determined by the Agent Bank and (ii) the margin of 0.[*]% applicable to the
Class A Notes.
There is no maximum or minimum Interest Rate.
(C) DETERMINATION OF INTEREST RATE AND CALCULATION OF INTEREST
The Agent Bank will, as soon as practicable after 11.00 am (London time) on
each Interest Determination Date, determine the Interest Rate applicable to, and
calculate the amount of interest payable (the "Interest") for the immediately
succeeding Interest Period. The Interest is calculated by applying the Interest
Rate for the Class A Notes to the Invested Amount (as defined in Class A
Condition 5(a)) of the Class A Note on the first day of the next Interest
Period, multiplying such product by the actual number of days in the relevant
Interest Period and dividing by 360 and rounding the resultant figure down to
the nearest cent (half a cent being rounded upwards). The determination of the
Interest Rate and the Interest by the Agent Bank shall (in the absence of
manifest error) be final and binding upon all parties.
(D) NOTIFICATION AND PUBLICATION OF INTEREST RATE AND INTEREST
The Agent Bank will cause the Interest Rate and the Interest applicable to
each Class A Note for each Interest Period and the relevant Payment Date to be
notified to the Issuer Trustee, the Trust Manager, the Note Trustee, the Paying
Agents, and, for so long as the Class A Notes are listed on the Official List of
the London Stock Exchange Limited (the "London Stock Exchange"), the London
Stock Exchange, and will cause the same to be published in accordance with Class
A Condition 12 on or as soon as possible after the date of commencement of the
relevant Interest Period. The Interest and the relevant Payment Date so
published may subsequently be amended (or appropriate alternative arrangements
made by way of adjustment) without notice in the event of a shortening of the
Interest Period.
(E) DETERMINATION OR CALCULATION BY THE NOTE TRUSTEE
If the Agent Bank at any time for any reason does not determine the Interest
Rate or calculate the Interest for a Class A Note, the Note Trustee shall do so
and each such determination or calculation shall be deemed to have been made by
the Agent Bank. In doing so, the Note Trustee shall apply the foregoing
provisions of this Condition, with any necessary consequential amendments, to
the extent that, in its opinion, it can do so, and, in all other respects it
shall do so in such a manner as it shall deem fair and reasonable in all the
circumstances.
(F) AGENT BANK
The Issuer Trustee will procure that, so long as any of the Class A Notes
remains outstanding, there will at all times be an Agent Bank. The Issuer
Trustee reserves the right at any time to terminate the appointment of the Agent
Bank. Notice of that termination will be given to the Class A Noteholders. If
any person is unable or unwilling to continue to act as the Agent Bank, or if
the appointment of the Agent Bank is terminated, the Issuer Trustee will, with
the approval of the Note Trustee, appoint a successor Agent Bank to act as such
in its place, provided that neither the resignation nor removal of the Agent
Bank shall take effect until a successor approved by the Note Trustee has been
appointed.
5. REDEMPTION AND PURCHASE
(A) MANDATORY REDEMPTION IN PART FROM PRINCIPAL COLLECTIONS AND
APPORTIONMENT OF PRINCIPAL COLLECTIONS BETWEEN THE CLASS A NOTES, THE CLASS B
NOTES, THE RFS CLASS A NOTES AND THE RFSS
The Class A Notes shall be subject to mandatory redemption in part on any
Payment Date if on that date there are any Principal Collections (as defined
below) available to be distributed in relation to such
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Class A Notes. The principal amount so redeemable in respect of each Class A
Note prior to enforcement of the Security Trust Deed (each a "Principal
Payment") on any Payment Date shall be the amount available for payment as set
out in Class A Condition 5(b) on the day which is four Business Days prior to
the Payment Date (the "Collection Determination Date") preceding that Payment
Date multiplied by the Invested Amount of the applicable Class A Note over the
total Invested Amount of all Class A Notes then outstanding (rounded down to the
nearest cent with half a cent being rounded upwards); provided always that no
Principal Payment on a Class A Note on any date may exceed the amount equal to
the Invested Amount of that Class A Note at that date less amounts charged off
as at that date, or to be charged off on the following Payment Date, as
described in Class A Condition 5(c) (that reduced amount being the "Stated
Amount" of that Class A Note).
The "Invested Amount" of a Class A Note is equal to the Initial Invested
Amount (as defined herein) of such Class A Note less all payments previously
made in respect of principal in respect of such Class A Note. The "Initial
Invested Amount" of a Class A Note is its principal balance at the date of its
issuance.
"Principal Collections" means, in respect of a Collection Period (as defined
below) and as applicable on any Collection Determination Date, the aggregate of:
(i) all amounts received by or on behalf of the Issuer Trustee from or on
behalf of borrowers under the Loans during the Collection Period in respect of
principal, in accordance with the terms of the Loans, including principal
prepayments;
(ii) all other amounts received by or on behalf of the Issuer Trustee under
or in respect of principal under the Loans and the Mortgages during that
Collection Period including:
(A) any amounts recovered in respect of enforcement of Loans and Mortgages
(other than under lender's mortgage insurance), on account of principal;
(B) any payments by Westpac to the Issuer Trustee on the repurchase of a
Loan under the Master Trust Deed during that Collection Period which are
attributable to principal;
(C) any payments by Westpac Securities Administration Limited (in its
capacity as trustee of any other trust established under the Master Trust Deed)
(the "WST Purchaser") on the purchase by the WST Purchaser of any assets of the
Trust which are attributable to principal;
(D) any Prepayment Costs (as defined in the Series Notice) applied towards
Prepayment Benefits (as defined in the Series Notice) under the Series Notice;
and
(E) any Prepayment Benefit Shortfall (as defined in the Series Notice) paid
by Westpac to the Trust under the Series Notice;
(iii) all amounts received by or on behalf of the Issuer Trustee during that
Collection Period from any provider of a Support Facility (as defined in the
Series Notice) (other than the Currency Swap) under that Support Facility and
which the Trust Manager determines should be accounted for to reduce any
principal loss on a Loan, being the total amount outstanding under a Loan after
applying all proceeds from the enforcement of the Loan and related Mortgages (a
"Liquidation Loss") to the extent that Liquidation Loss is attributable to
principal;
(iv) all amounts received by or on behalf of the Issuer Trustee during that
Collection Period:
(A) from Westpac or the WST Seller Trustee (each an "Approved Seller") in
respect of any breach of a representation, warranty or undertaking contained in
the Master Trust Deed or the Series Notice;
(B) from an Approved Seller under any obligation under the Master Trust Deed
or the Series Notice to indemnify or reimburse the Issuer Trustee for any
amount;
(C) from the Servicer, in respect of any breach of any representation,
warranty or undertaking contained in the Servicing Agreement; and
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(D) from the Servicer under any obligation under the Servicing Agreement to
indemnify or reimburse the Issuer Trustee for any amount,
in each case, which are determined by the Trust Manager to be in respect of
principal payable under the Loans and the Mortgages;
(v) any amounts in the nature of principal received by or on behalf of the
Issuer Trustee during that Collection Period pursuant to the sale of any asset
comprised in the Trust (including any amount received by the Issuer Trustee on
the issue of Notes and which was not used to purchase Loans or Mortgages, and
which the Trust Manager determines is surplus to the requirements of the Trust);
(vi) (for the purposes of clause 6.11 of the Series Notice only) any amount
of Excess Available Income (as defined in the Series Notice) to be applied to
pay a Principal Charge Off or a Carryover Charge Off (as defined in the Series
Notice);
(vii) any amount received by or on behalf of the Issuer Trustee during that
Collection Period as proceeds from the issue of any RFS to the extent not
applied to reimburse amounts drawn under the Redraw Facility dated [*] between
the Issuer Trustee, the Trust Manager and Westpac (the "Redraw Facility");
(viii) any Excess Available Income to be applied to Principal Draws (as
defined in the Series Notice) made on a previous Payment Date;
(ix) any Prepayment Calculation Adjustment (as defined in the Series Notice)
for that Collection Period;
(x) any Substitution Net Transfer Amount (Principal) (as defined in the
Series Notice) received by the Trust from a WST Purchaser with respect to that
Collection Period;
less any amounts deducted by or paid to Westpac to reimburse Redraws funded by
Westpac for which Westpac has not previously been reimbursed. A premium
receivable by the Issuer Trustee on the entry into a replacement Currency Swap
under clause 6.26 of the Series Notice is not treated as a Principal Collection.
"Collection Period" means, in relation to a Payment Date, the period from
(and including) the tenth day of the Quarter preceding the Quarter in which the
Payment Date occurs to (and including) the ninth day of the Quarter in which the
Payment Date occurs. The first Collection Period is the period from (but
excluding) May 6, 1998 (the "Cut-Off Date") to (and including) July 9, 1998. The
last Collection Period is the period from (but excluding) the last day of the
previous Collection Period to (and including) the termination date of the Trust.
(B) INITIAL PRINCIPAL DISTRIBUTIONS
Principal Collections will be distributed as follows on each Payment Date
before any payments in respect of the Notes:
(i) first, to repay any Redraws provided by Westpac in relation to Loans to
the extent that Westpac has not previously been reimbursed in relation to those
Redraws;
(ii) second, to repay all principal outstanding under the Redraw Facility on
that Payment Date;
(iii) third, to allocate to Total Available Funds any Principal Draw (as
defined in the Series Notice); and
(iv) fourth, to repay PARI PASSU and rateably all amounts outstanding under
the RFSs (if any).
(C) PRINCIPAL ALLOCATION METHOD
On each Collection Determination Date, the Trust Manager will determine the
A$ Equivalent of the aggregate of the Class B Stated Amounts divided by the sum
of (i) the A$ Equivalent of the Total Stated
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Amount at that time, plus (ii) the Redraw Limit at that time, plus (iii) the
aggregate of the RFS Stated Amount at that time, plus (iv) the aggregate of the
RFS Class A Stated Amounts at that time (the "Subordinated Percentage"). The
Trust Manager will calculate the Subordinated Percentage so as to determine the
appropriate principal distribution methodology to apply for that Collection
Period, as described below.
(D) APPLICABILITY OF SERIAL METHOD 1
If, on any Collection Determination Date:
(i) the Subordinated Percentage at the previous Collection Determination
Date was greater than or equal to twice the Initial Subordinated Percentage;
(ii) that Collection Determination Date occurs on or before the third
anniversary of the Closing Date;
(iii) the Total Invested Amount as at that Collection Determination Date as
a percentage of the Total Initial Invested Amount, is greater than or equal to
10%:
(iv) the Average Quarterly Percentage as at that Collection Determination
Date:
(A) does not exceed 2% and the Total Carryover Charge Off on that Collection
Determination Date does not exceed 30% of the Class B Initial Invested Amount;
or
(B) does not exceed 4% and the Total Carryover Charge Off on such Collection
Determination Date does not exceed 10% of the Class B Initial Invested Amount;
and
(v) the Stated Amounts of all Class B Notes as at that Collection
Determination Date exceeds 0.25% of the aggregate of all Initial Invested
Amounts of all Class A Notes and all Class B Notes as at the Collection
Determination Date;
then Principal Collections will be allocated serially in accordance with Serial
Method I set out in paragraph (e) below.
(E) SERIAL METHOD 1
On any Collection Determination Date, if the Trust Manager determines that
Serial Method 1 should apply, the Issuer Trustee (based on instructions from the
Trust Manager) will pay out of Principal Collections for the relevant Collection
Period which remain after the Initial Principal Distributions, on the Payment
Date following that Collection Determination Date the following amounts in the
following priority:
(i) first PARI PASSU and rateably between themselves:
(A) as a payment, denominated in A$, to the Currency Swap Providers under
the relevant swap confirmations relating to the Class A Notes of an amount equal
to the lesser of:
(1) the Class A Forex Percentage of the sum of:
(aa) the Class A Percentage of Principal Collections remaining after all
Initial Principal Distributions; and
(bb) 50% of the Class B Percentage of those Principal Collections; and
(2) the A$ Equivalent of the Class A Stated Amounts for all Class A Notes;
and
(B) as a payment denominated in A$ to the holders of the RFS Class A Notes
(if any) of an amount equal to the lesser of:
(1) the RFS Class A Forex percentage of the sum of:
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(aa) the Class A Percentage of Principal Collections remaining after all
Initial Principal Distributions; and
(bb) 50% of the Class B Percentage of those Principal Collections; and
(2) the RFS Class A Stated Amounts for all RFS Class A Notes (if any); and
(ii) second, as a payment, denominated in A$, to the Currency Swap Providers
under the relevant swap confirmations relating to the Class B Notes of an amount
equal to 50% of the Class B Percentage of those Principal Collections remaining
after all Initial Principal Distributions.
(F) APPLICABILITY OF SERIAL METHOD 2
If, on any Collection Determination Date:
(i) the Subordinated Percentage at the previous Collection Determination
Date was greater than or equal to twice the Initial Subordinated Percentage;
(ii) that Collection Determination Date occurs after the third anniversary
of the Closing Date;
(iii) the Total Invested Amount as at that Collection Determination Date, as
a percentage of the Total Initial Invested Amount, is greater than or equal to
10%;
(iv) the Average Quarterly Percentage as at the Collection Determination
Date:
(A) does not exceed 2% and the Total Carryover Charge Off on that Collection
Determination Date does not exceed 30% of the Class B Initial Invested Amount;
or
(B) does not exceed 4% and the Total Carryover Charge Off on that Collection
Determination Date does not exceed 10% of the Class B Initial Invested Amount;
and
(v) the Stated Amount of the Class B Notes as at that Collection
Determination Date exceeds 0.25% of the aggregate of all Initial Invested
Amounts of all Class A Notes and all Class B Notes and the US$ Equivalent of the
Invested Amounts of all RFS Class A Notes (if any);
then Principal Collections will be allocated serially in accordance with Serial
Method 2 set out in paragraph (g) below.
(G) SERIAL METHOD 2
On any Collection Determination Date, if the Trust Manager determines that
Serial Method 2 shall apply, the Issuer Trustee (based on instructions from the
Trust Manager) will pay out of Principal Collections for the relevant Collection
Period which remain after the Initial Principal Distributions on the Payment
Date following that Collection Determination Date in the following amounts in
the following priority:
(i) first, PARI PASSU and rateably between themselves:
(A) as a payment, denominated in A$, to the Currency Swap Providers under
the relevant swap confirmations relating to the Class A Notes of an amount equal
to the lesser of:
(1) the Class A Forex Percentage of the Class A Percentage of Principal
Collections remaining after all Initial Principal Distributions; and
(2) the A$ Equivalent of the Class A Stated Amounts for all Class A Notes;
and
(B) as a payment denominated in A$ to the holders of the RFS Class A Notes
(if any) of an amount equal to the lesser of:
(1) the RFS Class A Forex Percentage of the Class A Percentage of those
Principal Collections remaining after all Initial Principal Distributions: and
(2) the RFS Class A Stated Amounts for all RFS Class A Notes (if any); and
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(ii) second as a payment, denominated in A$, to the Currency Swap Providers
under the relevant swap confirmations relating to the Class B Notes of an amount
equal to the Class B Percentage of those Principal Collections.
(H) SEQUENTIAL METHOD
On any Collection Determination Date, if the Trust Manager determines that
neither Serial Method I nor Serial Method 2 (set out in Conditions 5(d) to (g)
above) applies, the Issuer Trustee (based on instructions from the Trust
Manager) will pay out of Principal Collections for the relevant Collection
Period which remain after the Initial Principal Distributions the following
amounts in the following priority:
(I) FIRST PARI PASSU and rateably between themselves:
(A) as a payment, denominated in A$, to the Currency Swap Providers under
the relevant swap confirmations relating to the Class A Notes of an amount equal
to the lesser of:
(1) the Class A Forex Percentage of the amount available for distribution
under this paragraph (i) after all Initial Principal Distributions; and
(2) the A$ Equivalent of the Class A Stated Amounts for all Class A Notes;
and
(B) as a payment, denominated in A$, to the holders of the RFS Class A Notes
(if any) of an amount equal to the lesser of:
(1) the RFS Class A Forex Percentage of the amount available for
distribution under this paragraph (i) after all Initial Principal Distributions;
and
(2) the RFS Class A Stated Amounts for all RFS Class A Notes (if any); and
(ii) second, as a payment, denominated in A$, to the Currency Swap Providers
under the relevant swap confirmations relating to the Class B Notes of an amount
equal to the lesser of:
(A) the amount available for distribution under this paragraph (ii) after
the application of paragraph (i); and
(B) the A$ Equivalent of the Class B Stated Amounts for all Class B Notes.
(I) GENERAL
No amount of principal will be paid to a Noteholder in excess of the Stated
Amount applicable to the Notes held by that Noteholder.
(J) DISTRIBUTION OF EXCESS AVAILABLE INCOME
On each Collection Determination Date Excess Available Income for the
Collection Period relating to that Collection Determination Date will be applied
in the following order of priority:
(i) to reimburse Principal Charge Offs for that Collection Period;
(ii) PARI PASSU and rateably between themselves (based on the Stated Amount
of the RFSs (if any), the Stated Amount of the RFS Class A Notes (if any), the
Principal Outstanding under the Redraw Facility and the A$ Equivalent of the
Stated Amount of the Class A Notes):
(A) as a payment to the RFSs (if any) in or towards reinstating the Stated
Amount of the RFSs, to the extent of any Carryover RFS Charge Offs;
(B) as a payment to the RFS Class A Notes (if any) in or towards reinstating
the Stated Amount of the RFS Class A Notes, to the extent of any Carryover RFS
Class A Charge Offs;
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(C) as a payment to the Currency Swap Providers under the relevant swap
confirmations relating to the Class A Notes, of the A$ Equivalent of any
Carryover Class A Charge Offs; and
(D) as a repayment under the Redraw Facility Agreement, as a reduction of,
and to the extent of, any Carryover Redraw Charge Offs;
(iii) as a payment, denominated in A$, to the Currency Swap Providers under
the relevant swap confirmations relating to the Class B Notes of the A$
Equivalent of any Carryover Class B Charge Offs; and
(iv) to all Principal Draws which have not been repaid as at that Payment
Date.
Any amount to be paid pursuant to paragraphs (ii) and (iii) will be paid on
the Payment Date immediately following the Collection Determination Date.
(K) US$ ACCOUNT
The Issuer Trustee shall direct the Currency Swap Providers to pay all
amounts denominated in US$ payable to the Issuer Trustee by the Currency Swap
Providers under the Currency Swaps into the US$ Account or to the Principal
Paying Agent under the Agency Agreement on behalf of the Issuer Trustee. The
Issuer Trustee shall pay all such amounts as follows, and in accordance with the
Note Trust Deed and the Agency Agreement:
(i) under Class A Condition 4, PARI PASSU in relation to the Class A Notes
as payments of Interest on those Class A Notes;
(ii) under Class A Condition 4, PARI PASSU in relation to the Class B Notes
as payments of Interest on those Class B Notes;
(iii) under Class A Condition 5(j)(ii)(C), PARI PASSU in relation to the
Class A Notes in or towards reinstating the Stated Amount of those Class A
Notes, to the extent of the Carryover Class A Charge Offs;
(iv) under Class A Condition 5(j)(iii), PARI PASSU in relation to Class B
Notes in or towards reinstating the Stated Amount of those Class B Notes, to the
extent of the Carryover Class B Charge Offs;
(v) under Class A Condition 5(e)(i)(A), 5(g)(i)(A) and 5(h)(i)(A) PARI PASSU
in relation to the Class A Notes as Class A Principal Payments until the Class A
Stated Amounts have been reduced to zero; and
(vi) under Class A Condition 5(e)(ii), 5(g)(ii) and 5(h)(ii) PARI PASSU in
relation to the Class B Notes as Class B Principal Payments until the Class B
Stated Amounts have been reduced to zero.
(L) CHARGE OFFS
If the Principal Charge Offs (as defined in the Series Notice) for any
Collection Period exceed the Excess Available Income (as defined in the Series
Notice) calculated on the Collection Determination Date for that Collection
Period, the Trust Manager must, on and with effect from the Payment Date
immediately following the end of the Collection Period:
(i) reduce PARI PASSU the Class B Stated Amount of each of the Class B Notes
by the US$ Equivalent of the amount of that excess which is attributable to each
Class B Note until the Class B Stated Amount is zero; and
(ii) if the Class B Stated Amount is zero and any amount of that excess has
not been applied under paragraph (i), reduce PARI PASSU and rateably as between
themselves (based on the Stated Amount of the RFSs (if any), the Principal
Outstanding under the Redraw Facility, the Stated Amount of the RFS Class A
Notes (if any) and the A$ Equivalent of the Stated Amount of the Class A Notes):
(A) the Class A Stated Amount on each of the Class A Notes by the US$
Equivalent of the balance of that excess which is attributable to each Class A
Note until the Class A Stated Amount of that Class A Note is zero;
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(B) the RFS Class A Stated Amount on each of the RFS Class A Notes (if any)
by the balance of that excess which is attributable to each RFS Class A Note
until the RFS Class A Stated Amount of that RFS Class A Note is zero;
(C) the RFS Stated Amount on each of the RFSs (if any) by the balance of
that excess which is attributable to each RFS until the RFS Stated Amount is
zero: and
(D) the principal outstanding under the Redraw Facility by the balance of
that excess until the Principal Outstanding is zero.
(M) CALCULATION OF PRINCIPAL PAYMENTS, STATED AMOUNT AND BOND FACTOR
(i) On each Collection Determination Date, the Trust Manager shall
determine:
(A) the amount of any Principal Payment in respect of each Class A Note on
the Payment Date following that Collection Determination Date;
(B) the Stated Amount and Invested Amount of each Class A Note as of the
first day of the next following Interest Period (after deducting any Principal
Payment due to be made in respect of each Class A Note on the next Payment
Date); and
(C) the fraction in respect of each Class A Note expressed as a decimal to
the seventh point (the "Bond Factor" of which the numerator is the aggregate of
the Invested Amount of all Class A Notes at that date less all Principal
Payments to be made on the following Payment Date, and the denominator is the
Initial Invested Amount of the Class A Notes.
(ii) The Trust Manager will notify the Note Trustee, the Principal Paying
Agent, the Agent Bank and (for so long as the Class A Notes are listed on the
London Stock Exchange) the London Stock Exchange by not later than the
Collection Determination Date immediately preceding the relevant Payment Date of
each determination of a Principal Payment, Invested Amount, Stated Amount and
Bond Factor and will immediately cause details of each of those determinations
to be published in accordance with Condition 12. If no Principal Payment is due
to be made on the Class A Notes on any Payment Date a notice to this effect will
be given to the Class A Noteholders in accordance with Class A Condition 12.
(iii) If the Trust Manager does not at any time for any reason determine a
Principal Payment, the Invested Amount, the Stated Amount or the Bond Factor
applicable to Class A Notes in accordance with this paragraph, the Principal
Payment, Invested Amount, the Stated Amount and the Bond Factor shall be
determined by the Note Trustee in accordance with this paragraph and paragraph
(i) above (but based on the information in its possession) and each such
determination or calculation shall be deemed to have been made by the Trust
Manager.
(iv) The Trust Manager will deliver to the Principal Paying Agent a
quarterly servicing report as set forth in clause 11 of the Note Trust Deed.
(N) REDEMPTION FOR TAXATION OR OTHER REASONS
If the Trust Manager satisfies the Issuer Trustee and the Note Trustee
immediately prior to giving the notice referred to below that either (i) on the
next Payment Date the Issuer Trustee would be required to deduct or withhold
from any payment of principal or interest in respect of the Class A Notes any
amount for or on account of any present or future taxes, duties, assessments or
governmental charges of whatever nature imposed, levied, collected, withheld or
assessed by the Commonwealth of Australia or any of its political sub-divisions
or any of its authorities or (ii) the total amount payable in respect of
interest in relation to the Loans for a Collection Period ceases to be
receivable (whether or not actually received) by the Issuer Trustee during such
Collection Period by reason of any present or future taxes, duties, assessments
or governmental charges of whatever nature imposed, levied, collected, withheld
or assessed by the Commonwealth of Australia or any of its political
sub-divisions or any of its authorities, the Issuer Trustee must, when so
directed by the Trust Manager (at any time at the Trust Manager's option)
(provided
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that the Issuer Trustee will be in a position on such Payment Date to discharge
(and will so certify to the Issuer Trustee and Note Trustee) all its liabilities
in respect of the Class A Notes and any amounts required under the Security
Trust Deed to be paid in priority to or PARI PASSU with the Class A Notes), upon
having given not more than 60 nor less than 30 days' notice to the Class A
Noteholders in accordance with Class A Condition 12 redeem all, but not some
only, of the Class A Notes at their Invested Amount (or at the option of the
holders of 75% of the aggregate Invested Amount of Class A Notes at the time, at
their Stated Amount), together with accrued interest to the date of redemption
on any subsequent Payment Date, provided that the holders of 75% of the
aggregate Invested Amount of Class A Notes at the time may elect, and shall
notify the Issuer Trustee and the Trust Manager, that they do not require the
Issuer Trustee to redeem the Class A Notes in the circumstances described above.
(O) OPTIONAL REDEMPTION IN WHOLE
On any Payment Date, and upon giving no more than 60 nor less than 30 days'
notice to the Note Trustee and the Security Trustee, on which the aggregate
principal outstanding of the Loans is less than 10% of the aggregate principal
outstanding of the Loans at the Cut-Off Date, the Issuer Trustee may redeem all
(but not some only) of the Class A Notes at their Stated Amount.
(P) REDEMPTION ON MATURITY
If not otherwise redeemed, the Class A Notes will be redeemed at their
Stated Amount on the Payment Date falling in December 2029.
(Q) CANCELLATION
All Class A Notes redeemed in full pursuant to the foregoing provisions will
be cancelled forthwith, and may not be resold or reissued.
(R) CERTIFICATION
For the purposes of any redemption made pursuant to this Condition 5 the
Note Trustee may rely upon an officer's certificate under the Note Trust Deed
from the Trust Manager on behalf of the Issuer Trustee certifying or stating the
opinion of each person signing such certificate as:
(i) to the fair value (within 90 days of such release) of the property or
securities proposed to be released from the Security Trust Deed;
(ii) that in the opinion of such person the proposed release will not impair
the security under the Security Trust Deed in contravention of the provisions of
the Security Trust Deed or the Note Trust Deed;
(iii) that the Issuer Trustee will be in a position to discharge all its
liabilities in respect of the relevant Class A Notes; and
(iv) any amounts required under the Security Trust Deed to be paid in
priority to or PARI PASSU with those Class A Notes,
and such officer's certificate shall be conclusive and binding on the Issuer
Trustee, the Note Trustee and the holders of those Class A Notes.
(S) PURCHASES
The Issuer Trustee may not purchase any Class A Notes at any time.
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6. PAYMENTS
(A) METHOD OF PAYMENT
Any instalment of interest or principal, payable on any Class A Note which
is punctually paid or duly provided for by the Issuer Trustee to the Principal
Paying Agent on the applicable Payment Date or Maturity Date shall be paid to
the person in whose name such Class A Note is registered on the Record Date, by
cheque mailed first-class, postage prepaid, to such person's address as it
appears on the Note Register on such Record Date, except that, unless Definitive
Notes have been issued pursuant to clause 3.3 of the Note Trust Deed, with
respect to Class A Notes registered on the Record Date in the name of the
nominee of DTC (initially, such nominee to be Cede & Co.), payment will be made
by wire transfer in immediately available funds to the account designated by
such nominee and except for the final instalment of principal payable with
respect to such Class A Note on a Payment Date or Maturity Date.
(B) INITIAL PRINCIPAL PAYING AGENT
The initial Principal Paying Agent is Morgan Guaranty Trust Company of New
York, London Branch at its office at 60 Victoria Embankment, London EC4Y 0JP.
(C) PAYING AGENTS
The Issuer Trustee (or the Trust Manager on its behalf after advising the
Issuer Trustee thereof) may at any time (with the previous written approval of
the Note Trustee) vary or terminate the appointment of any Paying Agent and
appoint additional or other Paying Agents, provided that it will at all times
maintain a Paying Agent having a specified office in London and in New York
City. Notice of any such termination or appointment and of any change in the
office through which any Paying Agent will act will be given in accordance with
Class A Condition 12.
(D) DUE DATE FOR REDEMPTION
If the due date for redemption in full of a Class A Note is not a Payment
Date, the interest accrued in respect of the period from the preceding Payment
Date (or from the Closing Date as the case may be) shall be payable only against
presentation or surrender of the relevant Class A Note.
(E) PAYMENTS ON BUSINESS DAYS
If the due date for payment of any amount of principal or Interest in
respect of any Class A Note is not a Business Day then payment will not be made
until the next succeeding Business Day and the holder thereof shall not be
entitled to any further interest or other payment in respect of that delay. In
this Condition 6 the expression "Business Day" means any day (other than a
Saturday, Sunday or a public holiday) on which banks are open for business in
the place where the specified office of the Paying Agent is situated and, in the
case of payment by transfer to a US dollar account, in New York City and prior
to any exchange of the Book-Entry Note (in respect of the Class A Notes) for any
definitive Class A Notes, on which DTC is open for business.
(F) INTEREST
If Interest is not paid in respect of a Class A Note on the date when due
and payable (other than because the due date is not a Business Day), that unpaid
Interest shall itself bear interest at the Interest Rate applicable from time to
time to the Class A Notes until the unpaid interest, and interest on it, is
available for payment and notice of that availability has been duly given in
accordance with Class A Condition 12.
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7. TAXATION
All payments in respect of the Class A Notes will be made without
withholding or deduction for, or on account of, any present or future taxes,
duties or charges of whatsoever nature unless the Issuer Trustee or any Paying
Agent is required by applicable law to make any such payment in respect of the
Class A Notes subject to any withholding or deduction for, or on account of, any
present or future taxes, duties or charges of whatsoever nature. In that event
the Issuer Trustee or that Paying Agent (as the case may be) shall make such
payment after such withholding or deduction has been made and shall account to
the relevant authorities for the amount so required to be withheld or deducted.
Neither the Issuer Trustee nor any Paying Agent will be obliged to make any
additional payments to Class A Noteholders in respect of that withholding or
deduction.
8. PRESCRIPTION
A Class A Note shall become void in its entirety unless surrendered for
payment within ten years of the Relevant Date in respect of any payment thereon
the effect of which would be to reduce the Stated Amount of that Class A Note to
zero. After the date on which a Class A Note becomes void in its entirety, no
claim may be made in respect of it.
As used in these Conditions, the "Relevant Date" means the date on which a
payment first becomes due but, if the full amount of the money payable has not
been received by the Principal Paying Agent or the Note Trustee on or prior to
that date, it means the date on which, the full amount of such money having been
so received, notice to that effect is duly given in accordance with Class A
Condition 12.
9. EVENTS OF DEFAULT
Each of the following is an "Event of Default":
(a) the Issuer Trustee fails to pay:
(i) any interest within 10 Business Days of the Payment Date on which the
interest was due to be paid to Class A Noteholders, Class B Noteholders or
holders of RFSs or holders of RFS Class A Notes, or
(ii) any other amount owing to Class A Noteholders, Class B Noteholders or
holders of RFSs or holders of RFS Class A Notes or any other Mortgagee (as
defined in the Security Trust Deed) within 10 Business Days of the due date for
payment (or within any applicable grace period agreed with the Mortgagee or
where the Mortgagee is a Noteholder, with the Note Trustee).
(b) the Issuer Trustee fails to perform or observe any other provisions
(other than an obligation referred to in paragraph (a)) of a Transaction
Document (other than the Underwriting Agreement) where such failure will have a
material and adverse affect on the amount of any payment to be made to any
Noteholder, or will materially and adversely affect the timing of such payment,
and that default (if in the opinion of the Security Trustee capable of remedy
(that opinion, being subject to the approval of the Note Trustee in accordance
with the provisions of the Security Trust Deed) is not remedied within 30 days
(or such longer period as may be specified in the notice, that longer period
having been approved by the Note Trustee, for so long as amounts outstanding
under the Offered Notes are 75% of the Secured Money) after written notice from
the Security Trustee requiring the failure to be remedied.
(c) any of the following occurs in relation to the Issuer Trustee (in its
personal capacity or as Trustee of the Trust):
(i) an administrator of the Issuer Trustee is appointed; or
(ii) except for the purpose of a solvent reconstruction or amalgamation:
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(A) an application or an order is made, proceedings are commenced, a
resolution is passed or proposed in a notice of meeting or an application to a
court or other steps (other than frivolous or vexatious applications,
proceedings, notices and steps) are taken for:
(1) the winding up, dissolution or administration of the Issuer Trustee; or
(2) the Issuer Trustee entering into an arrangement, compromise or
composition with or assignment for the benefit of its creditors or a class of
them; or
(B) the Issuer Trustee ceases, suspends or threatens to cease or suspend the
conduct of all or substantially all of its business or disposes of or threatens
to dispose of substantially all of its assets; or
(iii) the Issuer Trustee is, or under applicable legislation is taken to be,
unable to pay its debts (other than as the result of a failure to pay a debt or
claim the subject of a good faith dispute) or stops or suspends or threatens to
stop or suspend payment of all or a class of its debts (except, where this
occurs in relation to another trust of which it is the trustee):
(iv) a receiver, receiver and manager or administrator is appointed (by the
Issuer Trustee or by any other person) to all or substantially all of the assets
and undertaking of the Issuer Trustee or any part thereof (except, in the case
of the Issuer Trustee where this occurs in relation to another trust of which it
is the trustee); or
(v) anything analogous to an event referred to in paragraphs (i) to (iv)
(inclusive) or having substantially similar effect, occurs with respect to the
Issuer Trustee;
(d) the charge created by the Security Trust Deed is not or ceases to be a
first ranking charge over the Trust Assets, or any other obligation of the
Issuer Trustee (other than as mandatorily preferred by law) ranks ahead of or
pari passu with any of the moneys secured by the Security Trust Deed;
(e) any security interest over the Trust Assets is enforced;
(f) all or any part of any Transaction Document, other than the Redraw
Facility or the Basis Swap (each as defined in the Series Notice), is terminated
or is or becomes void, illegal, invalid, unenforceable or of limited force and
effect, or a party becomes entitled to terminate, rescind or avoid all or part
of any Transaction Document (other than the Redraw Facility or the Basis Swap);
or
(g) without the prior consent of the Security Trustee (that consent, in
accordance with the provisions of the Security Trust Deed, being subject to the
prior written consent of the Note Trustee in accordance with the provisions of
the Security Trust Deed), (i) the Trust is wound up, or the Issuer Trustee is
required to wind up the Trust under the Master Trust Deed or applicable law, or
the winding up of the Trust commences; (ii) the Trust is held or is conceded by
the Issuer Trustee not to have been constituted or to have been imperfectly
constituted; or (iii) unless another trustee is appointed to the Trust under the
Relevant Documents, the Issuer Trustee ceases to be authorised under the Trust
to hold the property of the Trust in its name and to perform its obligations
under the Relevant Documents.
IN THE EVENT THAT THE SECURITY CONSTITUTED BY THE SECURITY TRUST DEED
BECOMES ENFORCEABLE FOLLOWING AN EVENT OF DEFAULT UNDER THE NOTES ANY FUNDS
RESULTING FROM THE REALIZATION OF SUCH SECURITY SHALL BE APPLIED IN ACCORDANCE
WITH THE ORDER OF PRIORITY OF PAYMENTS AS STATED IN THE SECURITY TRUST DEED.
10. ENFORCEMENT
(a) At any time after an Event of Default occurs, the Security Trustee may,
with the prior written consent of the Note Trustee in accordance with the
provisions of the Security Trust Deed and shall, if so directed by (a) the Note
Trustee alone, where the Note Trustee is the only Voting Mortgagee, or otherwise
(b) an Extraordinary Resolution (being 75% of votes capable of being cast by
Voting Mortgagees present or in person or by proxy of the relevant meeting or a
written resolution signed by all Voting Mortgagees) of
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the Voting Mortgagees (which includes the Note Trustee on behalf of Noteholders,
but not the Noteholders themselves), declare the Class A Notes immediately due
and payable and enforce the Security Trust Deed. If an Extraordinary Resolution
of Voting Mortgagees referred to in sub-paragraph (b) above elects not to direct
the Security Trustee to enforce the Security Trust Deed, in circumstances where
the Security Trustee could enforce, the Note Trustee may nonetheless, and shall
at the direction of the Class A Noteholders, direct the Security Trustee to
enforce the Security Trust Deed on behalf of the Noteholders.
"Voting Mortgagee" means:
(a) for so long as the amounts outstanding under the Class A Notes and the
Class B Notes are 75% or more of all amounts secured by the Security Trust Deed,
the Note Trustee alone; and
(b) at any other time:
(i) the Note Trustee, acting on behalf of the Noteholders under the Note
Trust Deed and the Security Trust Deed: and
(ii) each other Mortgagee under the Security Trust Deed (other than the
Noteholders).
Subject to being indemnified in accordance with the Security Trust Deed, the
Security Trustee shall take all action necessary to give effect to any direction
by the Note Trustee where it is the only Voting Mortgagee or to any
Extraordinary Resolution of the Voting Mortgagees and shall comply with all
directions given by the Note Trustee where it is the only Voting Mortgagee or
contained in or given pursuant to any Extraordinary Resolution of the Voting
Mortgagees in accordance with the Security Trust Deed.
No Noteholder is entitled to enforce the Security Trust Deed or to appoint
or cause to be appointed a receiver to any of the assets secured by the Security
Trust Deed or otherwise to exercise any power conferred by the terms of any
applicable law on chargees except as provided in the Security Trust Deed.
(b) If any of the Class A Notes remains outstanding and are due and payable
otherwise than by reason of a default in payment of any amount due on the Class
A Notes, the Note Trustee must not vote under the Security Trust Deed to, or
otherwise direct the Security Trustee to, dispose of the Mortgaged Property
unless either:
(i) a sufficient amount would be realised to discharge in full all amounts
owing to the Class A Noteholders and any other amounts payable by the Issuer
Trustee ranking in priority to or PARI PASSU with the Class A Notes; or
(ii) the Note Trustee is of the opinion, reached after considering at any
time and from time to time the advice of a merchant bank or other financial
adviser selected by the Note Trustee, that the cash flow receivable by the
Issuer Trustee (or the Security Trustee under the Security Trust Deed) will not
(or that there is a significant risk that it will not) be sufficient, having
regard to any other relevant actual, contingent or prospective liabilities of
the Issuer Trustee, to discharge in full in due course all the amounts referred
to in paragraph (i).
(c) Neither the Note Trustee nor the Security Trustee will be liable for any
decline in the value, nor any loss realised upon any sale or other dispositions
made under the Security Trust Deed, of any Mortgaged Property or any other
property which is charged to the Security Trustee by any other person in respect
of or relating to the obligations of the Issuer Trustee or any third party in
respect of the Issuer Trustee or the Class A Notes or relating in any way to the
Mortgaged Property. Without limitation, neither the Note Trustee nor the
Security Trustee shall be liable for any such decline or loss directly or
indirectly arising from its acting, or failing to act, as a consequence of an
opinion reached by it.
(d) The Note Trustee shall not be bound to vote under the Security Trust
Deed, or otherwise direct the Security Trustee under the Security Trust Deed or
to take any proceedings, actions or steps under, or any other proceedings
pursuant to or in connection with the Security Trust Deed, the Note Trust Deed,
any
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Class A Notes, unless directed or requested to do so by Noteholders holding at
least 75% of the aggregate Invested Amount of Class A Notes or Class B Notes (as
the case may be) at the time; and then only if the Note Trustee is indemnified
to its satisfaction against all action, proceedings, claims and demands to which
it may render itself liable and all costs, charges, damages and expenses which
it may incur by so doing.
(e) Only the Security Trustee may enforce the provisions of the Security
Trust Deed and neither the Note Trustee nor any holder of a Class A Note is
entitled to proceed directly against the Issuer Trustee to enforce the
performance of any of the provisions of the Security Trust Deed, the Class A
Notes (including these Class A Conditions).
(f) The rights, remedies and discretions of the Class A Noteholders under
the Security Trust Deed including all rights to vote or give instructions or
consent can only be exercised by the Note Trustee on behalf of the Class A
Noteholders in accordance with the Security Trust Deed. The Security Trustee may
rely on any instructions or directions given to it by the Note Trustee as being
given on behalf of the Class A Noteholders from time to time and need not
enquire whether the Note Trustee or the Noteholders from time to time have
complied with any requirements under the Note Trust Deed or as to the
reasonableness or otherwise of the Note Trustee. The Security Trustee is not
obliged to take any action, give any consent or waiver or make any determination
under the Security Trust Deed without being directed to do so by the Note
Trustee or the Voting Mortgagees in accordance with the Security Trust Deed.
UPON ENFORCEMENT OF THE SECURITY CREATED BY THE SECURITY TRUST DEED, THE NET
PROCEEDS THEREOF MAY BE INSUFFICIENT TO PAY ALL AMOUNTS DUE ON REDEMPTION TO THE
NOTEHOLDERS. THE PROCEEDS FROM ENFORCEMENT (WHICH WILL NOT INCLUDE AMOUNTS
REQUIRED BY LAW TO BE PAID TO THE HOLDER OF ANY PRIOR RANKING SECURITY INTEREST,
THE PROCEEDS OF OR AMOUNTS CREDITED TO THE COLLATERAL ACCOUNT UNDER THE
LIQUIDITY FACILITY AGREEMENT (AS DEFINED IN THE MASTER TRUST DEED) AND PAYABLE
TO THE LIQUIDITY FACILITY PROVIDER (AS DEFINED IN THE MASTER TRUST DEED) AND THE
PROCEEDS OF CASH COLLATERAL LODGED WITH AND PAYABLE TO A SWAP PROVIDER OR OTHER
PROVIDER OF A SUPPORT FACILITY (AS DEFINED IN THE MASTER TRUST DEED)) WILL BE
APPLIED IN THE ORDER OF PRIORITY AS SET OUT IN THE SECURITY TRUST DEED. ANY
CLAIMS OF NOTEHOLDERS REMAINING AFTER REALIZATION OF THE SECURITY AND
APPLICATION OF THE PROCEEDS AS AFORESAID SHALL, EXCEPT IN CERTAIN LIMITED
CIRCUMSTANCES, BE EXTINGUISHED.
11. REPLACEMENTS OF CLASS A NOTES
If any Class A Note is lost, stolen, mutilated, defaced or destroyed, it may
be replaced at the specified office of the Principal Paying Agent upon payment
by the claimant of the expenses incurred in connection with that replacement and
on such terms as to evidence and indemnity as the Issuer Trustee may reasonably
require. Mutilated or defaced Class A Notes must be surrendered before
replacements will be issued.
12. NOTICES
All notices, other than notices given in accordance with the following
paragraph, to Class A Noteholders shall be deemed given if in writing and
mailed, first-class, postage prepaid to each Class A Noteholder, at his or her
address as it appears on the Note Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice. In
any case where notice to Class A Noteholders is given by mail, neither the
failure to mail such notice nor any defect in any notice so mailed to any
particular Class A Noteholder shall affect the sufficiency of such notice with
respect to other Class A Noteholders, and any notice that is mailed in the
manner herein provided shall conclusively be presumed to have been duly given.
A notice may be waived in writing by the relevant Class A Noteholder, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Class A Noteholders shall be filed with the Note
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
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Any such notice shall be deemed to have been given on the date such notice
is deposited in the mail.
In case, by reason of the suspension of regular mail services as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Class A Noteholders when such notice is required to be
given, then any manner of giving such notice as the Trustee shall direct the
Note Trustee shall be deemed to be a sufficient giving of such notice.
Any notice specifying a Payment Date, an Interest Rate, Interest payable, a
Principal Payment (or the absence of a Principal Payment), an Invested Amount, a
Stated Amount or a Bond Factor shall be deemed to have been duly given if the
information contained in such notice appears on the relevant page of the Reuters
Screen or such other similar electronic reporting service as may be approved by
the Note Trustee and notified to Class A Noteholders (the "Relevant Screen").
Any such notice shall be deemed to have been given on the first date on which
such information appeared on the Relevant Screen. If it is impossible or
impracticable to give notice in accordance with this paragraph then notice of
the matters referred to in this Condition shall be given in accordance with the
preceding paragraph.
The Principal Paying Agent shall deliver a quarterly servicing report for
each Collection Period to each Class A Noteholder on the Notice date relating to
such Collection Period in the method provided in the first paragraph of this
Condition 12.
13. MEETINGS OF VOTING MORTGAGEES AND VOTES OF CLASS A NOTEHOLDERS;
MODIFICATIONS; CONSENTS; WAIVER
The Security Trust Deed contains provisions for convening meetings of the
Voting Mortgagees to, INTER ALIA, enable the Voting Mortgagees to direct or
consent to the Security Trustee taking or not taking certain actions under the
Security Trust Deed, for example to enable the Voting Mortgagees to direct the
Security Trustee to enforce the Security Trust Deed.
For so long as the amounts outstanding under the Notes are 75% or more of
all amounts secured by the Security Trust Deed, the Note Trustee may direct the
Security Trustee to do any act or thing which the Security Trustee is required
to do, or may only do, at the direction of an Extraordinary Resolution of the
Voting Mortgagees.
Neither the Security Trustee nor the Trust Manager may call a meeting of
Voting Mortgagees without the Note Trustee's consent, if the amounts outstanding
under the Notes are 75% or more of all amounts secured by the Security Trust
Deed.
The Note Trust Deed contains provisions for the Class A Noteholders to
consider any matter affecting their interests. In general, the holders of a
majority of the aggregate Invested Amount of the Class A Notes may take or
consent to any action permitted to be taken by Class A Noteholders under the
Note Trust Deed. Notwithstanding the foregoing, the consent of holders of 75% of
the aggregate Invested Amount of the Class A Notes shall be required to (i)
direct the Note Trustee to direct the Security Trustee to enforce the security
under the Note Trust Deed, (ii) override any waiver by the Note Trustee of a
breach of any provisions of the Transaction Documents or an Event of Default,
(iii) alter, add, or modify the terms and conditions of the Class A Notes or the
provisions of any of the Transaction Documents if such alteration, addition or
modification is, in the opinion of the Note Trustee, materially prejudicial or
likely to be materially prejudicial to the Offered Noteholders as a whole or the
Class A Noteholders, which shall include any modification to the date of
maturity of the Class A Notes or a modification which would have the effect of
postponing any day for payment of interest in respect of any Class A Notes,
reducing or cancelling the amount of principal payable in respect of any Class A
Notes or the rate of interest applicable to any Class A Notes or altering the
percentage of the aggregate Invested Amount required to consent to any action or
altering the currency of payment of any Class A Notes or an alteration of the
date or priority of redemption of the Class A Notes (any such modification being
referred to below as a "Basic Terms Modification"). The Note Trust Deed contains
provisions limiting the powers of the Class B Noteholders, INTER ALIA, to
request or direct the Note Trustee to take any action that would be materially
prejudicial to the interests of the Class A Noteholders. Except in certain
circumstances, the Note Trust Deed imposes no
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such limitations on the powers of the Class A Noteholders, the exercise of which
will be binding on the Class B Noteholders, irrespective of the effect on the
Class B Noteholders' interests. Any action taken by the requisite percentage of
the Invested Amount of the Class A Noteholders shall be binding on all Class A
Noteholders (both present and future).
Pursuant to the terms of the Note Trust Deed, the Note Trustee may agree,
without the consent of the Class A Noteholders, among other things, (i) to any
modification (except a Basic Terms Modification) of, or to the waiver or
authorisation of any breach or proposed breach of the Class A Notes (including
these Conditions), or any of the Transaction Documents which is not, in the
opinion of the Note Trustee materially prejudicial to the interests of the Class
A Noteholders or (ii) to any modification of the Class A Notes (including these
Conditions, or any of the Transaction Documents which, in the Note Trustee's
opinion, is to correct a manifest error or is of a formal, minor or technical
nature. The Note Trustee may also, without the consent of the Class A
Noteholders, determine that any Event of Default or any condition, event or act
which with the giving of notice and/or lapse of time and/or the issue of a
certificate would constitute an Event of Default shall not, or shall not subject
to specified conditions, be treated as such. Any such modification, waiver,
authorisation or determination shall be binding on the Class B Noteholders and,
unless the Note Trustee agrees otherwise, any such modification shall be
notified to the Class A Noteholders in accordance with Class A Condition 12 as
soon as practicable thereafter.
14. INDEMNIFICATION AND EXONERATION OF THE NOTE TRUSTEE AND THE SECURITY TRUSTEE
The Note Trust Deed contains provisions for the indemnification of the Note
Trustee and for its relief from responsibility, including provisions relieving
it from taking proceedings to realise the security and to obtain repayment of
the Class A Notes unless indemnified to its satisfaction. Each of the Note
Trustee and the Security Trustee is entitled to enter into business transactions
with the Issuer Trustee and/or any other party to the Relevant Documents without
accounting for any profit resulting from such transactions. Neither the Security
Trustee nor the Note Trustee will be responsible for any loss, expense or
liability which may be suffered as a result of any assets secured by the
Security Trust Deed, Mortgaged Property or any deeds or documents of title
thereto, being uninsured or inadequately insured or being held by or to the
order of the Servicer or any of its affiliates or by clearing organisations or
their operators or by any person on behalf of the Note Trustee.
15. LIMITATION OF LIABILITY OF THE ISSUER TRUSTEE
(A) GENERAL
Clause 33 of the Master Trust Deed applies to the obligations and
liabilities of the Issuer Trustee in relation to this Class A Note.
(B) LIABILITY OF TRUSTEE LIMITED TO ITS RIGHT OF INDEMNITY
(i) This Class A Note applies to the Issuer Trustee only in its capacity as
trustee of the Trust and in no other capacity. A liability arising under or in
connection with this Class A Note or the Trust can be enforced against the
Issuer Trustee only to the extent to which it can be satisfied out of property
of the Trust out of which the Issuer Trustee is actually indemnified for the
liability. This limitation of the Issuer Trustee's liability applies despite any
other provision of this Class A Note or any other Transaction Document and
extends to all liabilities and obligations of the Issuer Trustee in any way
connected with any representation, warranty, conduct, omission, agreement or
transaction related to this Class A Note or the Trust.
(ii) None of the Note Trustee or the Class A Noteholders may take action
against the Issuer Trustee in any capacity other than as trustee of the Trust or
seek the appointment of a receiver (except under the Security Trust Deed), or a
liquidator, an administrator or any similar person to the Issuer Trustee or
prove in any liquidation, administration or arrangements of or affecting the
Issuer Trustee.
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(iii) The provisions of this Condition 15 shall not apply to any obligation
or liability of the Issuer Trustee to the extent that it is not satisfied
because under a Transaction Document or by operation of law there is a reduction
in the extent of the Issuer Trustee's indemnification out of the Trust Assets as
a result of the Issuer Trustee's fraud, negligence or breach of trust.
(iv) It is acknowledged that the Trust Manager, the Servicer, each Paying
Agent, the Agent Bank and the Note Trustee (each a "Relevant Party") are
responsible under the Transaction Documents for performing a variety of
obligations relating to the Trust. No act or omission of the Issuer Trustee
(including any related failure to satisfy its obligations under this Class A
Note or a Transaction Document) will be considered fraud, negligence or breach
of trust of the Issuer Trustee for the purpose of sub-paragraph (iii) of this
Condition 15 to the extent to which the act or omission was caused or
contributed to by any failure by any Relevant Party or any other person who
provides services in respect of the Trust (other than a person who has been
delegated or appointed by the Issuer Trustee and for whom the Issuer Trustee is
responsible under the Transaction Documents, other than a Relevant Party) to
fulfil its obligations relating to the Trust or by any other act or omission of
a Relevant Party or any other person who provides services in respect of the
Trust (other than a person who has been delegated or appointed by the Issuer
Trustee and for whom the Issuer Trustee is responsible under the Transaction
Documents, other than a Relevant Party).
(v) No attorney, agent, receiver or receiver and manager appointed in
accordance with a Transaction Document (including without limitation a Relevant
Party) has authority to act on behalf of the Issuer Trustee in a way which
exposes the Issuer Trustee to any personal liability and no act or omission of
any such person will be considered fraud, negligence or breach of trust of the
Issuer Trustee for the purpose of sub-paragraph (iii), if the Issuer Trustee has
exercised reasonable care in the selection and supervision of such a person.
16. GOVERNING LAW
The Class A Notes and the Relevant Documents (other than the Security Trust
Deed which is governed by the laws of the Australian Capital territory and the
Currency Swap with Morgan Guaranty Trust Company of New York, London Office,
which is governed by the laws of England) are governed by, and shall be
construed in accordance with, the laws of New South Wales, Australia.
SUMMARY OF PROVISIONS RELATING TO THE CLASS A NOTES WHILE IN BOOK ENTRY FORM
The Class A Notes will initially be represented by typewritten book-entry
notes (the Book-Entry Class A Notes"), without coupons, in the principal amount
of US$1,372,700,000. The Book-Entry Class A Notes will be deposited with the
Common Depositary for DTC on or about the Closing Date. Upon deposit of the
Book-Entry Class A Notes with the Common Depositary, DTC will credit each
investor in the Class A Notes with a principal amount of Class A Notes for which
it has subscribed and paid.
The Book-Entry Class A Note will be exchangeable for definitive Class A
Notes in certain circumstances described below.
Each person who is shown in the Note Register as the holder of a particular
principal amount of Class A Notes will be entitled to be treated by the Issuer
Trustee and the Note Trustee as a holder of such principal amount of Class A
Notes and the expression "Class A Noteholder" shall be construed accordingly,
but without prejudice to the entitlement of the holder of the Book-Entry Class A
Note to be paid principal and interest thereon in accordance with its terms.
Such persons shall have no claim directly against the Issuer Trustee in respect
of payment due on the Class A Notes for so long as the Class A Notes are
represented by a Book-Entry Class A Note and the relevant obligations of the
Issuer Trustee will be discharged by payment to the registered holder of the
Book-Entry Class A Note in respect of each amount so paid.
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(A) PAYMENTS
Interest and principal on each Book-Entry Class A Note will be payable by
the Principal Paying Agent to the Common Depositary provided that no payment of
interest may be made by the Issuer Trustee or any Paying Agent in the
Commonwealth of Australia or its possessions or into a bank account or to an
address in the Commonwealth of Australia or its possessions.
Each of the persons appearing from time to time as the beneficial owner of a
Class A Note will be entitled to receive any payment so made in respect of that
Class A Note in accordance with the respective rules and procedures of DTC. Such
persons will have no claim directly against the Issuer Trustee in respect of
payments due on the Class A Notes which must be made by the holder of the
relevant Book-Entry Class A Note, for so long as such Book-Entry Class A Note is
outstanding.
A record of each payment made on a Book-Entry Class B Note, distinguishing
between any payment of principal and any payment of interest, will be recorded
in the Note Register by the Principal Paying Agent and such record shall be
prima facie evidence that the payment in question has been made.
(B) EXCHANGE
The Book-Entry Class A Note will be exchangeable for definitive Class A
Notes only if:
(a) the Trust Manager advises the Principal Paying Agent in writing that the
Clearing Agency is no longer willing or able properly to discharge its
responsibilities with respect to the Class A Notes or the Clearing Agency
ceases to carry on business, and the Trust Manager is unable to located a
qualified successor;
(b) the Issuer Trustee, at the direction of the Trust Manager (at the Trust
Manager's option) advises the Principal Paying Agent in writing that the
book entry system through the Clearing Agency is or is to be terminated; or
(c) after the occurrence of an Event, of Default the Class A Note Owner's
representing beneficial interests aggregating to at least a majority of the
aggregate Invested Amount of the Class A Notes advise the Principal Paying
Agent and Issuer Trustee through the Clearing Agency in writing that the
continuation of a book entry system through the Clearing Agency is no longer
in the best interest of the Note Owners,
then the Principal Paying Agent shall notify all Class A Note Owners and the
Issuer Trustee of the occurrence of any such event and of the availability of
Definitive Notes to Class A Note Owners requesting the same. Upon the surrender
of the Book-Entry Notes to the Issuer Trustee by the Clearing Agency, and the
delivery by the Clearing Agency of the relevant registration instructions to the
Issuer Trustee, the Issuer Trustee shall execute and procure the Principal
Paying Agent to authenticate the Definitive Notes in accordance with the
instructions of the Clearing Agency.
(C) NOTICES
So long as the Notes are represented by the Book-Entry Class A Note and the
same is/are held on behalf of the Clearing Agency, notices to Class A
Noteholders may be given by delivery of the relevant notice to the Clearing
Agency for communication by them to entitled account holders in substitution for
delivery to each Class A Noteholder as required by the Class A Conditions.
(D) CANCELLATION
Cancellation of any Class A Note required by the Class A Conditions will be
effected by reduction in the principal amount of the relevant Book-Entry Class A
Note.
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APPENDIX III--TERMS AND CONDITIONS OF THE CLASS B NOTES
TERMS AND CONDITIONS OF THE CLASS B NOTES
THE FOLLOWING, SUBJECT TO AMENDMENTS, ARE THE TERMS AND CONDITIONS OF THE
CLASS B NOTES, SUBSTANTIALLY AS THEY WILL APPEAR ON THE REVERSE OF THE CLASS B
NOTES. CLASS B NOTES IN DEFINITIVE FORM WILL ONLY BE ISSUED IN CERTAIN
CIRCUMSTANCES. WHILE THE CLASS B NOTES REMAIN IN BOOK-ENTRY FORM, THE SAME TERMS
AND CONDITIONS GOVERN THEM, EXCEPT TO THE EXTENT THAT THEY ARE APPROPRIATE ONLY
TO THE CLASS B NOTES IN DEFINITIVE FORM. FOR A SUMMARY OF THE PROVISIONS
RELATING TO THE CLASS B NOTES IN BOOK-ENTRY FORM, SEE THE SUMMARY AT THE END OF
THIS SECTION.
The issue of US$32,300,000 Class B Mortgage Backed Floating Rate Notes due
2029 (the "Class B Notes") of Westpac Securities Administration Limited in its
capacity as trustee of the Series 1998-1G WST Trust (the "Trust"), in such
capacity (the "Issuer Trustee") was authorised by resolution[s] of the Board of
Directors of the Issuer Trustee passed on [*]. These Notes, together with
US$1,372,700,000 Class A Mortgage Backed Floating Rate Notes due 2029 (the
"Class A Notes" and, together with the Class B Notes, the "Notes") of the Issuer
Trustee are (a) issued subject to a Master Trust Deed (the "Master Trust Deed")
dated 14th February 1997 between the Issuer Trustee and The Mortgage Company Pty
Limited, acceded to by Westpac Securitisation Management Pty Limited (the "Trust
Manager"), by a Series Notice (the "Series Notice") dated [*] between (among
others) the Issuer Trustee, Morgan Guaranty Trust Company of New York, London
Branch (the note trustee for the time being referred to as the "Note Trustee")
as trustee for the holders for the time being of the Class B Notes (the "Class B
Noteholders") and the holders for the time being of the Class A Notes (the
"Class A Noteholders" and together with the Class B Noteholders, the
"Noteholders") and the Trust Manager, and by these terms and conditions (the
"Class B Conditions"); (b) issued subject to a note trust deed dated [*] (the
"Note Trust Deed") between the Issuer Trustee, the Trust Manager and the Note
Trustee; and (c) secured by a Security Trust Deed (the "Security Trust Deed")
dated [*] between the Issuer Trustee, the Trust Manager, the Note Trustee and
Perpetual Trustee Company Limited (ACN 000 001 007) (the security trustee for
the time being referred to as "Security Trustee").
The statements set out below include summaries of, and are subject to the
detailed provisions of the Master Trust Deed, the Series Notice, the Security
Trust Deed and the Note Trust Deed. Certain words and expressions used herein
have the meanings defined in those documents. In accordance with an agency
agreement (the "Agency Agreement") dated [*] between the Issuer Trustee, the
Trust Manager, the Note Trustee and Morgan Guaranty Trust Company of New York,
London Branch as principal paying agent (the "Principal Paying Agent", which
expression includes its successors as principal paying agent under the Agency
Agreement) and as agent bank (the "Agent Bank", which expression includes its
successors as Agent Bank under the Agency Agreement), and under which further
paying agents may be appointed (together with the Principal Paying Agent, the
"Paying Agents", which expression includes the successors of each paying agent
as such under the Agency Agreement and any additional paying agents appointed),
payments in respect of the Class B Notes will be made by the Paying Agents and
the Agent Bank will make the determinations specified in the Agency Agreement.
The Class B Noteholders will be entitled (directly or indirectly) to the benefit
of, will be bound by, and will be deemed to have notice of, all the provisions
of the Master Trust Deed, the Series Notice, the Security Trust Deed, the Note
Trust Deed and the Servicing Agreement as amended (the "Servicing Agreement
Amendment Agreement") dated [*] and made between the Issuer Trustee, Westpac
Banking Corporation ("Westpac") and The Mortgage Company Pty Limited as Servicer
(together with any substitute or successor, the "Servicer") (together with the
Currency Swap Agreements (as defined below), those documents the "Relevant
Documents" and, together with certain other transaction documents defined as
such in the Series Notice, the "Transaction Documents"). Copies of the
Transaction Documents are available for inspection at the principal office of
the Principal Paying Agent, being at the date hereof 60 Victoria Embankment,
London EC4Y 0JP.
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In connection with the issue of the Class B Notes, the Issuer Trustee has
entered into an ISDA master interest rate and currency exchange agreement dated
[*] with Westpac Banking Corporation in such capacity (the "Interest Rate Swap
Provider") together with three confirmations relating thereto dated [*] (the
"Variable Rate Basis Swap" and the "Fixed Rate Basis Swap", respectively and,
together, the "Interest Rate Swaps"). The Issuer Trustee has also entered into
ISDA master interest rate and currency exchange agreements dated [*] with each
of Morgan Guaranty Trust Company of New York, London Branch and Westpac Banking
Corporation (each, in such capacity a "Currency Swap Provider", and together
with the Interest Rate Swap Provider, the "Swap Providers") together with two
confirmations relating to each such agreement dated [*] in respect of two
distinct swap transactions relating to each of the Class B Notes and the Class A
Notes, respectively (each, a "Currency Swap", and together the "Currency
Swaps").
1. FORM, DENOMINATION AND TITLE
The Class B Notes will be issued in registered form, without interest
coupons, in minimum denominations of US$100,000 and integral multiples thereof.
The Class B Notes will be represented by one or more typewritten fully
registered book-entry notes (each, a "Book-Entry Note" and collectively, the
"Book-Entry Notes") registered in the name of Cede & Co. ("Cede") as nominee of
The Depository Trust Company ("DTC"). Beneficial interests in the Book-Entry
Notes will be shown on, and transfers thereof will be effected only through,
records maintained by DTC and its participants. Morgan Guaranty Trust Company of
New York, Brussels office, as operator of the Euroclear System ("Euroclear") and
Cedel Bank, societe anonyme ("Cedel Bank"), may hold interests in the Book-Entry
Notes on behalf of persons who have accounts with Euroclear and Cedel Bank
through accounts maintained in the names of Euroclear or Cedel Bank, or in the
names of their respective depositories, with DTC.
If the Issuer Trustee is obliged to issue Definitive Notes under clause 3.3
of the Note Trust Deed, interests in the applicable Book-Entry Note will be
transferred to the beneficial owners thereof in the form of Definitive Notes,
without interest coupons, in the denominations set forth above. A Definitive
Note will be issued to each Noteholder in respect of its registered holding or
holdings of Class B Notes against delivery by such Noteholders of a written
order containing instructions and such other information as the Issuer Trustee
and Morgan Guaranty Trust Company of New York, London Branch, acting as note
registrar (the "Note Registrar") may require to complete, execute and deliver
such Definitive Notes. In such circumstances, the Issuer Trustee will cause
sufficient Definitive Notes to be executed and delivered to the Note Registrar
for completion, authentication and dispatch to the relevant Noteholders.
2. STATUS, SECURITY AND RELATIONSHIP BETWEEN THE CLASS B NOTES, THE CLASS A
NOTES, THE RFSS AND THE RFS CLASS A NOTES
The Class B Notes are secured by a first ranking floating charge over all of
the assets of the Trust (which include, among other things, the Loans (as
defined below) and the Mortgages (as defined below) and related securities) (as
more particularly described in the Security Trust Deed) and rank PARI PASSU and
rateably without any preference or priority among themselves.
The Class B Notes are constituted by the Master Trust Deed and the Series
Notice and are secured by the same security as secures the Class A Notes but the
Class A Notes will rank in priority to the Class B Notes in the event of the
security being enforced and in respect of principal and interest (as set out in
Class B Condition 4 and 5).
The proceeds of the issue of the Class B Notes and the Class A Notes are to
be used by the Issuer Trustee to purchase an equitable interest in certain
housing loans (the "Loans") and certain related mortgages (the "Mortgages") from
Westpac or Westpac Securities Administration Limited in its capacity as trustee
of certain other trusts (each a "WST Seller").
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In the event that the security for the Class B Notes is enforced and the
proceeds of such enforcement are insufficient, after payment of all other claims
ranking in priority to or PARI PASSU with the Class B Notes under the Security
Trust Deed, to pay in full all principal and interest and other amounts
whatsoever due in respect of the Class B Notes, then the Class B Noteholders
shall have no further claim against the Issuer Trustee in respect of any such
unpaid amounts.
The net proceeds of realisation of the assets of the Trust may be
insufficient to pay all amounts due to the Noteholders. Save in certain limited
circumstances the other assets of the Issuer Trustee will not be available for
payment of any shortfall arising and all claims in respect of such shortfall
shall be extinguished (see further Class B Condition 15). None of the Servicer,
the Trust Manager, the Seller Trustee, Westpac, the Note Trustee or the Security
Trustee has any obligation to any Noteholder for payment of any amount by the
Issuer Trustee in respect of the Notes.
THE ISSUER TRUSTEE MAY FROM TIME TO TIME ISSUE DEBT SECURITIES ("RFSS")
CONSTITUTED UNDER THE MASTER TRUST DEED AND THE SERIES NOTICE TO FUND AMOUNTS
REDRAWN BY RELEVANT BORROWERS UNDER THE LOANS (UP TO THE SCHEDULED AMORTISED
PRINCIPAL OF THE LOANS) FROM TIME TO TIME ("REDRAWS"). RFSS AND CLASS A NOTES
WILL, ON ISSUE, RANK AHEAD OF THE CLASS B NOTES AS TO BOTH PRINCIPAL AND
INTEREST EXCEPT IN THE LIMITED CIRCUMSTANCES SET OUT IN THESE CONDITIONS.
IF, BY THE FIFTH COLLECTION DETERMINATION DATE (AS DEFINED IN CLASS A
CONDITION 5) FOLLOWING THE ISSUE OF AN RFS, THE RFS HAS NOT BEEN REDEEMED, IT
SHALL CONVERT TO AN RFS CLASS A NOTE (EACH, AN "RFS CLASS A NOTE" AND, TOGETHER
THE "RFS CLASS A NOTES"). RFS CLASS A NOTES WILL RANK AHEAD OF CLASS B NOTES AS
TO BOTH PRINCIPAL AND INTEREST EXCEPT IN THE LIMITED CIRCUMSTANCES SET OUT IN
THESE CONDITIONS. RFSS AND RFS CLASS A NOTES ARE REGISTERED, AUSTRALIAN-TRADED
INSTRUMENTS DENOMINATED IN AUSTRALIAN DOLLARS ("A$") AND SOLD TO AUSTRALIAN
INVESTORS ONLY AND FOR THE AVOIDANCE OF DOUBT ARE NOT FUNGIBLE WITH THE CLASS B
NOTES.
THE NOTE TRUST DEED CONTAINS PROVISIONS REQUIRING THE NOTE TRUSTEE TO HAVE
REGARD TO THE INTERESTS OF THE CLASS A NOTEHOLDERS AND THE CLASS B NOTEHOLDERS
AS REGARDS ALL THE POWERS, TRUSTS, AUTHORITIES, DUTIES AND DISCRETIONS OF THE
NOTE TRUSTEE (EXCEPT WHERE EXPRESSLY PROVIDED OTHERWISE), BUT REQUIRING THE NOTE
TRUSTEE IN ANY SUCH CASE TO HAVE REGARD ONLY TO THE INTERESTS OF THE CLASS A
NOTEHOLDERS IF, IN THE NOTE TRUSTEE'S OPINION, THERE IS A CONFLICT BETWEEN THE
INTERESTS OF THE CLASS A NOTEHOLDERS AND THE INTERESTS OF THE CLASS B
NOTEHOLDERS.
THE SECURITY TRUST DEED CONTAINS PROVISIONS REQUIRING THE SECURITY TRUSTEE
TO GIVE PRIORITY TO THE INTERESTS OF THE CLASS A NOTEHOLDERS AND THE HOLDERS OF
RFSS (IF ANY) AND RFS CLASS A NOTES (IF ANY), IF THERE IS A CONFLICT BETWEEN THE
INTERESTS OF SUCH NOTEHOLDERS AND ANY OTHER VOTING MORTGAGEE (AS DEFINED BELOW),
INCLUDING THE CLASS B NOTEHOLDERS.
3. COVENANTS OF THE ISSUER TRUSTEE
So long as any of the Class A Notes or the Class B Notes remains
outstanding, the Issuer Trustee has made certain covenants for the benefit of
Class A Noteholders and the Class B Noteholders which are set out in the Master
Trust Deed.
These covenants are as follows:
(a) The Issuer Trustee shall act continuously as trustee of the Trust until
the Trust is terminated as provided by the Master Trust Deed or the Issuer
Trustee has retired or been removed from office in the manner provided under the
Master Trust Deed.
(b) The Issuer Trustee shall:
(i) act honestly and in good faith in the performance of its duties and
in the exercise of its discretions under the Master Trust Deed;
(ii) subject to the Master Trust Deed, exercise such diligence and
prudence as a prudent person of business would exercise in performing its
express functions and in exercising its discretions under
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the Master Trust Deed, having regard to the interests of the Class A
Noteholders and the Class B Noteholders and other creditors and
beneficiaries of the Trust;
(iii) use its best endeavours to carry on and conduct its business in so
far as it relates to the Master Trust Deed in a proper and efficient manner;
(iv) keep, or ensure that the Trust Manager keeps, accounting records
which correctly record and explain all amounts paid and received by the
Issuer Trustee;
(v) keep the Trust separate from each other trust which is constituted
under the Master Trust Deed and account for assets and liabilities of the
Trust separately from those of other trusts constituted under the Master
Trust Deed; and
(vi) do everything and take all such actions which are necessary
(including obtaining all appropriate authorisations) to ensure that it is
able to exercise all its powers and remedies and perform all its obligations
under the Master Trust Deed, the Transaction Documents and all other deeds,
agreements and other arrangements entered into by the Issuer Trustee under
the Master Trust Deed.
(c) Except as provided in the Master Trust Deed, the Issuer Trustee shall
not, nor shall it permit any of its officers to, sell, mortgage, charge or
otherwise encumber or part with possession of any asset of the Trust (the "Trust
Assets").
(d) The Issuer Trustee's officers, employees, agents, attorneys, delegates
and sub-delegates shall duly observe and perform the covenants and obligations
of the Master Trust Deed in the same manner as is required of the Issuer
Trustee, and the Issuer Trustee agrees to indemnify the Trust Manager for its
own benefit or for the benefit of the Trust against any loss or damage that the
Trust, the Trust Manager, the Servicer, the Class A Noteholders, the Class B
Noteholders, the Beneficiaries (as defined in the Master Trust Deed) the holders
of RFSs (if any) and the holders of RFS Class A Notes (if any) or other
creditors incur or sustain in connection with, or arising out of, any breach or
default by such officers, employees, agents, delegates and persons in the
observance or performance of any such covenant or obligation, to the extent that
the Issuer Trustee would have been liable if that breach or default had been the
Issuer Trustee's own act or omission.
(e) The Issuer Trustee will open and operate certain bank accounts in
accordance with the Master Trust Deed and the Series Notice.
(f) Subject to the Master Trust Deed and any Transaction Document to which
it is a party, the Issuer Trustee shall act on all directions given to it by the
Trust Manager in accordance with the terms of the Master Trust Deed.
(g) The Issuer Trustee shall properly perform the functions which are
necessary for it to perform under all Transaction Documents in respect of the
Trust.
4. INTEREST
(A) PAYMENT DATES
Each Class B Note bears interest on its Invested Amount (as defined below)
from and including 9 June 1998 or such later date as may be agreed between the
Issuer Trustee and the Managers for the issue of the Class B Notes (the "Closing
Date"). Interest in respect of the Class B Notes will be payable quarterly in
arrear on the 19th day falling in July 1998 in respect of the period from (and
including) the Closing Date to (but excluding) that date, and thereafter on each
19 April, 19 July, 19 October and 19 January (each such date a "Payment Date"
and each such three month period beginning on each of 1 April, 1 July, 1 October
and 1 January a "Quarter"). If any Payment Date would otherwise fall on a day
which is not a Business Day (as defined below), it shall be postponed to the
next day which is a Business
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Day (as defined below) unless it would thereby fall into the next calendar month
in which event it shall be brought forward to the immediately preceding Business
Day.
"Business Day" in this Class B Condition 4 and in Class B Conditions 5 and 9
below means any day (London time) other than a Saturday, Sunday or public
holiday on which banks are open for business in Sydney, London and New York
City.
The period beginning on (and including) the Closing Date and ending on (but
excluding) the first Payment Date and each successive period beginning on (and
including) a Payment Date and ending on (but excluding) the next Payment Date is
called an "Interest Period". Interest payable on a Class B Note in respect of
any Interest Period or any other period will be calculated on the basis of the
actual number of days elapsed and a 360 day year.
Interest shall cease to accrue on any Class B Note from (and including):
(i) the date on which the Stated Amount (as defined in Class B Condition
5(a)) of that Class B Note is reduced to zero; or
(ii) if the Stated Amount on the due date for redemption is not zero, the
due date for redemption of the Class B Note, unless, upon due presentation,
payment of principal due is improperly withheld or refused, following which
interest shall continue to accrue on the Invested Amount of the Class B Note at
the rate from time to time applicable to the Class B Notes until the moneys in
respect of that Class B Note have been received by the Note Trustee or the
Principal Paying Agent and notice to that effect is given in accordance with
Class B Condition 12, or the Stated Amount of that Class B Note has been reduced
to zero.
(B) INTEREST RATE
The rate of interest applicable from time to time to the Class B Notes (the
"Interest Rate") will be determined by the Agent Bank on the basis of the
following paragraphs.
On the second London banking day before the beginning of each Interest
Period (each an "Interest Determination Date"), the Agent Bank will determine
the rate "USD-LIBOR-BBA" as an applicable Floating Rate Option under the
Definitions of the International Swaps and Derivatives Association, Inc.
("ISDA") (the "ISDA Definitions") being the rate applicable to any Interest
Period for three-month deposits in US Dollars which appears on the Telerate Page
3750 as of 11am London time, on the Interest Determination Date. If such rate
does not appear on the Telerate Page 3750, the rate for the Interest Period will
be determined as if the Issuer Trustee and Agent Bank had specified
"USD-LIBOR-Reference Banks" as the applicable Floating Rate Option under the
ISDA Definitions. "USD-LIBOR-Reference Banks" means that the rate for an
Interest Period will be determined on the basis of the rates at which deposits
in US Dollars are offered by the Reference Banks (being four major banks in the
London interbank market) at approximately 11.00 am, London time, on the Interest
Determination Date to prime banks in the London interbank market for a period of
three months commencing on the first day of the Interest Period and in a
Representative Amount (as defined in the ISDA Definitions). The Agent Bank will
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that Interest Period will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for that Interest Period
will be the arithmetic mean of the rates quoted by major banks in New York City,
selected by the Agent Bank, at approximately 11.00 am, New York City time, on
that Interest Determination Date for loans in US Dollars to leading European
banks for a period of three months commencing on the first day of the Interest
Period and in a Representative Amount, provided that on the first day of the
first Interest Period USD-LIBOR-BBA shall be an interpolated rate calculated
with reference to the period from (and including) the Closing Date to (but
excluding) the first Interest Payment Date.
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The Interest Rate applicable to the Class B Notes for such Interest Period
shall be the aggregate of (i) such Interest Rate or arithmetic mean as
determined by the Agent Bank and (ii) the margin of 0.[*]% applicable to the
Class B Notes.
There is no maximum or minimum Interest Rate.
(C) DETERMINATION OF INTEREST RATE AND CALCULATION OF INTEREST
The Agent Bank will, as soon as practicable after 11.00 am (London time) on
each Interest Determination Date, determine the Interest Rate applicable to, and
calculate the amount of interest payable (the "Interest") for the immediately
succeeding Interest Period. The Interest is calculated by applying the Interest
Rate for the Class B Notes to the Invested Amount (as defined in Class B
Condition 5(a)) of the Class B Note on the first day of the next Interest
Period, multiplying such product by the actual number of days in the relevant
Interest Period and dividing by 360 and rounding the resultant figure down to
the nearest cent (half a cent being rounded upwards). The determination of the
Interest Rate and the Interest by the Agent Bank shall (in the absence of
manifest error) be final and binding upon all parties.
(D) NOTIFICATION AND PUBLICATION OF INTEREST RATE AND INTEREST
The Agent Bank will cause the Interest Rate and the Interest applicable to
each Class B Note for each Interest Period and the relevant Payment Date to be
notified to the Issuer Trustee, the Trust Manager, the Note Trustee, the Paying
Agents, and, for so long as the Class B Notes are listed on the Official List of
the London Stock Exchange Limited (the "London Stock Exchange"), the London
Stock Exchange, and will cause the same to be published in accordance with Class
B Condition 12 on or as soon as possible after the date of commencement of the
relevant Interest Period. The Interest and the relevant Payment Date so
published may subsequently be amended (or appropriate alternative arrangements
made by way of adjustment) without notice in the event of a shortening of the
Interest Period.
(E) DETERMINATION OR CALCULATION BY THE NOTE TRUSTEE
If the Agent Bank at any time for any reason does not determine the Interest
Rate or calculate the Interest for a Class B Note, the Note Trustee shall do so
and each such determination or calculation shall be deemed to have been made by
the Agent Bank. In doing so, the Note Trustee shall apply the foregoing
provisions of this Condition, with any necessary consequential amendments, to
the extent that, in its opinion, it can do so, and, in all other respects it
shall do so in such a manner as it shall deem fair and reasonable in all the
circumstances.
(F) AGENT BANK
The Issuer Trustee will procure that, so long as any of the Class B Notes
remains outstanding, there will at all times be an Agent Bank. The Issuer
Trustee reserves the right at any time to terminate the appointment of the Agent
Bank. Notice of that termination will be given to the Class B Noteholders. If
any person is unable or unwilling to continue to act as the Agent Bank, or if
the appointment of the Agent Bank is terminated, the Issuer Trustee will, with
the approval of the Note Trustee, appoint a successor Agent Bank to act as such
in its place, provided that neither the resignation nor removal of the Agent
Bank shall take effect until a successor approved by the Note Trustee has been
appointed.
5. REDEMPTION AND PURCHASE
(A) MANDATORY REDEMPTION IN PART FROM PRINCIPAL COLLECTIONS AND
APPORTIONMENT OF PRINCIPAL COLLECTIONS BETWEEN THE CLASS A NOTES, THE CLASS
B NOTES, THE RFS CLASS A NOTES AND THE RFSS
The Class B Notes shall be subject to mandatory redemption in part on any
Payment Date if on that date there are any Principal Collections (as defined
below) available to be distributed in relation to such
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Class B Notes. The principal amount so redeemable in respect of each Class B
Note prior to enforcement of the Security Trust Deed (each a "Principal
Payment") on any Payment Date shall be the amount available for payment as set
out in Class B Condition 5(b) on the day which is four Business Days prior to
the Payment Date (the "Collection Determination Date") preceding that Payment
Date multiplied by the Invested Amount of the applicable Class B Note over the
total Invested Amount of all Class B Notes then outstanding (rounded down to the
nearest cent with half a cent being rounded upwards); provided always that no
Principal Payment on a Class B Note on any date may exceed the amount equal to
the Invested Amount of that Class B Note at that date less amounts charged off
as at that date, or to be charged off on the following Payment Date, as
described in Class B Condition 5(c) (that reduced amount being the "Stated
Amount" of that Class B Note).
The "Invested Amount" of a Class B Note is equal to the Initial Invested
Amount (as defined herein) of such Class B Note less all payments previously
made in respect of principal in respect of such Class B Note. The "Initial
Invested Amount" of a Class B Note is its principal balance at the date of its
issuance.
"Principal Collections" means, in respect of a Collection Period (as defined
below) and as applicable on any Collection Determination Date, the aggregate of:
(i) all amounts received by or on behalf of the Issuer Trustee from or on
behalf of borrowers under the Loans during the Collection Period in respect of
principal, in accordance with the terms of the Loans, including principal
prepayments;
(ii) all other amounts received by or on behalf of the Issuer Trustee under
or in respect of principal under the Loans and the Mortgages during that
Collection Period including:
(A) any amounts recovered in respect of enforcement of Loans and Mortgages
(other than under lender's mortgage insurance), on account of principal;
(B) any payments by Westpac to the Issuer Trustee on the repurchase of a
Loan under the Master Trust Deed during that Collection Period which are
attributable to principal;
(C) any payments by Westpac Securities Administration Limited (in its
capacity as trustee of any other trust established under the Master Trust Deed)
(the "WST Purchaser") on the purchase by the WST Purchaser of any assets of the
Trust which are attributable to principal;
(D) any Prepayment Costs (as defined in the Series Notice) applied towards
Prepayment Benefits (as defined in the Series Notice) under the Series Notice;
and
(E) any Prepayment Benefit Shortfall (as defined in the Series Notice) paid
by Westpac to the Trust under the Series Notice;
(iii) all amounts received by or on behalf of the Issuer Trustee during that
Collection Period from any provider of a Support Facility (as defined in the
Series Notice) (other than the Currency Swap) under that Support Facility and
which the Trust Manager determines should be accounted for to reduce any
principal loss on a Loan, being the total amount outstanding under a Loan after
applying all proceeds from the enforcement of the Loan and related Mortgages (a
"Liquidation Loss") to the extent that Liquidation Loss is attributable to
principal;
(iv) all amounts received by or on behalf of the Issuer Trustee during that
Collection Period:
(A) from Westpac or the WST Seller Trustee (each an "Approved Seller") in
respect of any breach of a representation, warranty or undertaking contained in
the Master Trust Deed or the Series Notice;
(B) from an Approved Seller under any obligation under the Master Trust Deed
or the Series Notice to indemnify or reimburse the Issuer Trustee for any
amount;
(C) from the Servicer, in respect of any breach of any representation,
warranty or undertaking contained in the Servicing Agreement; and
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(D) from the Servicer under any obligation under the Servicing Agreement to
indemnify or reimburse the Issuer Trustee for any amount,
in each case, which are determined by the Trust Manager to be in respect of
principal payable under the Loans and the Mortgages;
(v) any amounts in the nature of principal received by or on behalf of the
Issuer Trustee during that Collection Period pursuant to the sale of any asset
comprised in the Trust (including any amount received by the Issuer Trustee on
the issue of Notes and which was not used to purchase Loans or Mortgages, and
which the Trust Manager determines is surplus to the requirements of the Trust);
(vi) (for the purposes of clause 6.11 of the Series Notice only) any amount
of Excess Available Income (as defined in the Series Notice) to be applied to
pay a Principal Charge Off or a Carryover Charge Off (as defined in the Series
Notice);
(vii) any amount received by or on behalf of the Issuer Trustee during that
Collection Period as proceeds from the issue of any RFS to the extent not
applied to reimburse amounts drawn under the Redraw Facility dated [*] between
the Issuer Trustee, the Trust Manager and Westpac (the "Redraw Facility");
(viii) any Excess Available Income to be applied to Principal Draws (as
defined in the Series Notice) made on a previous Payment Date;
(ix) any Prepayment Calculation Adjustment (as defined in the Series Notice)
for that Collection Period;
(x) any Substitution Net Transfer Amount (Principal) (as defined in the
Series Notice) received by the Trust from a WST Purchaser with respect to that
Collection Period;
less any amounts deducted by or paid to Westpac to reimburse Redraws funded by
Westpac for which Westpac has not previously been reimbursed. A premium
receivable by the Issuer Trustee on the entry into a replacement Currency Swap
under clause 6.26 of the Series Notice is not treated as a Principal Collection.
"Collection Period" means, in relation to a Payment Date, the period from
(and including) the tenth day of the Quarter preceding the Quarter in which the
Payment Date occurs to (and including) the ninth day of the Quarter in which the
Payment Date occurs. The first Collection Period is the period from (but
excluding) May 6, 1998 (the "Cut-Off Date") to (and including) July 9. The last
Collection Period is the period from (but excluding) the last day of the
previous Collection Period to (and including) the termination date of the Trust.
(B) INITIAL PRINCIPAL DISTRIBUTIONS PRINCIPAL COLLECTIONS WILL BE
DISTRIBUTED AS FOLLOWS ON EACH PAYMENT DATE BEFORE ANY PAYMENTS IN RESPECT
OF THE NOTES:
(i) first, to repay any Redraws provided by Westpac in relation to Loans to
the extent that Westpac has not previously been reimbursed in relation to those
Redraws;
(ii) second, to repay all principal outstanding under the Redraw Facility on
that Payment Date;
(iii) third, to allocate to Total Available Funds any Principal Draw (as
defined in the Series Notice); and
(iv) fourth, to repay PARI PASSU and rateably all amounts outstanding under
the RFSs (if any).
(C) PRINCIPAL ALLOCATION METHOD
On each Collection Determination Date, the Trust Manager will determine the
A$ Equivalent of the aggregate of the Class B Stated Amounts divided by the sum
of (i) the A$ Equivalent of the Total Stated
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Amount at that time, plus (ii) the Redraw Limit at that time, plus (iii) the
aggregate of the RFS Stated Amount at that time, plus (iv) the aggregate of the
RFS Class A Stated Amounts at that time (the "Subordinated Percentage"). The
Trust Manager will calculate the Subordinated Percentage so as to determine the
appropriate principal distribution methodology to apply for that Collection
Period, as described below.
(D) APPLICABILITY OF SERIAL METHOD 1
If, on any Collection Determination Date:
(i) the Subordinated Percentage at the previous Collection Determination
Date was greater than or equal to twice the Initial Subordinated Percentage;
(ii) that Collection Determination Date occurs on or before the third
anniversary of the Closing Date;
(iii) the Total Invested Amount as at that Collection Determination Date as
a percentage of the Total Initial Invested Amount, is greater than or equal to
10%;
(iv) the Average Quarterly Percentage as at that Collection Determination
Date:
(A) does not exceed 2% and the Total Carryover Charge Off on that Collection
Determination Date does not exceed 30% of the Class B Initial Invested Amount;
or
(B) does not exceed 4% and the Total Carryover Charge Off on such Collection
Determination Date does not exceed 10% of the Class B Initial Invested Amount;
and
(v) the Stated Amounts of all Class B Notes as at that Collection
Determination Date exceeds 0.25% of the aggregate of all Initial Invested
Amounts of all Class A Notes and all Class B Notes as at the Collection
Determination Date;
then Principal Collections will be allocated serially in accordance with Serial
Method I set out in paragraph (e) below.
(E) SERIAL METHOD 1
On any Collection Determination Date, if the Trust Manager determines that
Serial Method 1 should apply, the Issuer Trustee (based on instructions from the
Trust Manager) will pay out of Principal Collections for the relevant Collection
Period which remain after the Initial Principal Distributions, on the Payment
Date following that Collection Determination Date the following amounts in the
following priority:
(i) first PARI PASSU and rateably between themselves:
(A) as a payment, denominated in A$, to the Currency Swap Providers under
the relevant swap confirmations relating to the Class A Notes of an amount equal
to the lesser of:
(1) the Class A Forex Percentage of the sum of:
(aa) the Class A Percentage of Principal Collections remaining after all
Initial Principal Distributions; and
(bb) 50% of the Class B Percentage of those Principal Collections; and
(2) the A$ Equivalent of the Class A Stated Amounts for all Class A Notes;
and
(B) as a payment denominated in A$ to the holders of the RFS Class A Notes
(if any) of an amount equal to the lesser of:
(1) the RFS Class A Forex percentage of the sum of:
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(aa) the Class A Percentage of Principal Collections remaining after all
Initial Principal Distributions; and
(bb) 50% of the Class B Percentage of those Principal Collections; and
(2) the RFS Class A Stated Amounts for all RFS Class A Notes (if any); and
(ii) second, as a payment, denominated in A$, to the Currency Swap Providers
under the relevant swap confirmations relating to the Class B Notes of an amount
equal to 50% of the Class B Percentage of those Principal Collections remaining
after all Initial Principal Distributions.
(F) APPLICABILITY OF SERIAL METHOD 2
If, on any Collection Determination Date:
(i) the Subordinated Percentage at the previous Collection Determination
Date was greater than or equal to twice the Initial Subordinated Percentage;
(ii) that Collection Determination Date occurs after the third anniversary
of the Closing Date;
(iii) the Total Invested Amount as at that Collection Determination Date, as
a percentage of the Total Initial Invested Amount, is greater than or equal to
10%;
(iv) the Average Quarterly Percentage as at the Collection Determination
Date:
(A) does not exceed 2% and the Total Carryover Charge Off on that Collection
Determination Date does not exceed 30% of the Class B Initial Invested Amount;
or
(B) does not exceed 4% and the Total Carryover Charge Off on that Collection
Determination Date does not exceed 10% of the Class B Initial Invested Amount;
and
(v) the Stated Amount of the Class B Notes as at that Collection
Determination Date exceeds 0.25% of the aggregate of all Initial Invested
Amounts of all Class A Notes and all Class B Notes and the US$ Equivalent of the
Invested Amounts of all RFS Class A Notes (if any);
then Principal Collections will be allocated serially in accordance with Serial
Method 2 set out in paragraph (g) below.
(G) SERIAL METHOD 2
On any Collection Determination Date, if the Trust Manager determines that
Serial Method 2 shall apply, the Issuer Trustee (based on instructions from the
Trust Manager) will pay out of Principal Collections for the relevant Collection
Period which remain after the Initial Principal Distributions on the Payment
Date following that Collection Determination Date in the following amounts in
the following priority:
(i) first, PARI PASSU and rateably between themselves:
(A) as a payment, denominated in A$, to the Currency Swap Providers under
the relevant swap confirmations relating to the Class A Notes of an amount equal
to the lesser of:
(1) the Class A Forex Percentage of the Class A Percentage of Principal
Collections remaining after all Initial Principal Distributions; and
(2) the A$ Equivalent of the Class A Stated Amounts for all Class A Notes;
and
(B) as a payment denominated in A$ to the holders of the RFS Class A Notes
(if any) of an amount equal to the lesser of:
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(1) the RFS Class A Forex Percentage of the Class A Percentage of those
Principal Collections remaining after all Initial Principal Distributions: and
(2) the RFS Class A Stated Amounts for all RFS Class A Notes (if any); and
(ii) second as a payment, denominated in A$, to the Currency Swap Providers
under the relevant swap confirmations relating to the Class B Notes of an amount
equal to the Class B Percentage of those Principal Collections.
(H) SEQUENTIAL METHOD
On any Collection Determination Date, if the Trust Manager determines that
neither Serial Method I nor Serial Method 2 (set out in Conditions 5(d) to (g)
above) applies, the Issuer Trustee (based on instructions from the Trust
Manager) will pay out of Principal Collections for the relevant Collection
Period which remain after the Initial Principal Distributions the following
amounts in the following priority:
(i) first PARI PASSU and rateably between themselves:
(A) as a payment, denominated in A$, to the Currency Swap Providers under
the relevant swap confirmations relating to the Class A Notes of an amount equal
to the lesser of:
(1) the Class A Forex Percentage of the amount available for distribution
under this paragraph (i) after all Initial Principal Distributions; and
(2) the A$ Equivalent of the Class A Stated Amounts for all Class A Notes;
and
(B) as a payment, denominated in A$, to the holders of the RFS Class A Notes
(if any) of an amount equal to the lesser of:
(1) the RFS Class A Forex Percentage of the amount available for
distribution under this paragraph (i) after all Initial Principal Distributions;
and
(2) the RFS Class A Stated Amounts for all RFS Class A Notes (if any); and
(ii) second, as a payment, denominated in A$, to the Currency Swap Providers
under the relevant swap confirmations relating to the Class B Notes of an amount
equal to the lesser of:
(A) the amount available for distribution under this paragraph (ii) after
the application of paragraph (i); and
(B) the A$ Equivalent of the Class B Stated Amounts for all Class B Notes.
(I) GENERAL
No amount of principal will be paid to a Noteholder in excess of the Stated
Amount applicable to the Notes held by that Noteholder.
(J) DISTRIBUTION OF EXCESS AVAILABLE INCOME
On each Collection Determination Date Excess Available Income for the
Collection Period relating to that Collection Determination Date will be applied
in the following order of priority:
(i) to reimburse Principal Charge Offs for that Collection Period;
(ii) PARI PASSU and rateably between themselves (based on the Stated Amount
of the RFSs (if any), the Stated Amount of the RFS Class A Notes (if any), the
Principal Outstanding under the Redraw Facility and the A$ Equivalent of the
Stated Amount of the Class A Notes):
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(A) as a payment to the RFSs (if any) in or towards reinstating the Stated
Amount of the RFSs, to the extent of any Carryover RFS Charge Offs;
(B) as a payment to the RFS Class A Notes (if any) in or towards reinstating
the Stated Amount of the RFS Class A Notes, to the extent of any Carryover RFS
Class A Charge Offs;
(C) as a payment to the Currency Swap Providers under the relevant swap
confirmations relating to the Class A Notes, of the A$ Equivalent of any
Carryover Class A Charge Offs; and
(D) as a repayment under the Redraw Facility Agreement, as a reduction of,
and to the extent of, any Carryover Redraw Charge Offs;
(iii) as a payment, denominated in A$, to the Currency Swap Providers under
the relevant swap confirmations relating to the Class B Notes of the A$
Equivalent of any Carryover Class B Charge Offs; and
(iv) to all Principal Draws which have not been repaid as at that Payment
Date.
Any amount to be paid pursuant to paragraphs (ii) and (iii) will be paid on
the Payment Date immediately following the Collection Determination Date.
(K) US$ ACCOUNT
The Issuer Trustee shall direct the Currency Swap Providers to pay all
amounts denominated in US$ payable to the Issuer Trustee by the Currency Swap
Providers under the Currency Swaps into the US$ Account or to the Principal
Paying Agent under the Agency Agreement on behalf of the Issuer Trustee. The
Issuer Trustee shall pay all such amounts as follows, and in accordance with the
Note Trust Deed and the Agency Agreement:
(i) under Class A Condition 4, PARI PASSU in relation to the Class A Notes
as payments of Interest on those Class A Notes;
(ii) under Class A Condition 4, PARI PASSU in relation to the Class B Notes
as payments of Interest on those Class B Notes;
(iii) under Class B Condition 5(j)(ii)(C), PARI PASSU in relation to the
Class A Notes in or towards reinstating the Stated Amount of those Class A
Notes, to the extent of the Carryover Class A Charge Offs;
(iv) under Class B Condition 5(j)(iii), PARI PASSU in relation to Class B
Notes in or towards reinstating the Stated Amount of those Class B Notes, to the
extent of the Carryover Class B Charge Offs;
(v) under Class B Condition 5(e)(i)(A), 5(g)(i)(A) and 5(h)(i)(A) PARI PASSU
in relation to the Class A Notes as Class A Principal Payments until the Class A
Stated Amounts have been reduced to zero; and
(vi) under Class B Condition 5(e)(ii), 5(g)(ii) and 5(h)(ii) PARI PASSU in
relation to the Class B Notes as Class B Principal Payments until the Class B
Stated Amounts have been reduced to zero.
(L) CHARGE OFFS
If the Principal Charge Offs (as defined in the Series Notice) for any
Collection Period exceed the Excess Available Income (as defined in the Series
Notice) calculated on the Collection Determination Date for that Collection
Period, the Trust Manager must, on and with effect from the Payment Date
immediately following the end of the Collection Period:
(i) reduce PARI PASSU the Class B Stated Amount of each of the Class B Notes
by the US$ Equivalent of the amount of that excess which is attributable to each
Class B Note until the Class B Stated Amount is zero; and
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(ii) if the Class B Stated Amount is zero and any amount of that excess has
not been applied under paragraph (i), reduce PARI PASSU and rateably as between
themselves (based on the Stated Amount of the RFSs (if any), the Principal
Outstanding under the Redraw Facility, the Stated Amount of the RFS Class A
Notes (if any) and the A$ Equivalent of the Stated Amount of the Class A Notes):
(A) the Class A Stated Amount on each of the Class A Notes by the US$
Equivalent of the balance of that excess which is attributable to each Class A
Note until the Class A Stated Amount of that Class A Note is zero;
(B) the RFS Class A Stated Amount on each of the RFS Class A Notes (if any)
by the balance of that excess which is attributable to each RFS Class A Note
until the RFS Class A Stated Amount of that RFS Class A Note is zero;
(C) the RFS Stated Amount on each of the RFSs (if any) by the balance of
that excess which is attributable to each RFS until the RFS Stated Amount is
zero: and
(D) the principal outstanding under the Redraw Facility by the balance of
that excess until the Principal Outstanding is zero.
(M) CALCULATION OF PRINCIPAL PAYMENTS, STATED AMOUNT AND BOND FACTOR
(i) On each Collection Determination Date, the Trust Manager shall
determine:
(A) the amount of any Principal Payment in respect of each Class B Note on
the Payment Date following that Collection Determination Date;
(B) the Stated Amount and Invested Amount of each Class B Note as of the
first day of the next following Interest Period (after deducting any Principal
Payment due to be made in respect of each Class B Note on the next Payment Date)
and
(C) the fraction in respect of each Class B Note expressed as a decimal to
the seventh point (the "Bond Factor" of which the numerator is the aggregate of
the Invested Amount of all Class B Notes at that date less all Principal
Payments to be made on the following Payment Date, and the denominator is the
Initial Invested Amount of the Class B Notes.
(ii) The Trust Manager will notify the Note Trustee, the Principal Paying
Agent, the Agent Bank and (for so long as the Class B Notes are listed on the
London Stock Exchange) the London Stock Exchange by not later than the
Collection Determination Date immediately preceding the relevant Payment Date of
each determination of a Principal Payment, Invested Amount, Stated Amount and
Bond Factor and will immediately cause details of each of those determinations
to be published in accordance with Condition 12. If no Principal Payment is due
to be made on the Class B Notes on any Payment Date a notice to this effect will
be given to the Class B Noteholders in accordance with Class B Condition 12.
(iii) If the Trust Manager does not at any time for any reason determine a
Principal Payment, the Invested Amount, the Stated Amount or the Bond Factor
applicable to Class B Notes in accordance with this paragraph, the Principal
Payment, Invested Amount, the Stated Amount and the Bond Factor shall be
determined by the Note Trustee in accordance with this paragraph and paragraph
(i) above (but based on the information in its possession) and each such
determination or calculation shall be deemed to have been made by the Trust
Manager.
(iv) The Trust Manager will deliver to the Principal Paying Agent a
quarterly servicing report as set forth in clause 11 of the Note Trust Deed.
(N) REDEMPTION FOR TAXATION OR OTHER REASONS
If the Trust Manager satisfies the Issuer Trustee and the Note Trustee
immediately prior to giving the notice referred to below that either (i) on the
next Payment Date the Issuer Trustee would be required to
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deduct or withhold from any payment of principal or interest in respect of the
Class B Notes any amount for or on account of any present or future taxes,
duties, assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by the Commonwealth of Australia or any of its
political sub-divisions or any of its authorities or (ii) the total amount
payable in respect of interest in relation to the Loans for a Collection Period
ceases to be receivable (whether or not actually received) by the Issuer Trustee
during such Collection Period by reason of any present or future taxes, duties,
assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by the Commonwealth of Australia or any of its
political sub-divisions or any of its authorities, the Issuer Trustee must, when
so directed by the Trust Manager (at any time at the Trust Manager's option)
(provided that the Issuer Trustee will be in a position on such Payment Date to
discharge (and will so certify to the Issuer Trustee and the Note Trustee) all
its liabilities in respect of the Class B Notes and any amounts required under
the Security Trust Deed to be paid in priority to or PARI PASSU with the Class B
Notes), upon having given not more than 60 nor less than 30 days' notice to the
Class B Noteholders in accordance with Class B Condition 12 redeem all, but not
some only, of the Class B Notes at their Invested Amount (or at the option of
the holders of 75% of the aggregate Invested Amount of Class B Notes at the
time, at their Stated Amount), together with accrued interest to the date of
redemption on any subsequent Payment Date, provided that the holders of 75% of
the aggregate Invested Amount of Class B Notes at the time may elect, and shall
notify the Issuer Trustee and the Trust Manager, that they do not require the
Issuer Trustee to redeem the Class B Notes in the circumstances described above.
(O) OPTIONAL REDEMPTION IN WHOLE
On any Payment Date, and upon giving no more than 60 nor less than 30 days'
notice to the Note Trustee and the Security Trustee, on which the aggregate
principal outstanding of the Loans is less than 10% of the aggregate principal
outstanding of the Loans at the Cut-Off Date, the Issuer Trustee may redeem all
(but not some only) of the Class B Notes at their Stated Amount.
(P) REDEMPTION ON MATURITY
If not otherwise redeemed, the Class B Notes will be redeemed at their
Stated Amount on the Payment Date falling in December 2029.
(Q) CANCELLATION
All Class B Notes redeemed in full pursuant to the foregoing provisions will
be cancelled forthwith, and may not be resold or reissued.
(R) CERTIFICATION
For the purposes of any redemption made pursuant to this Condition 5 the
Note Trustee may rely upon an officer's certificate under the Note Trust Deed
from the Trust Manager on behalf of the Issuer Trustee certifying or stating the
opinion of each person signing such certificate as:
(i) to the fair value (within 90 days of such release) of the property or
securities proposed to be released from the Security Trust Deed;
(ii) that in the opinion of such person the proposed release will not impair
the security under the Security Trust Deed in contravention of the provisions of
the Security Trust Deed or the Note Trust Deed;
(iii) that the Issuer Trustee will be in a position to discharge all its
liabilities in respect of the relevant Class B Notes; and
(iv) any amounts required under the Security Trust Deed to be paid in
priority to or PARI PASSU with those Class B Notes,
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and such officer's certificate shall be conclusive and binding on the
Trustee and the holders of those Class B Notes.
(S) PURCHASES
The Issuer Trustee may not purchase any Class B Notes at any time.
6. PAYMENTS
(A) METHOD OF PAYMENT
Any instalment of interest or principal, payable on any Class B Note which
is punctually paid or duly provided for by the Issuer Trustee to the Principal
Paying Agent on the applicable Payment Date or Maturity Date shall be paid to
the person in whose name such Class B Note is registered on the Record Date, by
cheque mailed first-class, postage prepaid, to such person's address as it
appears on the Note Register on such Record Date, except that, unless Definitive
Notes have been issued pursuant to clause 3.3 of the Note Trust Deed, with
respect to Class B Notes registered on the Record Date in the name of the
nominee of DTC (initially, such nominee to be Cede & Co.), payment will be made
by wire transfer in immediately available funds to the account designated by
such nominee and except for the final instalment of principal payable with
respect to such Class B Note on a Payment Date or Maturity Date.
(B) INITIAL PRINCIPAL PAYING AGENT
The initial Principal Paying Agent is Morgan Guaranty Trust Company of New
York, London Branch, at its office at 60 Victoria Embankment, London EC4Y 0JP.
(C) PAYING AGENTS
The Issuer Trustee (or the Trust Manager on its behalf after advising the
Issuer Trustee thereof) may at any time (with the previous written approval of
the Note Trustee) vary or terminate the appointment of any Paying Agent and
appoint additional or other Paying Agents, provided that it will at all times
maintain a Paying Agent having a specified office in London and in New York
City. Notice of any such termination or appointment and of any change in the
office through which any Paying Agent will act will be given in accordance with
Class B Condition 12.
(D) DUE DATE FOR REDEMPTION
If the due date for redemption in full of a Class B Note is not a Payment
Date, the interest accrued in respect of the period from the preceding Payment
Date (or from the Closing Date as the case may be) shall be payable only against
presentation or surrender of the relevant Class B Note.
(E) PAYMENTS ON BUSINESS DAYS
If the due date for payment of any amount of principal or Interest in
respect of any Class B Note is not a Business Day then payment will not be made
until the next succeeding Business Day and the holder thereof shall not be
entitled to any further interest or other payment in respect of that delay. In
this Condition 6 the expression "Business Day" means any day (other than a
Saturday, Sunday or a public holiday) on which banks are open for business in
the place where the specified office of the Paying Agent is situated and, in the
case of payment by transfer to a US dollar account, in New York City and prior
to any exchange of the Book-Entry Note (in respect of the Class B Notes) for any
definitive Class B Notes, on which DTC is open for business.
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(F) Interest
If Interest is not paid in respect of a Class B Note on the date when due
and payable (other than because the due date is not a Business Day), that unpaid
Interest shall itself bear interest at the Interest Rate applicable from time to
time to the Class B Notes until the unpaid interest, and interest on it, is
available for payment and notice of that availability has been duly given in
accordance with Class B Condition 12.
7. TAXATION
All payments in respect of the Class B Notes will be made without
withholding or deduction for, or on account of, any present or future taxes,
duties or charges of whatsoever nature unless the Issuer Trustee or any Paying
Agent is required by applicable law to make any such payment in respect of the
Class B Notes subject to any withholding or deduction for, or on account of, any
present or future taxes, duties or charges of whatsoever nature. In that event
the Issuer Trustee or that Paying Agent (as the case may be) shall make such
payment after such withholding or deduction has been made and shall account to
the relevant authorities for the amount so required to be withheld or deducted.
Neither the Issuer Trustee nor any Paying Agent will be obliged to make any
additional payments to Class B Noteholders in respect of that withholding or
deduction.
8. PRESCRIPTION
A Class B Note shall become void in its entirety unless surrendered for
payment within ten years of the Relevant Date in respect of any payment thereon
the effect of which would be to reduce the Stated Amount of that Class B Note to
zero. After the date on which a Class B Note becomes void in its entirety, no
claim may be made in respect of it.
As used in these Conditions, the "Relevant Date" means the date on which a
payment first becomes due but, if the full amount of the money payable has not
been received by the Principal Paying Agent or the Note Trustee on or prior to
that date, it means the date on which, the full amount of such money having been
so received, notice to that effect is duly given in accordance with Class B
Condition 12.
9. EVENTS OF DEFAULT
Each of the following is an "Event of Default":
(a) the Issuer Trustee fails to pay:
(i) any interest within 10 Business Days of the Payment Date on which the
interest was due to be paid to Class A Noteholders, Class B Noteholders or
holders of RFSs or holders of RFS Class A Notes, or
(ii) any other amount owing to Class A Noteholders, Class B Noteholders or
holders of RFSs or holders of RFS Class A Notes or any other Mortgagee (as
defined in the Security Trust Deed) within 10 Business Days of the due date for
payment (or within any applicable grace period agreed with the Mortgagee or
where the Mortgagee is a Noteholder, with the Note Trustee).
(b) the Issuer Trustee fails to perform or observe any other provisions
(other than an obligation referred to in paragraph (a)) of a Transaction
Document (other than the Underwriting Agreement) where such failure will have a
material and adverse affect on the amount of any payment to be made to any
Noteholder, or will materially and adversely affect the timing of such payment,
and that default (if in the opinion of the Security Trustee capable of remedy
(that opinion, being subject to the approval of the Note Trustee in accordance
with the provisions of the Security Trust Deed) is not remedied within 30 days
(or such longer period as may be specified in the notice, that longer period
having been approved by the Note Trustee, for so long as amounts outstanding
under the Offered Notes are 75% of the Secured Moneys) after written notice from
the Security Trustee requiring the failure to be remedied.
III-16
<PAGE>
(c) any of the following occurs in relation to the Issuer Trustee (in its
personal capacity or as Trustee of the Trust):
(i) an administrator of the Issuer Trustee is appointed; or
(ii) except for the purpose of a solvent reconstruction or amalgamation:
(A) an application or an order is made, proceedings are commenced, a
resolution is passed or proposed in a notice of meeting or an application to a
court or other steps (other than frivolous or vexatious applications,
proceedings, notices and steps) are taken for:
(1) the winding up, dissolution or administration of the Issuer Trustee; or
(2) the Issuer Trustee entering into an arrangement, compromise or
composition with or assignment for the benefit of its creditors or a class of
them; or
(B) the Issuer Trustee ceases, suspends or threatens to cease or suspend the
conduct of all or substantially all of its business or disposes of or threatens
to dispose of substantially all of its assets; or
(iii) the Issuer Trustee is, or under applicable legislation is taken to be,
unable to pay its debts (other than as the result of a failure to pay a debt or
claim the subject of a good faith dispute) or stops or suspends or threatens to
stop or suspend payment of all or a class of its debts (except, where this
occurs in relation to another trust of which it is the trustee):
(iv) a receiver, receiver and manager or administrator is appointed (by the
Issuer Trustee or by any other person) to all or substantially all of the assets
and undertaking of the Issuer Trustee or any part thereof (except, in the case
of the Issuer Trustee where this occurs in relation to another trust of which it
is the trustee); or
(v) anything analogous to an event referred to in paragraphs (i) to (iv)
(inclusive) or having substantially similar effect, occurs with respect to the
Issuer Trustee;
(d) the charge created by the Security Trust Deed is not or ceases to be a
first ranking charge over the Trust Assets, or any other obligation of the
Issuer Trustee (other than as mandatorily preferred by law) ranks ahead of or
pari passu with any of the moneys secured by the Security Trust Deed;
(e) any security interest over the Trust Assets is enforced;
(f) all or any part of any Transaction Document, other than the Redraw
Facility or the Basis Swap (each as defined in the Series Notice), is terminated
or is or becomes void, illegal, invalid, unenforceable or of limited force and
effect, or a party becomes entitled to terminate, rescind or avoid all or part
of any Transaction Document (other than the Redraw Facility or the Basis Swap);
or
(g) without the prior consent of the Security Trustee (that consent, in
accordance with the provisions of the Security Trust Deed, being subject to the
prior written consent of the Note Trustee in accordance with the provisions of
the Security Trust Deed), (i) the Trust is wound up, or the Issuer Trustee is
required to wind up the Trust under the Master Trust Deed or applicable law, or
the winding up of the Trust commences; (ii) the Trust is held or is conceded by
the Issuer Trustee not to have been constituted or to have been imperfectly
constituted; or (iii) unless another trustee is appointed to the Trust under the
Relevant Documents, the Issuer Trustee ceases to be authorised under the Trust
to hold the property of the Trust in its name and to perform its obligations
under the Relevant Documents.
IN THE EVENT THAT THE SECURITY CONSTITUTED BY THE SECURITY TRUST DEED
BECOMES ENFORCEABLE FOLLOWING AN EVENT OF DEFAULT UNDER THE NOTES ANY FUNDS
RESULTING FROM THE REALISATION OF SUCH SECURITY SHALL BE APPLIED IN ACCORDANCE
WITH THE ORDER OF PRIORITY OF PAYMENTS AS STATED IN THE SECURITY TRUST DEED.
III-17
<PAGE>
10. ENFORCEMENT
(a) At any time after an Event of Default occurs, the Security Trustee may,
with the prior written consent of the Note Trustee in accordance with the
provisions of the Security Trust Deed and shall, if so directed by (a) the Note
Trustee alone, where the Note Trustee is the only Voting Mortgagee, or otherwise
(b) an Extraordinary Resolution (being 75% of votes capable of being cast by
Voting Mortgagees present or in person or by proxy of the relevant meeting or a
written resolution signed by all Voting Mortgagees) of the Voting Mortgagees
(which includes the Note Trustee on behalf of Noteholders, but not the
Noteholders themselves), declare the Class B Notes immediately due and payable
and enforce the Security Trust Deed. If an Extraordinary Resolution of Voting
Mortgagees referred to in sub-paragraph (b) above elects not to direct the
Security Trustee to enforce the Security Trust Deed, in circumstances where the
Security Trustee could enforce, the Note Trustee may nonetheless, and shall at
the direction of the Class B Noteholders, direct the Security Trustee to enforce
the Security Trust Deed on behalf of the Noteholders.
"Voting Mortgagee" means:
(a) for so long as the amounts outstanding under the Class A Notes and the
Class B Notes are 75% or more of all amounts secured by the Security Trust Deed,
the Note Trustee alone; and
(b) at any other time:
(i) the Note Trustee, acting on behalf of the Noteholders under the Note
Trust Deed and the Security Trust Deed: and
(ii) each other Mortgagee under the Security Trust Deed (other than the
Noteholders).
Subject to being indemnified in accordance with the Security Trust Deed, the
Security Trustee shall take all action necessary to give effect to any direction
by the Note Trustee where it is the only Voting Mortgagee or to any
Extraordinary Resolution of the Voting Mortgagees and shall comply with all
directions given by the Note Trustee where it is the only Voting Mortgagee or
contained in or given pursuant to any Extraordinary Resolution of the Voting
Mortgagees in accordance with the Security Trust Deed.
No Noteholder is entitled to enforce the Security Trust Deed or to appoint
or cause to be appointed a receiver to any of the assets secured by the Security
Trust Deed or otherwise to exercise any power conferred by the terms of any
applicable law on chargees except as provided in the Security Trust Deed.
(b) If any of the Class B Notes remains outstanding and are due and payable
otherwise than by reason of a default in payment of any amount due on the Class
B Notes, the Note Trustee must not vote under the Security Trust Deed to, or
otherwise direct the Security Trustee to, dispose of the Mortgaged Property
unless either:
(i) a sufficient amount would be realised to discharge in full all amounts
owing to the Class B Noteholders and any other amounts payable by the Issuer
Trustee ranking in priority to or PARI PASSU with the Class B Notes; or
(ii) the Note Trustee is of the opinion, reached after considering at any
time and from time to time the advice of a merchant bank or other financial
adviser selected by the Note Trustee, that the cash flow receivable by the
Issuer Trustee (or the Security Trustee under the Security Trust Deed) will not
(or that there is a significant risk that it will not) be sufficient, having
regard to any other relevant actual, contingent or prospective liabilities of
the Issuer Trustee, to discharge in full in due course all the amounts referred
to in paragraph (i).
(c) Neither the Note Trustee nor the Security Trustee will be liable for any
decline in the value, nor any loss realised upon any sale or other dispositions
made under the Security Trust Deed, of any Mortgaged Property or any other
property which is charged to the Security Trustee by any other person in respect
of or relating to the obligations of the Issuer Trustee or any third party in
respect of the Issuer
III-18
<PAGE>
Trustee or the Class B Notes or relating in any way to the Mortgaged Property.
Without limitation, neither the Note Trustee nor the Security Trustee shall be
liable for any such decline or loss directly or indirectly arising from its
acting, or failing to act, as a consequence of an opinion reached by it.
(d) The Note Trustee shall not be bound to vote under the Security Trust
Deed, or otherwise direct the Security Trustee under the Security Trust Deed or
to take any proceedings, actions or steps under, or any other proceedings
pursuant to or in connection with the Security Trust Deed, the Note Trust Deed,
any Class B Notes, unless directed or requested to do so by Noteholders holding
at least 75% of the aggregate Invested Amount of Class A Notes or Class B Notes
(as the case may be) at the time and then only if the Note Trustee is
indemnified to its satisfaction against all action, proceedings, claims and
demands to which it may render itself liable and all costs, charges, damages and
expenses which it may incur by so doing.
(e) So long as any of the Class A Notes remains outstanding, the Note
Trustee shall not, and shall not be bound to, act at the request or direction of
the Class B Noteholders under paragraph (d) unless (i) so to do would not in its
opinion be materially prejudicial to the interests of the Class A Noteholders;
(ii) the relevant action is sanctioned by way of written approval of Class A
Noteholders holding at least 75% of the aggregate Invested Amount of Class A
Notes at the time; or (iii) in the case of giving notice pursuant to Condition
10 of the Class B Conditions, the Class A Notes are all then repayable in full.
(f) Only the Security Trustee may enforce the provisions of the Security
Trust Deed and neither the Note Trustee nor any holder of a Class B Note is
entitled to proceed directly against the Issuer Trustee to enforce the
performance of any of the provisions of the Security Trust Deed, the Class B
Notes (including these Class B Conditions).
(g) The rights, remedies and discretions of the Class B Noteholders under
the Security Trust Deed including all rights to vote or give instructions or
consent can only be exercised by the Note Trustee on behalf of the Class B
Noteholders in accordance with the Security Trust Deed. The Security Trustee may
rely on any instructions or directions given to it by the Note Trustee as being
given on behalf of the Class B Noteholders from time to time and need not
enquire whether the Note Trustee or the Noteholders from time to time have
complied with any requirements under the Note Trust Deed or as to the
reasonableness or otherwise of the Note Trustee. The Security Trustee is not
obliged to take any action, give any consent or waiver or make any determination
under the Security Trust Deed without being directed to do so by the Note
Trustee or the Voting Mortgagees in accordance with the Security Trust Deed.
UPON ENFORCEMENT OF THE SECURITY CREATED BY THE SECURITY TRUST DEED, THE NET
PROCEEDS THEREOF MAY BE INSUFFICIENT TO PAY ALL AMOUNTS DUE ON REDEMPTION TO THE
NOTEHOLDERS. THE PROCEEDS FROM ENFORCEMENT (WHICH WILL NOT INCLUDE AMOUNTS
REQUIRED BY LAW TO BE PAID TO THE HOLDER OF ANY PRIOR RANKING SECURITY INTEREST,
THE PROCEEDS OF OR AMOUNTS CREDITED TO THE COLLATERAL ACCOUNT UNDER THE
LIQUIDITY FACILITY AGREEMENT (AS DEFINED IN THE MASTER TRUST DEED) AND PAYABLE
TO THE LIQUIDITY FACILITY PROVIDER (AS DEFINED IN THE MASTER TRUST DEED) AND THE
PROCEEDS OF CASH COLLATERAL LODGED WITH AND PAYABLE TO A SWAP PROVIDER OR OTHER
PROVIDER OF A SUPPORT FACILITY (AS DEFINED IN THE MASTER TRUST DEED)) WILL BE
APPLIED IN THE ORDER OF PRIORITY AS SET OUT IN THE SECURITY TRUST DEED. ANY
CLAIMS OF NOTEHOLDERS REMAINING AFTER REALISATION OF THE SECURITY AND
APPLICATION OF THE PROCEEDS AS AFORESAID SHALL, EXCEPT IN CERTAIN LIMITED
CIRCUMSTANCES, BE EXTINGUISHED.
11. REPLACEMENTS OF CLASS B NOTES
If any Class B Note is lost, stolen, mutilated, defaced or destroyed, it may
be replaced at the specified office of the Principal Paying Agent upon payment
by the claimant of the expenses incurred in connection with that replacement and
on such terms as to evidence and indemnity as the Issuer Trustee may reasonably
require. Mutilated or defaced Class B Notes must be surrendered before
replacements will be issued.
III-19
<PAGE>
12. NOTICES
All notices, other than notices given in accordance with the following
paragraph, to Class B Noteholders shall be deemed given if in writing and
mailed, first-class, postage prepaid to each Class B Noteholder, at his or her
address as it appears on the Note Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice. In
any case where notice to Class B Noteholders is given by mail, neither the
failure to mail such notice nor any defect in any notice so mailed to any
particular Class B Noteholder shall affect the sufficiency of such notice with
respect to other Class B Noteholders, and any notice that is mailed in the
manner herein provided shall conclusively be presumed to have been duly given.
A notice may be waived in writing by the relevant Class B Noteholder, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Class B Noteholders shall be filed with the Note
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
Any such notice shall be deemed to have been given on the date such notice
is deposited in the mail.
In case, by reason of the suspension of regular mail services as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Class B Noteholders when such notice is required to be
given, then any manner of giving such notice as the Trustee shall direct the
Note Trustee shall be deemed to be a sufficient giving of such notice.
Any notice specifying a Payment Date, an Interest Rate, Interest payable, a
Principal Payment (or the absence of a Principal Payment), an Invested Amount, a
Stated Amount or a Bond Factor shall be deemed to have been duly given if the
information contained in such notice appears on the relevant page of the Reuters
Screen or such other similar electronic reporting service as may be approved by
the Note Trustee and notified to Class B Noteholders (the "Relevant Screen").
Any such notice shall be deemed to have been given on the first date on which
such information appeared on the Relevant Screen. If it is impossible or
impracticable to give notice in accordance with this paragraph then notice of
the matters referred to in this Condition shall be given in accordance with the
preceding paragraph.
The Principal Paying Agent shall deliver a quarterly servicing report for
each Collection Period to each Class B Noteholder on the Notice Date relating to
such Collection Period in the method provided in the first paragraph of this
Condition 12.
13. MEETINGS OF VOTING MORTGAGEES AND VOTES OF CLASS B NOTEHOLDERS;
MODIFICATIONS; CONSENTS; WAIVER
The Security Trust Deed contains provisions for convening meetings of the
Voting Mortgagees to, INTER ALIA, enable the Voting Mortgagees to direct or
consent to the Security Trustee taking or not taking certain actions under the
Security Trust Deed, for example to enable the Voting Mortgagees to direct the
Security Trustee to enforce the Security Trust Deed.
For so long as the amounts outstanding under the Notes are 75% or more of
all amounts secured by the Security Trust Deed, the Note Trustee may direct the
Security Trustee to do any act or thing which the Security Trustee is required
to do, or may only do, at the direction of an Extraordinary Resolution of the
Voting Mortgagees.
Neither the Security Trustee nor the Trust Manager may call a meeting of
Voting Mortgagees without the Note Trustee's consent, if the amounts outstanding
under the Notes are 75% or more of all amounts secured by the Security Trust
Deed.
The Note Trust Deed contains provisions for the Class A Noteholders to
consider any matter affecting their interests. In general, the holders of a
majority of the aggregate Invested Amount of the Class A Notes may take or
consent to any action permitted to be taken by Class A Noteholders under the
Note Trust Deed. Notwithstanding the foregoing, the consent of holders of 75% of
the aggregate Invested Amount of
III-20
<PAGE>
the Class A Notes shall be required to (i) direct the Note Trustee to direct the
Security Trustee to enforce the security under the Note Trust Deed, (ii)
override any waiver by the Note Trustee of a breach of any provisions of the
Transaction Documents or an Event of Default, (iii) alter, add, or modify the
terms and conditions of the Class A Notes or the provisions of any of the
Transaction Documents if such alteration, addition or modification is, in the
opinion of the Note Trustee, materially prejudicial or likely to be materially
prejudicial to the Offered Noteholders as a whole or the Class A Noteholders,
which shall include any modification to the date of maturity of the Class A
Notes or a modification which would have the effect of postponing any day for
payment of interest in respect of any Class A Notes, reducing or cancelling the
amount of principal payable in respect of any Class A Notes or the rate of
interest applicable to any Class A Notes or altering the percentage of the
aggregate Invested Amount required to consent to any action or altering the
currency of payment of any Class A Notes or an alteration of the date or
priority of redemption of the Class A Notes (any such modification being
referred to below as a "Basic Terms Modification"). The Note Trust Deed contains
provisions limiting the powers of the Class B Noteholders, INTER ALIA, to
request or direct the Note Trustee to take any action that would be materially
prejudicial to the interests of the Class A Noteholders. Except in certain
circumstances, the Note Trust Deed imposes no such limitations on the powers of
the Class A Noteholders, the exercise of which will be binding on the Class B
Noteholders, irrespective of the effect on the Class B Noteholders' interests.
Any action taken by the requisite percentage of the Invested Amount of the Class
A Noteholders shall be binding on all Class A Noteholders (both present and
future).
Pursuant to the terms of the Note Trust Deed, the Note Trustee may agree,
without the consent of the Class B Noteholders, among other things, (i) to any
modification (except a Basic Terms Modification) of, or to the waiver or
authorisation of any breach or proposed breach of the Class B Notes (including
these Conditions), or any of the Transaction Documents which is not, in the
opinion of the Note Trustee materially prejudicial to the interests of the Class
B Noteholders or (ii) to any modification of the Class B Notes (including these
Conditions, or any of the Transaction Documents which, in the Note Trustee's
opinion, is to correct a manifest error or is of a formal, minor or technical
nature. The Note Trustee may also, without the consent of the Class B
Noteholders, determine that any Event of Default or any condition, event or act
which with the giving of notice and/or lapse of time and/or the issue of a
certificate would constitute an Event of Default shall not, or shall not subject
to specified conditions, be treated as such. Any such modification, waiver,
authorisation or determination shall be binding on the Class B Noteholders and,
unless the Note Trustee agrees otherwise, any such modification shall be
notified to the Class B Noteholders in accordance with Class B Condition 12 as
soon as practicable thereafter.
14. INDEMNIFICATION AND EXONERATION OF THE NOTE TRUSTEE AND THE SECURITY TRUSTEE
The Note Trust Deed contains provisions for the indemnification of the Note
Trustee and for its relief from responsibility, including provisions relieving
it from taking proceedings to realise the security and to obtain repayment of
the Class B Notes unless indemnified to its satisfaction. Each of the Note
Trustee and the Security Trustee is entitled to enter into business transactions
with the Issuer Trustee and/or any other party to the Relevant Documents without
accounting for any profit resulting from such transactions. Neither the Security
Trustee nor the Note Trustee will be responsible for any loss, expense or
liability which may be suffered as a result of any assets secured by the
Security Trust Deed, Mortgaged Property or any deeds or documents of title
thereto, being uninsured or inadequately insured or being held by or to the
order of the Servicer or any of its affiliates or by clearing organisations or
their operators or by any person on behalf of the Note Trustee.
15. LIMITATION OF LIABILITY OF THE ISSUER TRUSTEE
(A) GENERAL
Clause 33 of the Master Trust Deed applies to the obligations and
liabilities of the Issuer Trustee in relation to this Class B Note.
III-21
<PAGE>
(B) LIABILITY OF TRUSTEE LIMITED TO ITS RIGHT OF INDEMNITY
(i) This Class B Note applies to the Issuer Trustee only in its capacity as
trustee of the Trust and in no other capacity. A liability arising under or in
connection with this Class B Note or the Trust can be enforced against the
Issuer Trustee only to the extent to which it can be satisfied out of property
of the Trust out of which the Issuer Trustee is actually indemnified for the
liability. This limitation of the Issuer Trustee's liability applies despite any
other provision of this Class B Note or any other Transaction Document and
extends to all liabilities and obligations of the Issuer Trustee in any way
connected with any representation, warranty, conduct, omission, agreement or
transaction related to this Class B Note or the Trust.
(ii) None of the Note Trustee or the Class B Noteholders may take action
against the Issuer Trustee in any capacity other than as trustee of the Trust or
seek the appointment of a receiver (except under the Security Trust Deed), or a
liquidator, an administrator or any similar person to the Issuer Trustee or
prove in any liquidation, administration or arrangements of or affecting the
Issuer Trustee.
(iii) The provisions of this Condition 15 shall not apply to any obligation
or liability of the Issuer Trustee to the extent that it is not satisfied
because under a Transaction Document or by operation of law there is a reduction
in the extent of the Issuer Trustee's indemnification out of the Trust Assets as
a result of the Issuer Trustee's fraud, negligence or breach of trust.
(iv) It is acknowledged that the Trust Manager, the Servicer, each Paying
Agent, the Agent Bank and the Note Trustee (each a "Relevant Party") are
responsible under the Transaction Documents for performing a variety of
obligations relating to the Trust. No act or omission of the Issuer Trustee
(including any related failure to satisfy its obligations under this Class B
Note or a Transaction Document) will be considered fraud, negligence or breach
of trust of the Issuer Trustee for the purpose of sub-paragraph (iii) of this
Condition 15 to the extent to which the act or omission was caused or
contributed to by any failure by any Relevant Party or any other person who
provides services in respect of the Trust (other than a person who has been
delegated or appointed by the Issuer Trustee and for whom the Issuer Trustee is
responsible under the Transaction Documents, other than a Relevant Party) to
fulfil its obligations relating to the Trust or by any other act or omission of
a Relevant Party or any other person who provides services in respect of the
Trust (other than a person who has been delegated or appointed by the Issuer
Trustee and for whom the Issuer Trustee is responsible under the Transaction
Documents, other than a Relevant Party).
(v) No attorney, agent, receiver or receiver and manager appointed in
accordance with a Transaction Document (including without limitation a Relevant
Party) has authority to act on behalf of the Issuer Trustee in a way which
exposes the Issuer Trustee to any personal liability and no act or omission of
any such person will be considered fraud, negligence or breach of trust of the
Issuer Trustee for the purpose of sub-paragraph (iii), if the Issuer Trustee has
exercised reasonable care in the selection and supervision of such a person.
16. GOVERNING LAW
The Class B Notes and the Relevant Documents (other than the Security Trust
Deed which is governed by the laws of the Australian Capital territory and the
Currency Swap with Morgan Guaranty Trust Company of New York, London Office,
which is governed by the laws of England) are governed by, and shall be
construed in accordance with, the laws of New South Wales, Australia.
SUMMARY OF PROVISIONS RELATING TO THE CLASS B NOTES WHILE IN BOOK-ENTRY FORM
The Class B Notes will initially be represented by typewritten book-entry
notes (the "Book-Entry Class B Notes"), without coupons, in the principal amount
of US$32,300,000. The Book-Entry Class B Notes will be deposited with the Common
Depositary for DTC on or about the Closing Date. Upon
III-22
<PAGE>
deposit of the Book-Entry Class B Notes with the Common Depositary, DTC will
credit each investor in the Class B Notes with a principal amount of Class B
Notes for which it has subscribed and paid.
The Book-Entry Class B Notes will be exchangeable for definitive Class B
Notes in certain circumstances described below.
Each person who is shown in the Note Register as the holder of a particular
principal amount of Class B Notes will be entitled to be treated by the Issuer
Trustee and the Note Trustee as a holder of such principal amount of Class B
Notes and the expression "Class B Noteholder" shall be construed accordingly,
but without prejudice to the entitlement of the holder of the Book-Entry Class B
Note to be paid principal and interest thereon in accordance with its terms.
Such persons shall have no claim directly against the Issuer Trustee in respect
of payment due on the Class B Notes for so long as the Class B Notes are
represented by a Book-Entry Class B Note and the relevant obligations of the
Issuer Trustee will be discharged by payment to the registered holder of the
Book-Entry Class B Note in respect of each amount so paid.
(A) PAYMENTS
Interest and principal on each Book-Entry Class B Note will be payable by
the Principal Paying Agent to the Common Depositary provided that:
(i) no payment of interest may be made by the Issuer Trustee or any Paying
Agent in the United States of America or the Commonwealth of Australia or their
possessions or into a bank account or to an address in the United States or the
Commonwealth of Australia or their possessions, and
Each of the persons appearing from time to time as the holder of a Class B
Note will be entitled to receive any payment so made in respect of that Class B
Note in accordance with the respective rules and procedures of DTC. Such persons
will have no claim directly against the Issuer Trustee in respect of payments
due on the Class B Notes which must be made by the holder of the relevant
Book-Entry Class B Note, for so long as such Book-Entry Class B Note is
outstanding.
A record of each payment made on a Book-Entry Class B Note, distinguishing
between any payment of principal and any payment of interest, will be recorded
in the Note Register by the Principal Paying Agent, and such record shall be
prima facie evidence that the payment in question has been made.
(B) EXCHANGE
The Book-Entry Class B Note will be exchangeable for definitive Class B
Notes only if:
(a) the Trust Manager advises the Principal Paying Agent in writing that the
Clearing Agency is no longer willing or able properly to discharge its
responsibilities with respect to the Class A Notes or the Clearing Agency
ceases to carry on business, and the Trust Manager is unable to locate a
qualified successor;
(b) the Issuer Trustee, at the direction of the Trust Manager (at the Trust
Manager's option) advises the Principal Paying Agent in writing that the
book entry system through the Clearing Agency is or is to be terminated;
or
(c) after the occurrence of an Event of Default, the Class B Note Owner's
representing beneficial interests aggregating to at least a majority of
the aggregate Invested Amount of the Class B Notes advise the Principal
Paying Agent and Issuer Trustee through the Clearing Agency in writing
that the continuation of a book entry system through the Clearing Agency
is no longer in the best interests of the Note Owners,
then the Principal Paying Agent shall notify all Class B Note Owners and the
Issuer Trustee of the occurrence of any such event and of the availability of
Definitive Notes to Class B Note Owners requesting
III-23
<PAGE>
the same. Upon the surrender of the Book-Entry Notes to the Issuer Trustee by
the Clearing Agency, and the delivery by the Clearing Agency of the relevant
registration instructions to the Issuer Trustee, the Issuer Trustee shall
execute and procure the Principal Paying Agent to authenticate the Definitive
Notes in accordance with the instructions of the Clearing Agency.
(C) NOTICES
So long as the Notes are represented by the Book-Entry Class B Note and the
same is/are held on behalf of DTC, notices to Class B Noteholders may be given
by delivery of the relevant notice to DTC for communication by them to entitled
account holders in substitution for delivery to each Class B Noteholder as
required by the Class B Conditions.
(D) CANCELLATION
Cancellation of any Class B Note required by the Class B Conditions will be
effected by reduction in the principal amount of the relevant Book-Entry Class B
Note.
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<PAGE>
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE OFFERED NOTES OFFERED HEREBY, NOR AN OFFER OF
THE OFFERED NOTES IN ANY STATE OR JURISDICTION IN WHICH, OR TO ANY PERSON TO
WHOM, SUCH OFFER WOULD BE UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME
DOES NOT IMPLY THAT INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE; HOWEVER, IF ANY MATERIAL CHANGE OCCURS WHILE THE
PROSPECTUS IS REQUIRED BY LAW TO BE DELIVERED, THE PROSPECTUS WILL BE AMENDED OR
SUPPLEMENTED ACCORDINGLY.
--------------
TABLE OF CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Summary of Terms................................ 13
Structural Chart................................ 28
Cash Flow Summary............................... 29
Cash Flow Chart................................. 32
Risk Factors.................................... 34
Formation of the Trust.......................... 44
Security for the Notes.......................... 45
The Trust Fund.................................. 51
The Issuer Trustee.............................. 61
The Note Trustee................................ 66
Originator of the Housing Loans................. 66
The Servicer.................................... 66
The Trust Manager............................... 70
Westpac Residential Loan Program................ 73
The Mortgage Insurance Policies................. 77
Prepayment and Yield Considerations............. 84
Description of the Offered Notes................ 88
Description of the Servicing Agreement.......... 124
The Liquidity Facility.......................... 130
Description of the Swap Agreements.............. 133
Currency Swap Providers......................... 137
Certain Legal Aspects of the Housing Loans...... 138
Use of Proceeds................................. 144
United States Federal Income Tax Consequences... 144
Certain Australian Tax Matters.................. 146
ERISA Considerations............................ 148
Ratings of the Notes............................ 149
Legal Investment Considerations................. 149
Underwriting.................................... 149
Listing and General Information................. 151
Legal Matters................................... 153
Index of Defined Terms.......................... 154
Appendix I--Glossary of Australian Legal
Terms.......................................... I-1
Appendix II--Terms and Conditions of the Class A
Notes.......................................... II-1
Appendix III--Terms and Conditions of the Class
B Notes........................................ III-1
</TABLE>
US$1,405,000,000
WESTPAC SECURITIES
ADMINISTRATION LIMITED
IN ITS CAPACITY AS ISSUER TRUSTEE OF THE
SERIES 1998-1G WST TRUST
US$1,372,700,000 CLASS A MORTGAGE BACKED FLOATING RATE NOTES DUE
US$32,300,000 CLASS B MORTGAGE BACKED FLOATING RATE NOTES DUE
---------------------
PROSPECTUS
---------------------
J.P. MORGAN & CO.
MORGAN STANLEY DEAN WITTER
WESTPAC BANKING CORPORATION
DEUTSCHE MORGAN GRENFELL
MERRILL LYNCH & CO.
SBC WARBURG DILLON READ
NOMURA INTERNATIONAL PLC
JUNE , 1998
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 1, 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PRELIMINARY PROSPECTUS
US$1,405,000,000
WESTPAC SECURITIES ADMINISTRATION LIMITED
(ACN 000 049 472)
IN ITS CAPACITY AS TRUSTEE OF THE
SERIES 1998-1G WST TRUST
US$1,372,700,000 CLASS A MORTGAGE BACKED FLOATING RATE NOTES DUE
US$32,300,000 CLASS B MORTGAGE BACKED FLOATING RATE NOTES DUE
Interest on the Class A Mortgage Backed Floating Rate Notes (the "Class A
Notes") and the Class B Mortgage Backed Floating Rate Notes (the "Class B Notes"
and together with the Class A Notes, the "Offered Notes") offered hereby and
issued by Westpac Securities Administration Limited solely in its capacity as
trustee of the Series 1998-1G WST Trust (the "Trust") (the "Issuer Trustee")
will be payable quarterly on the 19th day of each of April, July, October and
January (or if such 19th day is not a Business Day (as defined herein), the next
succeeding Business Day in the same month or, if not in the same month, the
immediately preceding Business Day), commencing July 20, 1998 (each, a "Payment
Date"). The principal of a class of Offered Notes will be payable on its
maturity date indicated above, subject to earlier redemption in whole or in part
as described herein. Only the Offered Notes are offered hereby.
Under certain limited circumstances, the Issuer Trustee may issue certain
additional securities, the RFSs, which in certain circumstances will convert to
RFS Class A Notes. The RFSs will be senior in priority of distributions of
principal to the Class A Notes and the RFS Class A Notes (except with respect to
enforcement, in which case such classes will be PARI PASSU) and senior in
priority of distributions of principal and interest to the Class B Notes. Upon
conversion, the RFS Class A Notes will rank PARI PASSU in respect of priority of
principal and interest with the Class A Notes and senior in priority of
distributions of principal and interest to the Class B Notes. The RFSs and RFS
Class A Notes are not offered hereby. See "SUMMARY OF TERMS--Redraws, RFSs and
RFS Class A Notes."
(CONTINUED ON NEXT PAGE)
--------------------------
PROSPECTIVE INVESTORS IN THE NOTES SHOULD REVIEW THE INFORMATION SET FORTH
UNDER "RISK FACTORS" BEGINNING ON PAGE 34 HEREIN.
THE OFFERED NOTES REPRESENT OBLIGATIONS OF THE ISSUER TRUSTEE IN ITS CAPACITY AS
TRUSTEE OF THE TRUST ONLY AND DO NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF
WESTPAC, THE MORTGAGE COMPANY PTY LIMITED, WESTPAC SECURITISATION
MANAGEMENT PTY LIMITED, ANY OF THEIR RESPECTIVE AFFILIATES (OTHER THAN
THE ISSUER TRUSTEE) OR ANY GOVERNMENT OR GOVERNMENTAL AGENCY.
NEITHER THE OFFERED NOTES NOR THE HOUSING LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENT OR GOVERNMENTAL AGENCY EXCEPT TO
THE LIMITED EXTENT DESCRIBED HEREIN.
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Proceeds to
Underwriting Issuer
Price to Public Discount Trustee(1)
<S> <C> <C> <C>
Class A Notes...................................... % % %
Class B Notes...................................... % % %
Total.............................................. US$ US$ US$
</TABLE>
(1) Before deducting expenses, estimated to be US$ .
Application has been made to the London Stock Exchange Limited (the "London
Stock Exchange") for the Offered Notes to be admitted to the Official List.
Copies of this Prospectus (which includes the Appendices), which comprise
Listing Particulars with regard to the Issuer Trustee and the Offered Notes in
accordance with the listing rules made under Part IV of the Financial Services
Act of 1986, have been delivered to the Registrar of Companies in England and
Wales for registration in accordance with Section 149 of that Act.
The Offered Notes are offered by the Underwriters (as defined herein)
subject to prior sale when, as and if issued to and accepted by them, subject to
approval of certain legal matters by counsel for the Underwriters. The
Underwriters reserve the right to reject any order in whole or in part and to
withdraw, cancel or modify the offer without notice. It is expected that
delivery of the Offered Notes will be made in book-entry form through the
facilities of The Depository Trust Company ("DTC"), Cedel Bank, SOCIETE ANONYME
("Cedel") and the Euroclear System ("Euroclear") on or about June 9, 1998
against payment therefor in immediately available funds.
WESTPAC BANKING CORPORATION
The date of this Prospectus is June , 1998.
2
<PAGE>
UNDERWRITING
This Prospectus may be used by Westpac Banking Corporation, an affiliate of
the Trust Manager and the Issuer Trustee, in connection with offers and sales
related to secondary market transactions in the Offered Notes. Westpac Banking
Corporation may act as principal or agent in such transactions. Such sales will
be made at prices related to prevailing market prices at the time of sale or
otherwise. Westpac Banking Corporation does not have any obligation to make a
market in the Offered Notes, and it may discontinue any such market-making
activities at any time without notice, in its sole discretion. Westpac Banking
Corporation is among the underwriters participating in the initial distribution
of the Offered Notes.
142
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
The following table sets forth the estimated expenses in connection with the
issuance and distribution of the Notes being registered under this Registration
Statement, other than underwriting discounts and commissions:
<TABLE>
<S> <C>
SEC Registration Fee............................................ $ 414,475
Printing and Engraving.......................................... $ 60,000
Legal Fees and Expenses......................................... $ 533,352
Trustee Fees and Expenses....................................... $ 10,000
Rating Agency Fees.............................................. $ 162,056
Accounting Fees & Expenses...................................... $ 37,560
Miscellaneous................................................... $ 174,300
---------
Total..................................................... $1,391,743
---------
---------
</TABLE>
- ------------------------
* All amounts except the SEC Registration Fee are estimates of expenses
incurred in connection with the issuance and distribution of the Notes.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to Section 109 of the Articles of Association of the Registrant:
(1) To the extent permitted by law and without limiting the powers of the
Registrant, the Registrant must indemnify each person who is, or has been, a
director or secretary of the Registrant against any liability which results
directly or indirectly from facts or circumstances relating to the person
serving or having served in that capacity in relation to the Registrant or
any of its subsidiaries or in the capacity of an employee of the Registrant
or any of its subsidiaries:
(a) to any person (other than the Registrant or a related body corporate),
which does not arise out of conduct involving a lack of good faith or
conduct known to the person to be wrongful;
(b) for costs and expenses incurred by the person in defending proceedings,
whether civil or criminal, in which judgment is given in favor of the
person or in which the person is acquitted, or in connection with any
application in relation to such proceedings in which the court grants
relief to the person under the Corporations Law and the Corporations
Regulations of Australia.
(2) The Registrant need not indemnify a person as provided for in paragraph (1)
in respect of a liability to the extent that the person is entitled to an
indemnity in respect of that liability under a contract of insurance.
(3) To the extent permitted by law and without limiting the powers of the
Registrant, the board of directors may authorize the Registrant to, and the
Registrant may enter into any:
(a) documentary indemnity in favor of; or
(b) insurance policy for the benefit of,
a person who is, or has been, a director, secretary, auditor, employee or
other officer of the Registrant or of a subsidiary of the Registrant, which
indemnity or insurance policy may be in such terms as the board of directors
approves and, in particular, may apply to acts or omissions prior to or
after the time of entering into the indemnity or policy; and
II-1
<PAGE>
(4) The benefit of each indemnity given in paragraph (1) of Section 109
continues, even after its terms or the terms of this paragraph are modified
or deleted, in respect of a liability arising out of acts or omissions
occurring prior to the modification or deletion.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
The Registrant has not previously sold unregistered securities.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement.
3.1 Memorandum of Association of the Registrant.**
3.2 Articles of Association of the Registrant.**
4.1 Master Trust Deed.**
4.2 Form of the Series Notice.
4.3 Form of the Note Trust Deed.
4.4 Form of the Security Trust Deed.**
5.1 Opinion of Mayer, Brown & Platt as to legality of the Offered Notes.**
8.1 Opinion of Mayer, Brown & Platt as to certain tax matters (included in Exhibit 5.1
hereof).**
8.2 Opinion of Allen Allen & Hemsley as to certain tax matters.**
10.1 The Servicing Agreement.**
10.2 Form of Servicing Agreement Amendment Agreement.**
10.3 Form of the Liquidity Facility Agreement.**
10.4 Form of the Redraw Facility Agreement.**
10.5 Form of the Currency Swap (Westpac and Issuer Trustee).
10.6 Form of the Currency Swap (Morgan Guaranty and Issuer Trustee).
10.7 Form of Interest Rate Swaps.
23.1 Consent of Mayer, Brown & Platt (included in Exhibit 5.1 hereof).**
23.2 Consent of Allen Allen & Hemsley (included in Exhibit 8.2 hereof).**
24.1 Power of Attorney (included on signature pages).**
25.1 Statement of Eligibility of Trustee.**
99.1 Opinion of Allen Allen & Hemsley as to Enforceability of U.S. Judgments under
Australian Law.**
</TABLE>
- ------------------------
** Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant on behalf of the Westpac Securitization Trust,
Series 1998-1G (the "Trust") hereby undertakes:
II-2
<PAGE>
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) To file a post-effective amendment to the registration statement to
include any financial statements required by Rule 3-19 at the start of any
delayed offering or throughout a continuous offering.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
For purposes of determining any liability under the Securities Act of 1933,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
For the purposes of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-11 and has duly caused this Amendment No. 4 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Sydney, Australia, on the 1st day of
June 1998.
WESTPAC SECURITISATION MANAGEMENT PTY LIMITED
BY /S/ LEWIS E. LOVE, JR.
------------------------------------------
Lewis E. Love, Jr.
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 4 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ ---------------------------
*R. PATRICK HANDLEY Principal Executive Officer June 1, 1998
- ------------------------------ and Director
R. Patrick Handley
*MARTEN TOUW Principal Financial Officer June 1, 1998
- ------------------------------ and Director
Marten Touw
/s/ LUCY BERETIN Principal Accounting June 1, 1998
- ------------------------------ Officer
Lucy Beretin
*KIMBERLEY GIRE Director June 1, 1998
- ------------------------------
Kimberley Gire
/s/ LEWIS E. LOVE, JR. Director June 1, 1998
- ------------------------------
Lewis E. Love, Jr.
*PHIL CHRONICAN Director June 1, 1998
- ------------------------------
Phil Chronican
/s/ *LEWIS E. LOVE, JR.
- ------------------------------
By: Lewis E. Love, Jr.
ATTORNEY-IN-FACT
II-4
<PAGE>
SIGNATURE OF AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of Section 6(a) of the Securities Act of 1933,
the undersigned hereby certifies that it is the duly authorized representative
in the United States of the Registrant with respect to the Registration
Statement and signs this Amendment No. 4 to the Registration Statement solely in
such capacity and for the limited purpose of said Section 6(a).
<TABLE>
<S> <C> <C>
/s/ LEWIS E. LOVE, JR.
---------------------------------------------
Name: Lewis E. Love, Jr.
Director & Secretary
Address: Westpac Securitisation Management
Pty Limited
575 Fifth Avenue
39th Floor
New York, New York 10017-2422
Telephone: (212) 551-1905
</TABLE>
II-5
<PAGE>
EXHIBITS INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBIT NUMBER
- ----------- --------------------------------------------------------------------------------------------- ---------------
<C> <S> <C>
1.1 Form of Underwriting Agreement.
3.1 Memorandum of Association of the Registrant.**
3.2 Articles of Association of the Registrant.**
4.1 Master Trust Deed.**
4.2 Form of the Series Notice.
4.3 Form of the Note Trust Deed.
4.4 Form of the Security Trust Deed.**
5.1 Opinion of Mayer, Brown & Platt as to legality of the Offered Notes.**
8.1 Opinion of Mayer, Brown & Platt as to certain tax matters (included in Exhibit 5.1 hereof).**
8.2 Opinion of Allen Allen & Hemsley as to certain tax matters.**
10.1 The Servicing Agreement.**
10.2 Form of the Servicing Agreement Amendment Agreement.**
10.3 Form of the Liquidity Facility Agreement.**
10.4 Form of the Redraw Facility Agreement.**
10.5 Form of the Currency Swap (Westpac and Issuer Trustee).
10.6 Form of the Currency Swap (Morgan Guaranty and Issuer Trustee).
10.7 Form of Interest Rate Swaps.
23.1 Consent of Mayer, Brown & Platt (included in Exhibit 5.1 hereof).**
23.2 Consent of Allen Allen & Hemsley (included in Exhibit 8.2 hereof).**
24.1 Power of Attorney (included on signature pages).**
25.1 Statement of Eligibility of Trustee.**
99.1 Opinion of Allen Allen & Hemsley as to Enforceability of U.S. Judgments under Australian
Law.**
</TABLE>
- ------------------------
** Previously filed.
<PAGE>
Exhibit 1.1
UNDERWRITING AGREEMENT
$____________________
WESTPAC SECURITIES ADMINISTRATION LIMITED
SERIES 1998-1G WST TRUST
U.S.$ ________ Class A Mortgage Backed Floating Rate Notes
U.S.$ ________ Class B Mortgage Backed Floating Rate Notes
UNDERWRITING AGREEMENT
----------------------
June __, 1998
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
As Representatives of the
Several Underwriters Listed
in Schedule I
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
Westpac Securities Administration Limited, a limited liability public
company under the Corporations Law of New South Wales, Australia in its capacity
as trustee of the Series 1998-1G WST Trust (the "Issuer Trustee") proposes to
sell to the several Underwriters listed in Schedule I hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), $___________ principal amount of Class A Mortgage Backed
Floating Rate Notes (the "Class A Notes") and $________ principal amount of
Class B Mortgage Backed Floating Rate Notes (the "Class B Notes" and together
with the Class A Notes, the "Notes") issued by the Series 1998-1G WST Trust (the
"Trust"). Each Note will be secured by the assets of the Trust. The assets of
the Trust include, among other things, a pool of variable and fixed rate
residential housing loans (the "Housing Loans") originated or acquired by
Westpac Banking Corporation ("Westpac") including all monies at any time paid or
payable thereon or in respect thereof from, on and after _______________ (the
"Cut-Off Date") with respect to payments of principal and after the Closing Date
(as defined herein) with respect to payments of interest, rights under certain
insurance policies with respect to the Housing Loans, the Collections Account
and the rights of the Issuer Trustee under the Basic Documents. The Series
1998-1G WST Trust will be created pursuant to the Master Trust Deed, dated
February 14, 1997 (the "Master Trust Deed") and a series notice, to be
<PAGE>
dated ________ (the "Series Notice"), each between the Issuer Trustee and
Westpac Securitization Management Pty Limited (the "Trust Manager"), which sets
forth specific provisions regarding the Trust and details the provisions of the
Notes. The Note Trust Deed, dated June ___, 1998 (the "Note Trust Deed") by
and among the Issuer Trustee, the Trust Manager and Morgan Guaranty Trust
Company of New York (the "Note Trustee") provides for the issuance and
registration of the Notes in accordance with the terms and conditions attached
thereto. Payments in respect of the Class B Notes are, to the extent specified
in the Note Trust Deed, subordinated to the rights of the holders of the Class A
Notes. The Mortgage Company Pty Limited will act as servicer (the "Servicer")
of the Housing Loans. The Trust Manager and Westpac are each a "Westpac Party"
and collectively are referred to herein as the "Westpac Parties."
The Trust Manager has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement, including a prospectus, relating to the Notes. The registration
statement as amended at the time when it became effective, or, if a
post-effective amendment is filed with respect thereto, as amended by such
post-effective amendment at the time of its effectiveness, including in each
case information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Securities Act, is
referred to in this Agreement as the "Registration Statement", and the
prospectus in the form first used to confirm sales of Notes is referred to in
this Agreement as the "Prospectus".
When used in this Agreement, "Basic Documents" shall mean the Master Trust
Deed, the Series Notice, the Servicing Agreement, the Notes, the Security Trust
Deed, the Note Trust Deed, the Swap Agreements and the Agency Agreement and any
other contract, agreement or instrument which is or is to be entered into by any
of the Westpac Parties or the Issuer Trustee on the Closing Date or otherwise in
connection with any of the foregoing or this Agreement. To the extent not
defined herein, capitalized terms used herein have the meanings assigned to such
terms in the Prospectus.
In this Agreement, a reference to the Issuer Trustee is a reference to the
Issuer Trustee in its capacity as trustee of the Series 1998-1G WST Trust only,
and in no other capacity. Any reference to the assets, business, property or
undertaking of the Issuer Trustee is a reference to the Issuer Trustee in that
capacity only.
The Westpac Parties and the Issuer Trustee hereby agree with the
Underwriters as follows:
1. PURCHASE AND SALE. The Issuer Trustee, at the direction of the Trust
Manager, agrees to sell the Notes to the several Underwriters as hereinafter
provided, and each Underwriter, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees to purchase, severally and not jointly,
2
<PAGE>
from the Issuer Trustee the respective principal amount of Notes set forth
opposite such Underwriter's name in Schedule I hereto at a price equal to ___%
of the principal amount of the Class A Notes plus accrued interest, if any, on
the principal amount thereof at the Interest Rate of the Class A Notes from
______________, 1998 to the Closing Date and __% of the principal amount of the
Class B Notes plus accrued interest, if any, on the principal amount thereof at
the Interest Rate of the Class B Notes from ___________, 1998 to the Closing
Date.
2. OFFERING. The Westpac Parties and the Issuer Trustee understand that
the Underwriters intend (i) to make a public offering of their respective
portions of the Notes as soon after (A) the Registration Statement has become
effective and (B) the parties hereto have executed and delivered this Agreement
as in the judgment of the Representatives is advisable and (ii) initially to
offer the Notes upon the terms set forth in the Prospectus.
3. DELIVERY AND PAYMENT. Payment for the Notes shall be made by wire
transfer in immediately available funds to the account specified by the Issuer
Trustee to the Representatives no later than noon the Business Day (as defined
below) prior to the Closing Date (as defined below), at 10:00 a.m., New York
City time on June __, 1998, or at such other time on the same or such other
date, not later than the fifth Business Day thereafter, as the Representatives
and the Trust Manager may agree upon in writing. The time and date of such
payment are referred to herein as the "Closing Date". As used herein, the term
"Business Day" means any day other than a day on which banks are permitted or
required to be closed in New York City.
Payment for the Notes shall be made against delivery to the nominee of The
Depository Trust Company ("DTC") for the account of the Representatives [for the
respective accounts of the several Underwriters] of one or more book-entry notes
(the "Book-Entry Notes") representing the Notes, with any transfer taxes payable
in connection with the transfer to the Underwriters of the Notes duly paid by
the Trust Manager. The Book-Entry Notes will be made available for inspection
by the Representatives at the office of [the Note Trustee, address] [J.P. Morgan
Securities Inc. at the address set forth above] not later than 1:00 P.M., New
York City time, on the Business Day prior to the Closing Date.
4. REPRESENTATIONS AND WARRANTIES OF THE WESTPAC PARTIES AND THE ISSUER
TRUSTEE.
I. The Issuer Trustee represents and warrants to each Underwriter that:
(a) since ____________ there has been no material adverse change or
any development involving a prospective material adverse change in the
condition (financial or otherwise) of the Issuer Trustee and its material
subsidiaries except as disclosed in the Prospectus, which is material in
the context of the Issuer Trustee performing its obligations and duties
under the Notes and each Basic Document to which it is or is to be a party;
3
<PAGE>
(b) the Issuer Trustee is a corporation duly incorporated and
existing under the laws of New South Wales; it is lawfully qualified and
holds all Authorizations (as defined in the Master Trust Deed) necessary to
carry on its business as described in the Prospectus and to issue the Notes
and to act as required by each Basic Document to which it is or is to be a
party and by law to comply with the requirements of any legislation and
subordinate legislation (including, without limitation and to the extent
relevant, any Consumer Credit Legislation (as defined in the Master Trust
Deed) and no other thing is required to be done (including without
limitation the making of any filing or registration) in order to issue the
Notes or to execute and act as required by each Basic Document to which it
is to be a party;
(c) this Agreement has been duly authorized, executed and delivered
by the Issuer Trustee;
(d) the Notes have been duly authorized, and, when issued, delivered
and paid for pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and binding
obligations of the Issuer Trustee, entitled to the benefits provided by the
Note Trust Deed and the Security Trust Deed, subject to general principles
affecting creditors rights and general principles of equity. The Basic
Documents have been duly authorized, and, when executed and delivered by
the Issuer Trustee and, in the case of the Basic Documents, the other
parties thereto, each of the Basic Documents will constitute a legal, valid
and binding obligation of the Issuer Trustee, enforceable against the
Issuer Trustee in accordance with its terms, subject as to enforceability
to applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation or other similar laws affecting the enforcement
of creditors rights generally and to general equitable principles;
(e) the Issuer Trustee is not, nor with the giving of notice or lapse
of time or both would be, in violation of or in default under, its Articles
of Association or any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it or any
of its properties is bound, except for violations and defaults which
individually and in the aggregate would not have a material adverse effect
on the transactions contemplated herein or in the Basic Documents; the
issue and sale of the Notes and the performance by the Issuer Trustee of
all of the provisions of its obligations under the Notes, the Basic
Documents and this Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Issuer Trustee is a party or by which the Issuer
Trustee is bound or to which any of the property or assets of the Trust is
subject, nor will any such action result in any violation of the provisions
of the Articles of Association of the Issuer Trustee or any applicable law
or statute or any order, rule or regulation of any court or governmental
agency or
4
<PAGE>
body having jurisdiction over the Issuer Trustee, or any of its properties;
and no consent, approval, authorization, order, license, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Notes or the consummation by the
Issuer Trustee of the transactions contemplated by this Agreement or the
Basic Documents, except such consents, approvals, authorizations, orders,
licenses, registrations or qualifications as have been obtained under the
Securities Act, the Trust Indenture Act and as may be required under state
securities or Blue Sky Laws in connection with the purchase and
distribution of the Notes by the Underwriters;
(f) other than as set forth or contemplated in the Prospectus, there
are no legal or governmental investigations, actions, suits or proceedings
pending or, to the knowledge of the Issuer Trustee, threatened against or
affecting the Issuer Trustee or the Trust or, to which the Issuer Trustee
is or may be a party or to which the Issuer Trustee or any property of the
Issuer Trustee is or may be the subject, (i) asserting the invalidity of
this Agreement or of any of the Basic Documents in relation to the Issuer
Trustee, (ii) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this Agreement or
any of the Basic Documents by the Issuer Trustee, (iii) that may adversely
affect the federal or state income, excise, franchise or similar tax
attributes of the Notes, (iv) that could materially and adversely affect
the performance of the Issuer Trustee of its obligations under, or the
validity or enforceability of, this Agreement or any of the Basic Documents
by the Issuer Trustee or (v) which could individually or in the aggregate
reasonably be expected to have a material adverse effect on the interests
of the holders of the Notes or the marketability of the Notes;
(g) the representations and warranties of the Issuer Trustee
contained in the Basic Documents are true and correct in all material
respects;
(h) Coopers & Lybrand L.L.P. are independent public accountants with
respect to the Issuer Trustee within the meaning of the Securities Act;
(i) to the Issuer Trustee's knowledge, no event has occurred which
would entitle the Trust Manager to direct the Issuer Trustee to retire as
trustee of the Trust under clause 24 of the Master Trust Deed;
(j) the Prospectus complies with the Listing Rules of the London
Stock Exchange Limited (the "London Stock Exchange"), and any preliminary
prospectus and Prospectus (in the case of the Prospectus, as of the date
hereof and in the case of any preliminary prospectus, as of its date) (i)
contains all the information required by section 146 of the Financial
Services Act; and (ii) in the context of the issue of the Notes, is
accurate in all material respects and does not contain any untrue statement
of a material fact or omit to state any material fact necessary to make the
information therein, in the light of the circumstances under which it is
given, not misleading and
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all reasonable enquiries have been made to ascertain the accuracy of all
such information.
(k) the Issuer Trustee has not taken any corporate action nor (to the
best of its knowledge and belief) have any other steps been taken or legal
proceedings been started or threatened against the Issuer Trustee for its
winding-up, dissolution or reorganization or for the appointment of a
receiver, receiver and manager, administrator, provisional liquidator or
similar officer of it or of any or all of its assets;
(l) subject to compliance with Section 128F of the Income Tax
Assessment Act (1936) (the "Tax Act"), no stamp or other duty is assessable
or payable in, and no withholding or deduction for any taxes, duties,
assessments or governmental charges of whatever nature is imposed or made
for or on account of any income, registration, transfer or turnover taxes,
customs or other duties or taxes of any kind, levied, collected, withheld
or assessed by or within, the Commonwealth of Australia or any sub-division
of or authority therein or thereof having power to tax in such
jurisdiction, in connection with the authorization, execution or delivery
of the agreements to which it is to be a party or with the authorization,
execution, issue, sale or delivery of the Notes and the performance of the
Issuer Trustee's obligations under the agreements to which it is to be a
party and the Notes;
(m) the Notes and the obligations of the Trust Manager under the Note
Trust Deed will be secured (pursuant to the Security Trust Deed) by a first
floating charge over Mortgages (which expression in this agreement has the
meaning given to it in the Sale Notice) having an aggregate principal
amount (including, where applicable, the amount of any further advances
made prior to the Closing Date) at the time of the issue of the Notes of
not less than US$[ ] (on the basis of the exchange rate for A$
against US$ applicable under the Currency Swap Agreement) together with all
relative rights and interests; and
(n) no event has occurred or circumstances arisen which, had the
Notes already been issued, would (whether or not with the giving of notice
and/or the passage of time and/or the fulfillment of any other requirement)
constitute an event described under "Events of Default; Rights Upon Events
of Default" in the Prospectus.
II. The Trust Manager represents and warrants to each Underwriter that:
(a) no order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and each preliminary
prospectus filed as part of the Registration Statement as originally filed
or as part of any amendment thereto, or filed pursuant to Rule 424 under
the Securities Act, complied when so
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<PAGE>
filed in all material respects with the Securities Act, and did not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Trust Manager in
writing by such Underwriter through the Representatives expressly for use
therein;
(b) the Registration Statement has been declared effective under the
Securities Act by the Commission; no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of the
Trust Manager, threatened by the Commission; and the Registration Statement
and Prospectus (as amended or supplemented if the Trust Manager shall have
furnished any amendments or supplements thereto) comply, or will comply, as
the case may be, in all material respects with the Securities Act and the
Trust Indenture Act of 1939, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Trust Indenture Act") and do
not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the date of the
Prospectus and any amendment or supplement thereto, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and the Prospectus, as amended or supplemented, if applicable,
at the Closing Date will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; except that the foregoing representations and warranties shall
not apply to (i) that part of the Registration Statement which constitutes
the Statement of Eligibility and Qualification (Form T-1) of the Note
Trustee under the Trust Indenture Act, and (ii) statements or omissions in
the Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to any Underwriter furnished to the
Trust Manager in writing by such Underwriter through the Representatives
expressly for use therein;
(c) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, business,
prospects, management, financial position, stockholders' equity or results
of operations of the Trust Manager, taken as a whole, otherwise than as set
forth or contemplated in the Prospectus;
(d) the Trust Manager is a corporation duly incorporated and validly
existing under the Corporations Law of the Commonwealth of Australia, the
Trust Manager has the power and authority (corporate and other) to own its
properties and
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<PAGE>
conduct its business as described in the Prospectus and to enter into and
perform its obligations under this Agreement and the Basic Documents to
which it is a party and carry out the transactions contemplated by such
Basic Documents; the Trust Manager has been duly qualified or licensed for
the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification or licensing, other than
where the failure to be so qualified or licensed or in good standing would
not have a material adverse effect on the transactions contemplated herein
or in the Basic Documents;
(e) this Agreement has been duly authorized, executed and delivered
by the Trust Manager;
(f) the Basic Documents have been duly authorized, and upon
effectiveness of the Registration Statement, the Note Trust Deed will have
been duly qualified under the Trust Indenture Act and, when executed and
delivered by the Trust Manager and, in the case of the Basic Documents, the
other parties thereto, each of the Basic Documents will constitute a legal,
valid and binding obligation of the Trust Manager, enforceable against the
Trust Manager in accordance with its terms, subject as to enforceability to
applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation or other similar laws affecting the enforcement
of creditors rights generally and to general equitable principles; and the
Notes and the Basic Documents each will conform to the descriptions thereof
in the Prospectus;
(g) the Trust Manager is not, nor with the giving of notice or lapse
of time or both would be, in violation of or in default under, its Articles
and Memorandum of Association or any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which it is a party or
by which it or any of its properties is bound, except for violations and
defaults which individually and in the aggregate would not have a material
adverse effect on the transactions contemplated herein or in the Basic
Documents; the issue and sale of the Notes and the performance by the
Issuer Trustee of all of the provisions of its obligations under the Notes,
the Basic Documents and this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Trust Manager is a party or by
which the Trust Manager is bound or to which any of the property or assets
of the Trust Manager is subject, nor will any such action result in any
violation of the provisions of the Articles and Memorandum of Association
of the Trust Manager or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Trust Manager, or any of its properties; and no consent, approval,
authorization, order, license, registration or qualification of or with any
such court or governmental agency or body is required
8
<PAGE>
for the issue and sale of the Notes or the consummation by the Trust
Manager of the transactions contemplated by this Agreement or the Basic
Documents, except such consents, approvals, authorizations, orders,
licenses, registrations or qualifications as have been obtained under the
Securities Act, the Trust Indenture Act and as may be required under state
securities or Blue Sky Laws in connection with the purchase and
distribution of the Notes by the Underwriters;
(h) other than as set forth or contemplated in the Prospectus, there
are no legal or governmental investigations, actions, suits or proceedings
pending or, to the knowledge of the Trust Manager, threatened against or
affecting the Trust Manager or its properties or, to which the Trust
Manager is or may be a party or to which the Issuer Trustee or any property
of the Trust Manager is or may be the subject, (i) asserting the invalidity
of this Agreement or of any of the Basic Documents, (ii) seeking to prevent
the issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, (iii) that
may adversely affect the federal or state income, excise, franchise or
similar tax attributes of the Notes, (iv) that could materially and
adversely affect the performance of the Trust Manager of its obligations
under, or the validity or enforceability of, this Agreement or any of the
Basic Documents or (v) which could individually or in the aggregate
reasonably be expected to have a material adverse effect on the interests
of the holders of the Notes or the marketability of the Notes; and there
are no statutes, regulations, contracts or other documents that are
required to be filed as an exhibit to the Registration Statement or
required to be described in the Registration Statement or the Prospectus
which are not filed or described as required;
(i) the representations and warranties of the Trust Manager contained
in the Basic Documents are true and correct in all material respects;
(j) Coopers & Lybrand L.L.P. are independent public accountants with
respect to the Trust Manager within the meaning of the Securities Act;
(k) the Trust Manager owns, possesses or has obtained all
Authorizations (as defined in the Master Trust Deed), licenses, permits,
certificates, consents, orders, approvals and other authorizations from,
and has made all declarations and filings with, all federal, state, local
and other governmental authorities (including foreign regulatory agencies),
all self-regulatory organizations and all courts and other tribunals,
domestic or foreign, necessary to own the Housing Loans and to perform its
obligations under this Agreement and the Basic Documents, and the Trust
Manager has not received any actual notice of any proceeding relating to
revocation or modification of any such Authorization, license, permit,
certificate, consent, order, approval or other authorization; and the Trust
Manager is in compliance with all laws and regulations necessary for the
performance of its obligations under this Agreement and the Basic
Documents;
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<PAGE>
(l) no event has occurred which would entitle the Trust Manager to
direct the Issuer Trustee to retire as trustee of the Trust under clause 24
of the Master Trust Deed;
(m) the Prospectus complies with the Listing Rules of the London
Stock Exchange Limited (the "London Stock Exchange"), and any preliminary
prospectus and Prospectus (in the case of the Prospectus, as of the date
hereof and in the case of any preliminary prospectus, as of its date)
contains all the information required by section 146 of the Financial
Services Act;
(n) the Trust Manager has not taken any corporate action nor (to the
best of its knowledge and belief) have any other steps been taken or legal
proceedings been started or threatened against the Trust Manager for its
winding-up, dissolution or reorganization or for the appointment of a
receiver, receiver and manager, administrator, provisional liquidator or
similar officer of it or of any or all of its assets;
(o) subject to compliance with Section 128F of the Income Tax
Assessment Act (1936), no stamp or other duty is assessable or payable in,
and no withholding or deduction for any taxes, duties, assessments or
governmental charges of whatever nature is imposed or made for or on
account of any income, registration, transfer or turnover taxes, customs or
other duties or taxes of any kind, levied, collected, withheld or assessed
by or within, the Commonwealth of Australia or any sub-division of or
authority therein or thereof having power to tax in such jurisdiction, in
connection with the authorization, execution or delivery of the agreements
to which it is to be a party or with the authorization, execution, issue,
sale or delivery of the Notes and the performance of the Trust Manager's
obligations under the agreements to which it is to be a party and the
Notes;
(p) the Notes and the obligations of the Trust Manager under the Note
Trust Deed will be secured (pursuant to the Security Trust Deed) by a first
floating charge over Mortgages (which expression in this agreement has the
meaning given to it in the Sale Notice) having an aggregate principal
amount (including, where applicable, the amount of any further advances
made prior to the Closing Date) at the time of the issue of the Notes of
not less than US$[ ] (on the basis of the exchange rate for A$
against US$ applicable under the Currency Swap Agreement) together with all
relative rights and interests; and
(q) no event has occurred or circumstances arisen which, had the
Notes already been issued, would (whether or not with the giving of notice
and/or the passage of time and/or the fulfillment of any other requirement)
constitute an event described under "Events of Default; Rights Upon Events
of Default" in the Prospectus.
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<PAGE>
III. Westpac represents and warrants to each Underwriter that:
(a) Westpac is a corporation organized under the laws of New South
Wales;
(b) this Agreement has been duly authorized, executed and delivered
by Westpac;
(c) the representations and warranties of Westpac contained in the
Basic Documents are true and correct in all material respects;
(d) since ___________ there has been no material adverse change or
any development involving a prospective material adverse change in the
condition (financial or otherwise) of Westpac or the Westpac Group; and
(e) Westpac has good and marketable title to the Housing Loans free
and clear of all liens, encumbrances and defects, except such as are
described or referred to in the Prospectus, and by assignment and delivery
of each of the Housing Loans to the Trust as of the Closing Date, the Trust
Manager will transfer title in the Housing Loans to the Trust, subject to
no prior lien, mortgage, security interest, pledge, adverse claim, change
or encumbrance;
5. COVENANTS AND AGREEMENTS. (I) The Trust Manager covenants and
agrees with each of the several Underwriters as follows:
(a) to use its best efforts to cause the Registration Statement to
become effective at the earliest possible time and, if required, to file
the final Prospectus with the Commission within the time periods specified
by Rule 424(b) and Rule 430A under the Securities Act, and to furnish
copies of the Prospectus to the Underwriters in New York City prior to
10:00 a.m., New York City time, on the Business Day next succeeding the
date of this Agreement in such quantities as the Representatives may
reasonably request;
(b) to deliver, at the expense of the Trust Manager, to the
Representatives and to Brown & Wood LLP, counsel to the Underwriters,
signed copies of the Registration Statement (as originally filed) and each
amendment thereto, in each case including exhibits, and to each other
Underwriter a conformed copy of the Registration Statement (as originally
filed) and each amendment thereto, in each case without exhibits and,
during the period mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus (including all amendments and
supplements thereto) as the Representatives may reasonably request;
(c) before filing any amendment or supplement to the Registration
Statement or the Prospectus, whether before or after the time the
Registration
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<PAGE>
Statement becomes effective, to furnish to the Representatives a copy of
the proposed amendment or supplement for review and not to file any such
proposed amendment or supplement to which the Representatives reasonably
object;
(d) to advise the Representatives promptly, and to confirm such
advice in writing, (i) when the Registration Statement has become
effective, (ii) when any amendment to the Registration Statement has been
filed or becomes effective, (iii) when any supplement to the Prospectus or
any amendment to the Prospectus has been filed and to furnish the
Representatives with copies thereof, (iv) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for any additional information, (v) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of any order preventing or suspending the
use of any preliminary prospectus or the Prospectus or the initiation or
threatening of any proceeding for that purpose, (vi) of the occurrence of
any event, within the period referenced in paragraph (e) below, as a result
of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, and (vii) of the receipt by the Trust Manager of any
notification with respect to any suspension of the qualification of the
Notes for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and to use its best efforts
to prevent the issuance of any such stop order, or of any order preventing
or suspending the use of any preliminary prospectus or the Prospectus, or
of any order suspending any such qualification of the Notes, or
notification of any such order thereof and, if issued, to obtain as soon as
possible the withdrawal thereof;
(e) if, during such period of time after the first date of the public
offering of the Notes as in the opinion of counsel for the Underwriters a
prospectus relating to the Notes is required by law to be delivered in
connection with sales by an Underwriter or a dealer, any event shall occur
as a result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if it
is necessary to amend or supplement the Prospectus to comply with law,
forthwith to prepare and furnish, at the expense of the Trust Manager, to
the Underwriters and to the dealers (whose names and addresses the
Representatives will furnish to the Trust Manager) to which Notes may have
been sold by the Representatives on behalf of the Underwriters and to any
other dealers upon request, such amendments or supplements to the
Prospectus as may be necessary so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law;
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<PAGE>
(f) to endeavor to qualify the Notes for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives
shall reasonably request and to continue such qualification in effect so
long as reasonably required for distribution of the Notes; PROVIDED that
the Trust Manager shall not be required to file a general consent to
service of process in any jurisdiction;
(g) to make generally available to the holders of the Notes and to
the Representatives as soon as practicable an earnings statement covering a
period of at least twelve months beginning with the first fiscal quarter of
the Trust occurring after the effective date of the Registration Statement,
which shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 of the Commission promulgated thereunder;
(h) so long as the Notes are outstanding, to furnish to the
Representatives (i) copies of each certificate, the annual statements of
compliance and the annual independent certified public accountant's
servicing reports furnished to the Trustee pursuant to the Basic Documents
by first class mail as soon as practicable after such statements and
reports are furnished to the Trustee, (ii) copies of each amendment to any
of the Basic Documents, (iii) on each Determination Date or as soon
thereafter as practicable, notice by telex or facsimile to the
Representatives of the Bond Factor as of the related Record Date, (iv)
copies of all reports or other communications (financial or other)
furnished to holders of the Notes, and copies of any reports and financial
statements furnished to or filed with the Commission, any governmental or
regulatory authority or any national securities exchange, and (v) from time
to time such other information concerning the Trust or the Trust Manager as
the Representatives may reasonably request;
(i) to the extent, if any, that the ratings provided with respect to
the Notes by the Rating Agencies are conditional upon the furnishing of
documents or the taking of any other action by the Trust Manager, the Trust
Manager shall use its best efforts to furnish such documents and take any
other such action;
(j) to list the Notes on the London Stock Exchange and to use its
best efforts to maintain such listing for as long as any of the Notes are
outstanding; provided, however, if such listing becomes impossible, each of
the Issuer Trustee and the Trust Manager will use their best efforts to
obtain, and will thereafter use its best efforts to maintain a quotation
for, or listing of, the Notes on such other exchange as is commonly used
for the quotation or listing of debt securities as they may, with the
approval of the Representatives, decide;
(k) to furnish from time to time copies of the Prospectus and any and
all documents, instruments, information and undertakings (in addition to
any already published or lodged with the London Stock Exchange) and publish
all advertisements
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<PAGE>
or other material and to comply with any other requirements of the London
Stock Exchange that may be necessary in order to effect and maintain such
listing;
(l) to assist the Representatives to make arrangements with DTC,
Euroclear and Cedel Bank concerning the issue of the Notes and related
matters;
(m) to not take, or cause to be taken, any action and will not
knowingly permit any action to be taken which it knows or has reason to
believe would result in the Class A Notes or the Class B Notes not being
assigned the respective ratings referred to in Section 6(q) below; and
(n) whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, all fees, costs and
expenses incident to the performance of its obligations hereunder, shall be
paid as set forth in a letter among the Trust Manager and the
Representatives.
(II) The Issuer Trustee covenants and agrees with each of the several
Underwriters as follows:
(a) to use the net proceeds received by the Issuer Trustee from the
sale of the Notes pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(b) the Issuer Trustee will notify the Representatives promptly after
it becomes actually aware of any matter which would make any of its
representations, warranties, agreements and indemnities herein untrue if
given at any time prior to payment being made to the Issuer Trustee on the
Closing Date and take such steps as may be reasonably requested by the
Representatives to remedy and/or publicize the same;
(c) the Issuer Trustee will pay any stamp duty or other issue,
transaction, value added or similar tax, fee or duty (including court fees)
in relation to the execution of, or any transaction carried out pursuant
to, the Agreements or in connection with the issue and distribution of the
Notes or the enforcement or delivery of this Agreement;
(d) the Issuer Trustee will use all reasonable endeavors to procure
satisfaction on or before the Closing Date of the conditions referred to in
Section 6 below and, in particular (i) the Issuer Trustee shall execute
those of the Basic Documents not executed on the date hereof on or before
the Closing Date, and (ii) the Issuer Trustee will assist the
Representatives to make arrangements with DTC, Euroclear and Cedel Bank
concerning the issue of the Notes and related matters;
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<PAGE>
(e) the Issuer Trustee will procure that the charges created by or
contained in the Security Trust Deed are registered within all applicable
time limits in all appropriate registers;
(f) the Issuer Trustee will perform all its obligations under each of
the Basic Documents to which it is a party which are required to be
performed prior to or simultaneously with closing on the Closing Date;
(g) the Issuer Trustee will not take, or cause to be taken, any action
and will not knowingly permit any action to be taken which it knows or has
reason to believe would result in the Class A Notes or the Class B Notes
not being assigned the respective ratings referred to in Section 6(q)
below; and
(h) the Issuer Trustee will not prior to or on the Closing Date amend
the terms of any Basic Document nor execute any of the Basic Documents
other than in the agreed form without the consent of the Underwriters.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The several
obligations of the Underwriters hereunder are subject to the performance by the
Westpac Parties and the Issuer Trustee of their obligations hereunder and to the
following additional conditions:
(a) the Registration Statement shall have become effective, or if a
post-effective amendment is required to be filed under the Securities Act,
such post-effective amendment shall have become effective, not later than
5:00 P.M., New York City time, on the date hereof; and no stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment shall be in effect, and no proceedings for such
purpose shall be pending before or threatened by the Commission; the
Prospectus shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Securities Act and in accordance with
Section 5(a) hereof; and all requests for additional information shall have
been complied with to the satisfaction of the Representatives;
(b) the representations and warranties of the Westpac Parties and the
Issuer Trustee contained herein are true and correct on and as of the
Closing Date as if made on and as of the Closing Date and the
representations and warranties of the Westpac Parties in the Basic
Documents will be true and correct on the Closing Date; and each Westpac
Party and the Issuer Trustee shall have complied with all agreements and
all conditions on its part to be performed or satisfied hereunder and under
the Basic Documents at or prior to the Closing Date;
(c) subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any downgrading,
nor shall any notice have been given of (i) any intended or potential
downgrading or (ii) any review or
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<PAGE>
possible change that does not indicate an improvement, in the rating
accorded any securities of or guaranteed by each Westpac Party by any
"nationally recognized statistical rating organization", as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
(d) since the respective dates as of which information is given in
the Prospectus there shall not have been any material adverse change or any
development involving a prospective material adverse change, in or
affecting the general affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of each Westpac
Party, taken as a whole, otherwise than as set forth or contemplated in the
Prospectus, the effect of which in the judgment of the Representatives
makes it impracticable or inadvisable to proceed with the public offering
or the delivery of the Notes on the Closing Date on the terms and in the
manner contemplated in the Prospectus;
(e) the Representatives shall have received on and as of the Closing
Date a certificate of an executive officer of each Westpac Party, with
specific knowledge about financial matters of such Westpac Party,
satisfactory to the Representatives to the effect set forth in subsections
[(a) through (d)] of this Section;
(f) Allen Allen & Hemsley, Australian counsel for Westpac, the Trust
Manager and the Servicer, shall have furnished to the Representatives their
written opinion, dated the Closing Date, in form and substance satisfactory
to the Representatives, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon
such matters;
(g) Allen Allen & Hemsley, Australian tax counsel for Westpac, the
Trust Manager and the Servicer, shall have furnished to the Representatives
their written opinion, dated the Closing Date, in form and substance
satisfactory to the Representatives, and such counsel shall have received
such papers and information as they may reasonably request to enable them
to pass upon such matters;
(h) on the date hereof and also on the Closing Date, Coopers &
Lybrand L.L.P. shall have furnished to you letters, dated the respective
dates of delivery thereof, in form and substance satisfactory to you;
(i) the Representatives shall have received on and as of the Closing
Date an opinion of Brown & Wood LLP, counsel to the Underwriters, with
respect to the Registration Statement, the Prospectus and other related
matters as the Representatives may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
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<PAGE>
(j) Mayer Brown & Platt, United States counsel for Westpac, the
Issuer Trustee and the Trust Manager, shall have furnished to the
Representatives their written opinion, dated the Closing Date, in form and
substance satisfactory to the Representatives, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(k) Mayer Brown & Platt, United States federal income tax counsel for
Westpac, the Issuer Trustee and the Trust Manager, shall have furnished to
the Representatives their written opinion, dated the Closing Date, in form
and substance satisfactory to the Representatives:
(l) Mallesons Stephen Jaques, counsel for the Issuer Trustee, shall
have furnished to the Representatives their written opinion, dated the
Closing Date, in form and substance satisfactory to the Representatives,
and such counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters;
(m) Brown & Wood, London, counsel for the Note Trustee, shall have
furnished to the Representatives their written opinion, dated the Closing
Date, in form and substance satisfactory to the Representatives, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(n) Counsel to the Interest Rate Swap and Currency Swap Provider
shall have furnished to the Representatives their written opinion and
substance satisfactory to the Representatives;
(o) the Representative shall have received a letter or letters from
each counsel delivering any written opinion to any Rating Agency in
connection with the transaction described herein which is not otherwise
described in this Agreement allowing the Representative to rely on such
opinion as if it were addressed to the Representative;
(p) at the Closing Date, the Class A Notes shall have been rated
"AAA" by Standard & Poor's Ratings Services, A Division of The McGraw-Hill
Companies, Inc. ("Standard and Poor's) and Fitch IBCA, Inc. ("Fitch") and
"Aaa" by Moody's Investors Service, Inc. ("Moody's" and together with
Standard and Poor's and Fitch, the "Rating Agencies") and the Class B Notes
shall have been rated "AA-" by Standard and Poor's and Fitch, as evidenced
by letters from the Rating Agencies;
(q) the execution and delivery by all parties thereto of the Basic
Documents on or prior to the Closing Date;
17
<PAGE>
(r) the London Stock Exchange shall have agreed on or prior to the
Closing Date to list the Notes; and
(s) on or prior to the Closing Date the Westpac Parties and the
Issuer Trustee shall have furnished to the Representatives such further
certificates and documents as the Representatives shall reasonably request.
7. (a) INDEMNIFICATION AND CONTRIBUTION. Each of Westpac and the Trust
Manager, jointly and severally, agrees to indemnify and hold harmless each
Underwriter,each affiliate of an Underwriter which assists such Underwriter in
the distribution of the Securities, and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, the legal fees and other
expenses incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Trust Manager shall have furnished any amendments
or supplements thereto) (other than to the extent any losses, claims, damages or
liabilities arise as a result of any information under the heading "Prepayment
and Yield Considerations"), or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except (i) insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Trust Manager in
writing by such Underwriter through the Representatives expressly for use
therein or (ii) that such indemnity with respect to the Prospectus shall not
inure to the benefit of any Underwriter (or any person controlling any
Underwriter) from whom the person asserting any such loss, claim, damage or
liability purchased the Offered Notes which are the subject thereof if such
person did not receive a copy of the Prospectus (or the Prospectus as amended or
supplemented) at or prior to the confirmation of the sale of such Offered Notes
to such person in any case where such delivery is required by the Act and the
untrue statement or omission of a material fact contained in such Prospectus was
corrected in the Prospectus (or the Prospectus as amended or supplemented);
(b) To the extent that any payment of damages by Westpac pursuant to
subsection 7(a) above is determined to be a payment of damages pursuant to
"Funds Management and Securitisation Prudential Statement C2" such payment shall
be subject to the terms of Section 89 therein.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Trust Manager, its directors, its officers who sign the
Registration Statement, the Issuer Trustee and Westpac and each person who
controls any of the Westpac Parties or the Issuer Trustee within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Westpac Parties or
18
<PAGE>
the Issuer Trustee to each Underwriter, but only with reference to information
relating to such Underwriter furnished to the Trust Manager in writing by such
Underwriter through the Representatives expressly for use in the Registration
Statement, the Prospectus, any amendment or supplement thereto.
(d) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to Subsections
(a) or (b) above, such person (the "Indemnified Person") shall promptly notify
the person against whom such indemnity may be sought (the "Indemnifying Person")
in writing, and the Indemnifying Person, upon request of the Indemnified Person,
shall retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such counsel
related to such proceeding. In any such proceeding, any Indemnified Person
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to the
contrary, (ii) the Indemnifying Person has failed within a reasonable time to
retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed as they are
incurred. Any such separate firm for the Underwriters, each affiliate of any
Underwriter which assists such Underwriter in the distribution of the Notes, and
such control persons of Underwriters shall be designated in writing by the
Representatives and any such separate firm for the Trust Manager, its directors,
its officers who sign the Registration Statement, the Issuer Trustee and Westpac
and such control persons of any of the Westpac Parties or the Issuer Trustee
shall be designated in writing by the Trust Manager. The Indemnifying Person
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an Indemnified Person shall have requested an Indemnifying Person to reimburse
the Indemnified Person for fees and expenses of counsel as contemplated by the
third sentence of this subsection (c), the Indemnifying Person agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such Indemnifying Person of the aforesaid request and (ii) such
Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a
19
<PAGE>
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
(e) If the indemnification provided for in subsections (a) or (b) above is
unavailable to an Indemnified Person in respect of any losses, claims, damages
or liabilities referred to therein, then each Indemnifying Person under such
subsection, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative benefits received by the Westpac Parties and
the Issuer Trustee on the one hand and the Underwriters on the other hand from
the offering of the Notes and also the relative fault of the Westpac Parties and
the Issuer Trustee on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Westpac Parties and the
Issuer Trustee on the one hand and the Underwriters on the other shall be deemed
to be in the same respective proportions as the net proceeds from the offering
(before deducting expenses) received by the Westpac Parties and the Issuer
Trustee and the total underwriting discounts and the commissions received by the
Underwriters bear to the aggregate public offering price of the Notes. The
relative fault of the Westpac Parties and the Issuer Trustee on the one hand and
the Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Westpac Parties or the Issuer Trustee or by the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Westpac Parties, the Issuer Trustee and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by PRO RATA allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in this subsection (d)
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses incurred by such Indemnified Person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, in no event shall an Underwriter be required to
contribute any amount in excess of the amount by which the total price at which
the Notes underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute
20
<PAGE>
pursuant to this Section 7 are several in proportion to the respective principal
amount of Notes set forth opposite their names in Schedule I hereto, and not
joint.
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
(f) The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Westpac Parties or the Issuer
Trustee set forth in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter or by or on behalf of the Westpac Parties or the Issuer Trustee,
its officers or directors or any other person controlling the Westpac Parties or
the Issuer Trustee and (iii) acceptance of and payment for any of the Notes.
8. TERMINATION. Notwithstanding anything herein contained, this
Agreement may be terminated in the absolute discretion of the Representatives,
by notice given to the Trust Manager, if after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, (ii) trading of any securities of or guaranteed by any
of the Westpac Parties or the Issuer Trustee shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York, Sydney, Australia or London, England
shall have been declared by either Federal or New York or related authorities,
or (iv) there shall have occurred any outbreak or escalation of hostilities or
any change in financial markets or any calamity or crisis that, in the judgment
of the Representatives, is material and adverse and which, in the judgment of
the Representatives, makes it impracticable to market the Notes on the terms and
in the manner contemplated in the Prospectus.
9. EFFECTIVENESS OF AGREEMENT; DEFAULT OF UNDERWRITERS. This Agreement
shall become effective upon the later of (x) execution and delivery hereof by
the parties hereto and (y) release of notification of the effectiveness of the
Registration Statement (or, if applicable, any post-effective amendment) by the
Commission.
If on the Closing Date any one or more of the Underwriters shall fail or
refuse to purchase Notes which it or they have agreed to purchase hereunder on
such date, and the aggregate principal amount of Notes which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate principal amount of the Notes to be purchased on
such date, the other Underwriters shall be obligated severally in the
proportions that the principal amount of Notes set forth opposite their
respective names in Schedule I bears to the aggregate principal amount of Notes
set forth opposite the names of all such non-defaulting Underwriters, or in such
other proportions as the Representatives may specify, to purchase the Notes
which such defaulting Underwriter or
21
<PAGE>
Underwriters agreed but failed or refused to purchase on such date; PROVIDED
that in no event shall the principal amount of Notes that any Underwriter has
agreed to purchase pursuant to Section 1 be increased pursuant to this Section 9
by an amount in excess of one-ninth of such principal amount of Notes without
the written consent of such Underwriter. If on the Closing Date any Underwriter
or Underwriters shall fail or refuse to purchase Notes which it or they have
agreed to purchase hereunder on such date, and the aggregate principal amount of
Notes with respect to which such default occurs is more than one-tenth of the
aggregate principal amount of Notes to be purchased on such date, and
arrangements satisfactory to the Representatives and the Trust Manager for the
purchase of such Notes are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Trust Manager. In any such case either you or the Trust
Manager shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
10. EXPENSES UPON TERMINATION. If this Agreement shall be terminated by
the Underwriters, or any of them, because of any failure or refusal on the part
of the Westpac Parties or the Issuer Trustee to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason any of the
Westpac Parties or the Issuer Trustee shall be unable to perform its obligations
under this Agreement or any condition of the Underwriters' obligations cannot be
fulfilled, Westpac agrees to reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and expenses of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
11. SELLING RESTRICTIONS. (a) No prospectus in relation to the Notes has
been lodged with, or registered by, the Australian Securities Commission or the
Australian Stock Exchange Limited. Each Underwriter represents and agrees that
in connection with the initial distribution of the Notes:
(i) it has not (directly or indirectly) offered for subscription
or purchase or issued invitations to subscribe for or buy nor
has it sold, the Notes,
(ii) will not (directly or indirectly) offer for subscription or
purchase or issue invitations to subscribe for or buy nor will
it sell the Notes, and
(iii) has not distributed and will not distribute any prospectus, or
any advertisement or other offering material
in the Commonwealth of Australia, its territories or possessions
("Australia") or to any person who is actually known by the
Underwriter (without an
22
<PAGE>
obligation on the Underwriter to make any inquiry) to be a resident of
Australia for the purposes of section 128F of the Income Tax
Assessment Act 1936 of Australia (the "Tax Act") or to any associates
of Westpac identified on Annex A hereto or as otherwise notified in
writing by Westpac to the Underwriters from time to time.
(b) Each Underwriter (severally, not jointly) undertakes that the issue of
Offered Notes governed by this Agreement resulted from:
(a) an offer by such Underwriter within 30 days of issue to any
person as a result of negotiations being initiated in
electronic form (specifying the particular electronic screen
or service), the Prospectus or in such other form as may be
applicable, being a form that is used by the financial markets
for dealing in securities; or
(b) its offer of the Notes for sale within 30 days of issue to at
least 10 persons who are in the business of providing finance
or investing or dealing in securities in financial markets
each of whom was not known to be an associate of any of the
others (within the meaning of section 128F of the Tax Act),
and in either case it has announced on behalf of the Issuer Trustee in
relation to the offer that Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System ("Euroclear") or
Cedel Bank SOCIETE ANONYME ("Cedel Bank") will confer rights in the
Notes under Book-Entry Notes. Each Underwriter will provide the
Issuer Trustee (within five Business Day of the offer of Notes by it)
a written statement which sets out details of the relevant offer.
Each Underwriter (severally, not jointly) agrees to co-operate with
reasonable requests from the Issuer Trustee for information for the
purposes of assisting the Issuer Trustee to demonstrate that the
public offer test under section 128F of the Tax Act has been
satisfied, provided that no Underwriter shall be obliged to disclose
the identity of the purchaser of any Note or any information from
which such identity might/would be capable of being ascertained, or
any information the disclosure of which would be contrary to or
prohibited by any relevant law, regulation or directive.
(c) Each Underwriter acknowledges that no representation is made by the
Issuer Trustee or any Underwriter that any action has been or will be
taken in any jurisdiction by the Issuer Trustee or any Underwriter
that would permit a public offering of the Notes, or possession or
distribution of the Prospectus or any other offering material, in any
country or jurisdiction where action for that purpose is required.
Each Underwriter will comply with all applicable
23
<PAGE>
securities law and regulations in each jurisdiction in which it
purchases, offers, sell or delivers Notes or has in its possession or
distributes the Prospectus or any other offering material, in all
cases at its own expense.
12. CERTAIN MATTERS RELATING TO THE ISSUER TRUSTEE. The Issuer Trustee
enters into this Agreement only in its capacity as trustee of the Trust and in
no other capacity. A liability arising under or in connection with this
Agreement or the Trust can be enforced against the Issuer Trustee only to the
extent to which it can be satisfied out of assets of the Trust out of which the
Issuer Trustee is actually indemnified for such liability. This limitation of
the Issuer Trustee's liability applies despite any other provisions of this
Agreement and extends to all liabilities and obligations of the Issuer Trustee
in any way connected with any representation, warranty, conduct, omission,
agreement or Transaction related to this Agreement or the Trust.
The parties other than the Issuer Trustee may not sue the Issuer Trustee in
any capacity other than as trustee of the Trust or seek the appointment of a
receiver (except under the Security Trust Deed) or a liquidator, an
administrator or any other similar person to the Issuer Trustee or prove in any
liquidation, administration or arrangements of or affecting the Issuer Trustee.
The provisions of this clause 12 shall not apply to any obligation or
liability of the Issuer Trustee to the extent that it is not satisfied because
under the Master Trust Deed or by operation of law there is a reduction in the
extent of the Issuer Trustee's indemnification out of the assets of the Trust as
a result of the Issuer Trustee's fraud, negligence or breach of trust.
It is acknowledged that the Trust Manager, the Servicer, the Currency Swap
Providers, the Note Trustee, the Principal Paying Agent, the other Paying Agents
and the Agent Bank (each, a "Relevant Party") are responsible under the
Transaction Documents (as defined in the Master Trust Deed) for performing a
variety of obligations relating to the Trust. No act or omission of the Issuer
Trustee (including any related failure to satisfy its obligations under the
Transaction Documents) will be considered fraud, negligence or breach of trust
of the Issuer Trustee for the purpose of this Agreement to the extent to which
the act or omission was caused or contributed to by any failure by any Relevant
Party or any other person who provides services in respect of the Trust (other
than a person who has been delegated or appointed by the Issuer Trustee and for
whom the Issuer Trustee is responsible under the relevant Transaction Document,
but excluding any Relevant Party) to fulfil its obligations relating to the
Trust or by any other act or omission of a Relevant Party or by any other person
who provides services in respect of the Issuer Trustee (other than a person who
has been delegated or appointed by the Issuer Trustee and for whom the Issuer
Trustee is responsible under the Transaction Documents, but excluding any
Relevant Party).
24
<PAGE>
13. SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the Westpac Parties, the Issuer Trustee, the Underwriters, each
affiliate of any Underwriter which assists such Underwriter in the distribution
of the Notes, any controlling persons referred to herein and their respective
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person, firm or corporation any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. No purchaser of Notes from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
14. ACTIONS BY REPRESENTATIVES; NOTICES. Any action by the Underwriters
hereunder may be taken by the Representatives jointly or by J.P. Morgan
Securities Inc. alone on behalf of the Underwriters, and any such action taken
by the Representatives jointly or by J.P. Morgan Securities Inc. alone shall be
binding upon the Underwriters. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be given to [the Representatives c/o J.P. Morgan Securities
Inc., 60 Wall Street, New York, New York 10060-0060 (Facsimile No.: (212)
648-5909); Attention: Syndicate Desk. Notices to the Trust Manager shall be
given to it at _____________, ____________, ________________, (Facsimile No.:
_______________; Attention: ________________, to the Issuer Trustee shall be
given to it at _______________, ________________, _______________, (Facsimile
No.: ______________; Attention: ______________ and to Westpac shall be given to
it at _________________, ______________, _______________, (Facsimile No:
_____________).
15. COUNTERPARTS: APPLICABLE LAW. This Agreement may be signed in
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the conflicts of laws provisions thereof.
25
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return the enclosed counterparts hereof.
Very truly yours,
WESTPAC SECURITIZATION
MANAGEMENT PTY LIMITED
By:
-----------------------------------
Name:
Title:
WESTPAC SECURITIES ADMINISTRATION
LIMITED
By:
-----------------------------------
Name:
Title:
WESTPAC BANKING CORPORATION
By:
-----------------------------------
Name:
Title:
26
<PAGE>
Accepted: May __, 1998
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Acting severally on behalf
of themselves and the
several Underwriters
listed in Schedule I hereto.
J.P. MORGAN SECURITIES INC.
By:
---------------------------
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED
By:
---------------------------
Name:
Title:
27
<PAGE>
SCHEDULE I
PRINCIPAL AMOUNT OF
NOTES TO BE PURCHASED
---------------------
Underwriter
- -----------
J.P. Morgan Securities Inc. ..................
Morgan Stanley & Co. Incorporated ............
Westpac Banking Corporation ..................
Deutsche Morgan Grenfell Inc. ................
Merrill Lynch, Pierce, Fenner and Smith
Incorporated .....................
Total ..............................
==============
28
<PAGE>
Exhibit 4.2
WESTPAC SECURITIES ADMINISTRATION LIMITED
(Trustee)
WESTPAC SECURITISATION MANAGEMENT PTY LIMITED
(Trust Manager)
WESTPAC BANKING CORPORATION
(Approved Seller)
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
(Note Trustee)
and
THE MORTGAGE COMPANY PTY LIMITED
(Servicer)
======================
SERIES 1998-1G WST TRUST
SERIES NOTICE
======================
(C)Allen Allen & Hemsley
Sydney
Ref.: AEJ 1279390
<PAGE>
================================================================================
T A B L E O F C O N T E N T S
================================================================================
1. INTRODUCTION AND TRUST MANAGER 1
1.1 Introduction 1
1.2 Trust Manager 1
2. DIRECTION AND TRUST BACK 1
3. DEFINITIONS AND INTERPRETATION 2
3.1 Definitions 2
3.2 Interpretation 25
3.3 Limitation of liability of the Trustee 25
3.4 Knowledge of Trustee 26
4. NOTES 26
4.1 Conditions of Notes 26
4.2 Summary of conditions of Notes 27
4.3 Issue of Notes 29
4.4 Trustee's Covenant to Noteholders 29
4.5 Repayment of Notes on Payment Dates 29
4.6 Final Redemption 29
4.7 Period During Which Interest Accrues 30
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
4.8 Calculation of Interest 30
4.9 Aggregate receipts 31
5. REDRAW FUNDING SECURITIES 31
5.1 Note Issue Direction for RFS 31
5.2 Conditions to Note Issue Direction 31
5.3 Terms of Note Issue Direction 31
5.4 Conversion of RFS 32
5.5 Master Trust Deed definitions 32
6. CASHFLOW ALLOCATION METHODOLOGY 32
6.1 General 32
6.2 Determination Date - Calculations 32
6.3 Redraws 34
6.4 Determination Date - Payment Shortfall 35
6.5 Determination Date - Liquidity Shortfall 35
6.6 Allocating Liquidation Losses 35
6.7 Insurance claims 36
6.8 Remittance Date 36
6.9 Payment - Purchase Price adjustment 36
6.10 Total Payments 36
6.11 Excess Available Income - reimbursement of Charge Offs
and Principal Draw 37
6.12 Excess Collections Distribution 38
6.13 Initial Principal Distributions 39
6.14 Principal Payments - Sequential Method 39
6.15 Principal Payments - Serial Method prior to third anniversary
(procedure 1) 40
6.16 Principal Payments - Serial Method after third anniversary
(procedure 2) 41
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
6.17 Remaining Liquidity Shortfall 43
6.18 Charge Offs 43
6.19 Payments into US$ Account 44
6.20 Payments out of US$ Account 44
6.21 Prepayment Costs and Prepayment Benefits 45
6.22 Rounding of amounts 45
6.23 Bond Factors 46
6.24 Trust Manager's Report 46
6.25 Prescription 46
6.26 Replacement of Currency Swap 46
7. MASTER TRUST DEED 46
7.1 Completion of details in relation to Master Trust Deed 46
7.2 Amendments to Master Trust Deed 47
8. TRANSFER OF PURCHASED RECEIVABLES - TOP UPS 47
9. TRANSFERS TO WAREHOUSE TRUST 48
10. SUBSTITUTION OF PURCHASED RECEIVABLES 48
10.1 Purchase from Warehouse Trust 48
10.2 Contents of direction 49
10.3 Conditions to direction 49
10.4 Criteria for Replacement Receivable 49
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
10.5 Consent of Designated Ratings Agency 50
11. APPLICATION OF THRESHOLD RATE 50
11.1 Calculation of Threshold Rate 50
11.2 Setting Threshold Rate 50
11.3 Trustee Setting Threshold Rate 50
12. BENEFICIARY 50
12.1 Issue of Units 50
12.2 Residual Capital Unit 51
12.3 Residual Income Unit 51
12.4 Register 52
12.5 Transfer of Units 52
12.6 Limit on rights 52
13. TITLE PERFECTION EVENTS 52
14. ADDITIONAL RECEIVABLE PRODUCT FEATURES 53
15. WST WAREHOUSE TRUST #1 53
15.1 Direction under Warehouse Series Notice 53
15.2 Direction 53
16. SERVICER REPRESENTATIONS 53
17. WAREHOUSE TRUSTEE REPRESENTATIONS 55
18. NOTE TRUSTEE 55
18.1 Capacity 55
18.2 Exercise of rights 55
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
18.3 Representation and warranty 56
18.4 Payments 56
19. WESTPAC UNDERTAKINGS 56
19.1 Set Off 56
19.2 Notice of actions 56
19.3 Notification of Trust 56
20. REDEMPTION 56
21. GOVERNING LAW AND JURISDICTION 57
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
SERIES 1998-1G WST TRUST
SERIES NOTICE
================================================================================
I. INTRODUCTION AND TRUST MANAGER
1.1 Introduction
This Series Notice is issued on 1998 by Westpac Securitisation
Management Pty Limited (ACN 081 709 211) of Level 4, 60 Martin Place,
Sydney, New South Wales as manager (Trust Manager) under the Master Trust
Deed (as defined below). It is issued pursuant and subject to the Master
Trust Deed dated 14 February 1997 (the Master Trust Deed) between the
Trust Manager and Westpac Securities Administration Limited (ACN 000 049
472) of Level 10, 130 Pitt Street, Sydney, New South Wales as trustee of
the Series 1998-1G WST Trust (the Trustee).
Each party to this Series Notice agrees to be bound by the Transaction
Documents as amended by this Series Notice in the capacity set out with
respect to them in this Series Notice or the Master Trust Deed.
The Mortgage Company Pty Limited (ACN 070 968 302) (the Servicer) agrees
to service the Purchased Receivables and Purchased Receivable Securities
in accordance with the Servicing Agreement.
Morgan Guaranty Trust Company of New York (the Note Trustee) has agreed to
act as note trustee in relation to Notes issued by the Trust under the
Note Trust Deed and in accordance with this Series Notice.
1.2 Trust Manager
(a) The Master Trust Deed is amended for the purpose of the Series
1998-1G WST Trust so that all references to Trust Manager will be
taken to be references to Westpac Securitisation Management Pty
Limited of Level 6, 60 Martin Place, Sydney, New South Wales, and
each party agrees that:
(i) Westpac Securitisation Management Pty Limited will be Trust
Manager for the purposes of that Trust; and
(ii) The Mortgage Company Pty Limited will have no obligations or
liabilities as Trust Manager for the purpose of that Trust.
This amendment does not relate to or affect any Other Trust.
(b) Westpac Securitisation Management Pty Limited will comply with all
obligations of the Trust Manager in relation to the Series 1998-1G
WST Trust as named as such in the Master Trust Deed.
2. DIRECTION AND TRUST BACK
(a) A Trust Back, entitled Westpac 1998-1G Trust Back, is created in
relation to Other Secured
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Liabilities secured by the Purchased Receivable Securities.
(b) The parties agree that the Trust will be a Trust for the purposes of
the Transaction Documents.
3. DEFINITIONS AND INTERPRETATION
3.1 Definitions
Unless otherwise defined in this Series Notice, words and phrases defined
in the Master Trust Deed have the same meaning where used in this Series
Notice.
In this Series Notice, and for the purposes of the definitions in the
Master Trust Deed, the following terms have the following meanings unless
the contrary intention appears. These definitions apply only in relation
to the Series 1998-1G WST Trust, and do not apply to any other Trust (as
defined in the Master Trust Deed).
A$ Class A Coupon Amount means, for any Payment Date, the amount in
Australian dollars which is calculated:
(a) on a daily basis at the applicable rate set out in the Confirmation
relating to the Class A Notes (being AUD-BBR-BBSW, as defined in the
ISDA Definitions, as at the first day of the Coupon Period ending on
(but excluding) that Payment Date with a designated maturity of 90
days plus the Spread);
(b) on the A$ Equivalent of the aggregate of the Invested Amount of the
Class A Notes as at the first day of the Coupon Period ending on
(but excluding) that Payment Date; and
(c) on the basis of the actual number of days in that Coupon Period and
a year of 365 days.
A$ Class B Coupon Amount means, for any Payment Date, the amount in
Australian dollars which is calculated:
(a) on a daily basis at the applicable rate set out in the Confirmation
relating to the Class B Notes (being AUD-BBR-BBSW, as defined in the
ISDA Definitions, as at the first day of the Coupon Period ending on
(but excluding) that Payment Date with a designated maturity of 90
days plus the Spread);
(b) on the A$ Equivalent of the aggregate of the Invested Amount of the
Class B Notes as at the first day of the Coupon Period ending on
(but excluding) that Payment Date; and
(c) on the basis of the actual number of days in that Coupon Period and
a year of 365 days.
A$ Equivalent means, in relation to an amount denominated or to be
denominated in US$, the amount converted to (and denominated in) A$ at the
A$ Exchange Rate.
A$ Exchange Rate means, on any date, the rate of exchange (set as at the
commencement of a Currency Swap) applicable under that Currency Swap for
the exchange of United States dollars for Australian dollars.
Accrued Interest Adjustment means in relation to an Approved Seller, all:
(a) interest and fees accrued on the Purchased Receivables, purchased
from that Approved Seller, up to (but excluding) the Closing Date
which are unpaid as at the close of business on the Closing Date;
and
(b) all amounts received by that Approved Seller under those Purchased
Receivables applied by the Servicer to payment of interest and fees
under those Purchased Receivables for the period
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from (but excluding) the Cut-Off Date to (but excluding) the Closing
Date.
Agency Agreement means the Agency Agreement dated [*] 1998 between the
Trustee, the Trust Manager, the Note Trustee, the Principal Paying Agent
and the Agent Bank.
Agent Bank means the person appointed as agent bank under the Agency
Agreement from time to time.
Application for Notes means an application for Registered Notes in the
form of schedule 1 to the Master Trust Deed or in such other form as may
from time to time be agreed between the Trustee and the Trust Manager.
Approved Seller means Westpac Banking Corporation (ARBN 007 457 141) or,
other than in clauses 8.1, 8.2, 8.3, 8.5(b), 8.6, 8.7, 8.11, 8.12, 11, 33
and 37 of the Master Trust Deed, the Trustee in its capacity as trustee of
the WST Warehouse Trust #1.
Arrears subsist in relation to a Purchased Receivable if the Obligor under
that Purchased Receivable fails to pay any amount due under that Purchased
Receivable on the day it was due. Delayed payments arising from payment
holidays based on early repayments (agreed in writing by Westpac), or from
maternity or paternity leave repayment reductions, which are granted by
Westpac or the Servicer will not, by themselves, lead to a Purchased
Receivable being in Arrears.
Asset means any Loan, Mortgage or Related Security specified in each Sale
Notice which is to be acquired in favour of the Trust, or any Authorised
Investment acquired by the Trust.
Authorised Signatory means:
(a) in relation to the Note Trustee, any duly authorised officer of
Morgan Guaranty Trust Company of New York and any other duly
authorised person of Morgan Guaranty Trust Company of New York;
(b) in relation to the Principal Paying Agent, any duly authorised
officer of Morgan Guaranty Trust Company of New York and any other
duly authorised person of Morgan Guaranty Trust Company of New York;
and
(c) in relation to the Agent Bank, any duly authorised officer of Morgan
Guaranty Trust Company of New York and any other duly authorised
person of Morgan Guaranty Trust Company of New York.
Available Income means, in relation to the Trust for any Collection
Period, the total of the following:
(a) the Finance Charge Collections for the Trust for that Collection
Period; plus
(b) to the extent not included in paragraph (a):
(i) any amount received or due to be received by or on behalf of
the Trustee in relation to that Collection Period on or by the
Payment Date immediately following the end of that Collection
Period with respect to net receipts under any Hedge Agreement
(other than the Currency Swap);
(ii) any interest income received by or on behalf of the Trustee
during that Collection Period in respect of moneys credited to
the Collection Account in relation to the
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Trust;
(iii) amounts in the nature of interest otherwise paid by Westpac,
the Servicer or the Trust Manager to the Trustee in respect of
Collections held by it;
(iv) all other amounts received by or on behalf of the Trustee in
respect of the Assets in the nature of income;
(v) all amounts received by or on behalf of the Trustee during
that Collection Period from any provider of a Support Facility
(other than the Currency Swap) under that Support Facility and
which the Trust Manager determines should be accounted for to
reduce a Finance Charge Loss; and
(vi) any Substitution Net Transfer Amount (Income) received by the
Trust form a Warehouse Trust with respect to that Collection
Period.
but excluding interest credited to a Support Facility Collateral Account
and any amount payable by the Trustee under clause 6.26.
Available Liquidity Amount means at any time the Liquidity Limit at that
time less the Liquidity Outstandings at that time, if positive.
Average Quarterly Percentage means, at any date, the sum of Quarterly
Percentages for the four full Collection Periods preceding that date,
divided by four.
Bank means:
(a) for the purposes of paragraph (a) of the definition of Business Day
and the definition of US$ Account:
(i) a corporation authorised under the Banking Act 1959 (Cth) to
carry on general banking business in Australia or a
corporation formed or incorporated under an Act of the
Parliament of an Australian Jurisdiction to carry on the
general business of banking;
(ii) a person authorised under the Banking Act 1987 (UK) to carry
on a deposit taking business; or
(iii) a banking institution or trust company organised or doing
business under the laws of the United States or any state
thereof; and
(b) in any other case, a corporation authorised under the Banking Act
1959 (Cth) to carry on general banking business in Australia or a
corporation formed or incorporated under an Act of the Parliament of
an Australian Jurisdiction to carry on the general business of
banking.
Bank Bill Rate on any date means the rate calculated by taking the rates
quoted on the Reuters Screen BBSW Page at approximately 10.00am, Sydney
time, on that date for each Reference Bank so quoting (but not fewer than
five) as being the mean buying and selling rate for a bill (which for the
purpose of this definition means a bill of exchange of the type specified
for the purpose of quoting on the Reuters Screen BBSW Page) having a tenor
of 90 days eliminating the highest and lowest mean rates and taking the
average of the remaining mean rates and then (if necessary) rounding the
resultant figure upwards to four decimal places. If on any date fewer than
five Reference Banks have quoted rates on the Reuters Screen BBSW Page,
the rate for that date shall be calculated as above by taking the rates
otherwise quoted by five of the Reference Banks on application by the
parties for such a bill of the same tenor. If in respect of any date the
rate for that date cannot be determined in accordance with the foregoing
procedures then the rate for that date shall mean such rate as is agreed
between the Trust Manager and Westpac Banking Corporation having regard to
comparable indices then available, PROVIDED THAT on the first day of
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any first Coupon Period as it relates to a Class of Notes the Bank Bill
Rate shall be an interpolated rate calculated with reference to the tenor
of the relevant period.
Basis Swap means, in relation to the master agreement dated on or about
the date of this Series Notice made between the Trustee as trustee of the
Trust, the Trust Manager and Westpac Banking Corporation, on the terms of
the ISDA Master Agreement (with amendments thereto), each Transaction (as
defined in that agreement) entered into in accordance with that agreement
in relation to the interest rate risk arising from a Receivable which is
subject to either a variable rate set, as permitted by the relevant
Receivable Agreement, at the discretion of Westpac, or a concessionary
introductory fixed rate of 12 months or less as determined by Westpac.
Beneficiary means, in relation to the Trust, each holder of a Unit (as
defined in clause 12).
Bond Factor means the Class A Bond Factor, the Class B Bond Factor, the
RFS Class A Bond Factor or the RFS Bond Factor.
Book-Entry Note means a Class A Book-Entry Note or a Class B Book-Entry
Note.
Business Day means:
(a) in relation to the Note Trust Deed, the Agency Agreement and any
Offshore Note, (including any Condition), any day, other than a
Saturday, Sunday or public holiday, on which Banks are open for
business in Sydney, London and New York, or as otherwise specified
in the relevant Conditions; and
(b) in relation to any other Transaction Document, any day, other than a
Saturday, Sunday or public holiday, on which Banks are open for
business in Sydney.
Carryover Charge Off means, in relation to the Trust at any time, a
Carryover Class A Charge Off, a Carryover Class B Charge Off, a Carryover
RFS Charge Off, a Carryover RFS Class A Charge Off or a Carryover Redraw
Charge Off.
Carryover Class A Charge Off means, on any Determination Date in relation
to a Class A Note, the aggregate of Class A Charge Offs in relation to
that Class A Note prior to that Determination Date and which have not been
reinstated under clauses 6.11(a)(ii)(C) and 6.20(b)(iii).
Carryover Class B Charge Off means, on any Determination Date in relation
to a Class B Note, the aggregate of Class B Charge Offs in relation to
that Class B Note prior to that Determination Date and which have not been
reinstated under clauses 6.11(a)(iii) and 6.20(b)(iv).
Carryover Redraw Charge Off means, on any Determination Date, the
aggregate of Redraw Charge Offs prior to that Determination Date and which
have not been reinstated under clause 6.11(a)(ii)(D).
Carryover RFS Charge Off means, on any Determination Date in relation to
an RFS, the aggregate of RFS Charge Offs in relation to that RFS prior to
that Determination Date and which have not been reinstated under clause
6.11(a)(ii)(A).
Carryover RFS Class A Charge Off means, on any Determination Date in
relation to an RFS Class A Note, the aggregate of Class A RFS Charge Offs
in relation to that RFS Class A Note prior to that Determination Date and
which have not been reinstated under clause 6.11(a)(ii)(B).
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Cedel Bank means Cedel Bank, societe anonyme.
Class A Bond Factor means, on a Determination Date, the aggregate of the
Class A Invested Amounts for all Class A Notes for that Determination Date
less all Class A Principal Payments to be made on the next Payment Date
divided by the aggregate Class A Initial Invested Amount for all Class A
Notes, expressed to seven decimal places.
Class B Bond Factor means, on a Determination Date, the aggregate of the
Class B Invested Amounts for all Class B Notes for that Determination Date
less all Class B Principal Payments to be made on the next Payment Date
divided by the aggregate Class B Initial Invested Amount for all Class B
Notes, expressed to seven decimal places.
Class A Book-Entry Note means a book-entry note issued or to be issued by
the Trustee in registered form under clause 3.1 of the Note Trust Deed
representing Class A Notes, substantially in the form of schedule 1 to the
Note Trust Deed.
Class B Book-Entry Note means a book-entry note issued or to be issued by
the Trustee in registered form under clause 3.1 of the Note Trust Deed
representing Class B Notes, substantially in the form of schedule 1 to the
Note Trust Deed.
Class A Charge Off means, in relation to a Class A Note, the amount of any
reduction in the Class A Stated Amount for that Note under clause 6.18.
Class B Charge Off means, in relation to a Class B Note, the amount of any
reduction in the Class B Stated Amount for that Note under clause 6.18.
Class A Conditions means the Conditions for the Class A Notes in the form
set out in schedule 2 to the Note Trust Deed (but, so long as the Class A
Notes are represented by Class A Book-Entry Notes, with the deletion of
any provisions which are applicable only to the Definitive Class A Notes),
as the same may from time to time be modified in accordance with this
Series Notice. Any reference in this Series Notice to a particular
numbered Class A Condition shall be construed accordingly.
Class B Conditions means the Conditions for the Class B Notes in the form
set out in schedule 3 to the Note Trust Deed (but, so long as the Class B
Notes are represented by Class B Book-Entry Notes, with the deletion of
any provisions which are applicable only to the Definitive Class B Notes),
as the same may from time to time be modified in accordance with this
Series Notice. Any reference in this Series Notice to a particular
numbered Class B Condition shall be construed accordingly.
Class A Coupon means all interest accrued on the Class A Notes in respect
of a Coupon Period in accordance with clause 4.8.
Class B Coupon means all interest accrued on the Class B Notes in respect
of a Coupon Period in accordance with clause 4.8.
Class A Forex Percentage means, on any date the A$ Equivalent of the Class
A Stated Amounts at that date divided by the sum of the A$ Equivalent of
the Class A Stated Amounts and the RFS Class A Stated Amounts, as at that
date, expressed as a percentage.
Class A Initial Invested Amount means, in relation to any Class A Note,
the Initial Invested Amount of that Class A Note.
Class B Initial Invested Amount means, in relation to any Class B Note,
the Initial Invested Amount of that Class B Note.
Class A Note means a Note issued as a Class A Note by the Trustee with the
characteristics of a Class A Note under this Series Notice and includes
any Class A Book-Entry Note (or any part or interest in it) and any
Definitive Class A Note, but does not include any RFS Class A Note.
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Class A Noteholder means a Noteholder who holds a Class A Note.
Class B Note means a Note issued as a Class B Note by the Trustee with the
characteristics of a Class B Note under this Series Notice and includes
any Class B Book-Entry Note (or any part or interest in it) and any
Definitive Class B Note.
Class B Noteholder means a Noteholder who holds a Class B Note.
Class A Percentage means, on a Determination Date, the sum of the
aggregate of:
(a) the A$ Equivalent of the Class A Stated Amounts;
(b) the RFS Class A Stated Amounts; and
(c) the Redraw Limit,
in each case for the preceding Determination Date as a percentage of the
sum of the A$ Equivalent of the Total Stated Amount, the RFS Class A
Stated Amounts and the Redraw Limit calculated as at the preceding
Determination Date.
Class B Percentage means, on a Determination Date, the aggregate of the A$
Equivalent of the Class B Stated Amounts for the preceding Determination
Date as a percentage of the sum of the A$ Equivalent of the Total Stated
Amount, RFS Class A Stated Amounts and the Redraw Limit calculated as at
the preceding Determination Date.
Class A Principal Payment means each payment to the Class A Noteholders
under clause 6.20(b)(v).
Class B Principal Payment means each payment to the Class B Noteholders
under clause 6.20(b)(vi).
Class A Stated Amount means, on a Determination Date and in relation to a
Class A Note, an amount equal to:
(a) the Class A Initial Invested Amount for that Note; less
(b) the aggregate of all Class A Principal Payments made before that
Determination Date with respect to that Class A Note; less
(c) Carryover Class A Charge Offs (if any) made in relation to that
Class A Note to the extent not reinstated under clause 6.11 before
that Determination Date; less
(d) Class A Principal Payments (if any) to be made in relation to that
Class A Note on the next Payment Date; less
(e) Class A Charge Offs (if any) to be made in relation to that Class A
Note on the next Payment Date; plus
(f) the amount (if any) of the Excess Available Income applied in
reinstating the Stated Amount of that Class A Note under clause
6.11(a)(ii) on that Determination Date.
Class B Stated Amount means, on a Determination Date and in relation to a
Class B Note, an amount
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equal to:
(a) the Class B Initial Invested Amount for that Note; less
(b) the aggregate of all Class B Principal Payments made before that
Determination Date with respect to that Class B Note; less
(c) Carryover Class B Charge Offs (if any) made in relation to that
Class B Note to the extent not reinstated under clause 6.11 before
that Determination Date; less
(d) Class B Principal Payments (if any) to be made in relation to that
Class B Note on the next Payment Date; less
(e) Class B Charge Offs (if any) to be made in relation to that Class B
Note on the next Payment Date; plus
(f) the amount (if any) of the Excess Available Income applied in
reinstating the Stated Amount of that Class B Note under clause
6.11(a)(iii) on that Determination Date.
Clearing Agency means an organisation registered as a clearing agency
pursuant to Section 17A of the Exchange Act appointed by the Trust Manager
and the Trustee to hold Offshore Notes (directly or through a Common
Depositary), and initially means DTC.
Closing Date means, in relation to the Trust, 9 June 1998.
Collection Account means, in relation to the Trust, the Australian dollar
account, number [ ], with Westpac Banking Corporation at [ ] [Queensland],
or any other account opened and maintained by the Trustee [in Queensland]
with an Approved Bank under clause 27 of the Master Trust Deed.
Collection Period means, in relation to a Payment Date, the period from
(and including) the tenth day of the Quarter preceding the Quarter in
which the Payment Date occurs to (and including) the ninth day of the
Quarter in which the Payment Date occurs. The first Collection Period is
the period from (but excluding) the Cut-Off Date to (and including) 9
December 1997. The last Collection Period is the period from (but
excluding) the last day of the previous Collection Period to (and
including) the Termination Date of the Trust.
Collections means, in relation to the Trust for a period, Finance Charge
Collections and Gross Principal Collections for that period.
Common Depositary means Cede & Co. as depositary for DTC, or any other
common depositary for DTC or any other Clearing Agency appointed from time
to time to hold any Book-Entry Note.
Conditions means, in respect of a Class A Note, the Class A Conditions
and, in respect of a Class B Note, the Class B Conditions, and any
reference in this Series Notice to a particular numbered Condition shall
be construed accordingly.
Confirmation means, in respect of a Currency Swap, any Confirmation (as
defined in the Currency Swap).
Coupon means a Class A Coupon, Class B Coupon, an RFS Class A Coupon or
RFS Coupon.
Coupon Payment Date means, for the purposes of the Master Trust Deed, each
Payment Date.
Coupon Period means:
(a) in relation to the first Coupon Period of an RFS, the period
commencing on (and including) the issue date of that RFS and ending
on (but excluding) the next Payment Date;
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(b) in relation to the final Coupon Period of an RFS, the period
commencing on (and including) the Payment Date immediately preceding
the date of conversion of that RFS under clause 5.4 and ending on
(but excluding) that date of conversion;
(c) in relation to the first Coupon Period of any Offshore Note, the
period commencing on (and including) the Closing Date and ending on
(but excluding) the first Payment Date;
(d) in relation to the first Coupon Period of any RFS Class A Note, the
period commencing on (and including) the date on which that RFS
Class A Note converts from an RFS under clause 5.4 and ending on
(but excluding) the first Payment Date following that date;
(e) in relation to the final Coupon Period, the period commencing on
(and including) the Payment Date prior to the Maturity Date and
ending on (but excluding) the Maturity Date; and
(f) in relation to each other Coupon Period, each period commencing on
(and including) a Payment Date and ending on (but excluding) the
next Payment Date.
Coupon Rate means, in relation to:
(a) a Note (other than a Registered Note) and a Coupon Period, LIBOR in
relation to that Coupon Period; and
(b) in relation to a Registered Note and a Coupon Period, the Bank Bill
Rate on the first day of that Coupon Period,
plus, in all cases, the relevant Margin for the relevant Note.
Currency Swap means, in relation to each master agreement dated [ ] 1998
between the Trustee as trustee of the Trust, the Trust Manager and each
Currency Swap Provider, on the terms of the ISDA Master Agreement (with
amendments thereto), each Transaction (as defined in that agreement)
entered into in accordance with that agreement under which the relevant
Currency Swap Provider agrees to pay certain amounts in US$ to the Trustee
in exchange for certain amounts in A$ or any other Hedge Agreement on
similar terms which, if entered into, will not result in the downgrading
of, or withdrawal of rating for, any Notes.
Currency Swap Provider means:
(a) initially, Morgan Guaranty Trust Company of New York, [London
Office] or Westpac; and
(b) thereafter, any other person who is a party to a Currency Swap.
Cut-Off Date means the date specified in the Sale Notice as the Cut-Off
Date.
Day Count Fraction means, for the purpose of the Currency Swap, the basis
for the calculation of interest on Offshore Notes set out in Clause
4.8(a)(iii).
Dealer Agreement means the Underwriting Agreement or an RFS Dealer
Agreement.
Definitive Class A Note means a note in definitive form (whether bearer or
registered) issued or to be issued in respect of Class A Notes under, and
in the circumstances specified in, clause 3.3 of the Note Trust Deed, and
includes any replacement for a Definitive Class A Note issued under Class
A Condition
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11.
Definitive Class B Note means a note in definitive form (whether bearer or
registered) issued or to be issued in respect of Class B Notes under, and
in the circumstances specified in, clause 3.3 of the Note Trust Deed, and
includes any replacement for a Definitive Class B Note issued under Class
B Condition 11.
Definitive Note means a Definitive Class A Note or a Definitive Class B
Note.
Designated Maturity means, for the purpose of the Currency Swap, three
months.
Designated Rating Agency means:
(a) in the case of Class A Notes, S&P, Moody's and Fitch;
(b) in the case of Class B Notes, S&P and Fitch; and
(c) in the case of RFSs, S&P or as otherwise determined by the Trust
Manager and advised to the Trustee.
Determination Date means, in relation to the Trust for a Collection
Period, the date which is four Business Days prior to the Payment Date
following the end of that Collection Period.
DTC means the Depository Trust Company.
Eligibility Criteria means the criteria set out in the schedule to this
Series Notice.
Enforcement Expenses means the costs and expenses incurred by Westpac or
the Servicer in connection with the enforcement of any Purchased
Receivables or the related Receivable Rights referred to in clause 7.2(a)
of the Servicing Agreement.
Euroclear means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System.
Excess Available Income means, for a Collection Period, the amount (if
any) by which the Total Available Funds for the Collection Period exceeds
the Total Payments for the Collection Period.
Excess Collections Distribution means, in relation to a Collection Period,
the amount (if any) by which the Excess Available Income for that
Collection Period exceeds the amounts applied under clause 6.11 on the
Determination Date relating to that Collection Period.
Finance Charge Collections means, for a Collection Period, the aggregate
of:
(a) the aggregate of all amounts received by or on behalf of the Trustee
during that Collection Period in respect of interest, fees and other
amounts in the nature of income payable under or in respect of the
Purchased Receivables and the related Receivable Rights, to the
extent not included within any other paragraph of this definition,
including:
(i) any Liquidation Proceeds received on account of interest;
(ii) any payments by Westpac to the Trustee on the repurchase of a
Purchased Receivable under the Master Trust Deed during that
Collection Period which are attributable to interest;
(iii) any amounts in the nature of interest adjustments received by
the Trust from the Trustee as trustee of a Warehouse Trust in
relation to the transfer of Purchased Receivables and
Purchased Receivable Securities from the Trust to that
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Warehouse Trust; and
(iv) the Prepayment Cost Surplus for that Collection Period (if
any);
(b) all amounts in respect of interest, fees and other amounts in the
nature of income, received by or on behalf of the Trustee during
that Collection Period including:
(i) from an Approved Seller, in respect of any breach of a
representation, warranty or undertaking contained in the
Master Trust Deed or this Series Notice;
(ii) from an Approved Seller under any obligation under the Master
Trust Deed or this Series Notice to indemnify or reimburse or
pay damages to the Trustee for any amount;
(iii) from the Servicer in respect of any breach of a
representation, warranty or undertaking contained in the
Servicing Agreement or the Series Notice; and
(iv) from the Servicer under any obligation under the Servicing
Agreement or the Series Notice to indemnify or reimburse or
pay damages to the Trustee for any amount,
in each case which are determined by the Trust Manager to be in
respect of interest, fees and other amounts in the nature of income
payable under the Purchased Receivables and the related Receivable
Rights; and
(c) Recoveries received by or on behalf of the Trustee during that
Collection Period;
less:
(d) the Government Charges collected by or on behalf of the Trustee for
that Collection Period;
(e) the aggregate of all fees and charges due to the Servicer or Westpac
under the Receivables as agreed by them from time to time and
collected by Westpac or the Servicer during that Collection Period;
and
(f) the Prepayment Cost Surplus (if any) due to Westpac under clause
6.21(b) for that Collection Period and collected by Westpac or the
Servicer during that Collection Period.
Finance Charge Loss means, for a Collection Period, the amount of all
Liquidation Losses referred to in clause 6.6(a).
Fitch means Fitch IBCA (Australia) Pty Limited (ACN 081 339 184).
Government Charges means, for any Collection Period, the aggregate of all
amounts collected by the Servicer or Westpac in respect of the Purchased
Receivables and the related Receivable Rights representing financial
institutions duty, bank accounts debit tax or similar Taxes.
Gross Principal Collections means, for a Collection Period, the aggregate
of:
(a) all amounts received by or on behalf of the Trustee from or on
behalf of Obligors under the Purchased Receivables during the
Collection Period in respect of principal, in accordance with
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the terms of the Purchased Receivables, including principal prepayments;
(b) all other amounts received by or on behalf of the Trustee under or
in respect of principal under the Purchased Receivables and the
related Receivable Rights during that Collection Period including:
(i) any Liquidation Proceeds received on account of principal;
(ii) any payments by Westpac to the Trustee on the repurchase of a
Purchased Receivable under the Master Trust Deed during that
Collection Period which are attributable to principal;
(iii) any payments by the Trustee (as trustee of a Warehouse Trust)
on the purchase by that Warehouse Trust of any Assets of the
Trust which are attributable to principal;
(iv) any Prepayment Costs applied towards Prepayment Benefits under
clause 6.21(a); and
(v) any Prepayment Benefit Shortfall paid by Westpac to the Trust
under clause 6.21(c);
(c) all amounts received by or on behalf of the Trustee during that
Collection Period from any provider of a Support Facility (other
than the Currency Swap) under that Support Facility and which the
Trust Manager determines should be accounted for to reduce a
Principal Loss;
(d) all amounts received by or on behalf of the Trustee during that
Collection Period:
(i) from an Approved Seller, in respect of any breach of a
representation, warranty or undertaking contained in the
Master Trust Deed or this Series Notice;
(ii) from an Approved Seller under any obligation under the Master
Trust Deed or this Series Notice to indemnify or reimburse or
pay damages to the Trustee for any amount;
(iii) from the Servicer, in respect of any breach of any
representation, warranty or undertaking contained in the
Servicing Agreement; and
(iv) from the Servicer under any obligation under the Servicing
Agreement to indemnify or reimburse or pay damages to the
Trustee for any amount,
in each case, which are determined by the Trust Manager to be in
respect of principal payable under the Purchased Receivables and the
related Receivable Rights;
(e) any amounts in the nature of principal received by or on behalf of
the Trustee during that Collection Period pursuant to the sale of
any Asset (including any amount received by the Trustee on the issue
of Notes, or the A$ Equivalent of that amount if the relevant Notes
are denominated in US$, which was not used to purchase a Purchased
Receivable or Purchased Receivable Security and which the Trust
Manager determines is surplus to the requirements of the Trust);
(f) for the purposes of clause 6.11 only, any amount of Excess Available
Income to be applied to pay a Principal Charge Off or a Carryover
Charge Off;
(g) any amount received by or on behalf of the Trustee during that
Collection Period as proceeds from the issue of any RFS to the
extent not applied to reimburse amounts drawn under the Redraw
Facility;
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(h) any Excess Available Income to be applied under clause 6.11(a)(iv)
to Principal Draws made on a previous Payment Date;
(i) any Prepayment Calculation Adjustment for that Collection Period;
and
(j) any Substitution Net Transfer Amount (Principal) received by the
Trust from a Warehouse Trust with respect to that Collection Period,
but excludes any amount payable by the Trustee under clause 6.26.
Hedge Agreement in relation to the Trust includes the Basis Swap, any
Interest Rate Swap or (notwithstanding the definition of Hedge Agreement
in the Master Trust Deed) the Currency Swap.
Housing Loan Principal means, in relation to a Purchased Receivable, the
principal amount of that Purchased Receivable from time to time.
Income Percentage means, in relation to the holder of a Residual Income
Unit (as defined in clause 12) at any time, the subscription price paid by
that person for that Residual Income Unit divided by the total
subscription prices of all Residual Income Units recorded in the Register
maintained under clause 12 at that time, expressed as a percentage.
Information Memorandum means the Prospectus dated on or after [ ] 1998
relating to the Trust and the Notes.
Initial Invested Amount means, in respect of a Note, the amount stated as
the Initial Invested Amount for that Note in clause 4.2(e).
Initial Principal Distribution means any distribution of Principal
Collections in accordance with clause 6.13.
Initial Subordinated Percentage means 2.2%.
Interest Rate Swap means, in relation to the master agreement dated on or
about the date of this Series Notice made between the Trustee as trustee
of the Trust, the Trust Manager and Westpac Banking Corporation, on the
terms of the ISDA Master Agreement (with amendments thereto), each
Transaction (as defined in that agreement) entered into in accordance with
that agreement in relation to the interest rate risk arising from a
Receivable which is a Fixed Option Home Loan or which is otherwise subject
to a fixed rate of interest (other than a Receivable subject to a
concessional introductory fixed rate of interest for 12 months or less).
Invested Amount means, on any day in relation to a Note, the Initial
Invested Amount of that Note minus the aggregate of Principal Payments
made or to be made in respect of the Note on or before that date.
ISDA Definitions means the 1991 Definitions published by the International
Swaps and Derivatives Association, Inc.
Launch Date means [*] 1998.
LIBOR means, in relation to any Coupon Period, the rate of interest
determined by the Agent Bank on the basis of the following paragraphs.
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On the second Business Day before the beginning of each Coupon Period
(each a Coupon Determination Date), the Agent Bank will determine the rate
"USD-LIBOR-BBA" as the applicable Floating Rate Option under the ISDA
Definitions being the rate applicable to any Coupon Period for three-month
deposits in US dollars which appears on the Telerate Page 3750 as of 11.00
a.m., London time, on the Coupon Determination Date. If such rate does not
appear on the Telerate Page 3750, the rate for that Coupon Period will be
determined as if "USD-LIBOR-Reference Banks" were the applicable Floating
Rate Option under the ISDA Definitions. Provided that on the first day of
the first Coupon Period USD-LIBOR-BBA shall be an interpolated rate
calculated with reference to the period from (and including) the Closing
Date to (but excluding) the first Payment Date.
In this definition of LIBOR, Business Day means any day on which
commercial banks are open for business (including dealings in foreign
exchange and foreign currency deposits) in London.
Lead Manager means:
(a) in relation to the Underwriting Agreement, any Manager; and
(b) in relation to an RFS Dealer Agreement, any person identified as a
"Lead Manager" in that RFS Dealer Agreement for the purposes of this
Series Notice.
Liquidity Facility Agreement means, in relation to the Trust, the
agreement so entitled dated on or about the date of this Series Notice
between the Trustee, the Trust Manager and the Liquidity Facility
Provider.
Liquidity Facility Provider means, in relation to the Trust, Westpac
Banking Corporation.
Liquidation Loss means, for a Collection Period in relation to a Purchased
Receivable which is being enforced, the amount (if any) by which the
Unpaid Balance of the Purchased Receivable (together with the Enforcement
Expenses relating to the Purchased Receivable and the related Receivable
Rights) exceeds the Liquidation Proceeds in relation to the Purchased
Receivable.
Liquidation Proceeds means, in relation to a Purchased Receivable and the
related Receivable Rights which have been or are being enforced, all
amounts recovered, or determined by the Servicer as likely to be
recovered, in respect of the enforcement of the Purchased Receivable and
the related Receivable Rights (but does not include the proceeds of any
Mortgage Insurance Policy).
Liquidity Draw means a drawing under the Liquidity Facility.
Liquidity Limit means the commitment of the Liquidity Facility Provider
under the Liquidity Facility, as varied from time to time.
Liquidity Outstandings means, at any time, the total principal amount of
all outstanding Liquidity Draws at that time.
Liquidity Shortfall means, in relation to a Collection Period, the amount
(if any) by which the Total Payments for the Collection Period exceed the
aggregate of the Available Income and any Principal Draws for the
Collection Period.
Manager means:
(a) in relation to the Underwriting Agreement, any person identified as
a "Manager" in the Underwriting Agreement for the purposes of this
Series Notice; and
(b) in relation to an RFS Dealer Agreement, any person identified as a
"Manager" in that RFS Dealer Agreement for the purposes of this
Series Notice.
Margin means, in relation to any Note, the Margin for that Note specified
in clause 4.2(d).
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Maturity Date means, in relation to a Note, the Maturity Date for that
Note specified in clause 4.2(i).
Mortgage includes any Mortgage originated by Westpac which is transferred
to the Trustee by the Warehouse Trustee (as Approved Seller) from the
Warehouse Trust.
Mortgage Insurer means Housing Loan Insurance Corporation, Sun Alliance
and Royal Insurance Limited, MGICA Ltd or Westpac Lenders Mortgage
Insurance Limited.
Mortgage Shortfall means, in relation to a Purchased Receivable, the
amount (if a positive number) equal to the Principal Loss for that
Purchased Receivable minus the aggregate of:
(a) the total amount recovered and recoverable in respect of that
Purchased Receivable under the Mortgage Insurance Policies,
determined to be attributable to principal under clause 6.7(b); and
(b) the total amount recovered and recoverable by the Trustee from the
Approved Sellers or the Servicer (as the case may be) in respect of
that Purchased Receivable (by way of damages or otherwise) under or
in respect of the Master Trust Deed, this Series Notice or the
Servicing Agreement (as the case may be), determined by the Trust
Manager to be attributable to principal.
For the purposes of:
(c) this definition, an amount shall be regarded as not recoverable upon
the earlier of:
(i) a determination being made, in the case of paragraph (a), by
the Trust Manager, and in the case of paragraph (b), by the
Trustee, in each case upon the advice of such suitably
qualified expert advisers as the Trust Manager or the Trustee
(as the case may be) thinks fit, that there is no such amount,
or that such amount is not likely to be recovered (including
because the relevant Mortgage Insurance Policy has been
terminated, the Mortgage Insurer is entitled to reduce the
amount of the claim or the Mortgage Insurer defaults in
payment of a claim); and
(ii) the date which is two years after the Determination Date upon
which the relevant Principal Loss was determined under clause
6.6(b); and
(d) this Series Notice, a Mortgage Shortfall arises on the date upon
which there are no further amounts referred to in (a) and (b)
recoverable in respect of the relevant Purchased Receivable.
Note means a Class A Note, a Class B Note, an RFS Class A Note or an RFS
referred to in clauses 4 and 5, and includes:
(a) the Conditions relating to an Offshore Note; and
(b) any interest in a Book-Entry Note as an account holder with a
Clearing Agency.
Note Acknowledgement means an acknowledgment of the registration of a
person as the holder of a Registered Note in the form set out in schedule
2 to the Master Trust Deed or in such other form as may from time to time
be agreed between the Trustee and the Trust Manager.
Note Transfer means a transfer and acceptance of Registered Notes
materially in the form of schedule
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4 to the Master Trust Deed or in such other form as may from time to time
be agreed between the Trustee and the Trust Manager.
Noteholder means, at any time, the person who:
(a) in relation to a Registered Note, is registered as the holder of
that Note at that time;
(b) in relation to a Definitive Note, is the registered holder of that
Note (in the case of registered Definitive Notes) or bearer of that
Note (in the case of bearer Definitive Notes) at that time; or
(c) in relation to a Note which is represented by a Book-Entry Note, is
the registered holder of that Note at that time.
except that for the purposes of payments in respect of Book-Entry Notes,
the right to those payments shall be vested, as against the Trustee and
the Note Trustee in respect of the Trust, by payment to the Clearing
Agency in accordance with and subject to their respective Conditions and
the provisions of this Series Notice and the Note Trust Deed. The words
holder and holders shall (where appropriate) be construed accordingly.
Note Party means the Agent Bank, the Paying Agent or the Note Registrar.
Note Registrar means the Principal Paying Agent or any successor note
registrar approved in writing by the Note Trustee and appointed under the
Note Trust Deed.
Note Register means the register kept by the Note Registrar to provide for
the registration and transfer of Offshore Notes under the Note Trust Deed.
Note Trust Deed means the deed so entitled dated [ ] 1998 between the
Trustee, the Trust Manager and the Note Trustee.
Note Trustee means Morgan Guaranty Trust Company of New York.
Notice Date means, in relation to a Collection Period, the date which is
the Business Day prior to the Payment Date following the end of that
Collection Period.
Notice of Creation of Trust means the Notice of Creation of Trust dated
[ ] 1998 issued under the Master Trust Deed in relation to the Trust.
Offshore Note means a Class A Note or a Class B Note.
Offshore Noteholder means a Noteholder who holds an Offshore Note.
Offshore Note Payment Date means a Payment Date for an Offshore Note.
Other Trust means any Trust (as defined in the Master Trust Deed) other
than the Trust.
Paying Agent means any person appointed as a Paying Agent under the Agency
Agreement, including the Principal Paying Agent.
Payment Date, in relation to a Note, has the meaning given in relation to
that Note in clause 4.2(h).
Payment Shortfall means, in relation to a Collection Period, the amount
(if any) by which the Total Payments for that Collection Period exceed the
Available Income for that Collection Period.
Prepayment Benefit means, on the early discharge of a Purchased Receivable
which is a Housing Loan bearing a fixed rate of interest (other than a
Receivable subject to a concessionary rate of interest for 12
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months or less), the amount (if any) credited to the relevant Obligor's
loan account by Westpac by means of a reduction in the Housing Loan
Principal of that Purchased Receivable, in accordance with the relevant
Receivable Agreement.
Prepayment Benefit Shortfall means, in relation to a Collection Period,
the amount by which the total of all Prepayment Benefits for that
Collection Period exceeds the total of all Prepayment Costs for that
Collection Period.
Prepayment Calculation Adjustment means, in relation to a Purchased
Receivable, any amount credited to the Obligor by Westpac under that
Purchased Receivable to reflect an interest adjustment resulting from a
change in computer systems.
Prepayment Cost means, on the early discharge of a Purchased Receivable
which is a Housing Loan bearing a fixed rate of interest (other than a
Receivable subject to a concessionary rate of interest for 12 months or
less), the amount (if any) owed by the relevant Obligor and collected by
Westpac, in accordance with the relevant Receivable Agreement.
Prepayment Cost Surplus means, in relation to a Collection Period, the
amount by which the total of all Prepayment Costs for that Collection
Period exceeds the total of all Prepayment Benefits for that Collection
Period.
Pricing Date means [*] 1998.
Principal Charge Off means, in relation to any Collection Period, the
aggregate of all Mortgage Shortfalls for that Collection Period.
Principal Collections means, for a Collection Period:
(a) the Gross Principal Collections for that Collection Period; less
(b) any amounts deducted by or paid to Westpac under clause 6.3(a) to
reimburse Redraws funded by Westpac during that Collection Period
for which Westpac has not previously been reimbursed.
Principal Draw means, for a Collection Period, the amount calculated under
clause 6.4 in relation to that Collection Period.
Principal Entitlement means, in relation to a Note for the purposes of the
Master Trust Deed on any date, the Stated Amount of that Note at that
date.
Principal Loss means, for a Collection Period in relation to a Purchased
Receivable, the amount of any Liquidation Loss for that Purchased
Receivable for that Collection Period referred to in clause 6.6(b).
Principal Outstanding has the meaning given in the Redraw Facility
Agreement.
Principal Paying Agent means Morgan Guaranty Trust Company of New York,
London office, or any successor as Principal Paying Agent under the Agency
Agreement.
Principal Payment means a Class A Principal Payment, a Class B Principal
Payment, an RFS Class A Principal Payment or an RFS Principal Payment.
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Principal Repayment Date means, in relation to a Note for the purposes of
the Master Trust Deed, the Maturity Date for that Note and each date on
which the Invested Amount or Stated Amount is reduced under this Series
Notice.
Property Restoration Expenses means costs and expenses incurred by or on
behalf of the Trustee, or by the Servicer under the Servicing Agreement,
in repairing, maintaining or restoring to an appropriate state of repair
and condition any Mortgaged Property, in exercise of a power conferred on
the mortgagee under the Purchased Receivable and Relevant Documents
relating thereto.
Purchased Receivable means each Loan specified in the Sale Notice
(including any Redraw in respect of that Loan), unless the Trustee has
ceased to have an interest in that Loan.
Purchased Receivable Security means each Mortgage specified in the Sale
Notice, unless the Trustee has ceased to have an interest in that
Mortgage.
Quarter means each three month period in a year which period begins on 1
July, 1 October, 1 January or 1 April.
Quarterly Percentage means, for a Collection Period, the aggregate Housing
Loan Principal of all Purchased Receivables which are in Arrears for more
than 60 consecutive days as at close of business on the last day of that
Collection Period, expressed as a percentage of the aggregate Housing Loan
Principal of all Purchased Receivables as at close of business on the last
day of that Collection Period.
Receivable means, in relation to the Trust, the rights of the relevant
Approved Seller or the Trustee (as the case may require) under or in
respect of Loans constituted upon acceptance of Westpac's standard Loan
Offer for:
(a) a Premium Option Home Loan;
(b) a Fixed Option Home Loan;
(c) a Special Offer Fixed Option Home Loan;
(d) a First Option Home Loan earning a variable rate of interest;
(e) a Basic Option Home Loan earning a variable rate of interest;
(f) a Investment Property Fixed Housing Loan;
(g) an Investment Property Variable Housing Loan earning a variable rate
of interest;
(h) an Investment Property Special Fixed Rate Housing Loan earning a
concessional introductory rate fixed for up to one year; or
(i) an Investment Property First Option Home Loan earning a variable
rate of interest.
(or any variation of those products after the Sale Notice is or was given)
as varied by Westpac's standard letter of variation, or any other
Receivables (as defined in the Master Trust Deed) originated by Westpac
which is acceptable to the Trustee (in all cases in the form certified by
Westpac before the Sale Notice is or was given, and as certified
thereafter from time to time).
Record Date means:
(i) with respect to a Payment Date for any Registered Note, 4.00pm
(Sydney time) on the second Business Day before that Payment Date;
(ii) with respect to the Payment Date for any Book-Entry Note, [close of
business] on the second
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Business Day before that Payment Date; and
(iii) with respect to the Payment Date for any Definitive Note, the last
day of the calendar month before that Payment Date.
Recovery means any amount received by Westpac or the Servicer under or in
respect of a Purchased Receivable and the related Receivable Rights at any
time after a Finance Charge Loss or Principal Loss has arisen in respect
of that Purchased Receivable (other than any amount received under a
Mortgage Insurance Policy), provided that amount is not otherwise payable
to an insurer under a Mortgage Insurance Policy.
Redraw means, in relation to any Collection Period, an amount provided to
an Obligor by Westpac under a Purchased Receivable in respect of any
principal prepayments previously made to the Obligor's loan account in
accordance with the terms of the Obligor's Purchased Receivable.
Redraw Charge Off means the amount of any reduction in the Principal
Outstanding under the Redraw Facility Agreement under clause 6.18(b)(iv)
of this Series Notice.
Redraw Facility Agreement means, in relation to the Trust, the agreement
so entitled dated on or about the date of this Series Notice between the
Trustee, the Trust Manager and the Redraw Facility Provider.
Redraw Facility Provider means, in relation to the Trust, Westpac Banking
Corporation.
Redraw Limit means the Redraw Limit as defined in the Redraw Facility
Agreement.
Redraw Shortfall means, on each Determination Date, the aggregate of
Redraws made prior to that Determination Date which remain outstanding
after applying Gross Principal Collections towards reimbursement of those
Redraws under clause 6.3.
Reference Bank means any financial institution authorised to quote on the
Reuters Screen BBSW Page.
Registered Note means an RFS or an RFS Class A Note.
Registered Note Payment Date means a Payment Date for a Registered Note.
Registered Noteholder means a person who is a Noteholder in relation to a
Registered Note.
Remaining Liquidity Shortfall means, in relation to a Collection Period,
the amount (if any) by which the Liquidity Shortfall (if any) for that
Collection Period exceeds the Available Liquidity Amount for that
Collection Period.
Remittance Date means, in relation to a Collection Period, the date which
is two Business Days prior to the Payment Date following the end of that
Collection Period.
RFS means a debt security issued by the Trustee as trustee of the Trust
under clause 5.
RFS Bond Factor means, on a Determination Date, for each RFS Series, the
RFS Invested Amount less any RFS Principal Payments to be made on the next
Payment Date divided by the aggregate RFS Initial Invested Amount for all
RFSs, expressed to seven decimal places.
RFS Charge Off means the amount of any reduction in the RFS Stated Amount
under clause 6.18(b)(iii).
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RFS Class A Bond Factor means, on a Determination Date, for all
outstanding RFS Class A Notes, the RFS Class A Invested Amount less any
RFS Class A Principal Payments to be made on the next Payment Date divided
by the aggregate RFS Class A Initial Invested Amount for all RFS Class A
Notes, expressed to seven decimal places.
RFS Class A Charge Off means the amount of any reduction in the RFS Class
A Stated Amount under clause 6.18(b)(ii).
RFS Class A Coupon means all interest on the RFS Class A Notes in respect
of a Coupon Period in accordance with clause 4.8.
RFS Class A Forex Percentage means, on any date, 100% minus the Class A
Forex Percentage as at that date, expressed as a percentage.
RFS Class A Initial Invested Amount means, in relation to any RFS Class A
Note, the Initial Invested Amount of that RFS Class A Note.
RFS Class A Invested Amount means, in relation to any RFS Class A Note at
any time, the Invested Amount of that RFS Class A Note at that time.
RFS Class A Note means any RFS which is converted to a Class A Note under
clause 5.4.
RFS Class A Principal Payment means each payment to the holder of an RFS
Class A Note under clause 6.15(B)(2) or 6.16(B)(2).
RFS Class A Stated Amount means, on a Determination Date and in relation
to an RFS Class A Note, an amount equal to:
(a) the RFS Class A Initial Invested Amount for that RFS Class A Note;
less
(b) the aggregate of all RFS Class A Principal Payments made before that
Determination Date with respect to that RFS Class A Note; less
(c) Carryover RFS Class A Charge Offs (if any) made in relation to that
RFS Class A Notes to the extent not reinstated under clause 6.11
before that Determination Date; less
(d) RFS Class A Principal Payments (if any) to be made in relation to
that RFS Class A Note on the next Payment Date; less
(e) RFS Class A Charge Offs (if any) to be made in relation to that RFS
Class A Note on the next Payment Date; plus
(f) the amount (if any) of the Excess Available Income applied in
reinstating the Stated Amount of that RFS Class A Note under clause
6.11(a)(ii) on that Determination Date.
RFS Coupon means all interest accrued on the RFSs in respect of a Coupon
Period in accordance with clause 4.8.
RFS Dealer Agreement means, in relation to any RFSs, any dealer agreement
which may be entered into by the Trustee, the Trust Manager and any other
person from time to time in relation to subscription for those RFSs.
RFS Initial Invested Amount means, in relation to any RFS, the Initial
Invested Amount of that RFS.
RFS Invested Amount means, at any time, the Invested Amount of that RFS at
that time.
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RFS Principal Payment means each payment to the holders of an RFS under
clause 6.13(a)(iv).
RFS Series means a tranche of RFSs with the same issue date, maturity date
and series number.
RFS Stated Amount means, on a Determination Date and in relation to an
RFS, an amount equal to:
(a) the RFS Initial Invested Amount for that RFS; less
(b) the aggregate of all RFS Principal Payments made before that
Determination Date with respect to that RFS; less
(c) Carryover RFS Charge Offs (if any) made in relation to that RFS to
the extent not reinstated under clause 6.11 before that
Determination Date; less
(d) RFS Principal Payments (if any) to be made in relation to that RFS
on the next Payment Date; less
(e) RFS Charge Offs (if any) to be made in relation to that RFS on the
next Payment Date; plus
(f) the amount (if any) of the Excess Available Income applied in
reinstating the Stated Amount of that RFS under clause 6.11(a)(ii)
on that Determination Date.
Sale Notice means any Sale Notice (as defined in the Master Trust Deed)
which may be given by Westpac or the Warehouse Trustee to the Trustee as
trustee of the Trust after the date of execution of this Series Notice and
which is subsequently accepted by the Trustee.
Security Trust Deed means the security trust deed dated [*] 1998 between
the Trustee, the Trust Manager, the Note Trustee and the Security Trustee.
Security Trustee means Perpetual Trustee Company Limited (ACN 000 001
007).
Servicer's Report means each report to be prepared by the Servicer under
clause 6.5 of the Servicing Agreement.
Servicing Agreement means the agreement so entitled dated 18 February 1997
as amended by the Servicing Agreement Series 1998-1G Amendment Agreement
dated on or about the date of this Series Notice between the Trustee, the
Trust Manager and the Servicer.
Servicing Fee means the fee payable under clause 7.1(c) of this Series
Notice and clause 7.1 of the Servicing Agreement.
Spread, in relation to any amount to be paid under a Currency Swap, has
the meaning given in that Currency Swap in respect of payments by the
Trustee under that Currency Swap.
Stated Amount means a Class A Stated Amount, a Class B Stated Amount, an
RFS Class A Stated Amount or an RFS Stated Amount.
Stock Exchange means the London Stock Exchange Limited.
Subordinated Percentage means, at any time, the A$ Equivalent of the
aggregate of the Class B Stated Amounts divided by the sum of:
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(a) the A$ Equivalent of the Total Stated Amount at that time;
(b) the Redraw Limit at that time;
(c) the aggregate of the RFS Stated Amounts at that time; and
(d) the aggregate of the RFS Class A Stated Amounts at that time.
Substitution means, in relation to any Receivable comprising an Asset of
an Other Trust, the transfer of that Receivable by the Trustee as trustee
of that Other Trust (expressed in the Series Notice for that Other Trust)
to the Trust, in exchange for a Receivable which comprises an Asset of the
Trust as contemplated under clause 10.
Substitution Net Transfer Amount means a Substitution Net Transfer Amount
(Principal) or a Substitution Net Transfer Amount (Income).
Substitution Net Transfer Amount (Income) means, in relation to a
Substitution of a Receivable on any day:
(i) the Unpaid Balance (other than any unpaid principal amount) of the
Receivable acquired by the relevant Warehouse Trust from the Trust
in relation to the Substitution on that day; minus
(ii) the Unpaid Balance (other than any unpaid principal amount) of the
Receivable acquired by the Trust from the relevant Warehouse Trust
in relation to the Substitution on that day,
but only if that amount is positive.
Substitution Net Transfer Amount (Principal) means, in relation to a
Substitution of a Receivable on any day:
(i) the unpaid principal amount of the Receivable acquired by the
relevant Warehouse Trust from the Trust in relation to the
Substitution on that day; minus
(ii) the unpaid principal amount of the Receivable acquired by the Trust
from the relevant Warehouse Trust in relation to the Substitution on
that day,
but only if that amount is positive.
Support Facility Collateral Account means, in relation to a Support
Facility, each Collateral Account as defined in that Support Facility.
Swap Provider means, in relation to a Hedge Agreement, the counterparty
which enters into that arrangement with the Trustee.
Threshold Rate means, at any time, the minimum rate of interest that must
be set on all Purchased Receivables where permitted under the relevant
Receivable Agreement which will be sufficient (assuming that all relevant
parties comply with their obligations at all times under the Transaction
Documents, the Purchased Receivables and the related Receivable Rights),
when aggregated with the income produced by the rate of interest on all
other Purchased Receivables, to ensure that the Trustee will have
available to it sufficient Collections to enable it to comply with its
obligations under the Transaction Documents relating to the Trust as they
fall due (including the repayment of any Principal Draws by the Maturity
Date of all Notes and the payment of all A$ denominated amounts to each
Currency Swap Provider under the relevant Currency Swap necessary to
enable the Trustee to pay all Coupons due on Offshore Notes from time to
time).
Title Perfection Event means, in relation to the Trust, the events set out
in clause 13.
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Total Available Funds means, for a Collection Period, the aggregate of:
(a) the Available Income for that Collection Period;
(b) any Principal Draw which the Trustee is required to allocate under
clause 6.13(a)(ii) on or before the Payment Date for that Collection
Period; and
(c) any Liquidity Draw which the Trustee is required to make under
clause 6.5 on or before the Payment Date for that Collection Period.
Total Carryover Charge Off means, on any date, the sum of:
(a) all Carryover Class A Charge Offs for all Class A Notes (other than
RFS Class A Notes) as at that date;
(b) all Carryover Class B Charge Offs for all Class B Notes as at that
date;
(c) the US$ Equivalent of all Carryover RFS Charge Offs for all RFSs as
at that date; and
(d) the US$ Equivalent of all Carryover RFS Class A Charge Offs for all
RFS Class A Charge Offs as at that date.
Total Initial Invested Amount means, at any time, the sum of:
(a) all Initial Invested Amounts of all Offshore Notes; and
(b) the US$ Equivalent of all Initial Invested Amounts of all Registered
Notes,
at that time.
Total Invested Amount means, at any time, the sum of:
(a) all Invested Amounts of all Bearer Notes; and
(b) the US$ Equivalent of all Invested Amounts of all Registered Notes,
at that time.
Total Payments means, in relation to a Collection Period, all amounts paid
by the Trustee under clause 6.10 in relation to that Collection Period.
Total Stated Amount means, at any time, the sum of the aggregate of the
Class A Stated Amounts and the aggregate of the Class B Stated Amounts at
that time.
Transaction Document means each Transaction Document (as defined in the
Master Trust Deed) which relates to the Trust and includes:
(a) each Dealer Agreement;
(b) the Note Trust Deed; and
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(c) the Agency Agreement.
Trust means the Series 1998-1G WST Trust constituted under the Master
Trust Deed and the Notice of Creation of Trust.
Trust Expenses means, in relation to a Collection Period (and in the
following order of priority):
(a) first, Taxes payable in relation to the Trust for that Collection
Period;
(b) second, the Trustee's Fee for that Collection Period;
(c) third, the Trust Manager's Fee for that Collection Period;
(d) fourth, any fee payable to the Security Trustee under the Security
Trust Deed;
(e) fifth, the Servicing Fee for that Collection Period;
(f) sixth, any fee payable to the Note Trustee under the Note Trust
Deed;
(g) seventh, pari passu any fee payable to a Note Party under the Agency
Agreement;
(h) eighth, pari passu any costs, charges or expenses (other than fees)
incurred by, and any liabilities owing under any indemnity granted
to, the Security Trustee, the Servicer, the Note Trustee, a Note
Party in relation to the Trust under the Transaction Documents, for
that Collection Period; and
(i) ninth, pari passu any other Expenses relating to the Trust,
all of the amounts in paragraphs (a) to (i) (inclusive) being Expenses for
the purposes of the Master Trust Deed.
Trust Manager's Report means a report in the form agreed by the Trustee
and the Trust Manager from time to time.
Underwriting Agreement means the Underwriting Agreement dated [*] 1998
between the Trustee, the Trust Manager, Westpac, J.P. Morgan Securities
Ltd, Morgan Stanley & Co and others in relation to subscription for
Offshore Notes.
US$ Account means, in relation to the Trust, the US$ account, number [ ],
with the Principal Paying Agent, or any other account opened and
maintained outside Australia with the Principal Paying Agent.
US$ Equivalent means, in relation to an amount denominated or to be
denominated in Australian dollars, that amount converted to (and
denominated in) US$ at the US$ Exchange Rate.
US$ Exchange Rate means, on any date, the rate of exchange (set as at the
commencement of a Currency Swap) applicable under that Currency Swap for
the exchange of Australian dollars for United States dollars.
Warehouse Investment Agreement means:
(a) the document so entitled dated 19 February 1997 between the Trustee
as trustee of the Warehouse Trust, the Trust Manager and Westpac
Banking Corporation; or
(b) any other agreement which the Trustee and the Trust Manager agree is
a Warehouse Investment Agreement or Warehouse Facility Agreement for
the purposes of this Series Notice.
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Warehouse Investor has the meaning given to that term in a Warehouse
Investment Agreement.
Warehouse Trust means the WST Warehouse Trust #1.
Warehouse Trustee means Westpac Securities Administration Limited as
trustee of the Warehouse Trust.
3.2. Interpretation
Clause 1.2 of the Master Trust Deed is incorporated into this Series
Notice as if set out in full, except that any reference to deed is
replaced by a reference to Series Notice and any reference to United
States dollars, USD and US$ is to currency of the United States of
America.
3.3. Limitation of liability of the Trustee
(a) General
Clause 33 of the Master Trust Deed applies to the obligations and
liabilities of the Trustee, the Warehouse Trustee and the Trust
Manager under this Series Notice.
(b) Liability of Trustee limited to its right of indemnity
(i) This Series Notice applies to the Trustee only in its capacity
as trustee of the Trust and in no other capacity. A liability
arising under or in connection with this Series Notice or the
Trust can be enforced against the Trustee only to the extent
to which it can be satisfied out of property of the Trust out
of which the Trustee is actually indemnified for the
liability. This limitation of the Trustee's liability applies
despite any other provision of this Series Notice and extends
to all liabilities and obligations of the Trustee in any way
connected with any representation, warranty, conduct,
omission, agreement or transaction related to this Series
Notice or the Trust.
(ii) The parties other than the Trustee may not sue the Trustee in
any capacity other than as trustee of the Trust or seek the
appointment of a receiver (except under the Security Trust
Deed), or a liquidator, an administrator or any similar person
to the Trustee or prove in any liquidation, administration or
arrangements of or affecting the Trustee.
(iii) The provisions of this clause 3.3 shall not apply to any
obligation or liability of the Trustee to the extent that it
is not satisfied because under a Transaction Document or by
operation of law there is a reduction in the extent of the
Trustee's indemnification out of the Assets of the Trust as a
result of the Trustee's fraud, negligence or breach of trust.
(iv) It is acknowledged that the Trust Manager, the Servicer, the
Note Trustee, the Principal Paying Agent, the other Paying
Agents and the Agent Bank (each a Relevant Party) are
responsible under this Series Notice and the other Transaction
Documents for performing a variety of obligations relating to
the Trust. No act or omission of the Trustee (including any
related failure to satisfy its obligations under this Series
Notice) will be considered fraud, negligence or breach of
trust of the Trustee for the purpose of sub-paragraph (iii) to
the extent to which the act or omission was caused or
contributed to by any failure by any Relevant Party or
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any other person who provides services in respect of the Trust
(other than a person who has been delegated or appointed by
the Trustee and for whom the Trustee is responsible under this
Series Notice or the relevant Transaction Documents, but
excluding any Relevant Party) to fulfil its obligations
relating to the Trust or by any other act or omission of a
Relevant Party or any other person who provides services in
respect of the Trust (other than a person who has been
delegated or appointed by the Trustee and for whom the Trustee
is responsible under this Series Notice or the relevant
Transaction Documents, but excluding any Relevant Party).
(v) No attorney, agent, receiver or receiver and manager appointed
in accordance with this Series Notice or any other Transaction
Documents (including a Relevant Party) has authority to act on
behalf of the Trustee in a way which exposes the Trustee to
any personal liability and no act or omission of any such
person will be considered fraud, negligence or breach of trust
of the Trustee for the purpose of sub-paragraph (iii), if the
Trustee has exercised reasonable care in the selection and
supervision of such a person.
(c) Liability of Warehouse Trustee limited to its right of indemnity
Clause 3.3(b) shall apply to the Warehouse Trustee as if restated in
full with all references to the Trustee being replaced with
references to the Warehouse Trustee and all reference to the Trust
being replaced with references to the Warehouse Trust.
3.4 Knowledge of Trustee
In relation to the Trust, the Trustee will be considered to have knowledge
or notice of or be aware of any matter or thing if the Trustee has
knowledge, notice or awareness of that matter or thing by virtue of the
actual notice or awareness of the officers or employees of the Trustee who
have day to day responsibility for the administration of the Trust.
4 NOTES
4.1 Conditions of Notes
(a) The conditions of the Registered Notes will be as set out in the
Master Trust Deed, as supplemented and amended by the provisions set
out in this Series Notice.
(b) The conditions of the Offshore Notes will be as set out in the
Master Trust Deed, the Conditions and the Series Notice.
4.2 Summary of conditions of Notes
Under clause 13.3 of the Master Trust Deed, the Trust Manager provides the
following information in respect of the Notes.
(a) Class of Note: There will be the following Classes of
Notes:
(i) Class A Notes
(ii) Class B Notes
(iii) any RFS Series
(iv) any RFS Class A Notes
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(b) Total Initial Invested Amount
of each Class of Notes: Class A Notes - US$[*]
Class B Notes - US$[*]
RFS Series - the aggregate of the
Initial Invested Amounts of the RFSs
at the relevant issue date
RFS Class A Notes - the aggregate of
the Initial Invested Amounts of the
relevant RFSs.
(c) Manner and order in which As set out in clause 6
principal and interest is to be
paid on Notes:
(d) Margin: in relation to a Note, the margin
expressed as a percentage per annum
notified by the Trust Manager to the
Trustee as applying to that Note:
(i) in the case of Class A Notes,
[*%];
(ii) in the case of Class B Notes,
[*%];
(iii) in the case of any RFSs, on the
relevant issue date of those RFSs as
inscribed in the Register in relation
to those RFSs
(iv) in the case of any RFS Class A
Note, the Margin for Class A Notes
plus the Spread, as inscribed in the
Register in relation to that RFS Class
A Note
(e) Initial Invested Amount: a. Class A and B Notes: each
denominated with an Initial Invested
Amount of US$100,000
b. RFS Series - $10,000 or such other
amount notified by the Trust Manager
to the Trustee as applying to the RFS
Series at the relevant issue date in
accordance with clause 5
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(f) Rating: a. Class A Notes - AAA long term
credit rating from S&P, Aaa long
term credit rating from Moody's
and AAA long term credit rating
from Fitch
(i) Class B Notes - AA- long term
credit rating from S&P and AA-
long term credit rating from Fitch
(ii) RFSs and RFS Class A Notes -such
rating (if any) notified by the
Trust Manager to the Trustee as
approved by the Designated Rating
Agency for the RFSs as applying to
the RFS Series at the relevant
issue date in accordance with
clause 5
(g) Issue Price: a. Class A Notes - issued at par
value
(i) Class B Notes - issued at par
value
(ii) RFS Series - issued at par value,
at a premium or at a discount, as
notified by the Trust Manager to
the Trustee to the RFS Series at
the relevant issue date in
accordance with clause 5
(h) Payment Dates: Class A Notes and Class B Notes - the
19th day of each Quarter (New York
time)
RFSs and RFS Class A Notes - the 19th
day of each Quarter (Sydney time)
If in either case that day is not a
Business Day then the Payment Date
will be the first Business Day (Sydney
time or New York time, as the case may
be) following that day. The first
Payment Date will be 20 July 1998 (New
York time)
(i) Maturity Date: Class A Notes, Class B Notes, RFSs
and RFS Class A Notes: The Payment
Date falling in July 2029.
4.3 Issue of Notes
(a) Registered Notes must be issued in minimum parcels or subscriptions
which have an aggregate Initial Invested Amount of A$500,000, or
must otherwise be issued on terms that they will constitute an
excluded issue of securities for the purposes of the Corporations
Law.
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(b) Notes (other than Registered Notes) must be issued in amounts, or on
terms, that their offer for subscription and their issue will comply
with:
(i) the Financial Services Act 1986 (UK) and all regulations made
under or in relation to that Act and the Public Offers of
Securities Regulations 1995; and
(ii) the United States Securities Act 1933, the United States
Securities Exchange Act of 1934, all regulations made under or
in relation to them, and all other laws or regulations of any
jurisdiction of the United States of America regulating the
Offer or issue of, or subscription for, Notes.
4.4 Trustee's Covenant to Noteholders
Subject to the terms of the Master Trust Deed and this Series Notice, the
Trustee:
(a) acknowledges its indebtedness in respect of the Invested Amount of
each Note;
(b) covenants for the benefit of each Noteholder:
(i) to make all payments on or in respect of the Notes held by
that Noteholder on the due date for payment;
(ii) to comply with the terms of this Series Notice and the
Transaction Documents to which it is a party; and
(iii) to pay the Stated Amount in relation to the Notes held by that
Noteholder on the Maturity Date.
4.5 Repayment of Notes on Payment Dates
(a) On each Payment Date for a Note, the Invested Amount of that Note
shall be reduced by, and the obligations of the Trustee with respect
to that Note shall be discharged to the extent of, the amount of the
Principal Payment made on that Payment Date in respect of that Note.
(b) All payments of principal on Notes (other than Registered Notes)
will be made in United States dollars.
(c) All payments of principal on Registered Notes will be made in
Australian dollars.
4.6 Final Redemption
Each Note shall be finally redeemed, and the obligations of the Trustee
with respect to the payment of the Invested Amount of that Note shall be
finally discharged, on the first to occur of:
(a) the date upon which the Invested Amount of that Note is reduced to
zero;
(b) if the Stated Amount is less than the Invested Amount, the date on
which the Stated Amount of that Note is reduced to zero;
(c) the date upon which the relevant Noteholder renounces all of its
rights to any amounts
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payable under or in respect of that Note; and
(d) the Payment Date immediately following the date on which the Trustee
completes a sale and realisation of all Assets of the Trust in
accordance with the Master Trust Deed or this Series Notice.
4.7 Period During Which Interest Accrues
Each Note bears interest calculated and payable in arrear in accordance
with this Series Notice from:
(a) in the case of Offshore Notes, the Closing Date;
(b) in the case of an RFS, the date on which it is issued; and
(c) in the case of an RFS Class A Note, the date on which it converts
from an RFS under clause 5.4,
to the date upon which that Note is finally redeemed under clause 4.6.
4.8 Calculation of Interest
(a) Subject to paragraphs (b) and (e), interest payable on each Note in
respect of each Coupon Period is calculated:
(i) on a daily basis at the applicable Coupon Rate;
(ii) on the Invested Amount of that Note as at the first day of
that Coupon Period; and
(iii) on the basis of the actual number of days in that Coupon
Period and a year of 365 days (in the case of Registered
Notes) or 360 days (in the case of Offshore Notes),
and shall accrue due from day to day.
(b) No interest will accrue on any Note for the period from and
including:
(i) the date on which the Stated Amount of that Note is reduced to
zero; or
(ii) in the case of an Offshore Note, if the Stated Amount of the
Offshore Note on the due date for redemption is not zero, the
due date for redemption of the Offshore Note, unless, after
the due date for redemption, payment of principal due is
improperly withheld or refused, following which interest shall
continue to accrue on the Invested Amount of the Offshore Note
at the rate from time to time applicable to the Offshore Note
until:
(A) the moneys in respect of that Offshore Note have been
received by the Note Trustee or the Principal Paying
Agent and notice to that effect is given in accordance
with the relevant Conditions; or
(B) the Stated Amount of that Offshore Note has been reduced
to zero.
(c) All payments of interest on Notes (other than Registered Notes) will
be made in United States dollars.
(d) All payments of interest on Registered Notes will be made in
Australian dollars.
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4.9 Aggregate receipts
Notwithstanding anything in clauses 6.13 to 6.20 (inclusive), no
Noteholder will be entitled to receive aggregate principal under any of
those clauses on any Note in excess of the Stated Amount for that Note.
5. REDRAW FUNDING SECURITIES
5.1 Note Issue Direction for RFS
If, on a Determination Date, either:
(a) (i) Gross Principal Collections for the Collection Period
preceding that Determination Date; plus
(ii) all amounts available to be drawn by the Trustee under the
Redraw Facility in accordance with clause 6.3 for that
Collection Period,
are insufficient to fund Redraws for that Collection Period in
accordance with this Series Notice; or
(b) the Principal Outstanding divided by the Redraw Limit (as defined in
the Redraw Facility), expressed as a percentage, is equal to or
greater than 90% of the Redraw Limit,
then the Trust Manager may give the Trustee a Note Issue Direction to
issue a series of redraw funding securities (RFS Series) in accordance
with clause 13 of the Master Trust Deed and this clause 5.
5.2 Conditions to Note Issue Direction
The Trust Manager must not give a Note Issue Direction under clause 5.1
unless it has received written confirmation from the Designated Rating
Agency that the issue of the RFSs would not result in a downgrading or
withdrawal of a rating of any Note then outstanding.
5.3 Terms of Note Issue Direction
A Note Issue Direction given under clause 5.1:
(a) must be given no later than the Business Day before the proposed
issue date of the relevant RFSs, or any other date agreed by the
Trustee and the Trust Manager; and
(b) must specify the Margin, the aggregate Initial Invested Amount,
Initial Invested Amount, rating, issue price and Maturity Date of
the relevant RFSs (in each case containing the relevant information
specified in clause 4.2).
5.4 Conversion of RFS
If, on the fifth Determination Date following the date on which an RFS
Series was issued, the RFS Stated Amount for all RFSs comprised in that
RFS Series has not been fully and finally reduced to zero, each of those
RFSs:
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(a) will convert to an RFS Class A Note for each Coupon Period after the
Payment Date following that Determination Date;
(b) will cease to be treated as an RFS in any respect;
(c) will:
(i) have an Initial Invested Amount equal to the RFS Initial
Invested Amount of that Note when it was an RFS;
(ii) have an Invested Amount equal to the RFS Invested Amount of
that Note when it was an RFS at the date of conversion;
(iii) have a Stated Amount equal to the RFS Stated Amount of that
Note when it was an RFS at the date of conversion;
(iv) be denominated in Australian dollars;
(v) receive all payments of principal and interest denominated in
Australian dollars;
(vi) have a Coupon Rate calculated by reference to the Bank Bill
Rate, not LIBOR;
(vii) be a registered instrument, not a bearer instrument; and
(viii) have a Margin as set out in clause 4.2(d)(iii).
5.5 Master Trust Deed definitions
Subject to this Series Notice:
(a) each RFS is a Note;
(b) each RFS Series is a Class, and
(c) all RFS Class A Notes outstanding on any date are a Class,
for the purposes of the Master Trust Deed.
6. CASHFLOW ALLOCATION METHODOLOGY
6.1 General
Collections and other amounts credited to the Collection Account will be
allocated by the Trust Manager, and paid by the Trustee as directed by the
Trust Manager, as set out in this clause 6.
6.2 Determination Date - Calculations
(a) On each Determination Date, the Trust Manager will, in respect of
the Collection Period ending before that Determination Date,
calculate or otherwise ascertain:
(i) the Available Income;
(ii) the Total Available Funds;
(iii) in the case of the first Determination Date, the Accrued
Interest Adjustment payable to each Approved Seller;
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(iv) the aggregate of all Redraws made during that Collection
Period;
(v) the Redraw Shortfall;
(vi) the Trust Expenses;
(vii) the Subordinated Percentage;
(viii) the Initial Subordinated Percentage;
(ix) the Total Payments;
(x) the Payment Shortfall (if any);
(xi) the Principal Draw (if any) for that Collection Period,
together with all Principal Draws made before the start of
that Collection Period and not repaid;
(xii) the Gross Principal Collections;
(xiii) the Principal Collections;
(xiv) the Excess Available Income (if any);
(xv) the Excess Collections Distribution (if any);
(xvi) the Liquidity Shortfall (if any);
(xvii) the Remaining Liquidity Shortfall (if any);
(xviii) the aggregate of all Liquidation Losses (if any);
(xix) the Principal Charge Off (if any);
(xx) the Class A Percentage and the Class B Percentage;
(xxi) the Class A Bond Factor, the Class B Bond Factor, the RFS
Class A Bond Factor and the RFS Bond Factor for each RFS
Series;
(xxii) the Class A Charge Offs, the Class B Charge Offs, the RFS
Class A Charge Offs, RFS Charge Offs and Redraw Charge Offs
(if any);
(xxiii) all Carryover Charge Offs (if any);
(xviv) the Purchase Price adjustment calculated under
paragraph 4(c) of the Sale Notice;
(xxv) if required by clause 11, the Threshold Rate at that
Determination Date;
(xxvi) total Prepayment Costs (if any);
(xxvii) total Prepayment Benefits (if any);
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(xxviii) the Prepayment Cost Surplus (if any);
(xxix) the Prepayment Benefit Shortfall (if any);
(xxx) the Substitution Net Transfer Amount (if any);
(xxxi) the Quarterly Percentage;
(xxxii) each US$ Equivalent amount, and each A$ Equivalent amount,
required to be calculated under this Series Notice;
(xxxiii) LIBOR, as at the first day of the Coupon Period ending
before that Determination Date as calculated by the Agent
Bank; and
(xxxiv) all other calculations necessary for the Trustee to make
allocations and distributions under this clause 6 and the
Conditions.
(b) The Trust Manager must:
(i) notify the Trustee of each of the amounts, percentages and
rates calculated by it in paragraph (a);
(ii) instruct the Trustee as to the payments to be made by the
Trustee on the relevant Payment Date; and
(iii) by no later than 4.00pm (Sydney time) on the Determination
Date, notify the Currency Swap Providers and the Principal
Paying Agent of the amounts to be paid to the Currency Swap
Providers under clauses:
(A) 6.10 and 6.11;
(B) 6.14, 6.15 or 6.16 (as the case may be); and
(C) 6.17 (if relevant).
(c) Any amount to be paid to the Currency Swap Providers under the
clauses referred to in subparagraph (b)(iii) may be divided between
the Currency Swap Providers as agreed by the Trustee, the Trust
Manager and the Currency Swap Providers. The obligations under the
Currency Swap providers under the Currency Swaps are joint and
several, and for the purpose of the clauses referred to in
sub-paragraph (b)(iii) a payment by the Trustee to one Currency Swap
Provider shall be taken to be a payment to both.
6.3 Redraws
(a) The Trustee and the Trust Manager irrevocably authorise:
(i) Westpac to deduct from Gross Principal Collections received
by it; and
(ii) the Servicer to pay to Westpac from Gross Principal
Collections received by the Servicer,
the total amount of all Redraws provided by Westpac in relation to
Purchased Receivables, to the extent that Westpac has not previously
been reimbursed in relation to any Redraws.
(b) The Servicer will, at the end of each Collection Period, notify the
Trust Manager of the amounts calculated by the Servicer under
clauses 6.2(a)(iv) and 6.2(a)(v).
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(c) If the Trust Manager determines on any Determination Date that there
is a Redraw Shortfall, the Trust Manager must on that date direct
the Trustee to make a drawing under the Redraw Facility on or before
the Payment Date following that Determination Date equal to the
amount which the Trustee is permitted to draw under clause 3.1(c) of
the Redraw Facility.
(d) The Trustee must, if so directed by the Trust Manager but subject to
the terms of the Redraw Facility Agreement, make that drawing and
pay that amount to Westpac on or before the relevant Payment Date.
(e) The Trustee shall not be in default under any Transaction Document
(and in particular it shall not be an Event of Default under the
Security Trust Deed) if Westpac is not reimbursed for Redraws in
relation to Purchased Receivables funded by Westpac. This paragraph
(e) does not limit Westpac's rights under the Security Trust Deed in
respect of those Redraws.
6.4 Determination Date - Payment Shortfall
If the Trust Manager determines on any Determination Date that there is a
Payment Shortfall for the relevant Collection Period the Trust Manager
must direct the Trustee to pay out of Principal Collections, as an Initial
Principal Distribution under clause 6.13, an amount (the Principal Draw)
equal to the lesser of:
(a) the Payment Shortfall; and
(b) the amount of Principal Collections available for distribution on
the Payment Date following that Determination Date.
6.5 Determination Date - Liquidity Shortfall
(a) If the Trust Manager determines on any Determination Date that there
is a Liquidity Shortfall for the relevant Collection Period the
Trust Manager must on that date direct the Trustee to make a
Liquidity Draw on or before the Payment Date following that
Determination Date equal to the amount which the Trustee is
permitted to draw under clause 3.1 of the Liquidity Facility
Agreement.
(b) The Trustee must, if so directed by the Trust Manager but subject to
the terms of the Liquidity Facility Agreement, make that Liquidity
Draw and have the proceeds of the Liquidity Draw deposited into the
Collection Account on or before 11.00 am on the Payment Date. The
Trust Manager must deal with the amount so deposited in accordance
with this clause 6.
6.6 Allocating Liquidation Losses
On each Determination Date, the Trust Manager must determine, in relation
to the aggregate of all Liquidation Losses arising during that Collection
Period:
(a) the amount of those Liquidation Losses which is attributable to
interest, fees and expenses in relation to the relevant Purchased
Receivables (Finance Charge Loss); and
(b) the amount of those Liquidation Losses which is attributable to
principal in relation to the
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relevant Purchased Receivables (Principal Loss),
on the basis that all Liquidation Proceeds actually received by or on
behalf of the Trustee in relation to a Purchased Receivable are applied
first against interest, fees and other Enforcement Expenses (other than
Property Restoration Expenses) relating to that Purchased Receivable, and
then against the Housing Loan Principal and Property Restoration Expenses
relating to that Purchased Receivable.
6.7 Insurance claims
(a) If, on any Determination Date, the Trust Manager determines that
there has been a Liquidation Loss in relation to a Purchased
Receivable, the Trust Manager shall direct the Servicer (if the
Servicer has not already done so), promptly, and in any event within
20 Business Days of that notice, to make a claim under the relevant
Mortgage Insurance Policy if it has not already done so.
(b) Upon receipt of any amount under or in respect of a Mortgage
Insurance Policy in payment of a claim referred to in paragraph (a),
the Trust Manager must determine which part of the amount is
attributable to interest, fees and other amounts in the nature of
income, and which part of that amount is attributable to principal.
6.8 Remittance Date
(a) By no later than 4.00 pm (Sydney time) on the Remittance Date for a
Collection Period, the Trust Manager must deposit or use its best
endeavours to procure that the Servicer or Westpac (as the case may
be) deposits, in the Collection Account all Available Income and
Principal Collections for that Collection Period to the extent
received on or before that time.
(b) The Trust Manager must direct the Trustee to:
(i) apply amounts credited to the Collection Account in making
payments in discharge of the Trustee's obligations under this
clause 6; and
(ii) make the applications and reinstatements required or
contemplated by this clause 6,
in each case, under and in accordance with this clause 6.
6.9 Payment - Purchase Price adjustment
The Trustee shall make the Purchase Price adjustment on the relevant
Payment Date as provided in paragraph 4(c) of each Sale Notice.
6.10 Total Payments
(a) Subject to paragraph (b) and clause 6.17, on each Payment Date, and
based on the calculations and instructions provided to it by the
Trust Manager under clause 6.2(b), the Trustee must pay out of Total
Available Funds, in relation to the Collection Period ending
immediately before that Payment Date, the following amounts in the
following order of priority:
(i) first, in relation to the first Collection Period, an amount
equal to any Accrued Interest Adjustment required to be paid
to the Approved Sellers (the Trustee acknowledges and agrees
that it has no entitlement to the moneys comprising the
Accrued Interest Adjustment);
(ii) second, Trust Expenses which have been incurred prior to that
Payment Date
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and which have not previously been paid or reimbursed under an
application of this clause 6.10 (in the order of priority set
out in the definition of Trust Expenses);
(iii) third, pari passu and ratably as between themselves, any
amounts payable under any Support Facility (other than a
Currency Swap), including:
(A) the net amount (if any) payable by the Trustee under the
Basis Swap;
(B) the net amount (if any) payable by the Trustee under
each Interest Rate Swap; and
(C) any interest or fees payable by the Trustee under the
Liquidity Facility Agreement,
but not including amounts due under paragraph (iv), paragraph
(v) or paragraph (vi);
(iv) fourth, any repayment of a Liquidity Draw made on or prior to
the previous Payment Date;
(v) fifth, pari passu and ratably as between themselves:
(A) the RFS Coupon on all RFSs at that date;
(B) the payment to the Currency Swap Providers under any
Confirmations relating to the Class A Notes of the A$
Class A Coupon Amount at that date;
(C) the RFS Class A Coupon on all RFS Class A Notes at that
date;
(D) any fee payable by the Trustee under the Redraw Facility
Agreement; and
(vi) sixth, the payment to the Currency Swap Providers under any
Confirmations relating to the Class B Notes of the A$ Class B
Coupon Amount as at that date.
(b) The Trustee shall only make a payment under any of sub-paragraphs
(a)(i) to (a)(vi) inclusive to the extent that any Total Available
Funds remain from which to make the payment after amounts with
priority to that payment have been distributed.
(c) For the purposes of sub-paragraph 6.10(a)(ii), if any Trust Expenses
are, or are to be, denominated in US$, the Trustee may, at the
direction of the Trust Manager, convert those Trust Expenses to US$.
Neither the Trustee nor the Trust Manager will be liable to any
person with respect to any such conversion.
6.11 Excess Available Income - reimbursement of Charge Offs and Principal Draw
(a) Subject to paragraph (b), on each Determination Date, the Trust
Manager must apply any Excess Available Income for the Collection
Period relating to that Determination Date in
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the following order of priority:
(i) first, the Excess Available Income must be applied in payment
of all Principal Charge Offs for that Collection Period;
(ii) second, the balance of the Excess Available Income (after
application under paragraph (i)) must be applied pari passu
and rateably between themselves (based on the Stated Amount of
RFSs, the Stated Amount of the RFS Class A Notes, the
Principal Outstanding and the A$ Equivalent of the Stated
Amount of the Class A Notes):
(A) as a payment to the holders of the RFSs in or towards
reinstating the Stated Amount of the RFSs, to the extent
of any Carryover RFS Charge Offs;
(B) as a payment to the holders of the RFS Class A Notes in
or towards reinstating the Stated Amount of the RFS
Class A Notes, to the extent of any Carryover RFS Class
A Charge Offs;
(C) as a payment, to the Currency Swap Providers under any
Confirmations relating to the Class A Notes, of the A$
Equivalent of any Carryover Class A Charge Offs; and
(D) as a repayment under the Redraw Facility Agreement, as a
reduction of, and to the extent of, any Carryover Redraw
Charge Offs;
(iii) third, the balance of the Excess Available Income (after
application under paragraphs (i) and (ii)) must be applied as
a payment, denominated in Australian dollars, to the Currency
Swap Providers under any Confirmations relating to the Class B
Notes, of the A$ Equivalent of any Carryover Class B Charge
Offs; and
(iv) fourth, the balance of the Excess Available Income (after
application under paragraphs (i) to (iv) inclusive) must be
applied to all Principal Draws which have not been repaid as
at that Payment Date.
Any amount applied pursuant to sub-paragraphs (i) to (iv)
(inclusive) above will be treated having been made using Principal
Collections to the extent of that application, and in the case of
amounts paid under sub-paragraph (ii) or (iii) will be paid on the
Payment Date following that Determination Date.
(b) The Trustee shall only make a payment under any of sub-paragraphs
(a)(i) to (a)(iv) inclusive to the extent that any Excess Available
Income remains from which to make the payment after amounts with
priority to that payment have been distributed.
6.12 Excess Collections Distribution
(a) The Trustee must pay any Excess Collections Distribution for a
Collection Period to the Beneficiary on the relevant Payment Date.
(b) The Trustee may not recover any Excess Collections Distribution from
the Beneficiary once it is paid to the Beneficiary except where
there has been an error in the relevant calculation of the Excess
Collections Distribution.
6.13 Initial Principal Distributions
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(a) Subject to paragraph (b), on each Payment Date, and based on the
calculations and instructions provided to it by the Trust Manager
under clause 6.2(b), the Trustee must distribute out of Principal
Collections, in relation to the Collection Period ending immediately
before that Payment Date, the following amounts in the following
order of priority:
(i) first, to repay any Redraws provided by Westpac in relation to
Purchased Receivables to the extent that it has not previously
been reimbursed in relation to those Redraws;
(ii) second, to repay all Principal Outstanding under the Redraw
Facility Agreement on that Payment Date;
(iii) third, to allocate to Total Available Funds any Principal Draw
calculated in accordance with clause 6.4; and
(iv) fourth, to repay all amounts outstanding under each RFS Series
in the following order of priority:
(A) first, pari passu against outstanding RFSs at that
Payment Date from the RFS Series with the oldest issue
date at that Payment Date, until those RFSs are repaid
in full;
(B) second, pari passu the balance against outstanding RFSs
at that Payment Date from the RFS Series with the next
oldest issue date at that Payment Date, until those RFSs
are repaid in full; and
(C) thereafter, pari passu the balance against outstanding
RFSs under further applications of paragraph (B) until
either all RFSs are repaid in full or there are no
further amounts available for distribution under this
clause 6.13.
(b) The Trustee shall only make a payment under any of sub-paragraphs
(a)(i) to (a)(iv) inclusive to the extent that any Principal
Collections remain from which to make the payment after amounts with
priority to that payment have been distributed.
6.14 Principal Payments - Sequential Method
(a) If on any Determination Date neither clause 6.15 nor clause 6.16
applies, the Trustee must (subject to paragraph (b)), based on the
instructions given to it by the Trust Manager, on the Payment Date
following that Determination Date, pay out of Principal Collections
for the Collection Period ending immediately before that Payment
Date the following amounts in the following order of priority (the
Sequential Method):
(i) first, all the Initial Principal Distributions for the
Collection Period ending immediately before that Payment Date;
(ii) second, pari passu and rateably between themselves:
(A) as a payment, denominated in Australian dollars, to the
Currency Swap Providers under any Confirmations relating
to the Class A
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Notes, of an amount equal to the lesser of:
(1) the Class A Forex Percentage of the amount
available for distribution under this
sub-paragraph (ii) after all Initial Principal
Distributions; and
(2) the A$ Equivalent of the Class A Stated Amounts
for all Class A Notes; and
(B) as a payment, denominated in Australian dollars, to the
RFS Class A Noteholders an amount equal to the lesser
of:
(1) the RFS Class A Forex Percentage of the amount
available for distribution under this subparagraph
(ii) after all Initial Principal Distributions;
and
(2) the RFS Class A Stated Amounts for all RFS Class A
Notes; and
(iii) third, as a payment, denominated in Australian dollars, to the
Currency Swap Providers under any Confirmations relating to
the Class B Notes, of an amount equal to the lesser of:
(A) the amount available for distribution under this
sub-paragraph (iii) after the application of
sub-paragraphs (i) and (ii); and
(B) the A$ Equivalent of the Class B Stated Amounts for all
Class B Notes.
(b) The Trustee shall only make a payment under any of sub-paragraphs
(a)(i) to (a)(iii) inclusive to the extent that any Principal
Collections remain from which to make the payment after amounts with
priority to that payment have been distributed.
6.15 Principal Payments - Serial Method prior to third anniversary (procedure 1)
(a) If on any Determination Date:
(i) the Subordinated Percentage at the previous Determination Date
was greater than or equal to twice the Initial Subordinated
Percentage; and
(ii) that Determination Date occurs on or before the third
anniversary of the Closing Date; and
(iii) the Total Invested Amount as at that Determination Date, as a
percentage of the Total Initial Invested Amount, is greater
than or equal to 10%; and
(iv) the Average Quarterly Percentage as at that Determination
Date:
(A) does not exceed 2% and the Total Carryover Charge Off on
that Determination Date does not exceed 30% of the Class
B Initial Invested Amount; or
(B) does not exceed 4% and the Total Carryover Charge Off on
that Determination Date does not exceed 10% of the Class
B Initial Invested Amount; and
(v) the Stated Amounts of all Class B Notes as at that
Determination Date exceeds
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the aggregate Initial Invested Amounts of all Class A Notes
and Class B Notes as at that Determination Date multiplied by
0.25%,
then the Trustee must (subject to paragraph (b)), based on the
instructions given to it by the Trust Manager, on the Payment Date
following that Determination Date, pay out of Principal Collections for
the Collection Period ending immediately before that Payment Date the
following amounts in the following order of priority:
(A) first, all the Initial Principal Distributions for the Collection
Period ending immediately before that Payment Date;
(B) second, pari passu and rateably between themselves:
(1) as a payment, denominated in Australian dollars, to the
Currency Swap Providers under any Confirmations relating to
the Class A Notes, of an amount equal to the lesser of:
(a) the Class A Forex Percentage of the sum of:
(i) the Class A Percentage of Principal Collections
remaining after all Initial Principal
Distributions; and
(ii) 50% of the Class B Percentage of those Principal
Collections; and
(b) the A$ Equivalent of the Class A Stated Amounts for all
Class A Notes; and
(2) as a payment denominated in Australian dollars to the RFS
Class A Noteholders of an amount equal to the lesser of:
(a) RFS Class A Forex percentage of the sum of:
(i) the Class A Percentage of Principal Collections
remaining after all Initial Principal
Distributions; and
(ii) 50% of the Class B Percentage of those Principal
Collections; and
(b) the RFS Class A Stated Amounts for all RFS Class A
Notes; and
(C) third, as a payment, denominated in Australian dollars, to the
Currency Swap Providers under any Confirmations relating to the
Class B Notes, of an amount equal to 50% of the Class B Percentage
of those Principal Collections remaining after all Initial Principal
Distributions.
(b) The Trustee shall only make a payment under sub-paragraphs (a)(A) to
(a)(C) inclusive to the extent that any Principal Collections remain from
which to make the payment after
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amounts with priority to that payment have been distributed.
6.16 Principal Payments - Serial Method after third anniversary (procedure 2)
(a) If on any Determination Date:
(i) the Subordinated Percentage at the previous Determination Date
was greater than or equal to twice the Initial Subordinated
Percentage; and
(ii) that Determination Date occurs after the third anniversary of
the Closing Date; and
(iii) the Total Invested Amount as at that Determination Date, as a
percentage of the Total Initial Invested Amount, is greater
than or equal to 10%; and
(iv) the Average Quarterly Percentage as at that Determination
Date:
(A) does not exceed 2% and the Total Carryover Charge Off on
that Determination Date does not exceed 30% of the Class
B Initial Invested Amount; or
(B) does not exceed 4% and the Total Carryover Charge Off on
that Determination Date does not exceed 10% of the Class
B Initial Invested Amount; and
(v) the Stated Amount of Class B Notes as at that Determination
Date exceeds the aggregate of:
(A) all Initial Invested Amounts of all Class A Notes and
Class B Notes; and
(B) the US$ Equivalent of the Invested Amount of all RFS
Class A Notes,
as at that Determination Date, multiplied by 0.25%,
then the Trustee must (subject to paragraph (b)), based on the
instructions given to it by the Trust Manager, on the Payment Date
following that Determination Date, pay out of Principal Collections
for the Collection Period ending immediately before that Payment
Date the following amounts in the following order of priority:
(A) first, all the Initial Principal Distributions for the
Collection Period ending immediately before that Payment Date;
(B) second, pari passu and rateably between themselves:
(1) as a payment, denominated in Australian dollars, to the
Currency Swap Providers under any Confirmations relating
to the Class A Notes, of an amount equal to the lesser
of:
(a) the Class A Forex Percentage of the Class A
Percentage of Principal Collections remaining
after all Initial Principal Distributions; and
(b) the A$ Equivalent of the Class A Stated Amounts
for all Class A Notes; and
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(2) as a payment, denominated in Australian dollars to the
RFS Class A Noteholders, of an amount equal to the
lesser of:
(a) the RFS Class A Forex Percentage of the Class A
Percentage of those Principal Collections
remaining after all Initial Principal
Distributions; and
(b) the RFS Class A Stated Amounts for all RFS Class A
Notes; and
(C) third, as a payment, denominated in Australian dollars, to the
Currency Swap Providers under any Confirmations relating to
the Class B Notes, of an amount equal to the Class B
Percentage of those Principal Collections.
(b) The Trustee shall only make a payment under any of sub-paragraphs
(a)(A) to (a)(C) inclusive to the extent that any Principal
Collections remain from which to make the payment after amounts with
priority to that payment have been distributed.
6.17 Remaining Liquidity Shortfall
(a) If there is a Remaining Liquidity Shortfall for a Collection Period,
the Trust Manager on behalf of the Trustee shall reduce the A$ Class
A Coupon Amount, the A$ Class B Coupon Amount and Coupons payable
with respect to RFSs and RFS Class A Notes, in each case in relation
to that Collection Period, as follows:
(i) the Remaining Liquidity Shortfall shall first reduce the A$
Class B Coupon Amount payable to the Currency Swap Providers
on the relevant Payment Date; and
(ii) if the A$ Class B Coupon Amount Payable to the Currency Swap
Providers on the relevant Payment Date under a Confirmation
relating to the Class B Notes has been reduced to zero and any
Remaining Liquidity Shortfall remains, the excess Remaining
Liquidity Shortfall shall reduce:
(A) the A$ Class A Coupon Amount payable to the Currency
Swap Providers;
(B) the RFS Coupon;
(C) the RFS Class A Coupon; and
(D) any draw fee under clause 4.2 of the Redraw Facility
Agreement,
for that Payment Date, on that Payment Date, pari passu and rateably
among themselves.
(b) If there is any reduction in the A$ Class B Coupon Amount payable to
a Currency Swap Provider under a Confirmation relating to the Class
B Notes on a Payment Date under clause 6.17(a) above, the Trust
Manager on behalf of the Trustee shall on that Payment Date reduce
the Class B Coupon Amount for that Payment Date by the same
proportion as the reduction in the A$ Class B Coupon Amount.
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(c) If there is any reduction in the A$ Class A Coupon Amount payable to
a Currency Swap Provider on a Payment Date under clause 6.17(a)
above, the Trust Manager on behalf of the Trustee shall on that
Payment Date reduce the Class A Coupon Amount for that Payment Date
by the same proportion as the reduction in the A$ Class A Coupon
Amount.
6.18 Charge Offs
If the Principal Charge Off for any Collection Period exceeds the Excess
Available Income calculated on the Determination Date for that Collection
Period, the Trust Manager must, on and with effect from the Payment Date
immediately following the end of the Collection Period:
(a) reduce pari passu the Class B Stated Amount of each of the Class B
Notes by the US$ Equivalent of the amount of that excess which is
attributable to each Class B Note until the Class B Stated Amount is
zero (Class B Charge Offs); and
(b) if the Class B Stated Amount is zero and any amount of that excess
has not been applied under paragraph (a), reduce pari passu and
rateably as between themselves (based on the Stated Amount of the
RFSs, the Principal Outstanding, the Stated Amount of the RFS Class
A Notes and the A$ Equivalent of the Stated Amount of the Class A
Notes):
(i) the Class A Stated Amount on each of the Class A Notes by the
US$ Equivalent of the balance of that excess which is
attributable to each Class A Note until the Class A Stated
Amount of that Class A Note is zero (Class A Charge Offs);
(ii) the RFS Class A Stated Amount on each of the RFS Class A Notes
by the balance of that excess which is attributable to each
RFS Class A Note until the RFS Class A Stated Amount of that
RFS Class A Note is zero (RFS Class A Charge Offs);
(iii) the RFS Stated Amount on each of the RFSs by the balance of
that excess which is attributable to each RFS until the RFS
Stated Amount is zero (RFS Charge Offs); and
(iv) the Principal Outstanding under the Redraw Facility Agreement
by the balance of that excess, applied against Redraw Advances
(as defined in the Redraw Facility Agreement) in inverse
chronological order of their Drawdown Dates (as defined in the
Redraw Facility Agreement), until the Principal Outstanding is
zero (Redraw Charge Offs).
6.19 Payments into US$ Account
(a) The Trustee shall direct each Currency Swap Provider to pay all
amounts denominated in US$ payable to the Trustee by that Currency
Swap Provider under the relevant Currency Swap into the US$ Account
or to the Principal Paying Agent under the Agency Agreement on
behalf of the Trustee.
(b) If any of the Trustee, the Trust Manager or the Servicer receives
any amount denominated in US$ from a Currency Swap Provider under
the relevant Currency Swap they will promptly pay that amount to the
credit of the US$ Account.
6.20 Payments out of US$ Account
(a) The Trustee shall, or shall require that the Paying Agents on its
behalf, pay all amounts credited to the US$ Account as follows and
in accordance with the Note Trust Deed and the Agency Agreement.
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(b) All amounts credited to the US$ Account by a Currency Swap Provider
in relation to a payment by the Trustee:
(i) under clause 6.10(a)(v)(B), will be paid pari passu in
relation to Class A Notes as payments of Coupon on those Class
A Notes;
(ii) under clause 6.10(a)(vi), will be paid pari passu in relation
to Class B Notes as payments of Coupon on those Class B Notes;
(iii) under clause 6.11(a)(ii)(C), will be paid pari passu in
relation to Class A Notes in or towards reinstating the Stated
Amount of those Class A Notes, to the extent of the Carryover
Class A Charge Offs;
(iv) under clause 6.11(a)(iii), will be paid pari passu in relation
to Class B Notes in or towards reinstating the Stated Amount
of those Notes, to the extent of the Carryover Class B Charge
Offs;
(v) under clause 6.14(a)(ii), 6.15(B)(1) or 6.16(B)(1), will be
paid pari passu to Class A Noteholders as Class A Principal
Payments until the Class A Stated Amounts have been reduced to
zero;
(vi) under clause 6.14(a)(iii), 6.15(C) or 6.16(C), will be paid
pari passu to the Class B Noteholders as Class B Principal
Payments until the Class B Stated Amounts have been reduced to
zero; and
(vii) in relation to Trust Expenses, under clause 6.10 will be paid
to the relevant recipient of those Trust Expenses.
6.21 Prepayment Costs and Prepayment Benefits
(a) On each Determination Date the Trust Manager will determine total
Prepayment Benefits and total Prepayment Costs for the relevant
Collection Period and will apply an amount equal to those total
Prepayment Costs in payment of those total Prepayment Benefits. If:
(i) there is a Prepayment Cost Surplus, it will be applied under
paragraph (b); and
(ii) there is a Prepayment Benefit Shortfall, it will be funded
under paragraph (c).
(b) On each Payment Date, and based on the calculations and instructions
provided to it by the Trust Manager under clause 6.2(b), the Trustee
shall pay to Westpac an amount equal to the Prepayment Cost Surplus
(if any) for the Collection Period on that Payment Date to the
extent received by or on behalf of the Trustee.
(c) If, on any Determination Date, the Trust Manager calculates that
there is a Prepayment Benefit Shortfall, the Trust Manager shall by
close of business on that Determination Date notify Westpac of the
amount of that Prepayment Benefit Shortfall. Westpac must, by 4.00
pm (Sydney time) on the Remittance Date deposit in the Collection
Account for the credit of the Trustee an amount equal to that
Prepayment Benefit Shortfall. That amount will be treated as a Gross
Principal Collection.
6.22 Rounding of amounts
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In making the calculations required or contemplated by this clause 6, the
Trust Manager shall round calculations to four decimal places, except that
all monetary amounts shall be rounded down to the nearest cent (or, in the
case of payments to a Currency Swap Provider under clause 6, half a cent
being rounded upwards) or as otherwise required in this Series Notice.
6.23 Bond Factors
The Trust Manager shall, on or promptly after each Notice Date, notify all
Registered Noteholders, the Principal Paying Agent and the Note Trustee of
the relevant Class A Bond Factor, the Class B Bond Factor, the RFS Class A
Bond Factor and each RFS Bond Factor calculated on the Determination Date
preceding that Notice Date.
6.24 Trust Manager's Report
The Trust Manager will provide to the Trustee the Trust Manager's Report
for a Collection Period no later than 4.00pm (Sydney time) on the
Remittance Date following that Collection Period.
6.25 Prescription
Despite any other provision of this Series Notice and the Master Trust
Deed, Condition 8 of the Offshore Notes applies to all amounts payable in
relation to any Offshore Note.
6.26 Replacement of Currency Swap
(a) If a Currency Swap is terminated, the Trustee may enter into one or
more currency swaps which replace that Currency Swap (other than by
way of transfer under section 6(b) of that Currency Swap)
(collectively a Replacement Currency Swap) but only on the condition
that the Settlement Amount (as defined in that Currency Swap), if
any, which is payable by the Trustee to that Currency Swap Provider
on termination of that Currency Swap will be paid in full when due
in accordance with this Series Notice and that Currency Swap.
(b) If the condition in paragraph (a) is satisfied, the Trustee may
enter into the Replacement Currency Swap and if it does so it must
direct the Replacement Currency Swap to pay any upfront premium to
enter into the Replacement Currency Swap due to the Trustee directly
to the relevant Currency Swap Provider in satisfaction of and to the
extent of the Trustee's obligation to pay the Settlement Amount to
that Currency Swap Provider as referred to in paragraph (a). To the
extent that such premium is not greater than or equal to the
Settlement Amount the balance may be satisfied by the Trustee as a
Trust Expense.
7. MASTER TRUST DEED
7.1 Completion of details in relation to Master Trust Deed
(a) (Trust Manager fee)
For the purpose of clause 19 of the Master Trust Deed, the fee
payable to the Trust Manager in respect of the Trust for each
Collection Period will be an amount calculated:
(i) on the average daily balance of the Housing Loan Principal of
the Purchased Receivables during that Collection Period;
(ii) at the rate of [0.01%] per annum or as otherwise agreed by the
Trust Manager and the Trustee from time to time; and
(iii) on the actual number of days in the Collection Period divided
by 365 days,
and shall accrue due from day to day. That fee is payable in
Australian dollars.
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(b) (Trustee fee)
For the purpose of clause 23.1 of the Master Trust Deed, the fee
payable to the Trustee in respect of the Trust for each Collection
Period will be an amount calculated:
(i) on the average daily balance of Housing Loan Principal of the
Purchased Receivables during that Collection Period;
(ii) at the rate of [0.03%] per annum or as otherwise agreed by the
Trust Manager and the Trustee from time to time; and
(iii) on the actual number of days in the Collection Period divided
by 365 days,
and shall accrue due from day to day. That fee is payable in
Australian dollars.
(c) (Servicing fee)
For the purpose of clause 7.1 of the Servicing Agreement, the fee
payable to the Servicer in respect of the Trust for each Collection
Period will be an amount calculated:
(i) on the average daily balance of Housing Loan Principal of the
Purchased Receivables during that Collection Period;
(ii) at the rate of [0.25%] per annum or as otherwise agreed by the
Trust Manager, the Trustee and the Servicer from time to time;
and
(iii) on the actual number of days in the Collection Period divided
by 365 days,
or as otherwise agreed by the Trustee, the Trust Manager and the
Servicer. That fee shall accrue due from day to day and is payable
in Australian dollars.
(d) (First Collection Period)
For the purpose of this clause 7.1, the first Collection Period will
commence on (and include) the Closing Date.
7.2 Amendments to Master Trust Deed
The Master Trust Deed is amended for the purpose of the Trust in the
manner set out in annexure A to this Series Notice. The amendments do not
relate to or affect any Other Trust.
8. TRANSFER OF PURCHASED RECEIVABLES - TOP UPS
(a) If during any Collection Period an Obligor requests from Westpac an
increase in the principal balance under the Receivable Agreement for
the relevant Purchased Receivable (other than as a Redraw) and that
request is approved by the Servicer, the Trust Manager must direct
the Trustee to transfer (subject to this clause 8) that Purchased
Receivable from the Trust to a Warehouse Trust. The transfer will
occur in accordance with clause 7 of the Master Trust Deed, this
Series Notice and the Warehouse Series Notice.
(b) The Trust Manager, as manager of the Warehouse Trust, shall monitor
each Warehouse
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Investment Limit and each Warehouse Funding (each as defined in the
relevant Warehouse Investment Agreements) and will advise Westpac,
the Servicer and the Trustee if, at any time, the Trustee will be
unable to obtain funds under any Warehouse Investment Agreements to
enable transfers to be made under paragraph (a).
(c) If Westpac is advised by the Trust Manager that there are not
sufficient funds available under any Warehouse Investment Agreements
to enable transfers to be made under paragraph (a), neither the
Servicer nor Westpac will allow any Obligor to increase the
principal balance of any Purchased Receivable until sufficient funds
are available under a Warehouse Investment Agreement.
9. TRANSFERS TO WAREHOUSE TRUST
Subject to clause 10, the Trust Manager may, from time to time, direct the
Trustee to transfer a Purchased Receivable to a Warehouse Trust. That
transfer:
(a) must be in accordance with clause 7 of the Master Trust Deed and the
Series Notice for that Warehouse Trust;
(b) must be for a consideration equal to the Unpaid Balance of that
Receivable;
(c) must not involve the transfer of a Receivable which is in Arrears;
and
(d) may only be made if there are funds available under any Warehouse
Investment Agreement to enable the relevant Warehouse Trust to pay
the necessary consideration for the transfer,
and the Trust Manager must be satisfied that the transfer will not result
in downgrading of the rating of any Notes.
The Trustee must comply with that direction.
10. SUBSTITUTION OF PURCHASED RECEIVABLES
10.1 Purchase from Warehouse Trust
(a) Subject to this clause 10, the Trust Manager may at any time
determine whether any Warehouse Trust holds a Receivable and related
Receivable Rights which complies with the requirements in clause
10.4 (a Replacement Receivable).
(b) If a Warehouse Trust does hold a Replacement Receivable, the Trust
Manager may, subject to:
(i) the Master Trust Deed and the Series Notice for that Warehouse
Trust; and
(ii) this clause 10,
take such action as is required under the Master Trust Deed to
procure the transfer of a Purchased Receivable and the relevant
Receivable Rights (together, Release Receivable) from the Trust to
the Warehouse Trust, and the transfer of the Replacement Receivable
from the Warehouse Trust to the Trust (a Substitution).
(c) The transfer by the Trustee of a Release Receivable must be on terms
that the relevant Warehouse Trust will pay to the Trust any
Substitution Net Transfer Amount and, on the following Payment Date,
any relevant interest adjustment.
10.2 Contents of direction
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A direction under clause 10.1 must specify:
(a) the Receivables of the Trust which are the subject of the
Substitution;
(b) the Warehouse Trust which is to be involved in the Substitution;
(c) the Receivables of the relevant Warehouse Trust which are the
subject of the Substitution; and
(d) the total Substitution Net Transfer Amount payable by the Warehouse
Trust.
10.3 Conditions to direction
The Trust Manager may only arrange a Substitution under clause 10.1, if:
(a) the relevant Release Receivable is not in Arrears;
(b) there is funding available under any relevant Warehouse Investment
Agreement to meet any Substitution Net Transfer Amount payable by
the Warehouse Trust in relation to the relevant Substitution; and
(c) the Unpaid Balance of all Purchased Receivables acquired by the
Trust from the relevant Warehouse Trust is less than the Unpaid
Balance of all Release Receivables transferred to the relevant
Warehouse Trust.
10.4 Criteria for Replacement Receivable
For the purposes of this clause 10, a Replacement Receivable must:
(a) have a maturity date no later than the date which is one year before
the Maturity Date of the Notes (other than RFSs);
(b) have similar product features to one or more Purchased Receivables
at that time;
(c) have an Unpaid Balance which is within A$30,000 of the Unpaid
Balance of the relevant Release Receivable (whether greater or less
than that amount);
(d) are otherwise suitable for substitution under this clause 10, in the
Trust Manager's sole and absolute discretion; and
(e) be the subject of a Mortgage Insurance Policy from a Mortgage
Insurer.
In making a determination under paragraph (b), the Trust Manager may (but
is not required to) have regard to whether the Replacement Receivables:
(f) are located in the same State or Territory as the relevant Release
Receivable; and
(g) have the same or similar (by location) postcode as the relevant
Release Receivable.
10.5 Consent of Designated Ratings Agency
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The Trust Manager must not procure the transfer of Receivables under this
clause 10 unless it has received written confirmation from the Designated
Rating Agency for each Class of Notes that the transfer would not result
in a downgrading of the rating given to any relevant Note or the
withdrawal of the rating of any relevant Note. The Trust Manager will
provide a copy of that confirmation to the Trustee and the Note Trustee.
11. APPLICATION OF THRESHOLD RATE
11.1 Calculation of Threshold Rate
If at any time the Basis Swap is terminated, the Trust Manager shall, on
each of:
(a) the earlier of:
(i) the date which is 3 Business Days following the date on which
the Basis Swap is terminated; and
(ii) the Determination Date immediately following the date on which
the Basis Swap is terminated; and
(b) each successive Determination Date for so long as the Basis Swap has
not been replaced by a similar Hedge Agreement or until the Trustee
and the Trust Manager otherwise agree (and the Designated Rating
Agency for each Class of Notes has confirmed in writing that that
agreement would not result in a downgrading of the rating given to
any relevant Note or the withdrawal of the rating of any relevant
Note),
calculate the Threshold Rate as at that date and notify the Trustee, the
Servicer and Westpac of that Threshold Rate on the relevant Payment Date.
11.2 Setting Threshold Rate
If the Servicer is notified of a Threshold Rate under clause 11.1, it
will, not more than 7 Business Days following the date on which the Basis
Swap is terminated, ensure that the interest rate payable on each
Purchased Receivable which is subject to a variable rate set, as permitted
by the relevant Receivable Agreement, at the discretion of Westpac is not
less than the Threshold Rate, and immediately notify the Trustee when it
has done so.
11.3 Trustee Setting Threshold Rate
If the Trustee does not receive notice from the Servicer under clause 11.2
within 7 Business Days following the date on which the Basis Swap is
terminated, the Trustee shall immediately exercise its rights and powers
under the Transaction Documents, including, without limitation, taking
action against the Servicer, to ensure that the interest rate payable on
each Purchased Receivable which is subject to a variable rate set, as
permitted by the Receivable Agreement, is not less than the Threshold
Rate.
12. BENEFICIARY
12.1 Issue of Units
(a) The beneficial interest in the Trust will be constituted by the
issue of:
(i) a single residual capital unit (the Residual Capital Unit);
and
(ii) such numbers of residual income units (each, a Residual Income
Unit) as the Trustee may issue from time to time in accordance
with this clause 12.1.
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The holders of the Residual Capital Unit and the Residual Income
Units (each, a Unit) hold the beneficial interest in the Trust in
accordance with the Master Trust Deed and this Series Notice.
(b) The Trustee must, on payment by the relevant Beneficiary of the
issue price of the Unit specified below, issue a Unit by registering
that Beneficiary's name in the register kept under this clause 12. A
failure by the Trust Manager to issue a Unit does not affect the
Beneficiary's rights as beneficiary of the Trust under the Master
Trust Deed and this Series Notice.
12.2 Residual Capital Unit
(a) The holder of the Residual Capital Unit is Westpac Banking
Corporation (Westpac).
(b) The issue price of the Residual Capital Unit is the amount of $10,
paid by Westpac under the Notice of Creation of the Trust on
establishment of the Trust.
(c) The beneficial interest held by the holder of the Residual Capital
Unit is limited to the Trust and each Asset of the Trust (other than
any Asset of the Trust held on trust for the holders of Residual
Income Units under clause 12.3) subject to and in accordance with
the Master Trust Deed and this Series Notice.
(d) The holder of the Residual Capital Unit has no right to receive
distributions in respect of the Trust other than the right to
receive on the termination of the Trust the entire beneficial
interest of the Trust subject to rights of holders of Residual
Income Unit. The Residual Capital Unit may not be redeemed at any
other time or in any other way.
(e) The Residual Capital Unit is not transferable.
12.3 Residual Income Unit
(a) The person may, with the consent of the Trustee and the Trust
Manager (whose consent may be given or withheld in their absolute
discretion), become the holder of a Residual Income Unit by paying
the subscription price for the Residual Income Unit.
(b) The issue price of a Residual Income Unit will be the amount agreed
between the Trustee, the Trust Manager and the person applying for
the Residual Income Unit.
(c) The beneficial interest held by the holder of the Residual Income
Unit is limited to that holder's Income Percentage of the amounts
(if any) standing to the credit of the Collections Account which
represents Net Income available for distribution under clause 30 of
the Master Trust Deed.
(d) The holder of the Residual Income Unit has the right to receive
distributions in respect of the Trust under the Master Trust Deed
and this Series Notice only to the extent that Net Income is
available for distribution under the Master Trust Deed and this
Series Notice.
(e) Each Residual Income Unit is transferable in accordance with clause
12.5.
12.4 Register
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(a) The entitlement of any person to a Unit will be evidenced by
registration in the register maintained under this clause 12.4 (the
Register).
(b) The Trustee will keep the Register at its registered office in a
form that it considers appropriate and will enter the following
particulars.
(i) The name and address of the holder of each Unit.
(ii) The date on which the name of the holder of each Unit is
entered in the Register.
(iii) The date on which the holder of a Unit ceases to be registered
as the holder of that Unit.
(iv) The subscription moneys initially paid for each Unit, and the
aggregate subscription moneys of all Units from time to time.
(v) Any other details which the Trustee may consider necessary or
desirable.
(c) The holder of a Unit shall promptly notify the Trustee of any change
of name or address and the Trustee will alter the Register
accordingly.
(d) Without limiting clause 12.1, the interest of any holder in a Unit
will be constituted by registration in the register.
12.5 Transfer of Units
(a) (i) The holder of a Unit may transfer the Unit by instrument in
writing in any form approved by the Trustee. No fee will be
charged on the transfer of a Unit.
(ii) An instrument of transfer shall be executed by or on behalf
both of the transferor and the transferee.
(iii) A transferor of a Unit remains the holder of the Unit
transferred until the transfer is registered and the name of
the transferee is entered in the register in respect of the
Unit.
(b) The instrument of transfer of a Unit must be left for registration
at the address where the Register is kept on which the Unit to which
the transfer relates are registered. It must be left together with
any information that the Trustee properly requires to show the right
of the transferor to make the transfer.
(c) The Trustee must notify the Designated Rating Agency for each Class
of Notes and the Trust Manager of any transfer of units under this
clause 12.5.
12.6 Limit on rights
Each Beneficiary is subject to, and bound by, the provisions of the Master
Trust Deed (including clause 12.1).
13. TITLE PERFECTION EVENTS
Each of the following is a Title Perfection Event.
(a) (Downgrade) Westpac ceases to have a long term rating of at least
BBB from S&P and BBB from Fitch and (so long as Class A Notes are
outstanding) Baa2 from Moody's.
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(b) (Insolvency Event) An Insolvency Event occurs with respect to
Westpac.
(c) (Non Compliance) Westpac fails to pay any Collections (as defined in
the Servicing Agreement) within 5 Business Days of receipt of notice
to do so from the Trustee or the Trust Manager under the Servicing
Agreement.
14. ADDITIONAL RECEIVABLE PRODUCT FEATURES
Westpac may, in relation to a Purchased Receivable, from time to time seek
to offer the relevant Obligor additional features for that Purchased
Receivable which were not features of that Purchased Receivable at the
Cut-Off Date. Before seeking to offer any such additional feature, Westpac
must satisfy the Trust Manager that the additional features would not
adversely affect any relevant Mortgage Insurance Policy and would not
cause the rating of any Notes to be downgraded or withdrawn.
15. WST WAREHOUSE TRUST #1
15.1 Direction under Warehouse Series Notice
This direction is given under clause 5 of the WST Warehouse Trust #1
Series Notice.
15.2 Direction
The Trust Manager directs the Warehouse Trustee:
(a) to dispose of the Receivables that are from time to time specified
in a Sale Notice prepared by the Trust Manager and given to the
Warehouse Trustee;
(b) the trust that will acquire those Receivables is the Trust;
(c) the consideration to be paid by the Trust for the Receivable will be
specified in the Sale Notice referred to in paragraph (a);
(d) the proposed date of disposal is 9 June 1998; and
(e) the Warehouse Investor has agreed to the consideration to be paid by
the Trust.
16. SERVICER REPRESENTATIONS
The Servicer makes the following representations and warranties for the
benefit of the Trustee in relation to the Sale Notice referred to in
clause 15 and the Receivables, Receivable Rights and Related Securities
referred to in that Sale Notice.
(a) (Eligible Receivable) As at the Cut-Off Date, each Receivable which
is specified in that Sale Notice is an Eligible Receivable. In
relation to any related Receivable Security that is required to be
registered with any Governmental Agency and which is not registered
at the Cut-Off Date, it will be registered.
(b) (Receivable Securities) The Servicer has not done, or omitted to do,
anything which would prevent each Receivable, Receivable Security
and Related Security which is specified in that Sale Notice from
being valid, binding and enforceable against the relevant
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Obligor(s) in all material respects except to the extent that it is
affected by laws relating to creditors rights generally, or
doctrines of equity.
(c) (Ownership) In relation to each Receivable Security which is
specified in that Sale Notice the Servicer has not done, or omitted
to do anything which would prevent the relevant Obligor(s) from
being the sole legal owner of the relevant Mortgaged Property and
registered as the sole proprietor(s) of the relevant Mortgaged
Property.
(d) (Insurance) As at the Closing Date, each Receivable which is
specified in the Sale Notice is the subject of a Mortgage Insurance
Policy from a Mortgage Insurer for the scheduled term of that
Receivable. The sale of each such Receivable to the Trustee is not
contrary to the relevant Mortgage Insurance Policy. The Servicer has
not done or omitted to do anything which might prejudicially affect
or limit the rights of the Trustee under or in respect of a Mortgage
Insurance Policy to the extent that those rights relate to that
Receivable or the related Receivable Security. On transfer to the
Trustee of equitable title to a Purchased Receivable, the Trustee
will have the benefit of the relevant Mortgage Insurance Policy for
that Receivable.
(e) (Solvency of Mortgage Insurers) The officers of the Servicer who
have responsibility for the transactions contemplated by the
Transaction Documents do not have actual notice that any insurer
under any insurance policy in relation to a Receivable is insolvent
or will be unable to pay a valid claim.
(f) (Selection process) There is no fraud, dishonesty, material
misrepresentation or negligence on the part of the Servicer in
connection with the selection and offer to the Trustee of any
Receivables or related Receivable Securities which is specified in
that Sale Notice.
(g) (Relevant Documents) The Servicer holds in its possession or control
all Relevant Documents that relate to the Receivables and the
related Receivable Securities which are specified in that Sale
Notice necessary to enforce the provisions of and the security
created by the relevant Receivable Securities.
(h) (No recision, etc) As at the Cut-Off Date, none of the Receivables
or Receivable Securities which are specified in that Sale Notice
were satisfied, cancelled, discharged or rescinded and the Mortgaged
Property relating to each relevant Receivable and Receivable
Security had not been released from the security of the relevant
Receivable Securities.
(i) (Interest rate) Except as may be provided in a Receivable Agreement
or Receivable Security which is specified in the Sale Notice, and
subject to applicable laws, the Servicer has not done, or omitted to
do anything which would render the interest rate for each such
Receivable subject to any limitation, or to any consent, additional
memoranda or other writing required from the relevant Obligor to
give effect to a change in that rate and any change in that rate
will be effective on notice being given to the that Obligor in
accordance with the terms of the relevant Receivable or Receivable
Security.
(j) (Assignability) All consents required in relation to the assignment
of the Receivables and the related Receivable Rights specified in
that Sale Notice have been obtained. Those Receivables and
Receivable Rights are assignable.
(k) (Servicing) Each relevant Receivable referred to in the Sale Notice
and each Receivable Security and Related Security has been serviced
by the Servicer in accordance with the Servicing Agreement, the
Servicing Agreement Series 1997-2 Amendment Agreement dated 23 April
1997, the Servicing Agreement Series 1997-3 Amendment Agreement
dated 25 June 1997 and the Servicing Agreement Series 1997-4E
Amendment Agreement dated 29 September 1997 from the time of its
transfer from Westpac to the Series 1997-1 WST Trust, the Series
1997-2 WST Trust, the Series 1997-3 WST Trust or the Series
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<PAGE>
1997-4E WST Trust, as the case may be, until the Closing Date. That
servicing includes, without limitation, ensuring compliance with the
Consumer Credit code in connection with servicing the Receivables
and Receivable Securities where failure to do so would have an
Adverse Effect.
(l) (Ordinary course of business) Between the Cut-Off Date and the
Closing Date, the Servicer dealt with the Receivables and the
Receivable Securities specified in the Sale Notice in the ordinary
course of its business.
17. WAREHOUSE TRUSTEE REPRESENTATIONS
The Warehouse Trustee makes the following representations and warranties
for the benefit of the Trustee in relation to the Sale Notice referred to
in clause 15 and the Receivables, Receivable Rights and Related Securities
referred to in that Sale Notice.
(a) (Quality of Title) It has good title to the Receivables and the
related Receivable Rights specified in that Sale Notice. Those
Receivables and the related Receivable Rights, together with the
interest of the Warehouse Trustee under the Relevant Documents, are
owned by it free and clear of any Security Interest other than a
Security Trust Deed given by the Warehouse Trustee in favour of the
Security Trustee. That Security Trust Deed created only a floating
charge over those Receivables and related Receivable Rights.
(b) (Receivable Securities) The Warehouse Trustee has not done anything,
during the period within which the Warehouse Trustee was trustee of
the Receivables and the related Receivable Rights specified in that
Sale Notice, which would prevent each Receivable, Receivable
Security and Related Security which is specified in that Sale Notice
from being valid, binding and enforceable against the relevant
Obligor(s) in all material respects except to the extent that it is
affected by laws relating to creditors rights generally, or
doctrines of equity.
(c) (Set Off) The Warehouse Trustee has not done anything, during the
period within which the Warehouse Trustee was trustee of the
Receivables and the related Receivable Rights specified in that Sale
Notice, which would render, once equitably assigned to the Trustee,
any Receivable or Receivable Right which is specified in that Sale
Notice subject to any right of rescission, set off, counterclaim or
similar defence, nor to render any Receivable or Receivable Right
which is specified in that Sale Notice subject to, or affected by,
any interest off-set arrangement or right.
(d) (Security Interest) The sale, transfer and assignment of the
Warehouse Trustee's interest in the Receivables and the related
Receivable Rights which are specified in that Sale Notice, will not
constitute a breach of any Relevant Document or the Warehouse
Trustee's obligations or a default by the Warehouse Trustee under
any Security Interest.
(e) (Solvency) The Warehouse Trustee is solvent.
18. NOTE TRUSTEE
18.1 Capacity
The Note Trustee is a party to this Series Notice in its capacity as
trustee for the Noteholders from time to time under the Note Trust Deed.
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18.2 Exercise of rights
(a) The rights, remedies and discretions of the Noteholders under the
Transaction Documents including all rights to vote or give
instructions to the Security Trustee and to enforce undertakings or
warranties under the Transaction Documents may only be exercised by
the Note Trustee on behalf of the Noteholders in accordance with the
Note Trust Deed.
(b) The Noteholders may only exercise enforcement rights in respect of
the Mortgaged Property through the Note Trustee and only in
accordance with the Transaction Documents.
18.3 Representation and warranty
The Note Trustee represents and warrants to each other party to this
Series Notice that it has power under the Note Trust Deed to enter into
the Transaction Documents and to exercise the rights, remedies and
discretions of, and to vote on behalf of the Noteholders.
18.4 Payments
Any payment to be made to the Noteholders under the Transaction Documents
may be made to the Principal Paying Agent or the Note Trustee (as the case
may be) in accordance with the Agency Agreement and the Note Trust Deed.
19. WESTPAC UNDERTAKINGS
19.1 Set Off
Westpac irrevocably waives, and must not exercise, any right it may have
to set off amounts deposited with it by the Trustee (in its capacity as
trustee of the Trustee) against amounts owed by the Trustee to Westpac (in
any capacity) under any Transaction Document.
19.2 Notice of actions
Westpac, as Approved Seller, must notify the Trustee and the Trust Manager
promptly after becoming aware of any action, claim or other legal
proceedings which may be brought against Westpac and which Westpac
believes would have a materially adverse effect on its title to any
Receivable or Receivable Security (an Action).
19.3 Notification of Trust
If the Trustee is notified of an Action under clause 19.2, the Trust
Manager (failing which the Trustee) must notify the relevant court or
tribunal of the Trustee's interest in the relevant Receivables or
Receivable Securities, unless Westpac (as Approved Seller), the Trust
Manager and the Trustee agree that to do so might prejudice Westpac's
ability successfully to defend or prosecute the Action (as the case may
be).
20. REDEMPTION
(a) For the purposes of clause 8.9 of the Master Trust Deed and the
relevant Condition 5(n), the Trustee may only redeem Offshore Notes
under Condition 5(n) at the direction of the Trust Manager.
(b) The Trust Manager may give a direction under paragraph (a) in its
absolute discretion in accordance with Condition 5(n), except that
the Trust Manager may only give that direction to the extent that
funds are available under the relevant Warehouse Investment
Agreement to acquire the Purchased Receivables to enable redemption
of the Offshore Notes.
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21. GOVERNING LAW AND JURISDICTION
This deed is governed by the laws of the Australian Capital Territory. The
Chargor submits to the non-exclusive jurisdiction of courts exercising
jurisdiction there.
EXECUTED as a deed in Canberra.
Each attorney executing this Series Notice states that he or she has no notice
of revocation or suspension of his or her power of attorney.
TRUSTEE/WAREHOUSE TRUSTEE
SIGNED SEALED and DELIVERED )
by WESTPAC SECURITIES )
ADMINISTRATION LIMITED by its )
attorney in the presence of: )
__________________________________________
Signature
__________________________________________
__________________________________________
Witness Print name
__________________________________________
Print name
TRUST MANAGER
SIGNED SEALED and DELIVERED )
by WESTPAC SECURITISATION )
MANAGEMENT PTY LIMITED by its )
attorney in the presence of: )
__________________________________________
Signature
__________________________________________
__________________________________________
Witness Print name
__________________________________________
Print name
SERVICER
SIGNED SEALED and DELIVERED )
by THE MORTGAGE COMPANY PTY )
__________________________________________
__________________________________________
<PAGE>
LIMITED by its attorney in the )
presence of: )
Signature
__________________________________________
__________________________________________
Witness Print name
__________________________________________
Print name
AN APPROVED SELLER/WAREHOUSE INVESTOR
SIGNED SEALED and DELIVERED )
by WESTPAC BANKING CORPORATION )
by its attorney in the )
presence of: )
__________________________________________
Signature
__________________________________________
__________________________________________
Witness Print name
__________________________________________
Print name
NOTE TRUSTEE
SIGNED SEALED and DELIVERED )
by MORGAN GUARANTY TRUST )
COMPANY OF NEW YORK by its )
attorney in the presence of: )
__________________________________________
Signature
__________________________________________
__________________________________________
Witness Print name
__________________________________________
Print name
<PAGE>
SCHEDULE
An Eligible Receivable means a Loan which, as at the Cut-Off Date for that Loan:
(a) is denominated and payable only in Australian dollars in Australia;
(b) is secured by a Receivable Security that constitutes a first ranking
mortgage over land situated in Australia which is or will be registered
under the Real Property Legislation, or where a Receivable Security is
not, or will not be when registered, a first ranking mortgage, the
relevant Sale Notice includes an offer in relation to all prior ranking
registered mortgages;
(c) is secured by a Receivable Security over a Mortgaged Property which has
erected on it a residential dwelling;
(d) has an LVR (as defined below) less than or equal to 95%;
(e) was approved and originated by Westpac in the ordinary course of its
business;
(f) under which the relevant Obligor does not owe more than $750,000;
(g) the relevant Obligor in respect of which was required to repay the
Receivable within 30 years of the Cut-Off Date;
(h) is not in Arrears for more than 30 consecutive days;
(i) the sale of an equitable interest in, or the sale of an equitable interest
in any related Receivable Security, does not contravene or conflict with
any law;
(j) together with the related Receivable Security, has been or will be
stamped, or has been taken by the relevant stamp duties authority to be
stamped, with all applicable duty;
(k) is subject to the terms and conditions of Westpac's standard Loan Offer
for the loan products referred to in the definition of Receivable in the
Series Notice, or any similar loan product, however named, the product
features of which comply with clause 14;
(l) is not governed or regulated by the Credit Act 1984 (NSW) (or the
corresponding legislation for any other Australian jurisdiction) or any
rural, primary production, moratorium or mediation legislation, other than
the Consumer Credit Legislation;
(m) is not a Loan with an interest only payment type and a bullet principal
repayment at the end of the interest only period as set out in the Terms
and Conditions letter relating to that Receivable; and
(n) the relevant Obligor in respect of which is a resident of Australia.
For the purpose of this schedule:
LVR means the outstanding amount of the Loan, plus any other amount secured by
any Mortgage for that Loan or related Loans, at the date of determination
divided by the aggregate value of the Mortgaged Property subject to the related
Mortgage for that Loan, expressed as a percentage.
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ANNEXURE A
WST SERIES 1998-1G TRUST
AMENDMENTS TO MASTER TRUST DEED
GENERAL
All references in the Master Trust Deed to the wilful default of the
Trustee in each of clauses 8.4(f), 8.4(g), 8.4(h), 24.1(c), 24.8,
24.10(a), 33.9, 33.10, 33.12(b), 33.13, 33.14(a), 33.14(b), 33.14(c),
33.17(b), 33.17(c), 33.17(d), 33.17(e), 33.18(h) and in Schedule 2 are
replaced by the words breach of trust and in clause 12.1(l) the words
wilful default are deleted.
CLAUSE 1.1 - Approved Bank
The definition of Approved Bank in clause 1.1 of the Master Trust Deed is
deleted and replaced with the following definition.
"Approved Bank means:
(a) a Bank which has a short term rating of at least A-1+ from S&P, P-1
from Moody's and F-1+ from Fitch; or
(b) in relation to a Trust, any bank or financial institution which is
specified to be an Approved Bank in the relevant Series Notice,
but means Westpac Banking Corporation for so long as it has a short term
rating of A-1 or better from S&P, P-1 or better from Moody's and F-1+ or
better from Fitch."
CLAUSE 1.1 - Bank
The existing definition of Bank in clause 1.1 of the Master Trust Deed is
deleted and replaced with the following definition.
"Bank means:
(a) a corporation authorised under the Banking Act, 1959 to carry on
general banking business in Australia or a corporation formed or
incorporated under an Act of the Parliament of an Australian
Jurisdiction to carry on the general business of banking; or
(b) where any Transaction Document requires money to be deposited by the
Trustee outside Australia, a corporation authorised by the banking
legislation of the relevant jurisdiction to carry on the general
business of banking in that jurisdiction."
CLAUSE 1.1 - Authorised Investment
For the purposes of the definition of Authorised Investment in clause 1.1
of the Master Trust Deed, each of the investments in paragraphs (d), (e),
(f) of that definition and (h) must have a rating of AAA (long term) or
A-1+ (short term) (as the case may be) from S&P and a rating of Aaa (long
term) or P-1 (short term) (as the case may be) from Moody's and a rating
of AAA (long term) or F-1+ (short term) (as the case may be) from Fitch to
be an Authorised Investment for the Trust.
CLAUSE 1.1 - Expenses
For the purposes of the definition of Expenses in clause 1.1 of the Master
Trust Deed, a new paragraph (o) is inserted as follows and the existing
paragraph (o) becomes paragraph (b).
"(o) any fees and expenses payable to any Stock Exchange, DTC, Euroclear
or Cedel Bank from time to
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time by the Trustee;"
CLAUSE 1.1 - Extraordinary Resolution
For the purposes of the definition of Extraordinary Resolution in clause
1.1 of the Master Trust Deed, that definition is deleted and the following
definition is inserted.
"Extraordinary Resolution in relation to:
(a) the Registered Noteholders means, subject to the provisions of the
Security Trust Deed:
(i) a resolution passed at a meeting of the Registered Noteholders
duly convened and held in accordance with the provisions
contained in clause 17 by a majority consisting of not less
than 75% of the votes able to be cast by the Registered
Noteholders cast (by show of hands or poll, as the case may
be); or
(ii) a resolution in writing under clause 17.15 signed by all the
Registered Noteholders.
(b) all Noteholders means, subject to the provisions of the Security
Trust Deed a resolution passed by Registered Noteholders duly
convened and held in accordance with the provisions contained in
clause 17 and by Offshore Noteholders in accordance with the Note
Trust Deed by a majority consisting of not less than 75% calculated
as follows:
(A x I) + (U)
-------------
T
Where: A = the percentage of Registered Noteholders voting in
favour of the resolution;
I = the US$ Equivalent of the Invested Amount of all
Registered Notes;
U = the aggregate Invested Amount of the Offshore
Noteholders capable of voting in respect of the
resolution; and
T = the Total Invested Amount.
CLAUSE 1.1 - Insolvency Event
For the purposes of the definition of Insolvency Event in clause 1.1 of
the Master Trust Deed:
(a) the word ", Westpac" is inserted after the words "a Servicer,"; and
(b) the following words are inserted at the end of paragraph (c) of the
definition:
", and for the avoidance of doubt an inability of the Trustee in its
capacity as trustee of the Trust to pay its debts does not include:
(i) the Trustee making any drawing under a Support Facility in
accordance with the Transaction Documents; or
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<PAGE>
(ii) until the Class A Notes are repaid in full, the Trustee making
any Class B Charge Off or failing to pay the full amount of
any Class B Coupon."
CLAUSE 1.1 - Rating Agency
For the purpose of the definition of Rating Agency in clause 1.1 of the
Master Trust Deed, the word ", Fitch" is inserted after the word "S&P".
CLAUSE 1.1 - Termination Date
For the purpose of the definition of Termination Date in clause 1.1 of the
Master Trust Deed, the words "and the Trustee and the Trust Manager agree
that no further Notes are proposed to be issued by the Trustee in relation
to that Trust" are inserted at the end of paragraph (c)(i) of that
definition.
CLAUSE 1.1 - Taxation Act
For the purposes of the definition of Taxation Act inclusive 1.1 of the
Master Trust Deed, the words "and the Income Tax Assessment Act 1997
(Commonwealth)" are inserted at the end of that definition.
CLAUSE 1.2
For the purposes of clause 1.2 of the Master Trust Deed, a new paragraph
is inserted as follows.
"(q) Except as otherwise provided, a reference to any time is a reference
to Sydney time."
CLAUSE 2.1
For the purposes of clause 2.1 of the Master Trust Deed, the words "and
the relevant Series Notice" are inserted at the end of that clause.
CLAUSE 3.4
Clause 3.4 of the Master Trust Deed is deleted and replaced with the
following new Clause 3.4.
"Each Trust shall continue until, and shall terminate on the later of:
(i) its respective Termination Date;
(ii) the date on which the provisions of clause 3.5 have been satisfied;
and
(iii) the date on which the Trustee ceases to hold any Trust Back Assets
in relation to that Trust."
CLAUSE 8.3(b) - Sale Notice
For the purposes of clause 8.3(b) of the Master Trust Deed, a Sale Notice
given by Westpac or the Warehouse Trustee in relation to the Trust may be
given at any time on the same day as the day on which the Expiry Time
falls.
CLAUSE 8.5(a) - Conditions precedent to purchase
For the purposes of clause 8.5(a) of the Master Trust Deed, the following
is a condition precedent to the giving of the Sale Notice.
(Certified copies) Except to the extent previously provided to the Trustee
(in its capacity as trustee of any Trust), certified copies of the forms
of each Mortgage Insurance Policy, and the forms of the Receivable
Agreements, relating to the Purchased Receivables.
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CLAUSE 8.6 - Representations and warranties
For the purposes of clause 8.6 of the Master Trust Deed, Westpac makes the
following representations and warranties in relation to the Sale Notice
given by it and the Receivables and Receivable Rights referred to in that
Sale Notice.
(a) (Assignability) All consents required in relation to the assignment
of the Receivables and the related Receivable Rights specified in
the Sale Notice have been obtained. Those Receivables and Receivable
Rights are assignable.
(b) (Quality of Title) It is the sole, legal and beneficial owner of the
Receivables and the related Receivable Rights specified in the Sale
Notice. Those Receivables and the related Receivable Rights,
together with the interest of Westpac under the Relevant Documents,
are owned by it free and clear of any Security Interest (other than
any Security Interest arising solely as the result of any action
taken by the Trustee).
(c) (Eligible Receivable) As at the Cut-Off Date, each Receivable which
is specified in the Sale Notice is an Eligible Receivable. In
relation to any related Receivable Security that is required to be
registered with any Governmental Agency and which is not registered
at the Cut-Off Date, it will be registered.
(d) (Receivable Securities) Each Receivable, Receivable Security and
Related Security which is specified in the Sale Notice is valid,
binding and enforceable against the relevant Obligor(s) in all
material respects except to the extent that it is affected by laws
relating to creditors rights generally, or doctrines of equity.
(e) (Set Off) Once equitably assigned to the Trustee, no Receivable or
Receivable Right which is specified in the Sale Notice will be
subject to any right of rescission, set off, counterclaim or similar
defence. No Receivable or Receivable Right which is specified in
that Sale Notice is subject to, or affected by, any interest off-set
arrangement or right.
(f) (Compliance with Laws) At the time each Receivable and Receivable
Security which is specified in the Sale Notice and each Related
Security was entered into it complied in all material respects with
applicable laws, including, without limitation, where the Consumer
Credit Legislation applies, the Consumer Credit Legislation.
(g) (Ownership) In relation to each Receivable Security which is
specified in the Sale Notice the relevant Obligor(s) is or are the
sole legal owner of the relevant Mortgaged Property and registered
as the sole proprietor(s) of the relevant Mortgaged Property.
(h) (Insurance) As at the Closing Date, each Receivable which is
specified in the Sale Notice is the subject of a Mortgage Insurance
Policy from a Mortgage Insurer for the scheduled term of that
Receivable. The sale of each such Receivable to the Trustee is not
contrary to the relevant Mortgage Insurance Policy. Westpac has not
done or omitted to do anything which might prejudicially affect or
limit its rights or the rights of the Trustee under or in respect of
a Mortgage Insurance Policy to the extent that those rights relate
to that Receivable or the related Receivable Security. On transfer
to the Trustee of equitable title to a Purchased Receivable, the
Trustee will have the benefit of the relevant Mortgage Insurance
Policy for that Receivable.
(i) (Solvency of Mortgage Insurers) The officers of Westpac who have
responsibility for the
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transactions contemplated by the Transaction Documents do not have
actual notice that any insurer under any insurance policy in
relation to a Receivable is insolvent or will be unable to pay a
valid claim.
(j) (Selection process) There is no fraud, dishonesty, material
misrepresentation or negligence on the part of Westpac in connection
with the selection and offer to the Trustee of any Receivables or
related Receivable Securities which is specified in the Sale Notice.
(k) (No void transactions) The assignment of the Receivables and
Receivable Rights which are specified in the Sale Notice will not be
held by a court to be an undervalue transfer, a fraudulent
conveyance, or a voidable preference under any law relating to
insolvency.
(l) (Security Interest) The sale, transfer and assignment of Westpac's
interest in the Receivables and the related Receivable Rights which
are specified in a Sale Notice, will not constitute a breach of any
Relevant Document or Westpac's obligations or a default by Westpac
under any Security Interest.
(m) (Relevant Documents) Westpac holds in its possession or control all
Relevant Documents that relate to the Receivables and the related
Receivable Securities which are specified in the Sale Notice
necessary to enforce the provisions of and the security created by
the relevant Receivable Securities.
(n) (Solvency) Westpac is solvent.
(o) (No recision, etc) As at the Cut-Off Date, none of the Receivables
or Receivable Securities which are specified in the Sale Notice were
satisfied, cancelled, discharged or rescinded and the Mortgaged
Property relating to each relevant Receivable and Receivable
Security had not been released from the security of the relevant
Receivable Securities.
(p) (Interest rate) Except as may be provided in a Receivable Agreement
or Receivable Security which is specified in the Sale Notice, and
subject to applicable laws, the interest rate for each such
Receivable is not subject to any limitation, no consent, additional
memoranda or other writing is required from the relevant Obligor to
give effect to a change in that rate and any change in that rate
will be effective on notice being given to the that Obligor in
accordance with the terms of the relevant Receivable or Receivable
Security.
(q) (Ordinary course of business) Between the Cut-Off Date and the
Closing Date, Westpac dealt with the Receivables and the Receivable
Securities specified in the Sale Notice in the ordinary course of
its business.
Westpac also makes the following representations and warranties in
relation to the Receivables and Receivable Rights referred to in the Sale
Notice given by the Warehouse Trustee:
(i) (Sale to earlier Series) Those Receivables and Receivable Rights
were assigned by Westpac to either the Series 1997-1 WST Trust, the
Series 1997-2 WST Trust, the Series 1997-3 WST Trust or the Series
1997-4E WST Trust.
(ii) (Representations and Warranties) At the time of those assignments
Westpac gave the same representations and warranties to the trustee
of the Series 1997-1 WST Trust, the Series 1997-2 WST Trust, the
Series 1997-3 WST Trust or the Series 1997-4E WST Trust, as the case
may be, in relation to those Receivables and Receivable Rights as it
has given to the Trustee in relation to the Sale Notice given by
Westpac to the Trustee. The only difference is that in relation to
the sale to the trustee of the Series 1997-1 WST Trust Westpac did
not represent and warrant that on transfer to the trustee of the
Series 1997-1 WST Trust of equitable title to a Purchased
Receivable, the Trustee will have the benefit of the relevant
Mortgage Insurance Policy for that Receivable. That representation
and warranty is given by the Servicer in clause 16(d) of this Series
Notice.
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CLAUSE 8.9(d) - Clean Up Offer
For the purposes of clause 8.9(d) of the Master Trust Deed, the term "(i)"
is inserted after "sub-paragraph" in the second line of sub-paragraph
(ii), and the following provisions apply.
(a) On any Determination Date on which the aggregate Housing Loan
Principal of a Portfolio of Receivables for Purchased Receivables
expressed as a percentage of the Housing Loan Principal of those
Purchased Receivables at the Cut-Off Date, is less than 10%, the
Trust Manager may:
(i) as manager of the Trust, direct the Trustee to offer to sell
the Portfolio of Receivables to a Warehouse Trust in
accordance with clause 7 of the Master Trust Deed and any
relevant Series Notice; and
(ii) as manager of that Warehouse Trust, direct the Trustee (as
trustee of that Warehouse Trust), to acquire orally or by
conduct the Portfolio of Receivables in accordance with clause
7 of the Master Trust Deed and any relevant Series Notice.
(b) The Trustee as trustee of the Trust will do all things reasonably
necessary to give effect to the disposal of the Portfolio of
Receivables to that Warehouse Trust in accordance with the Master
Trust Deed and any relevant Series Notice.
(c) The Trust Manager may only give the direction referred to in
sub-paragraph (i) to the extent that funds are available under the
relevant Warehouse Investment Agreement to acquire the Purchased
Receivables.
CLAUSE 10 - NOTES
For the purposes of the Trust, clause 10 in the Master Trust Deed is
deleted and the provisions of that clause 10 are as follows.
10.1 Acknowledgement of indebtedness
Subject to the terms of the Master Trust Deed and this Series
Notice:
(a) each entry in the Register for the Trust in respect of a
Registered Note relating to the Trust; and
(b) in relation to each Offshore Note relating to the Trust, that
Offshore Note,
constitutes an independent and separate acknowledgement to the
relevant Noteholder by the Trustee of its indebtedness as trustee of
the Trust for the Invested Amount of that Note together with the
other rights given to Noteholders under the Master Trust Deed, the
Series Notice and the Security Trust Deed, and (in relation to an
Offshore Note) the Note Trust Deed and the relevant Conditions.
10.2 Legal nature of Notes
(a) Registered Notes will be in the form of inscribed stock, and
the Trustee's obligations in relation to the Notes and under
the Master Trust and this Series Notice in respect of those
Notes (including any obligation to pay interest or
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principal) will become effective on inscription in the
Register for the Trust under the Master Trust and this Series
Notice of the details for those Notes.
(b) Offshore Notes will be in registered form in respect of
Book-Entry Notes and will be in bearer or registered form in
respect of Definitive Notes.
10.3 Terms of Notes
(a) All Notes issued by the Trustee as trustee of the Trust shall
be issued with the benefit of, and subject to, the Master
Trust Deed, this Series Notice and the Security Trust Deed
and, in relation to Offshore Notes, the Note Trust Deed and
the relevant Conditions.
(b) This Series Notice is binding on the Trust Manager, the
Trustee, the Note Trustee and the Noteholders.
10.4 Interest and Principal Entitlement of Noteholders
Subject to the Master Trust Deed, this Series Notice and the
Security Trust Deed and, in relation to Offshore Notes, the Note
Trust Deed and the relevant Conditions (and, in particular, subject
to any such provisions which provide for principal losses to be
charged off against any Notes), the Trustee as trustee of the Trust
shall in respect of the Notes issued by it in that capacity pay or
cause to be paid to the Noteholders (as relevant) of those Notes:
(a) (interest) their Coupon on each Coupon Payment Date; and
(b) (principal) their Principal Entitlement on each Principal
Repayment Date.
10.5 Notes not invalid if issued in breach
No Note shall be invalid or unenforceable on the ground that it was
issued in breach of the Master Trust Deed, this Series Notice or any
other Transaction Document.
10.6 Location of Registered Notes
The property in Registered Notes shall for all purposes be regarded
as situated at the place where the Register is located on which
those Registered Notes are recorded.
10.7 No discrimination between Noteholders
There shall not be any discrimination or preference between Notes
within the same Class, or the corresponding Noteholders, in relation
to a Trust by reason of the time of issue of Notes or for any other
reason, subject only to the Series Notice relating to the Notes and
the terms of the Security Trust Deed (if any) relating to the Trust.
10.8
In the event that any Definitive Class A Notes or Definitive Class B
Notes are issued in registered form, the Trustee (or if the Trustee
fails to do so, the Trust Manager on behalf of the Trustee) will
appoint a person to operate and maintain a register of those notes
in accordance with standard United States practice.
CLAUSE 12.4 - FURTHER LIMIT ON INTEREST OF NOTEHOLDERS
For the purposes of the Trust, clause 12.4 in the Master Trust Deed is
deleted and the provisions of that clause 12.4 are as follows.
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A Noteholder in relation to the Trust shall only be a creditor of
the Trustee in its capacity as trustee of that Trust to the extent
of the Notes held by that Noteholder (or, in the case of a Warehouse
Facility Provider, their rights under the relevant Warehouse
Facility Agreement) and shall not be entitled to any beneficial or,
subject to the Security Trust Deed, other interest in the Trust.
CLAUSES 13.1 AND 13.6(a) - NOTE ISSUE DIRECTION
(a) For the purposes of clause 13.1 of the Master Trust Deed, the Note
Issue Direction for the Notes may be issued by the Trust Manager on
or at any time prior to the Note Issue Date for the Notes.
(b) For the purposes of clause 13.6(a) of the Master Trust Deed, the
certification by the Trust Manager may occur on or at any time prior
to the Note Issue Date for the Notes.
CLAUSE 13.1(b) - CONDITIONS PRECEDENT TO DIRECTION
For the purposes of clause 13.1(b) of the Master Trust Deed, the following
is a condition precedent to the issue of a Note Issue Direction in
relation to proposed Purchased Receivables.
(Power of Attorney) Original execution copies of powers of attorney duly
executed and delivered by Westpac in registrable form in each Australian
jurisdiction appointing certain specified officers of the Trustee as its
attorney for the purposes of enabling the Trustee to perfect its title to
those purchased Receivables.
CLAUSE 13.6(b)
For the purposes of clause 13.6(b) of the Master Trust Deed, insert the
words "or 7.7(c) (as the case maybe)" after "clause 13.8(g)" in the last
line.
CLAUSE 13.7 - DEALER AGREEMENT
The Trustee will enter into the Dealer Agreement.
CLAUSE 13.8
For the purposes of clause 13.8 of the Master Trust Deed, insert a new
paragraph (g) as follows.
"(g) (transfer of benefit of Receivables) subject to payment of the
amount referred to in paragraph (e), hold automatically by virtue of
this deed and without any further act or instrument or other thing
being done or brought into existence, the benefit of the Portfolio
of Receivables referred to in the corresponding Note Issue Direction
with effect from the Note Issue Date as trustee of the relevant
Trust (together with the benefit with effect from the Note Issue
Date of all Receivables, Related Securities, Support Facilities and
other rights and entitlements relating to the Portfolio of
Receivables)."
CLAUSE 13.9 - ACTION FOLLOWING NOTE ISSUE DIRECTION
For the purposes of the Trust, clause 13.9 in the Master Trust Deed is
deleted and the provisions of that clause 13.9 are as follows.
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As soon as practicable after a Note Issue Date for a Trust:
(a) in relation to Registered Notes only:
(i) (enter details in the Register) the Trustee shall enter into
the Register for that Trust in accordance with clause 16 the
information required under clause 16.1;
(ii) (issue Note Acknowledgement) the Trustee shall issue a Note
Acknowledgement to each Registered Noteholder in respect of
its holding of Registered Notes; and
(iii) (issue Marked Note Transfers) if requested by a Registered
Noteholder in its Application for Notes, the Trustee shall
issue a Marked Note Transfer to the Registered Noteholder; and
(b) in relation to Offshore Notes only, the Trustee shall issue those
Offshore Notes in accordance with the Note Trust Deed and this
Series Notice.
CLAUSES 14, 15, 16 AND 17
For the purposes of the Trust, clauses 14, 15, 16 and 17 in the Master
Trust Deed are deleted and the provisions of those clauses 14, 15, 16 and
17 are as follows.
14. TRANSFERS OF NOTES
14.1 No restrictions on transfer of Notes
Subject to the Master Trust Deed and this Series Notice, there shall be no
restriction on the transfer of Notes.
14.2 Minimum transfer
(a) A Registered Noteholder must not transfer any Registered Notes held
by it unless:
(i) the amount payable by the transferee for those Registered
Notes is not less than A$500,000; or
(ii) the offer or invitation to the transferee by the Registered
Noteholder in relation to the Registered Notes is an excluded
offer or an excluded invitation for the purposes of the
Corporations Law.
(b) A Noteholder must not transfer any Offshore Notes except in
accordance with the Financial Services Act 1986 (UK) and all
regulations made under or in relation to that Act and the Public
Offers of Securities Regulations 1995.
(c) None of the Trustee, the Trust Manager, the Servicer or an Approved
Seller is liable to any Noteholder in relation to a breach by that
Noteholder of paragraph (b).
14.3 Form of transfer
Every transfer of Registered Notes shall be effected by a Note Transfer.
14.4 Execution of Note Transfer
Every Note Transfer shall be duly completed and executed by the transferor
and transferee.
14.5 Stamping of Note Transfer
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Every Note Transfer lodged with the Trustee shall be duly stamped (if
applicable).
14.6 Delivery of Note Transfer to Trustee
Every Note Transfer shall be delivered to the Trustee together with the
Note Acknowledgement to which it relates for registration.
14.7 Registration of Transferee as Registered Noteholder
Subject to this clause 14, the Trustee shall on receipt of a Note Transfer
enter the transferee in the Register as the holder of the Registered Notes
which are the subject of the Note Transfer.
14.8 Trustee entitled to refuse to register Registered transfer
The Trustee may refuse to register any Note Transfer which would result
in:
(a) (breach) a contravention of or failure to observe:
(iii) (Master Trust Deed) the terms of the Master Trust Deed;
(iv) (Series Notice) this Series Notice;
(v) (Security Trust Deed) the Security Trust Deed; or
(vi) (the Law) any law of an Australian Jurisdiction; or
(b) (requires registration) an obligation to procure registration of any
of the above with, or the approval of any of the above by, any
Government Agency.
14.9 Refusal to register absolute
The Trustee shall not be bound to give any reason for refusing to register
any Note Transfer and its decision shall be final, conclusive and binding.
If the Trustee refuses to register a Note Transfer it shall as soon as
practicable (and in no event later than 7 days after the date the Note
Transfer was lodged with it) send to the transferor and the transferee
notice of such refusal.
14.10 No fee for registration of a Note Transfer
No fee shall be charged for the registration of any Note Transfer.
14.11 Taking effect of Note Transfers
(a) (Note Transfer not effective until registration) A Note
Transfer shall not take effect until registered by the Trustee
and until the transferee is entered in the Register as the
holder of the Registered Notes which are the subject of the
Note Transfer, the transferor shall remain the holder of those
Registered Notes.
(b) (Transfer received when Register closed) When a Note Transfer
is received by the Trustee during any period when the Register
is closed for any purpose, the Trustee shall not register the
Note Transfer until the next Business Day on which that
Register is reopened.
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14.12 Rights and obligations of transferee
Subject to the Master Trust Deed and this Series Notice, a transferee of
Registered Notes on being noted in the Register as the holder of the
Registered Notes shall have the following rights and obligations:
(a) (those of the transferor) all the rights and the obligations which
the transferor previously had; and
(b) (those under Master Trust Deed) all the rights and obligations of a
Noteholder as provided by the Master Trust Deed and this Series
Notice as if the transferee was originally a party to the Master
Trust Deed and this Series Notice.
14.13 Payments to transferee
Subject to the Master Trust Deed (including clause 35.1 of the Master
Trust Deed), on the entry of a transferee of Registered Notes in the
Register the transferee shall become entitled to receive any payments then
due or which may become due to the holder of the relevant Registered Notes
(including whether or not the entitlement to payment wholly or partly
arose or accrued prior to the transfer and the Trustee shall be discharged
for any such payment made to the transferee).
14.14 Transmission of entitlements
(a) (Election) Any person becoming entitled to Registered Notes as a
result of the death, mental incapacity or bankruptcy of a Registered
Noteholder may, on producing such evidence as the Trustee requires
of their entitlement, elect to be either registered as the
Registered Noteholder or to transfer the Registered Notes in the
manner specified in this clause.
(b) (Method of election) If an entitled person elects to be registered
as the Registered Noteholder, the person shall deliver to the
Trustee a notice in writing to this effect signed by the person. If
the person elects to have another person registered he or she shall
execute a Note Transfer in relation to the Registered Notes in
favour of that person. All the provisions of the Master Trust Deed
and this Series Notice relating to the transfer of Registered Notes
and the registration of Note Transfers shall be applicable to any
such notice or Note Transfer as if the death, mental incapacity or
bankruptcy of the Registered Noteholder had not occurred and the
notice or Note Transfer was a Note Transfer executed by the
Registered Noteholder.
(c) (Discharge) A person entitled to Registered Notes under this clause
shall be entitled to receive and may give a good discharge for all
moneys payable in respect of such Registered Notes but, except as
otherwise provided by the Master Trust Deed and this Series Notice,
shall not be entitled to any of the rights or privileges of a
Registered Noteholder unless and until the person is entered in the
Register as the holder of those Registered Notes.
14.15 Marked Note Transfer
(a) (Entitlement to marking) A Registered Noteholder may from time to
time request the Trustee to provide the Registered Noteholder with a
Marked Note Transfer.
(b) (Marking) The Registered Noteholder shall deliver a Note Transfer to
the Trustee and the Trustee shall mark the Note Transfer in such
manner as agreed from time to time by the Trustee and the Trust
Manager and issue the same to the Registered Noteholder.
(c) (Trustee will not register transfer) Until the expiry of 90 days (or
any substitute period as the Trustee and Trust Manager agree from
time to time and as advised to Registered Noteholders) from the date
on which the Note Transfer was marked, the Trustee shall not
register any transfer of Registered Notes relating to the Marked
Note Transfer otherwise than on that Marked Note Transfer.
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(d) (No extension by closing of Register) The period referred to in
sub-paragraph (c) shall not be extended by the closing of the
Register for any purpose.
(e) (Delivery) A Marked Note Transfer shall be issued to a Registered
Noteholder by personal delivery at the time the Registered
Noteholder attends the offices of the Trustee (or such other place
nominated by the Trustee) for the marking of the Note Transfer by
the Trustee.
14.16 Reliance on documents
The Trustee shall be entitled to accept and assume the authenticity and
genuineness of any Note Transfer or other document produced to it to be
duly executed. The Trustee shall not be bound to enquire into the
authenticity or genuineness of any Note Transfer or other document, nor
shall it incur any liability for registering any Note Transfer which is
subsequently discovered to be a forgery or otherwise defective, unless the
Trustee had actual notice of such forgery or defect at the time of
registration of such Note Transfer.
14.17 Specimen signatures
The Trustee may (but need not) require each Registered Noteholder to
submit specimen signatures (and in the case of a corporation may require
those signatures to be authenticated by the secretary or director of such
Registered Noteholder) of persons authorised to execute Note Transfers on
behalf of such Registered Noteholder and shall be entitled to assume
(until notified to the contrary) that such authority has not been revoked.
14.18 Notes lodged with Austraclear
If Registered Notes are lodged into the Austraclear System, the Trustee
shall enter Austraclear in the Register as the holder of those Registered
Notes. While those Registered Notes remain in the Austraclear System:
(a) all payments and notices required of the Trustee and the Trust
Manager in relation to those Registered Notes will be directed to
Austraclear; and
(b) all dealings (including transfers) and payments in relation to those
Registered Notes within the Austraclear System will be governed by
the Austraclear Regulations and need not comply with this clause 14
to the extent of any inconsistency.
15. NOTE ACKNOWLEDGEMENT
15.1 Issue of Note Acknowledgement
When a person has been entered in the Register as the holder of Registered
Notes, as soon as practicable (and in any event no later than 5 Business
Days or such shorter period specified in the relevant Series Notice or as
otherwise agreed by the Trustee with the person or the Trust Manager)
thereafter, the Trustee shall issue a Note Acknowledgement to that person
in respect of those Registered Notes. If the person has been entered into
the Register under a Note Transfer and the transferor continues to retain
a holding of Registered Notes, the Trustee shall within the same period
stated above issue to the transferor a Note Acknowledgement in respect of
that retained holding of Registered Notes. No certificates will be issued
in respect of Registered Notes.
15.2 Note Acknowledgement not certificate of title
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A Note Acknowledgement shall not be a certificate of title as to
Registered Notes and the Register shall be the only conclusive evidence of
the ownership of Registered Notes and the entitlements under them. A Note
Acknowledgement cannot be pledged or deposited as security nor can a
Registered Note be transferred by delivery of only a Note Acknowledgement.
15.3 Execution of Note Acknowledgement
Each Note Acknowledgement shall be signed on behalf of the Trustee
manually, or in facsimile by mechanical or electronic means, by any
Authorised Signatory of the Trustee. If any Authorised Signatory of the
Trustee whose signature appears on a Note Acknowledgement dies or
otherwise ceases to be an Authorised Signatory before the Note
Acknowledgement has been issued, the Trustee may nevertheless issue the
Note Acknowledgement.
15.4 More than one Note Acknowledgement
If a Registered Noteholder wishes to receive more than one Note
Acknowledgement it shall return its Note Acknowledgement to the Trustee
and at the same time request in writing the issue of a specified number of
separate Note Acknowledgements. Subject to clause 10.5, the Trustee shall
then cancel the original Note Acknowledgement and issue in lieu separate
Note Acknowledgements. A fee prescribed by the Trustee (not exceeding $10
for each Note Acknowledgement) shall be paid by the Registered Noteholder
to the Trustee.
15.5 Worn out, defaced or lost Note Acknowledgement
If any Note Acknowledgement is worn out or defaced then on production to
the Trustee it may cancel the same and may issue a new Note
Acknowledgement. If any Note Acknowledgement is lost or destroyed then on
proof to the satisfaction of the Trustee, and on such indemnity as the
Trustee may consider adequate having been given, a new Note
Acknowledgement shall be given to the person entitled to such lost or
destroyed Note Acknowledgement. An entry as to the issue of the new Note
Acknowledgement and of the indemnity (if any) shall be made in the
Register. A fee prescribed by the Trustee (not exceeding $10) shall be
paid by the person requesting the new Note Acknowledgement to the Trustee.
15.6 Joint holdings
If a single parcel of Registered Notes is held by more than one person,
only the person whose name stands first in the Register in relation to
that parcel of Registered Notes shall be entitled to:
(a) be issued the relevant Note Acknowledgement and, if applicable, a
Marked Note Transfer;
(b) be given any notices; and
(c) be paid any moneys due in respect of such Registered Notes.
15.7 Delivery of Note Acknowledgement
A Note Acknowledgement may be sent to the relevant Registered Noteholder
by mail or by personal delivery to the Registered Noteholder's address
appearing in the Register and the Note Acknowledgement so sent shall be at
the risk of that Registered Noteholder.
16. THE REGISTER
16.1 Details to be kept on Register
The Trustee shall keep or cause to be kept a register with respect to the
Trust, on which shall be entered the following information relating to the
Trust:
(a) (name) the name of the Trust;
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(b) (creation) the date of the creation of the Trust;
(c) (Note Issue Dates) the Note Issue Dates for Registered Notes issued
in relation to the Trust;
(d) (Conversion Date) the date on which each RFS was converted to an RFS
Class A Note under clause 5.4 of this Series Notice;
(e) (Initial Invested Amount) the total Initial Invested Amount of
Registered Notes issued on each Note Issue Date;
(f) (Invested Amount) the Invested Amount of each Registered Note or
Class of Registered Notes from time to time;
(g) (Stated Amount) the Stated Amount of each Registered Note or Class
of Registered Notes from time to time;
(h) (Series) details of relevant Classes of Registered Notes;
(i) (details of Registered Noteholders) the name and address of each
Registered Noteholder;
(j) (number of Registered Notes) the number of Registered Notes held by
each Registered Noteholder;
(k) (Note Acknowledgement) the serial number of each Note
Acknowledgement issued to each Registered Noteholder;
(l) (date of entry) the date on which a person was entered as the holder
of Registered Notes;
(m) (date of cessation) the date on which a person ceased to be a
Registered Noteholder;
(n) (account) the account to which any payments due to a Registered
Noteholder are to be made (if applicable);
(o) (details) where applicable, Payment Dates, Principal Repayment
Dates, Maturity Dates and Margin on the Notes;
(p) (payments) a record of each payment in respect of the Registered
Notes in relation to the Trust; and
(q) (tax file number) a record that the Trustee has (or has not)
received the tax file number for each Registered Noteholder; and
(r) (additional information) such other information as:
(i) is required by this Series Notice;
(ii) the Trustee considers necessary or desirable; or
(iii) the Trust Manager reasonably requires.
16.2 Asset register
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The Trustee shall keep or cause to be kept an asset register with respect
to the Trust, in which shall be entered the Authorised Investments and
other Assets of the Trust (other than Purchased Receivables and the
related Receivable Rights) entered into the relevant asset register on an
individual basis.
16.3 Place of keeping Register, copies and access
The Register shall be:
(a) (place kept) kept at the Trustee's principal office in Sydney or at
such place as the Trustee and the Trust Manager may agree;
(b) (access to Trust Manager and Auditor) open to the Trust Manager and
the Auditor of the Trust to which it relates to inspect during
normal business hours;
(c) (inspection by Registered Noteholders) open for inspection by a
Registered Noteholder during normal business hours but only in
respect of information relating to that Registered Noteholder; and
(d) (not for copying) not available to be copied by any person (other
than the Trust Manager) except in compliance with such terms and
conditions (if any) as the Trust Manager and Trustee in their
absolute discretion nominate from time to time.
16.4 Details on Register conclusive
(a) (Reliance on Register) The Trustee shall be entitled to rely on the
Register in clause 16.1 as being a correct, complete and conclusive
record of the matters set out in it at any time and whether or not
the information shown in the Register is inconsistent with any other
document, matter or thing.
(b) (No trusts etc) The Trustee shall not be obliged to enter on the
Register notice of any trust, Security Interest or other interest
whatsoever in respect of any Registered Notes and the Trustee shall
be entitled to recognise a Registered Noteholder as the absolute
owner of Registered Notes and the Trustee shall not be bound or
affected by any trust affecting the ownership of any Registered
Notes unless ordered by a court or required by statute.
(c) (Register not to be signed) The Trustee shall ensure that it does
not sign or otherwise execute any entry in a Register.
16.5 Closing of Register
The Trustee may:
(a) without prior notice to the Noteholders close the Register in clause
16.1:
(i) in relation to all Notes (other than with respect to the
conversion of RFSs under clause 5.4), each period from the
close of business (Sydney time) on the Business Day preceding
each Payment Date to close of business on that Payment Date;
(ii) in relation to the conversion of RFSs under clause 5.4, each
period from the close of business (Sydney time) on the day
which is 5 Business Days before the proposed conversion date
to close of business on that conversion date; or
(iii) when required for the Auditor to conduct any audit in relation
to the Trust; or
(b) with prior notice to each Noteholder who holds a Registered Note,
close the Register for other periods not exceeding 30 days (or such
other period of time as agreed between the Trustee and the Trust
Manager, with the approval of an Extraordinary Resolution of
Registered
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Noteholders) in aggregate in any calendar year.
16.6 Alteration of details on Register
On the Trustee being notified of any change of name or address or payment
or other details of a Registered Noteholder by the Registered Noteholder,
the Trustee shall alter the Register accordingly as soon as reasonably
practicable (and in any event within 5 Business Days of receipt of that
notice).
16.7 Certification of Register
If:
(a) an entry is omitted from the Register;
(b) an entry is made in the Register otherwise than in accordance with
the Master Trust Deed or this Series Notice;
(c) an entry wrongly exists in the Register;
(d) there is an error, omission, misdescription or defect in any entry
in the Register; or
(e) default is made or unnecessary delay takes place in entering in the
Register that any person has ceased to be the holder of Registered
Notes,
the Trustee shall rectify the same upon becoming aware of it.
16.8 Correctness of Register
Neither the Trust Manager nor the Trustee shall be liable for any mistake
in the Register or in any purported copy except to the extent that the
mistake is attributable to its fraud, negligence or breach of trust.
16.9 Trust Manager must provide information
The Trust Manager must provide the Trustee and any person appointed in
accordance with clause 21.4 with such information as the Trustee may
reasonably require to maintain the Register.
16.10 Third party registrar
The Trustee may cause the Register to be maintained by a third party on
its behalf and require that person to discharge the Trustee's obligations
under the Master Trust Deed and this Series Notice in relation to the
Register.
17. DETERMINATIONS BY NOTEHOLDERS
17.1 Offshore Noteholders
(a) Any proposal requiring the consent of Offshore Noteholders will be
determined in accordance with the Note Trust Deed.
(b) The provisions of this clause 17, other than this clause 17.1, shall
not apply to Offshore Notes.
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17.2 Convening of meetings by Trustee and Trust Manager
(a) The Trustee or the Trust Manager may at any time convene a meeting
of the Registered Noteholders or Class of Registered Noteholders.
(b) Registered Noteholders or a Class of Registered Noteholders holding
in aggregate not less than 20% of the Invested Amounts of all
Registered Notes or in that Class, may at any time convene a meeting
of the Registered Noteholders or Class, as the case may be.
17.3 Notice of meetings
(a) (Period of notice) Subject to clause 17.3(b) at least 7 days' notice
(inclusive of the day on which the notice is given and of the day on
which the meeting is held) of a meeting of all Registered
Noteholders or any Class of Registered Noteholders of a Trust shall
be given to the relevant Registered Noteholders of the Trust.
(b) (Short notice) Notwithstanding clause 17.3(a), if it is so agreed by
a majority in number of the Registered Noteholders or the Class (as
the case may be) having the right to attend and vote at the meeting,
being a majority that together hold at least 95% of the then
outstanding Registered Notes or the Class, a resolution may be
proposed and passed at a meeting of which less than 7 days' notice
has been given.
(c) (Failure to give notice) The accidental omission to give notice to
or the non-receipt of notice by any Registered Noteholder shall not
invalidate the proceedings at any meeting.
(d) (Copies) A copy of a notice convening a meeting shall be given by
the Trustee or the Trust Manager convening the meeting to the other,
and also to the Beneficiary and the Designated Rating Agencies.
Failure to give such a notice in accordance with this clause shall
invalidate the meeting unless the party who has not received the
notice waives the invalidation.
(e) (Method of giving notice) Notice of a meeting shall be given in the
manner provided in this deed.
(f) (Contents of a notice) Notice of a meeting of Registered Noteholders
shall specify:
(i) (time etc) the day, time and place of the proposed meeting;
(ii) (agenda) the agenda of the business to be transacted at the
meeting;
(iii) (proposed resolution) the terms of any proposed resolution;
(iv) (closing of Register) that the persons appointed to maintain
the relevant Register for the purpose of determining those
entitled to attend may not register any Registered Note
Transfer in the period of 2 Business Days prior to the
meeting;
(v) (appointment of proxies) that appointments of proxies must be
lodged no later than 24 hours prior to the time fixed for the
meeting; and
(vi) (additional information) such additional information as the
person giving the notice thinks fit.
17.4 Chairman
The Trustee may nominate a person to be chairman of a meeting which has
been convened by the Trustee or the Trust Manager. The chairman need not
be a Registered Noteholder and may be a representative of the Trustee. If
such a person is not present or is present but unwilling to act, then the
Registered Noteholders present may choose a Noteholder to be the chairman.
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17.5 Quorum
At any meeting any two or more persons present in person being Registered
Noteholders holding, or Representatives holding or representing, in the
aggregate not less than 75% of the Invested Amounts of all Registered
Notes or constituting the Class (as the case may be) and then outstanding
shall form a quorum for the transaction of business and no business (other
than the choosing of a chairman) shall be transacted at any meeting unless
the requisite quorum is present at the commencement of business.
17.6 Adjournment
(a) (Quorum not present) If within 15 minutes from the time appointed
for any meeting a quorum is not present, the meeting shall stand
adjourned (unless the Trustee agrees that it be dissolved) for such
period, not being less than 7 days nor more than 42 days, as may be
appointed by the chairman. At such adjourned meeting two or more
persons present in person being Registered Noteholders holding, or
being Representatives holding or representing, in the aggregate not
less than 50% of the Invested Amounts of all Registered Notes or
constituting the Class (as the case may be) and then outstanding
(whatever the Registered Notes so held or represented) shall form a
quorum and shall have the power to pass any resolution and to decide
on all matters which could properly have been dealt with at the
meetings from which the adjournment took place had a quorum been
present at such meeting.
(b) (Adjournment of meeting) The chairman may with the consent of (and
shall if directed by) any meeting adjourn the same from time to time
and from place to place but no business shall be transacted at any
adjourned meeting except business which might lawfully have been
transacted at the meeting from which the adjournment took place.
(c) (Notice of adjourned meeting) At least 5 days' notice of any meeting
adjourned through want of a quorum shall be given in the same manner
as for the original meeting and such notice shall state the quorum
required at such adjourned meeting. It shall not, however, otherwise
be necessary to give any notice of an adjourned meeting.
17.7 Voting procedure
(a) (Show of hands) Every resolution submitted to a meeting shall be
decided in the first instance by a show of hands and, in case of
equality of votes, the chairman shall both on a show of hands and on
a poll have a casting vote in addition to the vote or votes (if any)
to which he or she may be entitled as a Registered Noteholder or as
a Representative.
(b) (Declaration) At any meeting, unless a poll is (before or on the
declaration of the result of the show of hands) demanded, a
declaration by the chairman that a resolution has been carried by a
particular majority or lost or not carried by any particular
majority is conclusive evidence of the fact without proof of the
number or proportion of the votes recorded in favour of or against
such resolution.
(c) (Poll) If at any meeting a poll is demanded by the chairman, the
Trustee or the Trust Manager or by one or more persons being
Registered Noteholders holding, or being Representatives holding or
representing, in aggregate not less than 2% of the Registered Notes
or constituting the Class (as the case may be) and then outstanding,
it shall be taken in such manner and (subject to this clause) either
at once or after such an adjournment as the chairman directs and the
result of such poll shall be deemed to be the resolution of the
meeting at which the poll was demanded as at the date of the taking
of the poll. The demand for a poll shall not prevent
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the continuance of the meeting for the transaction of any business
other than the question on which the poll has been demanded. The
demand for a poll may be withdrawn.
(d) (No adjournment) Any poll demanded at any meeting on the election of
a chairman or on any question of adjournment shall be taken at the
meeting without adjournment.
(e) (Votes) Subject to clause 17.7(a), at any meeting:
(i) on a show of hands, every person present being a Registered
Noteholder holding, or being a Representative holding or
representing, then outstanding Registered Notes shall have one
vote; and
(ii) on a poll, every person present shall have one vote for each
Registered Note then outstanding that he or she holds or in
respect of which he or she is a Representative as stated in
the relevant Register at the date the notices are dispatched
to Registered Noteholders for the meeting.
Any person entitled to more than one vote need not use all his or
her votes or cast all his or her votes to which he or she is
entitled in the same way.
17.8 Right to attend and speak
The Trustee, the Trust Manager and the relevant Beneficiary (through their
respective representatives) and their respective financial and legal
advisers shall be entitled to attend and speak at any meeting of the
Registered Noteholders or any Class (as the case may be). No person shall
otherwise be entitled to attend or vote at any meeting of the Registered
Noteholders or any Class (as the case may be) unless he or she holds
outstanding Registered Notes or is a Representative holding or
representing such Registered Notes.
17.9 Appointment of proxies
(a) (Requirements) Each instrument appointing a proxy shall be in
writing and, together (if so required by the Trustee) with proof
satisfactory to the Trustee of its due execution, shall be deposited
at the registered office of the Trustee or at such other place as
the Trustee shall designate or approve not less than 24 hours before
the time appointed for holding the meeting or adjourned meeting at
which the named proxy proposes to vote and in default, the
instrument or proxy shall be treated as invalid unless the chairman
of the meeting decides otherwise before such meeting or adjourned
meeting proceeds to business. A notarially certified copy proof (if
applicable) of due execution shall if required by the Trustee be
produced by the proxy at the meeting or adjourned meeting but the
Trustee shall not be obliged to investigate or be concerned with the
validity of, or the authority of, the proxy named in any such
instrument. Any person may act as a proxy whether or not that person
is a Registered Noteholder.
(b) (Proxy remains valid) Any vote given in accordance with the terms of
an instrument of proxy conforming with clause 17.9(a) shall be valid
notwithstanding the previous death or insanity of the principal,
revocation or amendment of the proxy or of any of the Registered
Noteholder's instructions under which it was executed, so long as no
intimation in writing of such death, insanity, revocation or
amendment is received by the Trustee at its registered office or by
the chairman of the meeting in each case not less than 24 hours
before the commencement of the meeting or adjourned meeting at which
the proxy is used.
17.10 Corporate representatives
A person authorised under sections 249(3)-(6) of the Corporations Law by a
Registered Noteholder being a body corporate to act for it at any meeting
shall, in accordance with his or her authority until his or her authority
is revoked by the body corporate concerned, be entitled to exercise the
same powers on behalf of that body corporate as that body corporate could
exercise if it were an individual Registered Noteholder
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and shall be entitled to produce evidence of his or her authority to act
at any time before the time appointed for the holding of or at the meeting
or adjourned meeting or for the taking of a poll at which he proposes to
vote.
17.11 Rights of Representatives
A Representative of a Registered Noteholder shall have the right to demand
or join in demanding a poll and shall (except and to the extent to which
the Representative is specially directed to vote for or against any
proposal) have power generally to act at a meeting for the Registered
Noteholder. The Trustee, the Trust Manager and any officer of the Trustee
and the Trust Manager may be appointed a Representative.
17.12 Powers of a meeting of Registered Noteholders
(a) (Powers) Subject to the Security Trust Deed (and in particular any
power of the Registered Note Trustee of Bearer Registered
Noteholders to override the decisions of Registered Noteholders), a
meeting of the Registered Noteholders shall, without prejudice to
any rights or powers conferred on other persons by the Transaction
Documents, only have power exercisable by Extraordinary Resolution:
(i) to sanction any action that the Trustee, the Trust Manager or
the relevant Servicer proposes to take to enforce the
provisions of any Transaction Document;
(ii) to sanction any proposal by the Trust Manager, the Trustee or
the relevant Servicer for any modification, abrogation,
variation or compromise of, or arrangement in respect of, the
rights of the Registered Noteholders against the Trustee, the
Trust Manager, an Approved Seller or the relevant Servicer
whether such rights arise under any Transaction Document or
otherwise;
(iii) to sanction the exchange or substitution of Registered Notes
for or the conversion of Registered Notes into, other
obligations or securities of the Trustee or any other body
corporate formed or to be formed;
(iv) under clause 36.2 of the Master Trust Deed, to consent to any
alteration, addition or modification of any Transaction
Document which shall be proposed by the Trustee or the Trust
Manager;
(v) to discharge or exonerate the Trustee, the Trust Manager, an
Approved Seller or the relevant Servicer from any liability in
respect of any act or omission for which it may become
responsible under any Transaction Document;
(vi) to authorise the Trustee, the Trust Manager, the relevant
Servicer or any other person to concur in and execute and do
all such documents, acts and things as may be necessary to
carry out and give effect to any Extraordinary Resolution; and
(vii) to exercise any other power expressly granted under a Series
Notice.
(b) (No power) A meeting of the Registered Noteholders shall not have
power to, nor shall any resolution submitted to the meeting propose
or have the effect of:
(i) removing the Servicer or the Trust Manager from office;
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(ii) interfering with the management of the Trust;
(iii) winding up or terminating the Trust (except as contemplated by
clause 17.12(a)(vii));
(iv) altering the Authorised Investments of the Trust;
(v) amending any Transaction Document (except as contemplated by
clause 17.12(a)); or
(vi) altering the Coupon Payment Dates, Principal Payment Dates,
Coupons, Principal Entitlements or the other terms of the
Series Notice (subject to clause 17.12(a)(iii)).
17.13 Extraordinary Resolution binding on Registered Noteholders
An Extraordinary Resolution passed at a meeting of the Registered
Noteholders or of any Class duly convened and held in accordance with this
deed shall be binding on all the Registered Noteholders or of the Class
whether or not present at such meeting. Each of the Registered Noteholders
or of the Class (as the case may be), the Trustee and the Trust Manager
shall be bound to give effect to that resolution accordingly.
17.14 Minutes and records
Minutes of all resolutions and proceedings at every meeting of the
Registered Noteholders of a Trust or any Class (as the case may be) shall
be made and duly entered in the books to be from time to time provided for
that purpose by the Trustee and any such minutes purporting to be signed
by the chairman of the meeting at which such resolutions were passed or
proceedings transacted or by the chairman of the next succeeding meeting
of the Registered Noteholders or of the Class (as the case may be) shall
be conclusive evidence of those matters and until the contrary is proved
every such meeting in respect of the proceedings of which minutes have
been made and signed shall be deemed to have been duly convened and held
and all resolutions passed or proceedings transacted at such meeting to
have been duly passed and transacted.
17.15 Written resolutions
Notwithstanding the preceding provisions of this clause 17, a resolution
of the Registered Noteholders or any Class (including an Extraordinary
Resolution) may be passed, without any meeting or previous notice being
required, by an instrument or instruments in writing which has or have:
(a) in the case of a resolution (including an Extraordinary Resolution)
of the Registered Noteholders or any Class, been signed by all
Registered Noteholders or the Class (as the case may be); and
(b) any such instrument shall be effective on presentation to the
Trustee for entry in the records referred to in clause 17.14.
17.16 Further procedures for meetings
Subject to all other provisions contained in this deed, the Trustee may
without the consent of the Registered Noteholders or any Class prescribe
such further regulations regarding the holding of meetings of the
Registered Noteholders or any Class of Registered Noteholders and
attendance and voting at such meetings as the Trustee may with the
agreement of the Trust Manager determine including particularly (but
without prejudice to the generality of the above) such regulations and
requirements as the Trustee thinks reasonable:
(a) (entitlement to vote) so as to satisfy itself that persons who
purport to attend or vote at any
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meeting of the Registered Noteholders or any Class of Registered
Noteholders are entitled to do so in accordance with this deed; and
(b) (forms of Representative) as to the form of appointment of a
Representative,
but the Trustee may not decrease the percentage of Registered Noteholders
required to pass an Extraordinary Resolution or an ordinary resolution.
CLAUSE 18.3 - NOTE ISSUANCE
For the purpose of clause 18.3(a) of the Master Trust Deed (but subject to
the conditions contained in clause 18.3 of the Master Trust Deed), the
Trust Manager has the following additional express powers:
(a) to negotiate with any Lead Manager and any Manager in relation to
the issue of relevant Notes;
(b) to invite bids from any Lead Manager or Manager for relevant Notes
on behalf of the Trustee; and
(c) to accept any such bid on behalf of the Trustee.
CLAUSE 18.9 - ACCOUNTING FOR MONEYS RECEIVED
For the purposes of clause 18.9(a) of the Master Trust Deed, the Trust
Manager will pay to the Trustee, within 5 Business Days of receipt, all
moneys coming into its hand belonging to the Trust or payable to the Trust
by the Trust Manager.
CLAUSE 18.10 - REUTERS
The Trust Manager will, on or promptly after each Notice Date, prepare and
arrange for the publication on Reuters Screen page [ ] (or another similar
electronic reporting service, in the case of Offshore Notes approved by
the Note Trustee and notified to Offshore Noteholders) of summary pool
performance data for that Trust in a format similar to that used by other
mortgage-backed securities or asset-backed securities (as the case may be)
in the Australian market in relation to the Registered Notes, and in the
London market in relation to Offshore Notes. In the case of the Offshore
Notes, this includes:
(a) details of the Offshore Notes (including the then Stated Amount,
Coupon Rate, relevant Coupon, the relevant Payment Date, the Initial
Invested Amount and the then Invested Amount);
(b) the Class A Bond Factor and the Class B Bond Factor;
(c) statistics relating to Arrears on Purchased Receivables; and
(d) statistics relating to Purchased Receivables in default.
CLAUSE 21.2
For the purposes of clause 21.2 of the Master Trust Deed, the following
new paragraphs (v) to (z) are inserted and the existing paragraph (v)
becomes paragraph (aa).
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(clearing systems) to lodge Notes, or arrange for Notes to be lodged, with
DTC, Euroclear or Cedel, or a depositary for DTC, Euroclear and/or Cedel;
(currency conversion) convert currencies on such terms and conditions as
the Trust Manager thinks fit and that are acceptable to the Trustee acting
reasonably;
(stock exchange) list and maintain the listing of the Notes on any stock
exchange;
(Note Trustee) appoint a note trustee in respect of a relevant Trust;
(Paying Agents) appoint paying agents in respect of a relevant Trust; and"
CLAUSE 24.11 - Outgoing Trustee to retain lien
For the purposes of clause 24.11 of the Master Trust Deed, the term
"24.8(c)" in line two is replaced with "24.9(c)".
CLAUSE 33.14
For the purposes of clause 33.14 of the Master Trust Deed, insert a new
paragraph (f) as follows:
"(f) (for acts of Note Registrar) for any act, omission or default
of any Note Registrar appointed under the relevant Agency
Agreement or Note Trust Deed, in relation to its duties and
obligations under the relevant Agency Agreement or Note Trust
Deed, except where the Note Registrar is the Trustee."
CLAUSE 34.2 - NOTICES TO NOTEHOLDERS
(a) A notice, request or other communication by the Trustee, the Trust
Manager or a Servicer to Registered Noteholders shall be deemed to
be duly given or made by:
(i) an advertisement placed on a Business Day in The Australian
Financial Review (or other nationally distributed newspaper);
or
(ii) mail, postage prepaid, to the address of the Registered
Noteholders as shown on the Register. Any notice so mailed
shall be conclusively presumed to have been duly given whether
or not the Registered Noteholder actually receives the notice.
(b) A notice, request or other communication by the Trustee, the Trust
Manager, the Note Trustee or a Servicer to Offshore Noteholders
shall be deemed to be duly given or made if given or made in
accordance with the relevant Condition 12.
CLAUSE 35 - PAYMENTS GENERALLY
35.1 Payments to Noteholders
(a) Any payment made by or on behalf of the Trustee in respect of any
Registered Note shall be made to the person whose name is, on the
Record Date, entered in the Register as the registered owner of the
relevant Registered Note (or in the case of joint registered owners,
to the person whose name first appears in the Register).
(b) Any payment by or on behalf of the Trustee in respect of any
Offshore Note shall be made in accordance with the Note Trust Deed
and the Agency Agreement.
35.2 Payment Methods - Registered Notes
Any moneys payable by the Trustee, the Trust Manager or the Servicer to a
Registered Noteholder or to
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a Beneficiary under the Master Trust Deed and this Series Notice shall be
paid by the Trustee in Sydney or if the Trustee elects may be paid by:
(a) (cheque) crossed not negotiable cheque in favour of the Registered
Noteholder or the Beneficiary (as the case may be) and despatched by
post to the address of the Registered Noteholder shown in the
Register on the Record Date or to the address of the Beneficiary for
the purposes of clause 34;
(b) (electronic transfer) electronic transfer through Austraclear;
(c) (direct payment) by direct transfer to a designated account of the
Registered Noteholder or the Beneficiary held with a bank or other
financial institution in Australia; or
(d) (other agreed manner) any other manner specified by the Registered
Noteholder or the Beneficiary (as the case may be) and agreed to by
the Trust Manager and the Trustee.
35.3 Payment to be made on Business Day
If any payment is due under a Transaction Document on a day which is not a
Business Day, the due date will be the next Business Day.
35.4 Payment good discharge
(a) There is a full satisfaction of the moneys payable under a
Registered Note, and a good discharge to the Trustee, the Trust
Manager or the Servicer (as the case may be) in relation to that
Registered Note, when the cheque is despatched by post in accordance
with clause 35.2(a) or, if not posted, delivered to the Registered
Noteholder or as directed by the Registered Noteholder. None of the
Trustee, the Trust Manager or the Servicer shall be responsible for
any moneys which are not credited to the bank account of a
Registered Noteholder or a Beneficiary if the Trustee's bank has
been instructed to effect the direct transfer referred to in clause
35.2(c).
(b) There is a full satisfaction of the moneys payable under a Offshore
Note, and a good discharge to the Trustee, the Trust Manager or the
Servicer (as the case may be) in relation to that Offshore Note,
when so provided under the Note Trust Deed.
35.5 Trust Manager to arrange payments
The Trustee will:
(a) prepare or cause to be prepared all cheques which are to be issued
to Registered Noteholders and to Beneficiaries and stamp the same as
required by law; or
(b) otherwise arrange payments under clause 35.20.
The Trustee will sign (by autographical, mechanical or other means)
cheques for despatch on the day on which they ought to be despatched.
35.6 Valid receipts
The receipt of the Trustee for any moneys shall exonerate the person
paying the same from all liability
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to make any further enquiry. Every such receipt shall as to the moneys
paid or expressed to be received in such receipt, effectually discharge
the person paying such moneys from such liability or enquiry and from
being concerned to see to the application or being answerable or
accountable or any loss or misapplication of such moneys.
35.7 Taxation
(a) (Net payments) Subject to this clause, payments in respect of the
Notes shall be made free and clear of, and without deduction for, or
by reference to, any present or future Taxes of any Australian
Jurisdiction unless required by law.
(b) (Interest Withholding Tax - Registered Notes) The Trustee or any
person making payments on behalf of the Trustee will be obliged to
deduct interest withholding tax imposed by the Commonwealth of
Australia from payments of interest in respect of the Registered
Notes to non- residents of the Commonwealth of Australia not
carrying on business in the Commonwealth of Australia at or through
a permanent establishment and to residents of the Commonwealth of
Australia carrying on business at or through a permanent
establishment outside the Commonwealth of Australia (Interest
Withholding Tax) unless a certificate pursuant to Section 221YM of
the Taxation Act is produced to the Trustee not later than close of
business on the tenth Business Day immediately preceding the
relevant payment date. The Trustee, or any person making any
payments on behalf of the Trustee, is entitled to deduct Interest
Withholding Tax in relation to payments on any Registered Notes.
(c) (Interest Withholding Tax - Offshore Notes) Payments on Offshore
Notes by or on behalf of the Trustee will be made subject to
deduction for any Interest Withholding Tax and all other
withholdings and deductions referred to in Condition 7 of the
Offshore Notes.
(d) (Tax file numbers) The Trustee or any person making payments on
behalf of the Trustee will be required to deduct tax-at-source on
interest payments on any Registered Note to each Noteholder who has
or is required to have a Tax File Number at the highest personal
marginal tax rate unless the Trustee receives from such Registered
Noteholder the Tax File Number of that Registered Noteholder or
evidence of any exemption the Registered Noteholder may have from
the need to advise the Trustee of a Tax File Number. The Tax File
Number or appropriate evidence (as the case may be) must be received
by the Trustee not less than ten Business Days prior to the relevant
payment date. The Trustee, or any person making any payments on
behalf of the Trustee, is entitled to deduct any such tax-at-source
required to be paid by it in relation to Registered Notes at that
highest personal marginal tax rate if no Tax File Number is
provided.
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<PAGE>
Exhibit 4.3
WESTPAC SECURITIES ADMINISTRATION LIMITED
(as Trustee)
WESTPAC SECURITISATION MANAGEMENT PTY LIMITED
(the Trust Manager)
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
(Note Trustee)
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NOTE TRUST DEED
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(C)Allen Allen & Hemsley
Sydney
Ref: AEJ 1279390 CTB
<PAGE>
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TABLE OF CONTENTS
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1. DEFINITIONS AND INTERPRETATION ...................................... 1
1.1 Definitions and Interpretation ............................... 1
1.2 Definitions in Master Trust Deed, Series Notice and
Conditions ...................................................... 3
1.3 Incorporation by reference ................................... 4
1.4 Interpretation ............................................... 4
1.5 Determination, statement and certificate sufficient
evidence ........................................................ 4
1.6 Document or agreement ........................................ 4
1.7 Transaction Document ......................................... 5
1.8 Trustee as trustee ........................................... 5
1.9 Obligations of the Trustee ................................... 5
2. PAYMENTS ON OFFSHORE NOTES .......................................... 5
2.1 Principal amount ............................................. 5
2.2 Covenant to repay ............................................ 5
2.3 Deemed payment ............................................... 6
2.4 Following Event of Default ................................... 6
2.5 Requirements of Paying Agent ................................. 7
2.6 Certification ................................................ 7
2.7 Determinations ............................................... 7
3. FORM OF, ISSUE OF AND DUTIES AND TAXES ON, OFFSHORE NOTES ........... 8
3.1 Issue of Book-Entry Notes .................................... 8
3.2 Form of Book-Entry Notes ..................................... 8
3.3 Definitive Notes ............................................. 9
3.4 Stamp and Other Taxes ....................................... 10
3.5 Indemnity for non-issue ..................................... 10
3.6 Note Register and Note Registrar ............................ 10
4. COVENANT OF COMPLIANCE ............................................. 11
5. CANCELLATION OF OFFSHORE NOTES ..................................... 12
5.1 Cancellation ................................................ 12
5.2 Records ..................................................... 12
6. ENFORCEMENT ........................................................ 12
6.1 Actions following Event of Default .......................... 12
6.2 Evidence of default ......................................... 12
6.3 Overdue interest ............................................ 13
6.4 Restrictions on enforcement ................................. 13
7. PROCEEDINGS ........................................................ 14
7.1 Acting only on direction .................................... 14
7.2 Security Trustee acting ..................................... 14
7.3 Note Trustee alone entitled to act .......................... 14
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Page (ii)
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7.4 Available amounts ........................................... 15
7.5 Conflict of interests ....................................... 15
8. NOTICE OF PAYMENT .................................................. 15
9. INVESTMENT BY NOTE TRUSTEE ......................................... 15
10. PARTIAL PAYMENTS ................................................... 16
11. COVENANTS BY THE TRUSTEE AND TRUST MANAGER ......................... 16
11.1 Covenants by the Trustee and Trust Manager .................. 16
12. REMUNERATION OF NOTE TRUSTEE ....................................... 18
12.1 Fee ......................................................... 18
12.2 Additional Remuneration ..................................... 19
12.3 Costs, expenses ............................................. 19
12.4 Overdue rate ................................................ 19
12.5 Continuing obligation ....................................... 19
13. NOTE TRUSTEE ....................................................... 19
13.1 Preferential Collection of Claims Against Trustee ........... 19
13.2 Duties of Note Trustee ...................................... 19
13.3 Notice of Defaults .......................................... 20
13.4 Rights of Note Trustee ...................................... 20
14. NOTE TRUSTEE'S LIABILITY ........................................... 26
15. DELEGATION BY NOTE TRUSTEE ......................................... 27
16. EMPLOYMENT OF AGENT BY NOTE TRUSTEE ................................ 27
17. NOTE TRUSTEE CONTRACTING WITH TRUSTEE .............................. 27
18. WAIVER ............................................................. 28
19. AMENDMENT .......................................................... 28
19.1 Approval .................................................... 28
19.2 Resolution of Offshore Noteholders .......................... 29
19.3 Distribution of amendments .................................. 29
19.4 Conformity with TIA ......................................... 29
20. OFFSHORE NOTEHOLDERS ............................................... 29
20.1 Absolute Owner .............................................. 29
20.2 Clearing Agency Certificate ................................. 30
21. CURRENCY INDEMNITY ................................................. 30
22. NEW NOTE TRUSTEES .................................................. 31
22.1 Appointment by Trustee ...................................... 31
22.2 Appointment by Note Trustee ................................. 31
22.3 Notice ...................................................... 32
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Page (iii)
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23. NOTE TRUSTEE'S RETIREMENT AND REMOVAL .............................. 32
23.1 Removal by Trustee .......................................... 32
23.2 Removal by Offshore Noteholders ............................. 33
23.3 Resignation ................................................. 33
23.4 Rating Agencies approval .................................... 33
23.5 Trust Corporation ........................................... 33
23.6 Successor to Note Trustee ................................... 33
23.7 Eligibility; Disqualification ............................... 34
24. NOTE TRUSTEE'S POWERS ADDITIONAL ................................... 34
25. SEVERABILITY OF PROVISIONS ......................................... 34
26. NOTICES ............................................................ 34
26.1 General ..................................................... 34
26.2 Details ..................................................... 35
27. GOVERNING LAW AND JURISDICTION ..................................... 36
28. COUNTERPARTS ....................................................... 36
29. LIMITED RECOURSE ................................................... 36
29.1 General ..................................................... 36
29.2 Liability of Trustee limited to its right to indemnity ...... 36
29.3 Unrestricted remedies ....................................... 37
29.4 Restricted remedies ......................................... 38
30. SUCCESSOR TRUSTEE .................................................. 38
31. OFFSHORE NOTEHOLDERS' LISTS AND REPORTS ............................ 38
31.1 Provision of information .................................... 38
31.2 Preservation of Information; Communications to Offshore
Noteholders ................................................. 39
31.3 Reports by Note Trustee ..................................... 39
31.4 Notices to Offshore Noteholders; Waiver ..................... 39
31.5 Reports by Trustee .......................................... 40
32. TRUST INDENTURE ACT - MISCELLANEOUS ................................ 40
32.1 Compliance Certificates and Opinions, etc ................... 40
32.2 Undertaking for Costs ....................................... 41
32.3 Exclusion of section 316 .................................... 42
32.4 Unconditional Rights of Offshore Noteholders to Receive
Principal and Interest ...................................... 42
32.5 Conflict with Trust Indenture Act ........................... 42
33. CONSENT OF OFFSHORE NOTEHOLDERS .................................... 43
33.1 General ..................................................... 43
33.2 Special Written Approvals ................................... 43
33.3 Requirement for writing ..................................... 44
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CROSS REFERENCE TABLE(1)
Trust Indenture Act Section Clause
310 (a)(1) 23.6
23.1(d)
(a)(2) 23.6
(a)(3) 22.2(b)
(a)(4) NA(2)
(a)(5) 23.6
(b) 23.6, 23.1
(c) NA
311 (a) 13.1
(b) 13.1
(c) NA
312 (a) 31.1,31.2(a)
(b) 31.2(b)
(c) 31.2(c)
313 (a) 31.3
(b)(1) 31.3
(b)(2) NA
(c) 31.4
(d) 31.3
314 (a)(1) 31.5
(a)(2) 31.5
(a)(3) 31.5
(a)(4) 11.1(i)
(b) 11.1(j)
(c) 32.1(a)
(d) 32.1(b)
(e) 32.1(c)
(f) 32.1(a)
315 (a) 13.2(b)
(b) 13.3
(c) 13.2(a)
(d) 13.2(c), (d)
(e) 32.2
316 (a)(1) 32.3
(a)(2) NA
(b) 32.4
317 (a)(1) 6.1
(a)(2) 2.5
(b) NA
318 (a) 32.5
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Notes:
1. This Cross Reference Table shall not, for any purpose, be deemed to be
part of this deed.
2. NA means not applicable.
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NOTE TRUST DEED
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DEED dated 1998 between:
1. WESTPAC SECURITIES ADMINISTRATION LIMITED (ACN 000 049 472) incorporated
in New South Wales of Level 10, 130 Pitt Street, Sydney in its capacity as
trustee of the Series 1998-1G WST Trust (the Trustee);
2. WESTPAC SECURITISATION MANAGEMENT PTY LIMITED (ACN 081 709 211)
incorporated in the Australian Capital Territory of Level 4, 60 Martin
Place, Sydney as trust manager in relation to the Series 1998-1G WST Trust
(the Trust Manager); and
3. MORGAN GUARANTY TRUST COMPANY OF NEW YORK acting through its office at 60
Victoria Embankment, London EC4Y OJP (Note Trustee), which expression
shall, wherever the context requires, include any other person or company
for the time being a trustee under this deed or trustees of this deed).
RECITALS
A. The Trustee has resolved at the direction of the Trust Manager to issue
US$[*] of mortgage backed floating rate notes due [ ] comprising US$[*]
Class A Notes and US$[*] Class B Notes, those Offshore Notes to be
constituted and secured in the manner provided in this deed and the other
Transaction Documents.
B. The Note Trustee has agreed to act as trustee for the Offshore Noteholders
under this deed.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions and Interpretation
The following definitions apply unless the context requires otherwise.
Clearing Agency Participant means a broker, dealer, bank, other financial
institution or other person for whom from time to time a Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
Conditions means:
(a) in respect of a Class A Note, the Class A Conditions;
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(b) in respect of a Class B Note, the Class B Conditions; and
(c) where no Class is specified, the applicable Conditions for the
relevant Notes,
and any reference in this deed to a particular numbered Condition shall be
construed accordingly.
Corporate Trust Office means the principal office of the Note Trustee at
which at any particular time its corporate trust business is administered
which at the date of the execution of this deed is 60 Victoria Embankment,
London EC4Y OJP or at such other address as the Note Trustee and the
Offshore Noteholders may designate by notice to the Trust Manager or the
principal corporate trust office of any successor Note Trustee.
Event of Default means, in respect of a Offshore Note, any of the events
described in the relevant Condition 9.
Exchange Act means the Securities Exchange Act 1934 of the United States
of America, as amended.
Independent means, in relation to a person, that the person:
(a) is independent of the Trustee, the Trust Manager, the Servicer, any
Approved Seller and any of their Associates;
(b) does not have any direct financial interest or any material indirect
financial interest (other than less than 5% of the outstanding
amount of any publicly traded security) in any person referred to in
paragraph (a); and
(c) is not an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions of any
person referred to in paragraph (a).
Independent Certificate means, in relation to any person, a certificate or
opinion from that person where that person must be Independent, which
opinion or certificate states that the signer has read the definition of
Independent in this deed and that the signer is Independent within the
meaning of that definition.
Issuer Order and Issuer Request means a written order or request signed in
the name of the Trustee by any one of its Authorised Signatories and
delivered to the Note Trustee.
Master Trust Deed means the Master Trust Deed dated 14 February 1997
between the Trustee and the Trust Manager.
Note Depository Agreement means the agreement among Trustee, Note Trustee
and The Depository Trust Company, as the initial Clearing Agency, dated as
of the Closing Date, relating to the Offshore Notes, as the same may be
amended or supplemented from time to time.
Noteholders Report means the report to be delivered by the Trust Manager,
on behalf of the Trustee, in accordance with clause 11.1(1) containing the
information set out in Schedule 2.
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Officer's Certificate means a certificate signed by any Authorised
Signatory of the Trustee or the Trust Manager on behalf of the Trustee,
under the circumstances described in, and otherwise complying with, the
applicable requirements of section 314 of the TIA.
Offshore Note Owner means, with respect to a Book-Entry Note, the person
who is the owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency, or on the books of a person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such
Clearing Agency).
Opinion of Counsel means one or more written opinions of legal counsel who
may, except as otherwise expressly provided in this deed, be employees of
or counsel to the Trustee or the Trust Manager on behalf of the Trustee
and who shall be satisfactory to the Trustee or the Note Trustee, as
applicable, and which opinion or opinions shall be addressed to the
Trustee or the Note Trustee, as applicable, and shall be in form and
substance satisfactory to the Trustee and the Note Trustee, as applicable.
Paying Agent means any institution, including where the context permits
the Principal Paying Agent at its office (for so long as required for
interest under the Offshore Notes to be exempt from interest withholding
tax under section 128F of the Income Tax Assessment Act 1936 (Cth),
outside of Australia):
(a) initially appointed as Paying Agent by the Trustee under the Agency
Agreement; or
(b) as may, with the prior written approval of, and on terms previously
approved in writing by, the Note Trustee (that approval not to be
unreasonably withheld or delayed) from time to time be appointed by
the Trustee in relation to the Offshore Notes,
in each case (except in the case of the initial Principal Paying Agent)
where notice of the appointment has been given to the Offshore Noteholders
under this deed and in accordance with the relevant Condition 12.
Responsible Officer means, with respect to the Note Trustee, any of its
officers, including any Vice President, Assistant Vice President,
Assistant Treasurer, Assistant Secretary, or any other of its officers
customarily performing functions similar to those performed by any of them
and, with respect to a particular matter, any other officer to whom such
matter is referred because of such officer's knowledge of and familiarity
with the particular subject.
Series Notice means the Series Notice dated [*] 1998 between the Trustee,
the Trust Manager, the Note Trustee, Westpac Banking Corporation and the
Servicer.
TIA means the Trust Indenture Act of 1939 of the United States of America,
as amended.
Trust Account means the Collection Account, the US$ Account or any other
account maintained by or on behalf of the Trustee in relation to the
Trust.
Trust Corporation means any person eligible for appointment as a trustee
under an indenture to be qualified pursuant to the TIA, as set forth in
Section 310(a) of the TIA, which shall include Morgan Guaranty Trust
Company of New York for so long as it complies with such section.
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1.2 Definitions in Master Trust Deed, Series Notice and Conditions
(a) Words and expressions which are defined in the Master Trust Deed (as
amended by the Series Notice), the Series Notice and the Conditions
(including in each case by reference to another agreement) have the
same meanings when used in this deed unless the context otherwise
requires or unless otherwise defined in this deed.
(b) No change to the Master Trust Deed or any other document (including
the order of payment set out in the Series Notice) after the date of
this deed will change the meaning of terms used in this deed or
adversely affect the rights of the Note Trustee or any Offshore
Noteholder under this deed unless the Note Trustee has agreed in
writing to the changes under this deed.
1.3 Incorporation by reference
Where this deed refers to a provision of the TIA, the provision is
incorporated by reference in and made part of this deed. The following
terms used in the TIA have the following meaning in this deed.
Commission means the Securities and Exchange Commission.
indenture securities means the Offshore Notes.
indenture security holder means a Offshore Noteholder.
indenture to be qualified means the Note Trust Deed.
indenture trustee or institutional trustee means the Note Trustee.
obligor on the indenture securities means the Trustee.
Any other term which is used in this deed in respect of a section or
provision of the TIA and which is defined in the TIA, defined in the TIA
by reference to another statute or defined by or in any rule of or issued
by the Commission, will have the meaning assigned to them by such
definitions.
1.4 Interpretation
Clause 1.2 of the Master Trust Deed applies to this deed as if set out in
full and:
(a) a reference to an asset includes any real or personal, present or
future, tangible or intangible property or asset and any right,
interest, revenue or benefit in, under or derived from the property
or asset;
(b) an Event of Default subsists until it has been waived in writing by
the Note Trustee;
(c) a reference to an amount for which a person is contingently liable
includes an amount which that person may become actually or
contingently liable to pay if a contingency occurs, whether or not
that liability will actually arise; and
(d) all references to costs or charges or expenses include any value
added tax or similar tax charged or chargeable in respect of the
charge or expense.
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1.5 Determination, statement and certificate sufficient evidence
Except where otherwise provided in this deed any determination, statement
or certificate by the Note Trustee or an Authorised Signatory of the Note
Trustee provided for in this deed is sufficient evidence of each thing
determined, stated or certified until proven wrong.
1.6 Document or agreement
A reference to:
(a) an agreement includes a Security Interest, Guarantee, undertaking,
deed, agreement or legally enforceable arrangement whether or not in
writing; and
(b) a document includes an agreement (as so defined) in writing or a
certificate, notice, instrument or document.
A reference to a specific agreement or document includes it as amended,
novated, supplemented or replaced from time to time, except to the extent
prohibited by this deed.
1.7 Transaction Document
This deed is a Transaction Document for the purposes of the Master Trust
Deed.
1.8 Trustee as trustee
In this deed, except where provided to the contrary:
(a) a reference to the Trustee is a reference to the Trustee in its
capacity as trustee of the Trust only, and in no other capacity; and
(b) a reference to the assets, business, property or undertaking of the
Trustee is a reference to the assets, business, property or
undertaking of the Trustee only in the capacity described in
paragraph (a) above.
1.9 Obligations of the Trustee
(a) A reference to the Trustee in each of clauses 3.6 other than the
first sentence, 5, 11.1(i), 11.1(j), 31.1, 31.5 and 32.1 is a
reference to the Trust Manager on behalf of the Trustee and, failing
action by the Trust Manager in accordance with the relevant clause
(including any requirement to take such action within a specified
time), the Trustee.
(b) The Trustee shall not be liable for any omission by the Trust
Manager where it is acting on behalf of the Trust Manager under
sub-paragraph (a).
2. PAYMENTS ON OFFSHORE NOTES
2.1 Principal amount
(a) Subject to clause 2.3, the aggregate principal amount of the Class A
Notes is limited to US$[*].
(b) The aggregate principal amount of the Class B Notes is limited to
US$[*].
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2.2 Covenant to repay
(a) The Trustee covenants with the Note Trustee that the Trustee will,
in accordance with the terms of the Offshore Notes (including the
Conditions) and the Transaction Documents (and subject to the terms
of the Transaction Documents and the Conditions, including clause 29
of this deed and the relevant Condition 6) on:
(i) the Maturity Date of the Offshore Notes; or
(ii) each earlier date as the Offshore Notes, or any of them, may
become repayable (whether in full or in part),
pay or procure to be paid unconditionally to or to the order of the
Note Trustee in US$ in [London] for immediate value the principal
amount of the Offshore Notes repayable, or in the case of a partial
payment of the Offshore Notes, the principal amount payable, subject
to and in accordance with the terms of the Offshore Notes (including
the Conditions).
(b) Subject to clause 2.3 and to the terms of the Offshore Notes
(including the Conditions) and the Transaction Documents, until any
payment as well after as before any judgment or other order of a
court of competent jurisdiction the Trustee shall pay or procure to
be paid unconditionally to or to the order of the Note Trustee:
(i) any interest, at the respective rates calculated from time to
time, in accordance with and on the dates provided for in the
Class A Conditions and the Class B Conditions respectively;
and
(ii) principal payable at the times and in the amounts as may be
determined in accordance with Class A Condition 5 or Class B
Condition 5, as the case may be.
(c) The Note Trustee shall hold the benefit of the covenant in this
clause 2.2, and all other rights of the Offshore Noteholders under
the Offshore Notes, on trust for the benefit of the Offshore
Noteholders.
2.3 Deemed payment
Any payment of principal or interest in respect of Offshore Notes to or to
the account of the Principal Paying Agent in the manner provided in clause
3 of the Agency Agreement shall satisfy the covenant in relation to the
Offshore Notes by the Trustee in this clause 2 to the extent of that
payment, except to the extent that the Principal Paying Agent subsequently
fails to pay that amount under the Offshore Notes in accordance with the
terms of the Offshore Notes (including the Conditions).
2.4 Following Event of Default
At any time after an Event of Default in respect of the Class A Notes or
the Class B Notes (as the case may be) has occurred, or at any time after
Definitive Notes have not been issued when so required in accordance with
the Conditions, the Note Trustee may:
(a) by notice in writing to the Trustee, the Trust Manager, the
Principal Paying Agent, the other Paying Agents and the Agent Bank
require the Principal Paying Agent, the other Paying Agents and the
Agent Bank under the Agency Agreement either:
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(i)(A) to act as Principal Paying Agent and Paying Agents and
Agent Bank respectively of the Note Trustee in relation
to payments to be made by or on behalf of the Note
Trustee under the provisions of this deed on the terms
of the Agency Agreement except that the Note Trustee's
liability under any provisions of the Agency Agreement
for the indemnification of the Paying Agents and Agent
Bank shall be limited to any amount for the time being
held by the Note Trustee on the trusts of this deed and
which is available to be applied by the Note Trustee
under this deed; and
(B) hold all Definitive Notes, and all amounts, documents
and records held by them in respect of the Offshore
Notes, on behalf of the Note Trustee; or
(ii) to deliver up all Definitive Notes and all amounts, documents
and records held by them in respect of the Offshore Notes, to
the Note Trustee or as the Note Trustee shall direct in that
notice, other than any documents or records which the relevant
Paying Agent or Agent Bank is obliged not to release by any
law or regulation; and
(b) by notice in writing to the Trustee require it to make all
subsequent payments in respect of the Offshore Notes to the order of
the Note Trustee and not to the Principal Paying Agent and, with
effect from the issue of that notice to the Trustee and until that
notice is withdrawn clause 2.3 shall not apply.
2.5 Requirements of Paying Agent
The Trustee will cause each Paying Agent to execute and deliver to the
Note Trustee an instrument in which that Paying Agent shall agree with the
Note Trustee, subject to the provisions of this Clause, that that Paying
Agent shall:
(a) hold in trust for the Note Trustee and the Offered Noteholders all
sums held by that Paying Agent for the payment of principal and
interest with respect to the Offered Notes until all relevant sums
are paid to the Note Trustee or the Offered Noteholders or otherwise
disposed of as provided in this deed; and
(b) immediately notify by telex or facsimile the Note Trustee, the
Trustee, the Security Trustee and the Trust Manager if the full
amount of any payment of principal or interest required to be made
by the Series Notice and the relevant Conditions in respect of the
Offshore Notes is not unconditionally received by it or to its order
in accordance with the Agency Agreement.
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2.6 Certification
For the purposes of any redemption of Offshore Notes under the relevant
Condition 5 the Note Trustee may rely upon an Officer's Certificate from
the Trust Manager on behalf of the Trustee certifying or stating, the
opinion of each person signing that Officer's Certificate as:
(a) the fair value (within 90 days of such release) of the property or
securities to be released from the Security Trust Deed;
(b) that the proposed release will not impair the security under the
Security Trust Deed in contravention of the provisions of the
Security Trust Deed or this deed;
(c) that the Trustee will be in a position to discharge all its
liabilities in respect of the relevant Offshore Notes; and
(d) any amounts required under the Security Trust Deed to be paid in
priority to or pari passu with those Offshore Notes,
and that Officer's Certificate shall be conclusive and binding on the
Trustee, the Note Trustee and the holders of those Offshore Notes.
2.7 Determinations
If the Trust Manager does not at any time for any reason determine a
Principal Payment, the Invested Amount, the Stated Amount or the Bond
Factor applicable to any Offshore Notes in accordance with the relevant
Condition 5(m), the Principal Payment, Invested Amount, the Stated Amount
and the Bond Factor may be determined by the Note Trustee in accordance
with the relevant Conditions 5(i) and 5(m) (but based on the information
in its possession) and each such determination or calculation shall be
deemed to have been made by the Trust Manager, and the Note Trustee shall
have no liability in respect thereof other than as a result of the gross
negligence or wilful default of the Note Trustee.
3. FORM OF, ISSUE OF AND DUTIES AND TAXES ON, OFFSHORE NOTES
3.1 Issue of Book-Entry Notes
(a) The Class A Notes and the Class B Notes shall on issue be
represented by, respectively, the Class A Book-Entry Notes and the
Class B Book-Entry Notes.
(b) Each Book-Entry Note must be signed manually or by facsimile by an
Authorised Signatory of the Trustee on behalf of the Trustee and
must be manually authenticated by the Principal Paying Agent.
3.2 Form of Book-Entry Notes
(a) The Class A Book-Entry Notes and the Class B Book-Entry Notes shall
be typed in the form or substantially in the form set out in
schedule 1.
(b) The procedures relating to the exchange, authentication, delivery,
surrender, cancellation, presentation, marking up or down of any of
the Book-Entry Note (or part of the Book-Entry Note and any other
matters to be carried out by the relevant parties upon exchange (in
whole or part) of any Offshore Note shall be made in accordance with
the provisions of the relevant terms of the Book-Entry Notes and the
normal practice of the Common Depositary, the
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Principal Paying Agent and the rules and procedures of the Clearing
Agency from time to time.
(c) The Class A Book-Entry Notes shall be in an aggregate principal
amount of US$[*]. The Class B Book-Entry Notes shall be in an
aggregate principal amount of US$[*].
(d) The Trustee shall procure that, prior to the issue and delivery of
any Book-Entry Note, that Book-Entry Note will be authenticated
manually by an Authorised Signatory of the Principal Paying Agent
and no Book-Entry Note shall be valid for any purpose unless and
until so authenticated. A Book-Entry Note so executed and
authenticated shall be binding and valid obligations of the Trustee.
Until a Book-Entry Note (or part of a Book-Entry Note) has been
exchanged pursuant to this deed, it (or that part) shall in all
respects be entitled to the same benefits as a Definitive Note. Each
Book-Entry Note shall be subject to this deed except that the
registered owner of a Book-Entry Note shall be the only person
entitled to receive payments of principal or interest in relation to
it.
(e) The Offshore Notes upon original issue will be issued in the form of
Notes representing the Book-Entry Notes. The Trustee shall, on the
date of this deed, deliver or arrange the delivery on its behalf to
the Principal Paying Agent, as agent for the Clearing Agency, of the
Book-Entry Notes. The Book-Entry Notes shall initially be registered
on the Note Register in the name of the Common Depositary as nominee
of the Clearing Agency, and no Offshore Note Owner will receive a
Definitive Note representing such Offshore Note Owner's interest in
such Offshore Note, except as provided in clause 3.3.
(f) Whenever a notice or other communication to the Offshore Noteholders
is required under this deed, unless and until Definitive Notes shall
have been issued to Offshore Note Owners pursuant to clause 3.3, the
Note Trustee shall give all such notices and communications
specified herein to be given to Offshore Noteholders to the Clearing
Agency, and shall have no obligation to the Offshore Note Owners.
(g) Unless and until the Definitive Notes have been issued to a Offshore
Note Owner pursuant to clause 3.3:
(i) the provisions of this clause shall be in full force and
effect;
(ii) the Note Registrar, the Trustee, the Trust Manager, each
Paying Agent and the Note Trustee shall be entitled to deal
with the Clearing Agency for all purposes of this deed
(including the payment of principal of and interest on the
Offshore Notes and the giving of instructions or directions
hereunder) as the sole holder of the Offshore Notes, and shall
have no obligation to any Offshore Note Owners;
(iii) to the extent that the provisions of this clause conflict with
any other provisions of this deed, the provisions of this
clause shall prevail;
(iv) the rights of Offshore Note Owners shall be exercised only
through the Clearing Agency and shall be limited to those
established by law and agreements between such Offshore Note
Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Note Depository Agreement,
unless and until Definitive Notes are issued pursuant to
clause 3.3, the initial Clearing Agency will make book-entry
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transfers among the Clearing Agency Participants and receive
and transmit payments of principal and interest on the
Offshore Notes to such Clearing Agency Participants; and
(v) whenever this deed requires or permits actions to be taken
based upon instructions or directions of Offshore Note Owners
evidencing a specific percentage of all Invested Amounts of
all Offshore Notes, the Clearing Agency shall be deemed to
represent such percentage only to the extent that it has
received instructions to such effect from Offshore Note Owners
and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial
interest in the Offshore Notes and has delivered such
instructions to the Principal Paying Agent.
3.3 Definitive Notes
If:
(a) the Trust Manager advises the Principal Paying Agent in writing that
the Clearing Agency is no longer willing or able properly to
discharge its responsibilities with respect to the Offshore Notes or
the Clearing Agency or its successor and the Trust Manager is unable
to locate a qualified successor;
(b) the Trustee, at the direction of the Trust Manager (at the Trust
Manager's option) advises the Principal Paying Agent in writing that
the book-entry system through the Clearing Agency is or is to be
terminated; or
(c) after the occurrence of an Event of Default, the Offshore Note
Owners representing beneficial interests aggregating to at least a
majority of the aggregate Invested Amount of a Class of Offshore
Notes advise the Trustee through the Clearing Agency in writing that
the continuation of a book entry system through the Clearing Agency
is no longer in the best interests of the Offshore Note Owners of
such Class of Offshore Notes,
then the Principal Paying Agent shall notify all of the appropriate
Offshore Note Owners and the Trustee of the occurrence of any such event
and of the availability of Definitive Notes to such Offshore Note Owners
requesting the same. Upon the surrender of the Book-Entry Notes to the
Trustee by the Clearing Agency, and the delivery by the Clearing Agency of
the relevant registration instructions to the Trustee, the Trustee shall
execute and authenticate the Definitive Notes in accordance with the
instructions of the Clearing Agency.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without
steel engraved borders), all as determined
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by the Authorised Signatories executing such Definitive Notes, as
evidenced by their execution of such Definitive Notes.
Neither the Note Registrar nor the Trustee shall be liable for any delay
in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions.
3.4 Stamp and Other Taxes
The Trustee will pay any stamp and other duties and Taxes payable in
Australia, the United Kingdom, Belgium, Luxembourg or the United States on
or in connection with:
(a) the execution of the Transaction Documents;
(b) the constitution and original issue and delivery of the Offshore
Notes; and
(c) any action taken by the Note Trustee or (where permitted under this
deed so to do), the Clearing Agency, or any Offshore Note Owner to
enforce the provisions of the Offshore Notes or the Transaction
Documents.
3.5 Indemnity for non-issue
If the Trustee is required to issue, or procure the issue of, Definitive
Notes following an event specified in clause 3.3 but fails to do so within
30 days of delivery to the Trustee of the Book-Entry Notes in accordance
with clause 3.3(e) then the Trustee shall indemnify the Note Trustee, the
Offshore Noteholders and Offshore Note Owners, and keep them indemnified,
against any loss or damage incurred by any of them if the amount received
by the Note Trustee, the Offshore Noteholders or Offshore Note Owners is
less than the amount that would have been received had Definitive Notes
been issued. If and for so long as the Trustee discharges its obligations
under this indemnity, the breach by the Trustee of the provisions of
clause 3.3 shall be deemed to be cured. The Trust Manager must promptly
advise the Trustee if it becomes actually aware of the occurrence of the
relevant event and the Trustee shall promptly notify the Note Trustee of
the relevant event.
3.6 Note Register and Note Registrar
(a) The Trustee shall keep or cause to be kept the Note Register in
which, subject to such reasonable regulations as it may prescribe,
the Trustee shall provide for the registration of the Offshore Notes
and the registration of transfers of Offshore Notes. The Note
Registrar will be responsible for registering Notes and transfers of
Offshore Notes as herein provided. The Trustee may, with the consent
of the Note Trustee, appoint another person as Note Registrar. Upon
any resignation or removal of any Note Registrar under the Agency
Agreement, the Trustee with the assistance of and at the direction
of, the Trust Manager shall promptly appoint a successor or, if it
elects not to make such an appointment, assume the duties of the
Note Registrar.
(b) Upon surrender for registration of transfer of any Offshore Note at
the office or agency of the Trustee to be maintained as provided in
clause 11.1, if the requirements of Section 8-401(a) of the Uniform
Commercial Code of New York (the UCC) are met the Trustee shall
execute and upon its written request
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the Note Registrar shall authenticate and the Offshore Noteholder
shall obtain from the Note Trustee, in the name of the designated
transferee or transferees, one or more new Offshore Notes, in any
authorised denominations, of the same class and a like aggregate
principal amount.
(c) At the option of the Offshore Noteholder, Offshore Notes may be
exchanged for other Offshore Notes in any authorised denominations,
of the same class and a like aggregate principal amount, upon
surrender of the Offshore Notes to be exchanged at such office or
agency. Whenever any Offshore Notes are so surrendered for exchange,
if the requirements of Section 8-401(a) of the UCC are met the
Trustee shall execute and upon its written request the Note
Registrar shall authenticate and the Offshore Noteholder shall
obtain from the Note Trustee, the Offshore Notes which the Offshore
Noteholder making the exchange is entitled to receive.
(d) Every Offshore Note presented or surrendered for registration of
transfer or exchange shall be (i) duly endorsed by, or be
accompanied by a written instrument of transfer in a form
satisfactory to the Note Registrar duly executed by, the Offshore
Noteholder thereof or such Offshore Noteholder's attorney duly
authorised in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the
Note Registrar which requirements include membership or
participation of Securities Transfer Agents Medallion Program
(Stamp) or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution
for, Stamp, all in accordance with the Exchange Act, and (ii)
accompanied by such other documents as the Note Registrar may
require.
(e) No Service charge shall be made to a Offshore Noteholder for any
registration of transfer or exchange of Offshore Notes, but the
Trustee may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Offshore Notes.
(f) The preceding provisions of this section notwithstanding, the
Trustee shall not be required to make and the Note Registrar need
not register transfers or exchanges of Offshore Notes selected for
redemption or of any Offshore Note for a period of 30 days preceding
the due date for any payment with respect to the Offshore Note.
4. COVENANT OF COMPLIANCE
The Trustee covenants with the Note Trustee that it will comply with and
perform and observe all material provisions of the Transaction Documents
which are expressed to be binding on it for the benefit of the Note
Trustee or any Offshore Noteholder. The Conditions shall be binding on the
Trustee, the Note Trustee and the Offshore Noteholders. The Note Trustee
is entitled to enforce the obligations of the Trustee under the Offshore
Notes and the Conditions as if the same were set out and contained in this
deed (which shall be read and construed as one document with the Offshore
Notes).
5. CANCELLATION OF OFFSHORE NOTES
5.1 Cancellation
The Trustee shall procure that all Offshore Notes:
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(a) which have been surrendered for payment, registration of transfer,
exchange or redemption; or
(b) in the case of any Definitive Note, which, being mutilated or
defaced, have been surrendered and replaced under the relevant
Condition 11,
shall forthwith be cancelled by or on behalf of the Trustee.
5.2 Records
The Trustee shall procure that:
(a) the Principal Paying Agent keeps a full and complete record of all
Offshore Notes and of their redemption, payment, exchange or
cancellation (as the case may be) and of all replacement Offshore
Notes, issued in substitution for lost, stolen, mutilated, defaced
or destroyed Definitive Notes; and
(b) such records shall be made available to the Note Trustee at all
reasonable times.
6. ENFORCEMENT
6.1 Actions following Event of Default
At any time while an Event of Default is subsisting the Note Trustee
may (subject to the Security Trust Deed, to clauses 6.4 and 7, and to
the relevant Conditions 9 and 10) at its discretion and without further
notice take any action available to it to direct the Security Trustee
to:
(a) institute any proceedings against the Trustee which are permitted
under the Transaction Documents;
(b) enforce the security created under the Security Trust Deed
(including anything set out in clause 8.2 of the Security Trust
Deed); and
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(c) enforce repayment of the Offshore Notes together with accrued
interest and any other moneys payable to the Note Trustee, the
Offshore Noteholders or the under the Transaction Documents.
6.2 Evidence of default
If the Security Trustee or the Note Trustee takes any action against the
Trustee to enforce any of the provisions of any Offshore Notes or this
deed, proof that as regards any Offshore Note, the Trustee has not paid
any principal or interest due in respect of that Offshore Note shall
(unless the contrary is proved) be sufficient evidence that the Trustee
has not paid that principal or interest on all other Offshore Notes in
respect of which the relevant payment is then due.
6.3 Overdue interest
The rates of interest payable in respect of any Offshore Note which has
become due and repayable in full (subject, in the case of the Class B
Notes, to the provisions of Class B Condition 7) and which has not been
repaid shall be calculated at three-monthly intervals, commencing on the
expiry of the Coupon Period for the Offshore Note during which the
Offshore Note became due and repayable in accordance with the provisions
of Class A Condition 4 (in the case of Class A Notes), and Class B
Condition 4 (in the case of Class B Notes) except that no notices need be
given to Offshore Noteholders, in relation to that interest.
6.4 Restrictions on enforcement
(a) If any of the Class A Notes remain outstanding and are due and
payable otherwise than by reason of a default in payment of any
amount due on the Class A Notes, the Note Trustee must not vote
under the Security Trust Deed to, or otherwise direct the Security
Trustee to, dispose of the Mortgaged Property unless either:
(i) a sufficient amount would be realised to discharge in full all
amounts owing to the Class A Noteholders and any other amounts
payable by the Trustee ranking in priority to or pari passu
with the Class A Notes; or
(ii) the Note Trustee is of the opinion, reached after considering
at any time and from time to time the advice of a merchant
bank or other financial adviser selected by the Note Trustee,
that the cash flow receivable by the Trustee (or the Security
Trustee under the Security Trust Deed) will not (or that there
is a significant risk that it will not) be sufficient, having
regard to any other relevant actual, contingent or prospective
liabilities of the Trustee, to discharge in full in due course
all the amounts referred to in paragraph (i).
(b) If all Class A Notes have been redeemed in full but while any of the
Class B Notes remain outstanding and are due and payable otherwise
than by reason of a default in payment of any amount due on the
Class B Notes, the Note Trustee must not vote under the Security
Trust Deed to, or otherwise direct the Security Trustee to, dispose
of the Mortgaged Property unless either:
(i) a sufficient amount would be realised to discharge in full all
amounts owing to the Class B Noteholders and any other amounts
payable by the Trustee ranking in priority thereto or pari
passu with the Class B Notes; or
(ii) the Note Trustee is of the opinion, reached after considering
at any time and from time to time the advice of a merchant
bank or other financial
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adviser selected by the Note Trustee, that the cash flow
prospectively receivable by the Trustee (or the Security
Trustee under the Security Trust Deed) will not (or that there
is a significant risk that it will not) be sufficient, having
regard to any other relevant actual, contingent or prospective
liabilities of the Trustee, to discharge in full in due course
all amounts referred to in paragraph (i).
(c) Neither the Note Trustee nor the Security Trustee will be liable for
any decline in the value, nor any loss realised upon any sale or
other dispositions made under the Security Trust Deed, of any
Mortgaged Property or any other property which is charged to the
Security Trustee by any other person in respect of or relating to
the obligations of the Trustee or any third party in respect of the
Trustee or the Offshore Notes or relating in any way to the
Mortgaged Property. Without limitation, neither the Note Trustee nor
the Security Trustee shall be liable for any such decline or loss
directly or indirectly arising from its acting, or failing to act,
as a consequence of an opinion reached by it in good faith based on
advice received by it in accordance with paragraph (a) or (b).
7. PROCEEDINGS
7.1 Acting only on direction
(a) Subject to paragraph (b), the Note Trustee shall not be bound to
vote under the Security Trust Deed, or otherwise direct the Security
Trustee under the Security Trust Deed, or take any proceedings,
actions or steps under, or any other proceedings pursuant to or in
connection with, the Security Trust Deed, this deed, or any Offshore
Notes, unless directed or requested to do so in writing by holders
of at least 75% of the aggregate Invested Amount of Class A Notes or
the Class B Notes, as appropriate and then only if the Note Trustee
is indemnified to its satisfaction against all action, proceedings,
claims and demands to which it may render itself liable and all
costs, charges, damages and expenses which it may incur by so doing;
or
(b) So long as any of the Class A Notes remains outstanding, the Note
Trustee shall not, and shall not be bound to, act at the request or
direction of the Class B Noteholders under paragraph (a) unless:
(i) so to do would not in its opinion be materially prejudicial to
the interests of the Class A Noteholders; or
(ii) the relevant action is sanctioned by holders of at least 75%
of the aggregate Invested Amount of the Class A Notes or the
Class B Notes, as appropriate; or
(iii) in the case of giving notice pursuant to Class B Condition 10,
the Class A Notes are all then repayable in full.
(c) If the Note Trustee is directed or requested to take any
proceedings, actions or steps under this clause, it shall not be
liable in respect of the time, method, or place of conducting any
proceeding or in exercising any trust or power conferred on it under
this deed.
7.2 Security Trustee acting
Only the Security Trustee may enforce the provisions of the Security Trust
Deed and neither the Note Trustee nor any holder of a Offshore Note is
entitled to proceed directly
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against the Trustee to enforce the performance of any of the provisions of
the Security Trust Deed, the Offshore Notes (including the Conditions).
7.3 Note Trustee alone entitled to act
Only the Note Trustee may:
(a) direct the Security Trustee to enforce or otherwise; or
(b) enforce the provisions of this deed, the Offshore Notes (including
the Conditions),
and no Offshore Noteholder or is entitled to take any of the above actions
or to proceed directly against the Trustee to enforce the performance of
any of the provisions of this deed the Offshore Notes (including the
Conditions).
7.4 Available amounts
For the purpose of Condition 5(n) the Note Trustee shall not be satisfied
that the Trustee will be in a position to discharge the liabilities
referred in those Conditions unless, either:
(a) the Trustee will have available to it sufficient cash in the
Collection Account and sufficient Authorised Investments which will
mature on or before the relevant Payment Date after making any other
payments or provisions having priority in order of application under
the applicable provisions of the Security Trust Deed; or
(b) the Trustee has entered into a legally binding contract with an
entity either whose long term unsecured and unguaranteed debt is
rated AA- by S&P and AA- by Fitch (and, where the obligations relate
to Class A Notes Aa3 by Moody's) or whose short term unsecured and
unguaranteed debt securities are rated A-1 by S&P and F-1 by Fitch
(and, where the obligations relate to Class A Notes P-1 by Moody's)
to provide sufficient cash on or before the relevant Payment Date to
enable the Trustee to discharge the relevant liabilities.
7.5 Conflict of interests
The Note Trustee shall, with respect to all the powers, trusts,
authorities, duties and discretions vested in it by the Transaction
Documents, except where expressly provided otherwise, have regard to the
interests of the Class A Noteholders and the Class B Noteholders subject
to the proviso in the following sentence. If the Note Trustee is required
by the Transaction Documents or Notes to have regard to the interests of
the Class A Noteholders and the Class B Noteholders and where, in the
opinion of the Note Trustee, there is a conflict between the interests of
the Class A Noteholders and the interests of the Class B Noteholders, the
Note Trustee shall have regard only to the interests of the Class A
Noteholders despite anything to the contrary in the Transaction Documents.
In such an event, the Class B Noteholders shall have no claim against the
Note Trustee for doing so.
8. NOTICE OF PAYMENT
The Note Trustee shall give notice to the relevant Offshore Noteholders in
accordance with the relevant Condition 12 of the day fixed for any payment
to them of amounts received by the Note Trustee under clause 16 of the
Security Trust Deed. Those payments may be made in accordance with
Condition 6 as appropriate (in the case of Definitive Notes) or in the
name of the nominee of the Common Depositary by wire transfer in
immediately available funds to an account designated by such nominee to
the order of the registered holder of the Offshore Note (in the case of
any Book-Entry
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Note) and payment of those amounts by the Note Trustee to the Principal
Paying Agent for that purpose shall be a good discharge to the Note
Trustee.
9. INVESTMENT BY NOTE TRUSTEE
Any amount which, under the trusts of this Deed ought to or may be
invested by the Note Trustee, may be invested in the name or under the
control of the Note Trustee in any Authorised Investments and the Note
Trustee may at any time or times vary any Authorised Investments into
other Authorised Investments and shall not be responsible for any loss due
to depreciation in value or otherwise resulting from any Authorised
Investments made by it.
10. PARTIAL PAYMENTS
In the case of Definitive Notes, on any payment of amounts received by or
on behalf of the Note Trustee under clause 16 of the Security Trust Deed
(other than the payment in full against surrender of a Definitive Note)
the Definitive Note in respect of which such payment is made shall be
produced to the Note Trustee or the Paying Agent by or through whom such
payment is made and the Note Trustee shall or shall cause the Paying Agent
to enface on the Definitive Note a memorandum of the amount and the date
of payment, but the Note Trustee may in any particular case dispense with
that production and enfacement upon an indemnity being given to the Note
Trustee by the recipient of the payment as the Note Trustee considers
sufficient.
11. COVENANTS BY THE TRUSTEE AND TRUST MANAGER
11.1 Covenants by the Trustee and Trust Manager
Each of the Trustee and the Trust Manager undertakes to the Note Trustee,
on behalf of the Offshore Noteholders as follows in relation to the Trust
for so long as any of the Offshore Notes remain outstanding (except to the
extent that the Note Trustee otherwise consents).
(a) (Master Trust Deed covenants) It will comply with its covenants in
clause 18, 22 or 29 of the Master Trust Deed (as the case may be).
(b) (Transaction Documents):
(i) It will ensure that it complies with its material obligations
under the Transaction Documents.
(ii) It will use its best endeavours to procure that each other
party to a Transaction Document complies with and performs its
obligations under that Transaction Document.
(c) (Information) Give to the Note Trustee a copy of any information
relating to the Trust that the Note Trustee reasonably requests in
connection with the exercise and performance of its powers and
obligations under this deed.
(d) (Notify Events of Default)
(i) It will promptly notify the Note Trustee if, to the knowledge
of its officers who are responsible for the administration of
the Trust, it becomes actually aware of the occurrence of an
Event of Default, Trustee's Default, Servicer Transfer Event,
Title Perfection Event or Trust Manager's Default including
full details (to the extent known, without making any enquiry)
of that Event of Default, Trustee's Default, Servicer Transfer
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Event, Title Perfection Event or Trust Manager's Default (as
the case may be).
(ii) The Trustee will confirm to the Note Trustee in writing, on
each anniversary of this deed:
(A) whether or not any Event of Default is subsisting of
which it is actually aware; and
(B) any other matter which is required to be notified to the
Note Trustee under the Transaction Documents and which
has not previously been so notified.
(e) (Listing) It will use its best endeavours to:
(i) obtain and maintain the listing of the Offshore Notes on the
Stock Exchange (including compliance with the continuing
obligations applicable to the Trustee by virtue of the
admission of the Offshore Notes to the Official List of the
Stock Exchange) or, if it is unable to do so having used best
endeavours, use best endeavours to obtain and maintain a
quotation or listing of the Offshore Notes on any other stock
exchange or exchanges or securities market or markets as the
Trust Manager (with the prior written approval of the Note
Trustee, that approval not to be unreasonably withheld or
delayed) decides and following that quotation or listing enter
into a deed supplemental to this Trust Deed to effect such
consequential amendments to this deed necessary to comply with
the requirements of any such stock exchange or securities
market; and
(ii) procure that there will at all times be furnished to the Stock
Exchange (or to any other relevant stock exchange or
securities market) any information which the Stock Exchange
or, as the case may be, any other such stock exchange or
securities market, may require to be furnished in accordance
with its requirements.
(f) (Maintenance of Office or Agency) The Trustee will maintain in the
Borough of Manhattan, The City of New York and in London, an office
or agency where Offshore Notes may be surrendered for registration
of transfer or exchange, and where notices and demands to or upon
the Trustee in respect of the Offshore Notes and this deed may be
served. The Trustee hereby initially appoints the Principal Paying
Agent to serve as its agent for the foregoing purposes. The
Principal Paying Agent shall act solely for and as agent of the
Trustee and shall not have any obligations towards or relationship
or agency or trust with any other person in respect of its
appointment under this sub-paragraph (f). The Trustee will give
prompt written notice to the Note Trustee of the location, and of
any change in the location, of any such office or agency. If at any
time the Trustee shall fail to maintain any such office or agency or
shall fail to furnish the Note Trustee with the address thereof,
such surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Trustee hereby appoints the Note
Trustee as its agent to receive all such surrenders, notices and
demands.
(g) (Agent Bank) It will procure that, so long as any of the Offshore
Notes remain outstanding, there will at all times be an Agent Bank.
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(h) (Change to Paying Agents or Agent Bank) It will give notice to the
Offshore Noteholders in accordance with the Agency Agreement and the
relevant Condition 12 of:
(i) any appointment, resignation or removal of any Paying Agent
(other than the appointment of the initial Principal Paying
Agent) or Agent Bank;
(ii) any change to any Paying Agent's Paying Office (as defined in
the Agency Agreement); or
(iii) any change to the Agent Bank's Specified Office (as defined in
the Agency Agreement).
(i) (Notices) It will promptly give to the Note Trustee, or ensure that
the Note Trustee receives, two copies of the form of every notice
given to the Offshore Noteholders in accordance with Condition 12.
(j) (Annual Statement as to Compliance) The Trustee will deliver to the
Note Trustee, within 120 days after the end of each fiscal year of
the Trust (commencing on 30 June 1999), and otherwise in compliance
with the requirements of section 314(a)(4) of the TIA, an Officer's
Certificate stating that:
(i) a review of the activities of the Trustee in respect of the
Trust during such year and of performance under the
Transaction Documents has been made under supervision of the
person signing the Officer's Certificate (the Signatory); and
(ii) to the best of the knowledge of the Signatory, based on the
review referred to in paragraph (i), the Trustee has complied
with all conditions and covenants under the Transaction
Documents throughout the relevant year, or, if there has been
a default in the compliance of any such condition or covenant,
specifying each such default known to the Signatory of the
nature and status of the default.
For the purposes of this clause 11.2(j) compliance shall be
determined without regard to any period of grace or requirement of
notice under the Transaction Documents.
(k) (Opinions as to Trust Estate) On the Closing Date, the Trustee shall
furnish to the Note Trustee an Opinion of Counsel (who may be of
counsel for the Trustee) either stating that in the opinion of such
counsel the Security Trust Deed and any other requisite documents
has been properly recorded and filed so as to make effective the
Security Interest intended to be created by the Security Trust Deed,
and reciting the details of such action, or stating that in the
opinion of such counsel no such action is necessary to make such
Security Interest effective.
Within 120 days after the end of each fiscal year commencing on 30
June 1999 the Trustee shall furnish to the Note Trustee an Opinion
of Counsel (who may be of counsel for the Trustee) either stating
that in the opinion of such counsel such action has been taken with
respect to the recording, filing, re-recording, and refiling of the
Security Trust Deed and any other requisite documents as is
necessary to maintain the Security Interest created by the Security
Trust Deed, and
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reciting the details of such action, or stating that in the opinion
of such counsel no such action is necessary to maintain such
Security Interest.
(1)(i) The Trustee (or the Trust Manager on its behalf) shall
deliver to the Principal Paying Agent on each Collection
Determination Date the Noteholders Report for the
related Collection Period, with written instructions for
the Principal Paying Agent to forward the Noteholders
Report to each Offshore Noteholder.
(ii) Each Noteholder Report shall contain the information set
out in Schedule 2.
12. REMUNERATION OF NOTE TRUSTEE
12.1 Fee
The Trustee shall pay to the Note Trustee a fee agreed between them.
12.2 Additional Remuneration
If the Note Trustee gives a notice under the relevant Condition 10 or it
undertakes duties which it considers expedient or necessary under this
deed, or which the Trustee requests it to undertake and which duties the
Note Trustee, the Trust Manager and the Trustee agree to be of an
exceptional nature or otherwise outside the scope of the normal duties of
the Note Trustee under this deed, the Trustee shall pay to the Note
Trustee any additional remuneration as they agree.
12.3 Costs, expenses
(a) The Trustee shall also reimburse, pay or discharge all reasonable
costs, charges, liabilities and expenses and any stamp and other
Taxes or duties paid by the Note Trustee in connection with properly
undertaking its duties under the Transaction Documents and in
connection with any legal proceedings brought by the Note Trustee to
enforce any obligation under this deed or the Offshore Notes. The
Note Trustee shall not be reimbursed for any overhead or general
operating expenses incurred by the Note Trustee.
(b) Without prejudice to the right of indemnity by law given to
trustees, to the extent the Trustee is itself entitled to be
indemnified, the Trustee indemnifies the Note Trustee and every
other person properly appointed by it under this deed from and
against all liabilities, losses, damages, costs, expenses, actions,
proceedings, claims and demands incurred by or made against it or
him in the execution of the trusts of this deed or of their powers
or in respect of any matter or thing done or omitted in any way
relating to this deed (other than arising from any breach of trust,
fraud, wilful default or negligence by the Note Trustee or that
person).
12.4 Overdue rate
All sums payable by the Trustee under clause 12.3 shall be payable by the
Trustee on the next Payment Date in the order set out in the Series Notice
or (if applicable) the Security Trust Deed and shall carry interest at the
rate of LIBOR from the due date. Any amount payable shall carry interest
at that rate from the due date to the date of actual payment.
12.5 Continuing obligation
Unless otherwise specifically stated in any discharge relating to this
deed the provisions of this clause shall continue in full force and effect
notwithstanding such discharge.
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13. NOTE TRUSTEE
13.1 Preferential Collection of Claims Against Trustee
The Note Trustee shall comply with section 311(a) of the TIA, excluding
any creditor relationship listed in section 311(b) of the TIA. A Note
Trustee who has resigned or been removed shall be subject to section
311(a) of TIA to the extent required by the TIA.
13.2 Duties of Note Trustee
(a) If an Event of Default has occurred and is subsisting, of which a
Responsible Officer of the Note Trustee has actual knowledge, the
Note Trustee shall exercise the rights and powers vested in it by
this deed and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except while an Event of Default subsists:
(i) the Note Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this deed and no
implied covenants or obligations shall be read into this deed
against the Note Trustee; and
(ii) in the absence of bad faith on its part, the Note Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Note Trustee and
conforming to the requirements of this deed; however, the Note
Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of
this deed.
(c) The Note Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (a) of
this clause; and
(ii the Note Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is
proved that the Note Trustee was negligent in ascertaining the
pertinent facts.
(d) Section 315(d)(3) of the TIA is expressly excluded by this deed.
13.3 Notice of Defaults
(a) If an Event of Default occurs and is subsisting and the Note Trustee
is actually aware of that Event of Default, the Note Trustee shall
mail to each Offshore Noteholder notice of the Event of Default
within 90 days after becoming so aware.
(b) Except in the case of a default in payment of principal of or
interest on any Offshore Note (including payments pursuant to the
mandatory redemption provisions of that Offshore Note), the Note
Trustee may withhold the notice referred to in paragraph (a) if and
so long as the board of directors, the executive committee or a
trust committee of its directors in good faith determines that
withholding the notice is in the interest of Offshore Noteholders.
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13.4 Rights of Note Trustee
(a) The Note Trustee may conclusively rely on any document believed by
it to be genuine and to have been signed or presented by the proper
person. The Note Trustee need not investigate any fact or matter
stated in the document.
(b) Before the Note Trustee acts or refrains from acting, it may require
an Officer's Certificate or an Opinion of Counsel. The Note Trustee
shall not be liable for any action it takes, suffers or omits to
take in good faith in reliance on the Officer's Certificate or
Opinion of Counsel.
(c) No provision of this deed shall require the Note Trustee to expend
or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any
of its rights or powers, if it shall have reasonable grounds to
believe that repayment of such funds or indemnity satisfactory to it
against such risk or liability is not assured to it.
(d) The Note Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this deed or the
Offshore Notes, shall not be accountable for the Trustee's use of
the proceeds from the Offshore Notes, and shall not be responsible
for any statement of the Trustee in this deed or in any document
issued in connection with the sale of the Offshore Notes or in the
Offshore Notes.
(e) The Note Trustee may in relation to this deed act on the advice or
opinion of or any information obtained from any lawyer, valuer,
accountant, banker, broker, credit-rating agency, lead manager or
other expert whether obtained by the Trustee, the Note Trustee, the
Trust Manager, the Servicer or otherwise.
(f) Any advice, opinion or information may be sent or obtained by
letter, telex, telegram, facsimile transmission or cable and the
Note Trustee shall not be liable for acting on any advice, opinion
or information purporting to be conveyed by any such letter, telex,
telegram, facsimile transmission or cable although the same shall
contain some error or shall not be authentic.
(g) The Note Trustee may call for and shall be at liberty to accept as
sufficient evidence of any fact or matter or the expediency of any
transaction or thing a certificate signed by an Authorised Signatory
of the Trustee or the Trust Manager (as the case may be) and the
Note Trustee shall not be bound in any such case to call for further
evidence or be responsible for any loss that may be occasioned by
the Note Trustee acting on that certificate.
(h) The Note Trustee is at liberty to hold or to place this deed and any
other documents relating to this deed in any part of the world
(other than Australia) with any banker or banking company or company
whose business includes undertaking the safe custody of documents or
lawyer or firm of lawyers reasonably considered by the Note Trustee
to be of good repute and neither the Note Trustee nor the Security
Trustee shall be responsible for or required to insure against any
loss incurred in connection with any such deposit and may pay all
sums required to be paid on account of or in respect of any such
deposit.
(i) The Note Trustee shall not be responsible for the application of the
proceeds of the issue of any of the Offshore Notes by the Trustee or
any moneys borrowed by the Trustee under any Transaction Document or
the exchange of any Book-Entry Note for any other Book-Entry Note or
Definitive Note, as the case may be.
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(j) The Note Trustee shall not be bound to give notice to any person of
the execution of this deed or any of the Transaction Documents or
any transaction contemplated hereby or thereby or to take any steps
to ascertain whether any Event of Default has happened and, until it
has actual knowledge or express notice to the contrary, the Note
Trustee is entitled to assume that no Event of Default has happened
and that the Trustee and each other party to any Relevant Document
is observing and performing all the obligations on its part
contained in the Offshore Notes and under this deed or, as the case
may be, the Security Trust Deed or any other Transaction Document to
which it is a party.
(k) Save as expressly otherwise provided in this deed or the Transaction
Documents, the Note Trustee shall have absolute and uncontrolled
discretion as to the exercise of the discretions vested in the Note
Trustee by this deed and the Transaction Documents (the exercise of
which as between the Note Trustee and the Offshore Noteholders and
Couponholders) shall be conclusive and binding on the Offshore
Noteholders and Couponholders but whenever the Note Trustee is under
the provisions of this deed or the Transaction Documents bound to
act at the request or direction of the Offshore Noteholders, or any
of them, the Note Trustee shall nevertheless not be so bound unless
first indemnified to its satisfaction against all actions,
proceedings, claims and demands to which it may render itself liable
and all costs, charges, damages, expenses and liabilities which it
may incur by so doing.
(l) Any consent or approval given by the Note Trustee for the purpose of
this deed, the Conditions and any Transaction Document may be given
on any terms and subject to any conditions as the Note Trustee
thinks fit and despite anything to the contrary contained in this
deed, any Transaction Document or the Conditions may be given
retrospectively.
(m) The Note Trustee shall not (unless and to the extent ordered so to
do by a court of competent jurisdiction) be required to disclose to
any Offshore Noteholder or any Mortgagee, any confidential
financial, price sensitive or other information made available to
the Note Trustee by the Trustee or any other person in connection
with the trusts of this deed and no Offshore Noteholder shall be
entitled to take any action to obtain from the Note Trustee any such
information.
(n) Where it is necessary or desirable for any purpose in connection
with this deed to convert any sum from one currency to another it
shall (unless otherwise provided by this deed or required by law) be
converted at the rate or rates, in accordance with the method and as
at the date for the determination of the rate of exchange, as may be
agreed by the Note Trustee in consultation with the Trustee and the
Trust Manager as relevant and any rate, method and date so agreed
shall be binding on the Trustee, the Offshore Noteholders.
(o) The Note Trustee may certify whether or not any of the events set
out in paragraphs (b) to (e) of the relevant Condition 9 or any
breach under clause 8 of the Security Trust Deed is in its opinion
materially prejudicial to the interests of the relevant Offshore
Noteholders and may certify, in relation to the event set out in
paragraph (a) of the relevant Condition 9 in relation to any payment
of interest on the Offshore Notes that the Trustee had, on the due
date for payment of the amount of interest in question, sufficient
cash to pay, in accordance with the provisions of the Series Notice
or the Security Trust Deed, all interest (after payment of all sums
which are permitted under the Series Notice or the Security Trust
Deed to be paid in priority to or pari passu with them) and that
certificate shall be conclusive and binding upon the Trustee, the
Offshore Noteholders. The Note Trustee shall have no liability to
the Trustee, any Offshore Noteholder or any other person
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in relation to any such certificate or in relation to any delay or
omission in providing certificate. In giving any certificate
relating to paragraph (a) of the relevant Condition 9, the Note
Trustee may rely on any determination made by any independent
accountants of recognised standing in Australia and any such
determination shall be conclusive and binding on the Trustee and the
Offshore Noteholders.
(p) The Note Trustee shall not be bound to take any steps to ascertain
whether any event, condition or act, the happening of which would
cause a right or remedy to become exercisable by the Note Trustee
under this deed or by the Trustee under any of the Transaction
Documents has happened or to monitor or supervise the observance and
performance by the Trustee or any of the other parties thereto of
their respective obligations thereunder and, until it shall have
actual knowledge or express notice to the contrary the Note Trustee
shall be entitled to assume that no such event, condition or act has
happened and that the Trustee and each of the other parties thereto
are observing and performing all their respective obligations
thereunder.
(q) The Note Trustee shall not be responsible for recitals, statements,
warranties or representations of any party contained in any
Transaction Document or other document entered into in connection
with it and shall assume its accuracy and correctness and its
execution, legality, effectiveness, adequacy, genuineness, validity
or enforceability or admissibility in evidence of that agreement or
other document or any security constituted by them, and the Note
Trustee may accept without enquiry, requisition or objection all
title as the Trustee may have to any of the Mortgaged Property or as
any other person may have to any other security charged from time to
time to the Note Trustee and shall not be bound to investigate or
make any enquiry in the title of the Trustee to any of the Mortgaged
Property or the title of any other person to any other security
charged from time to time to the Note Trustee whether or not any
default or failure is or was known to the Note Trustee or might be,
or might have been, discovered upon examination inquiry or
investigation and whether or not capable of remedy. Notwithstanding
the generality of the foregoing each Offshore Noteholder is solely
responsible for making its own independent appraisal of and
investigation into the financial condition, creditworthiness,
condition, affairs, status and nature of the Trustee and the Note
Trustee shall not at any time have any responsibility for the same
and no Offshore Noteholder or Couponholder shall rely on the Note
Trustee in that respect.
(r) The Note Trustee shall not be liable for any failure, omission or
defect in or filing or procuring registration or filing of or
otherwise protecting or perfecting the Security Trust Deed or the
Mortgaged Property or any other security or failure to call or
delivery of documents of title to the Mortgaged Property or any
other security or to require any further assurances in relation to
any property or assets comprised in the Mortgaged Property or any
other security.
(s) The Note Trustee shall not be obliged (whether or not directed to do
so by the Offshore Noteholders) to direct the Security Trustee to
perfect legal title to any Purchased Receivable Security if, in the
opinion of the Note Trustee, that perfection would or might result
in the Note Trustee becoming liable to or incurring any obligation
to any Borrower under a Purchased Receivable Security and, in its
opinion, there is or would be insufficient cash to discharge, in
accordance with the provisions of the Security Trust Deed, that
liability or obligations as and when they arise. Notwithstanding the
generality of the foregoing, the Note Trustee shall have no
responsibility or liability for the payment of any fees for the
registration of any Receivable Security in Australia or for any
related legal, administrative or other fees, costs and expenses
(including, but not limited to, any proper disbursements and any
value added tax).
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(t) The Note Trustee shall, as regards all the powers, trusts,
authorities, duties and discretions vested in it by this deed, the
Transaction Documents or the Offshore Notes (including the
Conditions), except where expressly provided otherwise have regard
to the interests of the Class A Noteholders and the Class B
Noteholders, except that where the Note Trustee is required by this
deed, the Transaction Documents or the Offshore Notes (including the
Conditions) to have regard to the interests of the Class A
Noteholders and the Class B Noteholders and where, in the opinion of
the Note Trustee, there is a conflict between the interests of the
Class A Noteholders and the interests of the Class B Noteholders the
Note Trustee shall, despite anything to the contrary contained in
this deed, the Transaction Documents or the Offshore Notes
(including the Conditions), have regard only to the interests of the
Class A Noteholders and the Class B Noteholders who shall have no
claim against the Note Trustee for so doing.
(u) Without prejudice to the provisions of any Transaction Document, the
Note Trustee shall not be under any obligation to insure any of the
Mortgaged Property (or any other property) or any deeds or documents
of title or other evidence relating to that property and shall not
be responsible for any loss, expense or liability which may be
suffered as a result of the lack of or inadequacy of any that
insurance.
(v) The Note Trustee shall not be responsible for any loss, expense or
liability occasioned to the Mortgaged Property or any other property
or in respect of all or any of the moneys which may stand to the
credit of the Collection Accounts from time to time however caused
(including any bank, broker, depositary, warehouseman or other
intermediary or any clearing system or its operator acting in
accordance with or contrary to the terms of any of the Transaction
Documents or otherwise), unless that loss is occasioned by the
wilful neglect or misconduct or fraud of the Note Trustee.
(w) The Note Trustee has no responsibility whatsoever to the Trustee or
any Offshore Noteholder as regards any deficiency or additional
payment, as the case may be, which might arise because the Note
Trustee or the Trustee is subject to any Tax in respect of the
Mortgaged Property, the Security Trust Deed or any other security or
any income or any proceeds from them.
(x) No provision of this deed requires the Note Trustee to do anything
which may be illegal or contrary to applicable law or regulation or
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties, or in the
exercise of any of its rights or powers, if it has reasonable
grounds to believe that repayment of those funds or adequate
indemnity against that risk or liability is not assured to it.
Without limitation nothing contained in this deed imposes any
obligation on the Note Trustee to make any further advance to a
Borrower or to borrow any moneys under a Transaction Document or to
maintain, protect or preserve any moneys standing to the credit of
the Collection Account.
(y) The Note Trustee is not responsible for the genuineness, validity,
effectiveness or suitability of any of the Transaction Documents or
any of the Mortgages, Charges or other documents entered into in
connection with them or any Mortgage Insurance Policy or any other
document or any obligation or rights created or purported to be
created by them or under them or any Security Interest or the
priority of constituted by or purported to be constituted by or
pursuant to that Security Interest, nor shall it be responsible or
liable to any person because of any invalidity of any provision of
those documents or the unenforceability of those documents, whether
arising from statute, law or decision of any court and (without
limitation) the Note Trustee shall not be responsible for or have
any duty to make any investigation in respect of or in any way be
liable whatsoever for:
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(i) the nature, status, creditworthiness or solvency of any
Borrower or any other person or entity who has at any time
provided any security or support whether by way of Guarantee,
Security Interest or otherwise in respect of any advance made
to any Borrower;
(ii) the execution, legality, validity, adequacy, admissibility in
evidence or enforceability of any Mortgage or Loan or any
other document entered into in connection with them;
(iii) the title, ownership, value, sufficiency or existence of any
Land, Mortgaged Property, any Mortgage Insurance Policy;
(iv) the registration, filing, protection or perfection of any
Mortgage or the priority of the security created under a
Mortgage whether in respect of any initial advance or any
subsequent advance or any other sums or liabilities;
(v) the scope or accuracy of any representations, warranties or
statements made by or on behalf of any Borrower in any
application for any advance or in any Mortgage or Loan or in
any document entered into in connection with them;
(vi) the performance or observance by any Borrower or any other
person of any provisions of any Mortgage or Loan or in any
document entered into in connection with them or the
fulfilment or satisfaction of any conditions contained in them
or relating to them or as to the existence or occurrence at
any time of any default, event of default or similar event
contained in them or any waiver or consent which has at any
time been granted in relation to any of the above;
(vii) the existence, accuracy or sufficiency of any legal or other
opinions, searches, reports, certificates, valuations or
investigations delivered or obtained or required to be
delivered or obtained at any time in connection with any
Mortgage or Loan;
(viii)the title of the Trustee to any Mortgage, Loan or other
Mortgaged Property;
(ix) the suitability, adequacy or sufficiency of any guidelines
under which Loans are entered into or compliance with those
guidelines or compliance with any applicable criteria for any
further advances or the legality or ability or enforceability
of the advances or the priority of the Mortgage in relation to
the advances;
(x) the compliance of the provisions and contents of and the
manner and formalities applicable to the execution of the
Mortgages and Loans and any documents connected with them or
the making of any advance intended to be secured by them or
with any applicable laws or regulations (including Consumer
Credit Legislation);
(xi) the failure by any Approved Seller, the Trustee, the Servicer
or the Trust Manager to obtain or comply with any
Authorisation in connection with the origination, sale,
purchase or administration of any of the Mortgages or Loans or
the making of any advances in connection with them or the
failure to effect or procure registration of or to give notice
to any person in relation to or otherwise protect the security
created or purported to be
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created by or pursuant to any of the Mortgages or Loans or
other documents entered into in connection with them;
(xii) the failure to call for delivery of documents of title to or
require any transfers, legal mortgages, charges or other
further assurances in relation to any of the assets the
subject matter of any of the Transaction Documents or any
other document;
(xiii) any accounts, books, records or files maintained by any
Approved Seller, the Servicer, the Trustee, the Trust Manager
or any other person in respect of any of the Mortgages or
Loans; or
(xiv) any other matter or thing relating to or in any way connected
with any Mortgage or Loans or any document entered into in
connection with them whether or not similar to the above.
(z) The Note Trustee is not liable or responsible for any loss, cost,
damages, expenses or inconvenience which may result from anything
done or omitted to be done by it in accordance with the provisions
of this deed, any Transaction Document or any other document or as a
consequence of or in connection with it being held or treated as, or
being deemed to be, a creditor, for the purposes of the Consumer
Credit Legislation, in respect of any of the Mortgages.
(aa) In connection with any proposed modification, waiver, authorisation
or determination permitted by this deed, the Note Trustee shall not
have regard to the consequences thereof for individual Offshore
Noteholders or Couponholders resulting from their being for any
purpose domiciled or resident in, or otherwise connected with, or
subject to, the jurisdiction of any particular territory.
(ab) The Note Trustee shall have no responsibility for the maintenance of
any rating of the Offshore Notes by a Designated Rating Agency or
any other credit-rating agency or any other person.
(ac) The Note Trustee has no liability whatsoever for any loss, cost,
damage or expenses directly or indirectly suffered or incurred by
the Trustee, any Offshore Noteholder or any other person as a result
of the delivery by the Note Trustee of a certificate, or the
omission by it to deliver a certificate, to the Trustee as to
material prejudice pursuant to the relevant Condition 9 on the basis
of an opinion formed by it in good faith.
(ad) The Note Trustee shall be under no obligation to monitor or
supervise the functions of the Servicer from time to time under the
terms of the Servicing Agreement or any other person under any other
Transaction Document, including and is entitled, in the absence of
actual knowledge of a breach of duty or obligation, to assume that
the Servicer is properly performing its obligations in accordance
with the provisions of the Servicing Agreement or that any other
person is properly performing its obligations in accordance with
each other Transaction Document, as the case may be.
(ae) The Note Trustee acknowledges that the Trust Manager is responsible,
under the Series Notice, for calculating all amounts referred to in
clause 6.2 of the Series Notice (other than calculations required to
be made by the Agent Bank under the Agency Agreement) and the Note
Trustee has no liability in respect of these calculations other than
as a result of the negligence, bad faith or wilful default of the
Note Trustee.
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14. NOTE TRUSTEE'S LIABILITY
Nothing in this deed shall in any case in which the Note Trustee has
failed to show the degree of care and diligence required of it as trustee
having regard to the provisions of this deed conferring on it any powers,
authorities or discretions exempt the Note Trustee from or indemnify it
against any liability for breach of trust or any liability which by virtue
of any rule of law would otherwise attach to it in respect of any wilful
misconduct, negligence, default, breach of duty or breach of trust of
which it may be guilty in relation to its duties under this deed.
15. DELEGATION BY NOTE TRUSTEE
(a) The Note Trustee may whenever it thinks fit delegate by power of
attorney or otherwise to any person or persons for any period
(whether exceeding one year or not) or indefinitely all or any of
the trusts, powers and authorities vested in the Note Trustee by
this deed and that delegation may be made upon any terms and subject
to any conditions (including power to sub-delegate) and subject to
any regulations as the Note Trustee may in the interests of the
Offshore Noteholders think fit.
(b) If the Note Trustee exercises reasonable care in the selection of a
delegate under paragraph (a), the Note Trustee shall not be in any
way responsible for any loss incurred by reason of any misconduct or
default on the part of any delegate or sub-delegate. The Note
Trustee must within a reasonable time prior to any delegation or any
renewal, extension or termination of any delegation give notice of
it to the Trustee.
16. EMPLOYMENT OF AGENT BY NOTE TRUSTEE
The Note Trustee may in the conduct of the trusts of this deed instead of
acting personally employ and pay an agent, whether being a lawyer or other
professional person, to transact or concur in transacting any business and
to do or concur in doing all acts required to be done in connection with
the trusts of this deed. If the Note Trustee exercises reasonable care in
the selection of that agent, the Note Trustee shall not in any way be
responsible for any loss incurred by reason of any misconduct or default
on the part of that agent.
Any trustee of this deed which is a lawyer, accountant, broker or other
person engaged in any profession or business is entitled to charge and be
paid all usual professional and other charges for business transacted and
acts done by him or his firm in connection with the trusts of this deed
and also his reasonable charges in addition to disbursements for all other
work and business done and all time spent by him or his firm in connection
with matters arising in connection with this deed. Those charges will be
for the account of the Note Trustee who shall be reimbursed by the Trustee
under clause 12.
17. NOTE TRUSTEE CONTRACTING WITH TRUSTEE
Neither the Note Trustee nor any director or officer of a corporation
acting as a trustee under this deed, nor the Security Trustee, is by
reason of its or their fiduciary position in any way precluded from
entering into or being interested in any contract or financial or other
transaction or arrangement with the Trustee or any other party to any of
the Transaction Documents or any person or body corporate associated with
the Trustee including any contract, transaction or arrangement of a
banking or insurance nature or any contract, transaction or arrangement in
relation to the making of loans or the provision of financial facilities
to or the purchase, placing or underwriting of or subscribing or procuring
subscriptions for or otherwise acquiring holding or dealing with the
Offshore Notes, or any of them, or any other bonds, stocks, shares,
debenture stock, debentures, notes or other securities of the Trustee or
any other party to any of the Transaction Documents or any related person
or body corporate or from accepting or holding the trusteeship of any
other
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trust deed constituting or securing any other securities issued by or
relating to the Trustee or any other party to any of the Transaction
Documents or any related person or body corporate or any other office of
profit under the Trustee or any other party to any of the Transaction
Documents or any related person or body corporate and shall be entitled to
retain and shall not be in any way liable to account for any profit made
or share of brokerage or commission or remuneration or other benefit
received or in connection with any of those arrangements.
18. WAIVER
(a) The Note Trustee may without prejudice to its rights in respect of
any subsequent breach, condition, event or act from time to time and
at any time (but only if, and in so far as, in its opinion the
interests of any of the Offshore Noteholders are not materially
prejudiced), waive or authorise on any terms and subject to any
conditions as it sees fit and proper:
(i) any breach or proposed breach by the Trustee of any of the
covenants or provisions contained in this deed or in the
Offshore Notes (including the Conditions) or any other
Transaction Document; or
(ii) determine that any condition, event or act which constitutes,
or which with the giving of notice, the lapse of time or the
issue of a certificate would constitute, but for that
determination, an Event of Default shall not, or shall not
subject to specified conditions, be so treated for the
purposes of this deed,
but the Note Trustee shall not exercise any powers conferred on it
by this clause in contravention of any express direction given in
writing by holders of Offshore Notes representing at least 75% of
the aggregate Invested Amount of the Offshore Notes or by a request
under the relevant Condition 10(d) (being, in the case of a
direction or request of the Class B Noteholders, a request or
direction which is binding on the Note Trustee in accordance with
clause 7.1). No direction or request shall affect any waiver,
authorisation or determination previously given or made.
(b) Any waiver, authorisation or determination under this clause is
binding on the Offshore Noteholders and if, but only if, the Note
Trustee so requires, shall be notified by the Trustee to the
Offshore Noteholders in accordance with the relevant Condition 12 as
soon as practicable.
19. AMENDMENT
19.1 Approval
The Note Trustee, the Trust Manager and the Trustee may, following giving
notice to each Designated Rating Agency, by way of supplemental deed
alter, add to or modify this deed (including this clause 19), the
Conditions (other than any provision of this deed or the Conditions
referred to in that proviso) and this clause or any Transaction Document
so long as that alteration, addition or modification is:
(a) to correct a manifest error or ambiguity or is of a formal,
technical or administrative nature only;
(b) in the opinion of the Note Trustee necessary to comply with the
provisions of any law or regulation or with the requirements of any
Government Authority;
(c) in the opinion of the Note Trustee appropriate or expedient as a
consequence of an amendment to any law or regulation or altered
requirements of any Government
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Agency (including, without limitation, an alteration, addition or
modification which is in the opinion of the Note Trustee appropriate
or expedient as a consequence of the enactment of a law or
regulation or an amendment to any law or regulation or ruling by the
Commissioner or Deputy Commissioner of Taxation or any governmental
announcement or statement, in any case which has or may have the
effect of altering the manner or basis of taxation of trusts
generally or of trusts similar to the Trust); or
(d) in the opinion of the Note Trustee neither materially prejudicial
nor likely to be prejudicial to the interest of the Offshore
Noteholders as a whole or any Class of Offshore Noteholder or,
and in the manner, and to the extent, permitted by the Transaction
Documents.
19.2 Resolution of Offshore Noteholders
Where in the opinion of the Note Trustee a proposed alteration, addition
or modification to this deed, other than an alteration, addition or
modification referred to in clause 19.1, is materially prejudicial or
likely to be materially prejudicial to the interest of Offshore
Noteholders as a whole or any class of Offshore Noteholders, or the Note
Trustee, the Trust Manager and the Trustee may make that alteration,
addition or modification if sanctioned in writing by holders of at least
75% of the aggregate Invested Amount of the Class A Notes or the Class B
Notes, as appropriate.
19.3 Distribution of amendments
The Trust Manager shall distribute to all Offshore Noteholders a copy of
any amendments made under clause 19.1 or 19.2 under the relevant Condition
12 as soon as reasonably practicable after the amendment has been made.
19.4 Amendments binding
Any amendment under this clause is binding on the Offshore Noteholders.
19.4 Conformity with TIA
Every amendment of this deed executed pursuant to this clause 19 shall
conform to the requirements of the TIA as then in effect so long as this
deed shall then be qualified under the TIA.
20. OFFSHORE NOTEHOLDERS
20.1 Absolute Owner
(a) The Trustee, the Trust Manager, the Security Trustee, the Note
Trustee and any Paying Agent may treat the registered holders or
bearer of any Definitive Note as the absolute owner of that
Definitive Note (whether or not that Definitive Note is overdue and
despite any notation or notice of ownership or writing on it or any
notice of previous loss or theft of it or trust or other interest in
it) for the purpose of making payment and for all purposes and none
of the Trustee, the Trust Manager, the Security Trustee, the Note
Trustee or the Paying Agents is affected by any notice to the
contrary.
(b) So long as the Offshore Notes, or any of them, are represented by a
Book-Entry Note, the Trustee, the Trust Manager, the Note Trustee
and any Paying Agent may treat the person for the time being shown
in the records of the Clearing
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Agency as the holder of any Offshore Note as the absolute owner of
that Offshore Note and the Trustee, the Trust Manager, the Note
Trustee and the Paying Agents are not affected by any notice to the
contrary, but without prejudice to the entitlement of the registered
holder the Book-Entry Note to be paid principal and interest on the
Book-Entry Note in accordance with its terms. Such person shall have
no claim directly against the Trustee in respect of payment due on
the Offshore Notes for so long as the Offshore Notes are represented
by a Book-Entry Note and the relevant obligations of the Trustee
will be discharged by payment to the registered holder of the
Book-Entry Note in respect of each amount so paid.
(c) All payments made to the owner of an Offshore Note under this clause
(or, in the case of a Book-Entry Note, to or to the order of the
registered holder of that Book-Entry Note) shall be valid and, to
the extent of the sums so paid, effective to satisfy and discharge
the liability for the moneys payable upon those Offshore Notes.
(d) Any instalment of interest or principal, payable on any Offshore
Note which is punctually paid or duly provided for by the Trustee to
the Paying Agent on the applicable Payment Date or Maturity Date
shall be paid to the person in whose name such Offshore Note is
registered on the Record Date, by cheque mailed first-class, postage
prepaid, to such person's address as it appears on the Note Register
on such Record Date, except that, unless Definitive Notes have been
issued pursuant to clause 3.3, with respect to Offshore Notes
registered on the Record Date in the name of the nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payment
will be made by wire transfer in immediately available funds to the
account designated by such nominee and except for the final
instalment of principal payable with respect to such Offshore Note
on a Payment Date or Maturity Date (and except for the redemption
for any Offshore Note called for redemption pursuant to Condition 5
which shall be payable as provided below.
(e) The principal of each Note shall be payable on each Payment Date and
the Maturity Date as set forth in the Conditions. The Note Trustee
shall notify the person in whose name an Offshore Note is registered
at the close of business on the Record Date preceding the Payment
Date on which the Trustee expects that the final instalment of
principal of and interest on such Offshore Note will be paid. Such
notice shall be mailed or transmitted by facsimile prior to such
Final Maturity Date and shall specify that such final instalment
will be payable only upon presentation and surrender of such
Offshore Note and shall specify the place where such Offshore Note
may be presented and surrendered for payment of such instalment.
Notices in connection with redemptions of Offshore Notes shall be
mailed to Noteholders as provided in clause 31.4.
20.2 Clearing Agency Certificate
The Trustee, the Trust Manager and the Note Trustee may call for and shall
be at liberty to accept and place full reliance on as sufficient evidence
a certificate or letter or confirmation signed on behalf of any Clearing
Agency or any form of record made by either of them to the effect that at
any particular time or throughout any particular period any particular
person is, was, or will be, shown in its records as entitled to a
particular interest in a Book-Entry Note.
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21. CURRENCY INDEMNITY
Subject to this deed, the Trustee indemnifies the Note Trustee and the
Offshore Noteholders and keeps them indemnified against:
(a) any loss or damage incurred by any of them arising from the
non-payment by the Trustee of any US$ due to the Note Trustee or the
relevant Offshore Noteholders under this deed or the relevant
Offshore Notes by reason of any variation in the rates of exchange
between those used for the purposes of calculating the amount due
under a judgment or order in respect of that payment, which amount
is expressed in a currency other than US$, and under which the Note
Trustee, the Offshore Noteholders do not have an option to have that
judgment or order expressed in US$, and those prevailing at the date
of actual payment by the Trustee; and
(b) any deficiency arising or resulting from any variation in rates of
exchange between:
(i) the date (if any) as of which the non-US$ currency equivalent
of the US$ amounts due or contingently due under this deed
(other than this clause) or in respect of the relevant
Offshore Notes is calculated for the purposes of any
bankruptcy, insolvency or liquidation of the Trustee; and
(ii) the final date for ascertaining the amount of claims in that
bankruptcy, insolvency or liquidation provided that in that
bankruptcy, insolvency or liquidation claims are required to
be made in a currency other than US$.
The amount of that deficiency shall not be reduced by any
variation in rates of exchange occurring between that final
date and the date of any distribution of assets in connection
with that bankruptcy, insolvency or liquidation.
(c) The indemnities in this clause are obligations of the Trustee
separate and independent from its obligations under the Offshore
Notes and apply irrespective of any time or indulgence granted by
the Note Trustee or the Offshore Noteholders from time to time and
shall continue in full force and effect despite the judgment or
filing of any proof or proofs in any bankruptcy, insolvency or
liquidation of the Trustee for a liquidated sum or sums in respect
of amounts due under this deed (other than this clause) or the
Offshore Notes. Any deficiency will constitute a loss suffered by
the Offshore Noteholders and no proof or evidence of any actual loss
shall be required by the Trustee or its liquidator.
22. NEW NOTE TRUSTEES
22.1 Appointment by Trustee
The Trustee may on the recommendation of the Trust Manager at any time
appoint a new note trustee of this deed who has previously been approved
in writing by holders of at least 75% of the aggregate Invested Amount of
the Class A Notes, or, if none of the Class A Notes remains outstanding,
by approval in writing by holders of at least 75% of the aggregated
Invested Amount of the Class B Notes. One or more persons may hold office
as note trustee or note trustees of this deed but that note trustee or
note trustees must be or include a Trust Corporation. Whenever there are
more than two note trustees of this deed the majority of those note
trustees are competent to execute and exercise all the duties, powers,
trusts, authorities and discretions vested in the Note Trustee by this
deed if a Trust Corporation is included in that majority.
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22.2 Appointment by Note Trustee
(a) The Note Trustee may, on 30 days prior written notice to the Trustee
and Trust Manager, appoint any person established or resident in any
jurisdiction (whether a Trust Corporation or not) to act either as a
separate note trustee or as a co-note trustee jointly with the Note
Trustee:
(i) if the Note Trustee considers that appointment to be in the
interests of the Offshore Noteholders;
(ii) for the purposes of conforming to any legal requirements,
restrictions or conditions in any jurisdiction in which any
particular act or acts is or are to be performed; or
(iii) for the purposes of obtaining a judgment in any jurisdiction
or the enforcement in any jurisdiction of either a judgment
already obtained or any of the provisions of this deed against
the Trustee.
(b) Subject to the provisions of this deed, a person appointed under
paragraph (a) has all trusts, powers, authorities and discretions
(not exceeding those conferred on the Note Trustee by this deed) and
all duties and obligations conferred or imposed by the instrument of
appointment. All rights, powers, duties and obligations conferred or
imposed upon the Note Trustee shall be conferred or imposed upon and
exercised or performed by the Note Trustee and such separate note
trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorised to act separately
without the Note Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act
or acts are to be performed the Note Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Note Trustee.
(c) The Note Trustee may remove any person appointed under this clause.
The reasonable remuneration of any person appointed under this
clause together with any costs, charges and expenses properly
incurred by it in performing its function as note trustee or co-note
trustee will be costs, charges and expenses incurred by the Note
Trustee under this deed.
22.3 Notice
(a) The Trustee shall notify the Principal Paying Agent and the Offshore
Noteholders of any appointment of a new note trustee or any
retirement or removal of an existing note trustee of this deed as
soon as practicable after becoming aware of that appointment,
retirement or removal.
(b) The Note Trustee shall notify each Designated Rating Agency of any
appointment of a new note trustee or its retirement or removal as
soon as practicable.
23. NOTE TRUSTEE'S RETIREMENT AND REMOVAL
23.1 Removal by Trustee
The Trustee (or the Trust Manager on its behalf after advising the
Trustee) may at any time terminate the appointment of the Note Trustee by
giving written notice to that effect to each Designated Rating Agency and
the Note Trustee with effect immediately on that notice, if any of the
following occurs in relation to the Note Trustee:
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(a) an Insolvency Event has occurred in relation to the Note Trustee;
(b) the Note Trustee has ceased its business;
(c) the Note Trustee has failed to remedy within fourteen days after
prior written notice by the Trustee or Trust Manger any material
breach of this deed on the part of the Note Trustee;
(d) the Note Trustee fails to satisfy any obligation imposed on it under
the TIA with respect to the Trust or this deed or comply with clause
23.6; or
(e) the rating (if any) assigned to the long term debt obligations of
the Note Trustee, or any of its holding companies is less than [*]
or, having been assigned, is withdrawn by any Designated Rating
Agency.
23.2 Removal by Offshore Noteholders
The Class A Noteholders or, if none of the Class A Noteholders remains
outstanding, the Class B Noteholders may resolve by written consent of the
holders of at least 75% of the aggregate Invested Amount of Class A Notes
or the Class B Notes, as appropriate, to require the Trustee (or the Trust
Manager on its behalf) to remove the Note Trustee or note trustees for the
time being of this deed.
23.3 Resignation
Subject to this clause 23, the Note Trustee may resign its appointment
under this deed at any time by giving to the Trustee, the Trust Manager
and each Designated Rating Agency not less than 3 months written notice to
that effect, which notice shall expire not less than 30 days before nor 30
days after any due date for payment of any Offshore Notes.
23.4 Rating Agencies approval
Any resignation or removal of the Note Trustee and appointment of a
successor note trustee will not become effective until acceptance of the
appointment by that successor note trustee and confirmation by the
Designated Rating Agencies that such appointment will not cause a
downgrading, qualification or withdrawal of the then current ratings of
the Offshore Notes.
23.5 Trust Corporation
The Trustee undertakes that if the only Note Trustee which is a Trust
Corporation retires or is removed it will use its best endeavours to
appoint a new note trustee of this deed which is a Trust Corporation as
soon as reasonably practicable. The retirement or removal of any Note
Trustee shall not become effective until a successor Note Trustee which is
a Trust Corporation is appointed.
23.6 Successor to Note Trustee
(a) On the execution by the Trustee, the Trust Manager and any successor
Note Trustee of an instrument effecting the appointment of that
successor Note Trustee, that successor Note Trustee shall, without
any further act, deed or conveyance, become vested with all the
authority, rights, powers, trusts, immunities, duties and
obligations of the predecessor Note Trustee with effect as if
originally named as Note Trustee in this deed and that predecessor
Note Trustee, on payment to it of the pro rata proportion of its fee
and disbursements then unpaid (if any), shall have no further
liabilities under this deed, except for any accrued liabilities
arising from or relating to any act or omission occurring prior to
the date on which the successor Note Trustee is appointed.
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(b) Any corporation:
(i) into which the Note Trustee is merged;
(ii) with which the Note Trustee is consolidated;
(iii) resulting from any merger or consolidation to which the Note
Trustee is a party;
(iv) to which the Note Trustee sells or otherwise transfers all or
substantially all the assets of its corporate trust business,
shall, on the date when that merger, conversion, consolidation, sale
or transfer becomes effective and to the extent permitted by
applicable law, become the successor Note Trustee under this deed
without the execution or filing of any agreement or document or any
further act on the part of the parties this deed, unless otherwise
required by the Trustee or the Trust Manager, and after that
effective date all references in this deed to the Note Trustee shall
be references to that corporation.
23.7 Eligibility; Disqualification
(a) The Note Trustee shall at all times satisfy the requirements of
section 310(a) of the TIA.
(b) The Note Trustee shall have a combined capital and surplus (as those
terms are used in the TIA) of at least $50,000,000 as set forth in
its most recent published annual report of condition.
(c) The Note Trustee shall comply with section 310(b) of the TIA
provided that any indenture or indentures under which other
securities of the Trustee are outstanding shall be excluded from the
operation of section 310(b)(1) of the TIA for the purposes of
paragraph (b) if the requirements for such exclusion set out in
section 310(b)(1) of the TIA are met.
24. NOTE TRUSTEE'S POWERS ADDITIONAL
The powers conferred upon the Note Trustee by this deed shall be in
addition to any powers which may from time to time be vested in the Note
Trustee by the general law or as a holder of any of the Offshore Notes.
25. SEVERABILITY OF PROVISIONS
Any provision of this deed which is prohibited or unenforceable in any
jurisdiction is ineffective as to that jurisdiction to the extent of the
prohibition or unenforceability. That does not invalidate the remaining
provisions of this deed nor affect the validity or enforceability of that
provision in any other jurisdiction.
26. NOTICES
26.1 General
All notices, requests, demands, consents, approvals, agreements or other
communications to or by a party to this deed:
(a) must be in writing;
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(b) must be signed by an Authorised Signatory of the sender; and
(c) will be taken to be duly given or made:
(i) (in the case of delivery in person or by post) when delivered,
received or left at the address of the recipient shown in
clause 26.2 or to any other address which it may have notified
by the recipient to the sender;
(ii) (in the case of facsimile transmission) on receipt of a
transmission report confirming successful transmission to the
number shown in clause 26.2 or any other number notified by
the recipient to the sender under this clause 26; and
(iii) (in the case of a telex) on receipt by the sender of the
answerback code of the recipient at the end of transmission to
the number shown in clause 26.2 or any other number notified
by the recipient to the sender under this clause 26,
but if delivery or receipt is on a day on which business is not
generally carried on in the place to which the communication is sent
or is later than 4.00 pm (local time), it will be taken to have been
duly given or made at the commencement of business on the next day
on which business is generally carried on in that place.
26.2 Details
The address, facsimile and telex of each party at the date of this deed
are as follows:
The Trustee
WESTPAC SECURITIES ADMINISTRATION LIMITED
Level 10
130 Pitt Street
SYDNEY NSW 2000
Tel:
Telex:
Fax:
Attention:
The Trust Manager
WESTPAC SECURITISATION MANAGEMENT PTY LIMITED
Level 4
60 Martin Place
SYDNEY NSW 2000
Tel:
Telex:
Fax:
Attention:
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The Principal Paying Agent
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
Global Trust and Agency Services
P.O. Box 161
60 Victoria Embankment
London EC4 OJP
Tel: 171 325 8977
Telex: 896631 MGT G
Fax: 171 325 8154
Attention: Global Trust and Agency Services
The Agent Bank
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
Global Trust and Agency Services
P.O. Box 161
60 Victoria Embankment
London EC4 OJP
Tel: 171 325 8816
Telex: 896631 MGT G
Fax: 171 325 8293
Attention: Global Trust and Agency Services
The Note Trustee
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
Global Trust and Agency Services
P.O. Box 161
60 Victoria Embankment
London EC4 OJP
Tel: 171 325 5102
Telex: 896631 MGT G
Fax: 171 325 8215
Attention: Global Trust and Agency Services
27. GOVERNING LAW AND JURISDICTION
This deed is governed by the laws of New South Wales. The Trustee submits
to the non-exclusive jurisdiction of courts exercising jurisdiction there.
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28. COUNTERPARTS
This deed may be executed in any number of counterparts. All counterparts
together will be taken to constitute one instrument.
29. LIMITED RECOURSE
29.1 General
Clause 33 of the Master Trust Deed applies to the obligations and
liabilities of the Trustee and the Trust Manager under this deed.
29.2 Liability of Trustee limited to its right to indemnity
(a) This deed applies to the Trustee only in its capacity as trustee of
the Trust and in no other capacity. A liability arising under or in
connection with this deed or the Trust can be enforced against the
Trustee only to the extent to which it can be satisfied out of
property of the Trust out of which the Trustee is actually
indemnified for the liability. This limitation of the Trustee's
liability applies despite any other provision of this deed and
extends to all liabilities and obligations of the Trustee in any way
connected with any representation, warranty, conduct, omission,
agreement or transaction related to this deed or the Trust.
(b) The parties other than the Trustee may not sue the Trustee in any
capacity other than as trustee of the Trust or seek the appointment
of a receiver (except under the Security Trust Deed), or a
liquidator, an administrator or any similar person to the Trustee or
prove in any liquidation, administration or arrangements of or
affecting the Trustee.
(c) The provisions of this clause 29 shall not apply to any obligation
or liability of the Trustee to the extent that it is not satisfied
because under a Transaction Document or by operation of law there is
a reduction in the extent of the Trustee's indemnification out of
the Assets of the Trust as a result of the Trustee's fraud,
negligence or breach of trust.
(d) Without affecting any limit or exclusion of liability in relation to
the duties, powers or obligations under the Transaction Documents of
any of the Trust Manager, the Servicer, the Note Trustee, the
Principal Paying Agent, the other Paying Agents or the Agent Bank
(each a Relevant Party), it is acknowledged that the Trust Manager,
the Servicer, the Note Trustee, the Principal Paying Agent, the
other Paying Agents and the Agent Bank (each a Relevant Party) are
responsible under this deed and the other Transaction Documents for
performing a variety of obligations relating to the Trust. No act or
omission of the Trustee (including any related failure to satisfy
its obligations under this deed) will be considered fraud,
negligence or breach of trust of the Trustee for the purpose of
sub-paragraph (iii) to the extent to which the act or omission was
caused or contributed to by any failure by any Relevant Party or any
other person who provides services in respect of the Trust (other
than a person who has been delegated or appointed by the Trustee and
for whom the Trustee is responsible under this deed or the relevant
Transaction Documents, but excluding any Relevant Party) to fulfil
its obligations relating to the Trust or by any other act or
omission of a Relevant Party or any other person who provides
services in respect of the Trust (other than a person who has been
delegated or appointed by the Trustee and for whom the Trustee is
responsible under this deed or the relevant Transaction Documents,
but excluding any Relevant Party).
(e) No attorney, agent, receiver or receiver and manager appointed in
accordance with this deed or any other Transaction Documents
(including a Relevant Party) has
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authority to act on behalf of the Trustee in a way which exposes the
Trustee to any personal liability and no act or omission of any such
person will be considered fraud, negligence or breach of trust of
the Trustee for the purpose of sub-paragraph (iii), if the Trustee
has exercised reasonable care in the selection and supervision of
such a person.
29. Unrestricted remedies
Nothing in clause 29.2 limits any party (other than the Trustee) in:
(a) obtaining an injunction or other order to restrain any breach of
this deed by any party;
(b) obtaining declaratory relief; or
(c) in relation to its rights under the Security Trust Deed.
29. Restricted remedies
Except as provided in clause 29.3, no Paying Agent shall:
(a) (judgment) obtain a judgment for the payment of money or damages by
the Trustee;
(b) (statutory demand) issue any demand under s459E(1) of the
Corporations Law (or any analogous provision under any other law)
against the Trustee;
(c) (winding up) apply for the winding up or dissolution of the Trustee;
(d) (execution) levy or enforce any distress or other execution to, on,
or against any assets of the Trustee;
(e) (court appointed receiver) apply for the appointment by a court of a
receiver to any of the assets of the Trustee;
(f) (set-off or counterclaim) exercise or seek to exercise any set-off
or counterclaim against the Trustee; or
(g) (administrator) appoint, or agree to the appointment, of any
administrator to the Trustee,
or take proceedings for any of the above and each Paying Agent waives its
rights to make those applications and take those proceedings.
30. SUCCESSOR TRUSTEE
The Note Trustee shall do all things reasonably necessary to enable any
successor Trustee appointed under clause 24 of the Master Trust Deed to
become the Trustee under this deed.
31. OFFSHORE NOTEHOLDERS' LISTS AND REPORTS
31.1 Provision of information
The Trustee will furnish or cause to be furnished to the Note Trustee:
(a) every six months (with the first six month period commencing on the
Closing Date) (each such date being a Notice Date), a list, in such
form as the Note Trustee may
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reasonably require, of the names and addresses of the Offshore
Noteholders as of the Record Date immediately preceding that Notice
Date; and
(b) at such other times as the Note Trustee may request in writing,
within 30 days after receipt by the Trustee of any such request, a
list of similar form and content as of a date not more than 10 days
prior to the time such list is furnished,
provided that so long as:
(c) the Note Trustee is the Note Registrar; or
(d) the Offshore Notes are Book-Entry Notes,
no such list shall be required to be furnished.
31.2 Preservation of Information; Communications to Offshore Noteholders
(a) The Note Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Offshore
Noteholders contained in the most recent list (if any) furnished to
the Note Trustee as provided in clause 31.1 and, so long as it
continues to act as Note Registrar, the names and addresses of
Offshore Noteholders received by the Note Trustee in its capacity as
Note Registrar. The Trustee may destroy any list furnished to it as
provided in such clause 31.1 upon receipt of a new list so
furnished.
(b) Offshore Noteholders may communicate pursuant to section 312(b) of
the TIA with other Offshore Noteholders with respect to their rights
under this Deed or under the Offshore Notes.
(c) The Trustee, Note Trustee and Note Registrar shall have the
protection of section 312(c) of the TIA.
31.3 Reports by Note Trustee
If required by section 313(a) of the TIA, within 60 days after each 30
June, beginning with 30 June 1999, the Note Trustee shall mail to each
Offshore Noteholder and the Trustee as required by section 313(c) of the
TIA a brief report dated as of such date that complies with section 313(a)
of the TIA. The Note Trustee also shall comply with section 313(b) of the
TIA. A copy of each report at the time of its mailing to Offshore
Noteholders shall be filed by the Note Trustee with the Commission and
each stock exchange, if any, on which the Offshore Notes are listed. The
Trust Manager on behalf of the Trustee shall notify the Note Trustee if
and when the Offshore Notes are listed on any stock exchange.
31.4 Notices to Offshore Noteholders; Waiver
Where this deed provides for notice to Offshore Noteholders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class, postage prepaid to each
Offshore Noteholder affected by such event, at his or her address as it
appears on the Note Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice.
In any case where notice to Offshore Noteholders is given by mail, neither
the failure to mail such notice nor any defect in any notice so mailed to
any particular Offshore Noteholder shall affect the sufficiency of such
notice with respect to other Offshore Noteholders, and any notice that is
mailed in the manner herein provided shall conclusively be presumed to
have been duly given.
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Where this deed provides for notice in any manner, such notice may be
waived in writing by any person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Offshore Noteholders shall be filed with the
Note Trustee but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail services as a result
of a strike, work stoppage or similar activity, it shall be impractical to
mail notice of any event to Offshore Noteholders when such notice is
required to be given pursuant to any provision of this deed, then any
manner of giving such notice as the Trustee shall direct the Note Trustee
shall be deemed to be a sufficient giving of such notice.
31.5 Reports by Trustee
The Trustee shall:
(a) file with the Note Trustee, within 15 days after the Trustee is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the
Trustee may be required to file with the Commission pursuant to
section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended;
(b) file with the Note Trustee and the Commission in accordance with
rules and regulations prescribed from time to time by the Commission
such additional information, documents and reports with respect to
compliance by the Trustee with the conditions and covenants of this
deed as may be required from time to time by such rules and
regulations; and
(c) supply to the Note Trustee (and the Note Trustee shall transmit by
mail to all Offshore Noteholders described in section 313(c) of the
TIA) such summaries of any information, documents and reports
required to be filed by the Trustee pursuant to clauses (a) and (b)
of this clause 31.5 as may be required by rules and regulations
prescribed from time to time by the Commission.
32. TRUST INDENTURE ACT - MISCELLANEOUS
32.1 Compliance Certificates and Opinions, etc
(a) Upon any application or request by the Trustee to the Note Trustee
to take any action under any provision of this deed, the Trustee
shall furnish to the Note Trustee:
(i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this deed relating to the
proposed action have been complied with;
(ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been
complied with; and
(iii) (if required by the TIA) an Independent Certificate from a
firm of certified public accountants meeting the applicable
requirements of section 314(c)(3) of the TIA, except that, in
the case of any such application or request as to which the
furnishing of such documents is specifically required by any
provision of this deed, no additional certificate or opinion
need be furnished.
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(b)(i)Prior to the deposit of any property or securities with
the Trustee that is to be made the basis for the release of
any property or securities subject to the Security Interest
created by the Security Trust Deed, the Trustee shall, in
addition to any obligation imposed in clause 32.1(a) or
elsewhere in this deed, furnish to the Note Trustee an
Officer's Certificate certifying or stating the opinion of
each person signing such certificate as to the fair value
(within 90 days of such deposit) of the property or securities
to be so deposited.
(ii) Whenever any property or securities are to be released from
the Security Interest created by the Security Trust Deed, the
Trustee shall also furnish to the Note Trustee an Officer's
Certificate certifying or stating the opinion of each person
signing such certificate as to the fair value (within 90 days
of such release) of the property or securities proposed to be
released and stating that in the opinion of such person the
proposed release will not impair the security under the
Security Trust Deed in contravention of the provisions of the
Security Trust Deed or this deed.
(iii) Whenever the Trustee is required to furnish to the Note
Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in
paragraphs (i) and (ii), the Trustee shall also furnish to the
Note Trustee an Independent Certificate as to the same matters
if the fair value of the property or securities and of all
other property or securities deposited or released from the
Security Interest created by the Security Trust Deed since the
commencement of the then current calendar year, as set forth
in the certificate required by clause (ii) and this clause
(iii), equals 10% or more of the Total Invested Amount of the
Notes, but such certificate need not be furnished in the case
of any release of property or securities if the fair value
thereof as set forth in the related Officer's Certificate is
less than $25,000 or less than one percent of the then Total
Invested Amount of the Notes.
Notwithstanding any other provision of this clause, the
Trustee may:
(A) collect, liquidate, sell or otherwise dispose of
Receivables or other Assets of the Trust as and to the
extent permitted or required by the Transaction
Documents; and
(B) make cash payments out of the [Trust Accounts] as and to
the extent permitted or required by the Transaction
Documents.
(c) Every Officer's Certificate or opinion with respect to compliance
with a condition or covenant provided for in this deed shall
include:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
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Page 43
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(iv) a statement as to whether, in the opinion of each such
signatory such condition or covenant has been complied with.
32.2 Undertaking for Costs
(a) Subject to paragraph (b), all parties to this deed agree, and each
Offshore Noteholder by such Offshore Noteholder's acceptance thereof
shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy
under this deed, or in any suit against the Note Trustee for any
action taken, suffered or omitted by it as the Note Trustee, the
filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion
assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defences made by such party
litigant.
(b) The provisions of this clause shall not apply to:
(i) any suit instituted by the Note Trustee;
(ii) any suit instituted by any Offshore Noteholder, or group of
Offshore Noteholders in each case holding in the aggregate
more than 10% of the aggregate Invested Amount of the Offshore
Notes; or
(iii) any suit instituted by any Offshore Noteholder for the
enforcement of the payment of principal or interest on any
Offshore Note on or after the respective due dates expressed
in such Offshore Note and in this deed (or, in the case of
final redemption of a Offshore Note, on or after the Final
Maturity Date).
32.3 Exclusion of section 316
(a) Section 316(a)(1) of the TIA is expressly excluded by this deed.
(b) For the purposes of section 316(a)(2) of the TIA in determining
whether any Offshore Noteholders have concurred in any relevant
direction or consent, Notes owned by the Trustee or by any Associate
of the Trustee, shall be disregarded, except that for the purposes
of determining whether the Note Trustee shall be protected in
relying on any such direction or consent, only Offshore Notes which
the Note Trustee knows are so owned shall be so disregarded.
32.4 Unconditional Rights of Offshore Noteholders to Receive Principal and
Interest
Notwithstanding any other provisions in this deed, any Offshore Noteholder
shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Offshore Note on
or after the respective due dates thereof expressed in such Offshore Note
or in this deed (or, in the case of final redemption of a Offshore Note,
on or after the Final Maturity Date) and to institute suit for the
enforcement of any such payment, and such right shall not be impaired
without the consent of such Offshore Noteholder, except to the extent that
this deed contains provisions limiting or denying the right of any
Offshore Noteholder to institute any such suit, if and to the extent that
the institution or prosecution thereof or the entry of judgment therein
would, under applicable law, result in the surrender, impairment, waiver,
or loss of the Security Interest created by the Security Trust Deed upon
any property subject to such Security Interest.
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Page 44
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32.5 Conflict with Trust Indenture Act
If any provision hereof limits, qualifies or conflicts with another
provision hereof that is required to be included in this indenture by any
of the provisions of the Trust Indenture Act, such required provision
shall prevail.
The provisions of section 310 to 317 (inclusive) of the TIA that impose
duties on any person (including the provisions automatically deemed
included herein unless expressly excluded by this deed) are a part of and
govern this deed, whether or not contained herein.
33. CONSENT OF OFFSHORE NOTEHOLDERS
33.1 General
Except as expressly provided in elsewhere in this deed or in clause 33.2
below, any action that may be taken by the Offshore Noteholders under this
deed may be taken by registered holders of not less than a majority of the
aggregate Invested Amount of Offshore Notes or the relevant Class of
Offshore Notes, as applicable.
33.2 Special Written Approvals
(a) The following matters are only capable of being effected by the
approval in writing of holders of at least 75% of the aggregate
Invested Amount of the Class A Notes or the Class B Notes, as
appropriate namely:
(i) modification of the date fixed for final maturity of the Class
A Notes or the Class B Notes;
(ii) reduction or cancellation of the principal payable on the
Class A Notes or the Class B Notes or any alteration of the
date or priority of redemption of the Class A Notes or the
Class B Notes;
(iii) alteration of the amount of interest payable on any class of
the Class A Notes or the Class B Notes or modification of the
method of calculating the amount of interest payable on the
Class A Notes or the Class B Notes or modification of the date
of payment of an, interest payable on the Class A Notes or the
Class B Notes;
(iv) alteration of the currency in which payments under the Class A
Notes or the Class B Notes are to be made;
(v) altering the required percentage of aggregate Invested Amount
required to consent or take any action of the Offshore Notes
or a Class of Offshore Notes;
(vi) alteration of this sub-paragraph.
(b) Subject to paragraph (c) the Noteholders shall in addition to the
powers given under this deed have the following powers if approval
is given by holders of at least 75% of the aggregate Invested Amount
of the Class A Notes or the Class B Notes:
(i) power to sanction any compromise or arrangement proposed to be
made between the Trustee and the Class A Noteholders or the
Class B Noteholders;
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<PAGE>
Page 45
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(ii) power to sanction any abrogation, modification, compromise or
arrangement in respect of the rights of the Class A
Noteholders or the Class B Noteholders, as the case may be,
against the Trustee or against any of its property or against
any other person whether such rights shall arise under these
presents, any of the Notes or otherwise;
(iii) power to assent to any modification of the provisions
contained in these presents, the Class A Notes or the Class B
Notes, as the case may be, (including the Conditions) or the
provisions of any of the Relevant Documents which shall be
proposed by the Trustee or the Note Trustee;
(iv) power to give any authority or sanction which under the
provisions of these presents or the Class A Notes or the
Class B Notes, as the case may be, (including the Conditions)
is required to be given by, in writing by holders of at least
75% of the aggregate Invested Amount of the Class A Notes or
the Class B Notes as appropriate;
(v) power to approve of a person to be appointed a trustee and
power to remove any trustee or trustees for the time being
under this deed;
(vi) power to discharge or exonerate the Note Trustee from all
liability in respect of any act or omission for which the
Note Trustee may have become responsible under this deed or
under the Class A Notes or the Class B Notes;
(vii) power to authorise the Note Trustee to concur in and execute
and do all such deeds, instruments, acts and things as may be
necessary to carry out and give effect to the approval in
writing by holders of at least 75% of the aggregate Invested
Amount of the Class A Notes or the Class B Notes as
appropriate;
(viii) power to sanction any scheme or proposal for the exchange or
sale of the Class A Notes or the Class B Notes, as the case
may be, for, or the conversion of the Class A Notes or the
Class B Notes, as the case may be, into, or the cancellation
of the Class A Notes or the Class B Notes, as the case may
be, in consideration of shares, stock, notes, bonds'
debentures, debenture stock and/or other obligations and/or
securities of the Trustee or of any other company formed or
to be formed, or for or into or in consideration of cash, or
partly for or into or in consideration of such shares, stock,
notes, bonds, debenture stock and/or other obligations and/or
securities as aforesaid and partly for or into or in
consideration of cash.
(c) Despite paragraph (b) no approval in writing by the holders of at
least 75% of the aggregate Invested Amount of the Class B
Noteholders shall be effective unless:
(i) the Note Trustee is of the opinion that it will not be
materially prejudicial to the interests of the Class A
Noteholders; or
(ii) it is sanctioned by approval in writing by the holders of at
least 75% of the aggregate Invested Amount of the Class A
Notes; or
(iii) none of the Class A Notes remains outstanding.
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<PAGE>
Page 46
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33.3 Requirement for writing
Except as expressly provided elsewhere in this deed, all notices and
consents from Offshore Noteholders and Offshore Note Owners shall be
delivered in writing. Any solicitation of such notices or consent shall be
in writing and be delivered by the Trustee, Trust Manager or Note Trustee,
as applicable, seeking such notice or consent form the Offshore
Noteholders or Offshore Note Owners to the Principal Paying Agent, who
shall deliver the foregoing to the appropriate Classes of Offshore
Noteholders or Offshore Note Owners. With respect to any solicitation of
approval of Offshore Noteholders, the record date for determining Offshore
Noteholders with respect to such solicitation shall be the date upon which
the Principal Paying Agent distributes such notices or solicitation to the
Offshore Noteholders.
EXECUTED as a deed in [*].
Each attorney executing this deed states that he has no notice of revocation or
suspension of his power of attorney.
TRUSTEE
SIGNED on behalf of )
WESTPAC SECURITIES )
ADMINISTRATION LIMITED )
by its attorney )
in the presence of: ) ________________________________
Signature
_____________________________________ ________________________________
Witness Print name
_____________________________________
Print name
TRUST MANAGER
SIGNED on behalf of )
WESTPAC SECURITISATION )
MANAGEMENT PTY LIMITED by its )
in the presence of: ) ________________________________
Signature
_____________________________________ ________________________________
Witness Print name
_____________________________________
Print name
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<PAGE>
47
- --------------------------------------------------------------------------------
NOTE TRUSTEE
SIGNED on behalf of )
MORGAN GUARANTY TRUST )
COMPANY OF NEW YORK )
by its attorney )
in the presence of: ) ________________________________
Signature
_____________________________________ ________________________________
Witness Print name
_____________________________________
Print name
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<PAGE>
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SCHEDULE 1
FORM OF CLASS A/CLASS B* BOOK-ENTRY NOTE
REGISTERED CUSIP NO.
No. R- ISIN No.
Common Code
Unless this Note is presented by an authorised representative of The Depository
Trust Company, a New York corporation (DTC), to the Issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorised
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorised representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CLASS B*: THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A NOTES AS
DESCRIBED IN THE TRANSACTION DOCUMENTS.
WESTPAC SECURITIES ADMINISTRATION LIMITED
(ACN 000 049 472)
(a limited liability company incorporated under the law of New South Wales,
Australia)
in its capacity as trustee of the Series 1998-1G WST Trust
CLASS A/CLASS B* BOOK-ENTRY NOTE
representing
US$[number]**
Class A/Class B* Mortgage Backed Floating Rate Notes Due [ ]
This Note is a Class A/Class B* Book-Entry Note without principal or interest in
respect of a duly authorised issue of Notes of Westpac Securities Administration
Limited in its capacity as trustee of the Series 1998-1G WST Trust (the "Trust")
(the "Issuer"), designated as specified in the title above (the "Notes"), in an
initial aggregate principal amount of
[ ]** (US$ [ ])**
and (a) constituted by a Master Trust Deed (the "Master Trust Deed") dated 14
February 1997 between the Issuer and Westpac Securitisation Management Pty
Limited (the "Trust Manager"), by a Series Notice (the "Series Notice") dated
[*] 1998 between (among others) the Issuer, Morgan Guaranty Trust Company of New
York, London office (the note trustee for the time being referred to as the
"Note Trustee") as trustee for the holders for the time being of the Class A
Notes (the "Class A Noteholders") and the holders for the time being of the
Class B Notes (the "Class B Noteholders", and together with the Class A
Noteholders the "Noteholders") and the Trust Manager, and by these
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<PAGE>
Conditions; (b) issued subject to a Note Trust Deed dated [*] 1998 (the "Note
Trust Deed") between the Issuer, the Trust Manager and the Note Trustee; and (c)
secured by a Security Trust Deed (the "Security Trust Deed") dated [*] 1998
between the Issuer, the Trust Manager, the Note Trustee and Perpetual Trustee
Company Limited (ACN 000 001 007) (the "Security Trustee", which expression
shall include its successor for the time being as security trustee under the
Security Trust Deed). References to the Conditions (or to any particular
numbered Condition) shall be to the Terms and Conditions of the Class A/Class B*
Notes (or that particular one of them) set out in Schedule 2/3* to the Note
Trust Deed but with the deletion of those provisions which are applicable only
to Class A/Class B* Notes in definitive form. Terms and expressions defined in
the Note Trust Deed and the Conditions shall, save as expressly stated
otherwise, bear the same meanings when used herein.
If the Issuer is obliged to issue Definitive Notes under Clause 3.3 of the Note
Trust Deed this Class A/Class B* Book-Entry Note will be exchangeable in whole
at the offices of the Principal Paying Agent at 60 Victoria Embankment, London
EC4Y 0JP (or such other place outside Australia and any of its respective
territories and possessions and other areas subject to jurisdictions as the Note
Trustee may agree) for Class A/Class B* Definitive Notes and the Issuer shall
execute and procure that the Principal Paying Agent authenticates and delivers
in full exchange for this Class A/Class B* Book-Entry Note, Class A/Class B*
Definitive Notes in aggregate principal amount equal to the Amount of all Class
A/Class B* Notes represented by this Class A/Class B* Book-Entry Note. The
Issuer is not obliged to issue Definitive Notes until 30 days after the
occurrence of an event set out in clause 3.3 of the Note Trust Deed.
The Issuer, in its capacity as trustee of the Trust, subject to this Class
A/Class B* Book-Entry Note and subject to and in accordance with the Conditions
and the Note Trust Deed promises to pay to Cede Co., or registered assigns of
this Class A/Class B* Book-Entry Note the principal sum of US$[words]**
(US$[number])** or such lesser amount as may from time to time be represented by
this Class A/Class B* Book-Entry Note (or such part of that amount as may become
repayable under the Conditions, the Series Notice and the Note Trust Deed) on
such date(s) that principal sum (or any part of it) becomes repayable in
accordance with the Conditions, the Series Notice and the Note Trust Deed and to
pay interest in arrear on each Payment Date (as defined in Condition 4) on the
Invested Amount (as defined in Condition 5(a)) of this Class A/Class B*
Book-Entry Note at rates determined in accordance with Class A/Class B*
Condition 4 and all subject to and in accordance with the certification
requirements described in this Class A/Class B* Book-Entry Note, the Conditions,
the Series Notice and the Note Trust Deed, which shall be binding on the
registered holder of this Class A/Class B* Book-Entry Note (as if references in
the Conditions to the Notes and the Noteholders were references to this Class
A/Class B* Book-Entry Note and the registered holder of this Class A/Class B*
Book-Entry Note respectively and as if the same had been set out in this Class
A/Class B* Book-Entry Note in full with all necessary changes, except as
otherwise provided in this Class A/Class B* Book-Entry Note).
Payments of interest on this Note due and payable on each Payment Date, together
with the instalment of principal, if any, shall be payable to the nominee of the
Common Depositary (initially, such nominee to be Cede & Co.). No payment of
interest or principal may be made by the Issuer or any Paying Agent in the
Commonwealth of Australia or its possessions or into a bank account or to an
address in the Commonwealth of
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<PAGE>
Australia. Each of the persons appearing from time to time in the records of
DTC, as the holder of a beneficial interest in a Class A/Class B* Note will be
entitled to receive any payment so made in respect of that Class A/Class B* Note
in accordance with the respective rules and procedures of DTC. Such persons will
have no claim directly against the Issuer in respect of payments due on the
Class A/Class B* Notes which must be made by the holder of this Class A/Class B*
Book-Entry Note, for so long as this Class A/Class B* Book-Entry Note is
outstanding.
On any payment of principal and/or interest on the Class A/Class B* Notes as set
out above details of that payment shall be endorsed by or on behalf of the
Issuer in the Note Register and, in the case of payments of principal, the
Invested Amount of the Class A/Class B* Notes shall be reduced for all purposes
by the amount so paid and endorsed in the Note Register. Any such record shall
be prima facie evidence that the payment in question has been made.
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<PAGE>
If the Issuer is obliged to issue Definitive Notes under Clause 3.3 of the Note
Trust Deed, the Book-Entry Notes will be surrendered to the Trustee by the
Clearing Agency and the Clearing Agency will deliver the relevant registration
instructions to the Trustee. Definitive Notes shall be executed by the Trustee
and authenticated by the Principal Paying Agent and delivered as per the
instructions of the Clearing Agency.
The Class A/Class B* Definitive Notes to be issued on that exchange will be in
registered form each in the denomination of US$100,000 or integral multiples
thereof. If the Issuer fails to meet its obligations to issue Class A/Class B*
Definitive Notes, this shall be without prejudice to the Issuer's obligations
with respect to the Notes under the Note Trust Deed, the Master Trust Deed, the
Series Notice and this Class A/Class B* Book-Entry Note.
On an exchange of this Class A/Class B* Book-Entry Note, this Class A/Class B*
Book-Entry Note shall be surrendered to the Principal Paying Agent.
This Class A/Class B* Book-Entry Note shall not become valid for any purpose
unless and until the Certificate of Authentication attached has been signed by
an Authorised Signatory of the Principal Paying Agent (as defined in the Series
Notice).
This Class A/Class B* Book-Entry Note is governed by, and shall be construed in
accordance with, the laws of New South Wales, Australia.
IN WITNESS the Issuer has caused this Class A/Class B* Book-Entry Note to be
signed [manually/in facsimile] by a person duly authorised on its behalf
WESTPAC SECURITIES ADMINISTRATION LIMITED
By: __________________________
Authorised Signatory
IMPORTANT NOTES:
(a) The Class A/Class B* Notes do not represent deposits or other liabilities
of Westpac Banking Corporation, ARBN 007 457 141 ("Westpac") or associates
of Westpac.
(b) The holding of Class A/Class B* Notes is subject to investment risk,
including possible delays in repayment and loss of income and principal
invested.
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<PAGE>
(c) Neither Westpac nor any associate of Westpac in any way stands behind the
capital value and/or performance of the Class A/Class B* Notes or the
assets of the Trust except to the limited extent provided in the Series
Notice, the Master Trust Deed, the Note Trust Deed and the other documents
for the Trust.
(d) None of Westpac, the Issuer, Westpac Securitisation Management Pty Limited
as servicer on behalf of the Issuer (the "Servicer") or the Trust Manager
guarantees the payment of interest or the repayment of principal due on
the Class A/Class B* Notes.
(e) None of the obligations of the Issuer or the Trust Manager are guaranteed
in any way by Westpac or any associate of Westpac.
(f) The Issuer's liability to make payments in respect of the Class A/Class B*
Notes is limited to its right of indemnity from the assets of Trust from
time to time available to make such payments under the Master Trust Deed
and Series Notice. All claims against the Issuer in relation to the Class
A/Class B* Notes can be enforced against the Issuer only to the extent to
which it can be satisfied out of the assets of the Trust out of which the
Issuer is actually indemnified for the liability except in the case of
(and to the extent of) any fraud, negligence or breach of trust on the
part of the Issuer.
(g) The Noteholder is required to accept any distribution of moneys under the
Security Trust Deed in full and final satisfaction of all moneys owing to
it, and any debt represented by any shortfall that exists after any such
final distribution is extinguished.
CERTIFICATE OF AUTHENTICATION
This Class A/Class B* Book-Entry Note is authenticated by Morgan Guaranty Trust
Company of New York and until so authenticated shall not be valid for any
purpose.
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
as Principal Paying Agent
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<PAGE>
ASSIGNMENT
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<PAGE>
Social Security or taxpayer I.D. or other identifying number of assignee
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
________________________________________________________________________________
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________________________ ___________________________________
Signature Guaranteed:
___________________________________
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the Note
Registrar, which requirements include
membership or participation in STAMP
or such other "signature guarantee
program" as may be determined by the
Note Registrar in addition to, or in
substitution for, STAMP, all in
accordance with the Securities
Exchange Act of 1934, as amended.
_________________________________
*/ NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in
every particular without alteration, enlargement or any change
whatsoever.
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<PAGE>
WESTPAC SECURITIES ADMINISTRATION LIMITED
<PAGE>
SCHEDULE 2
Information to be contained in Noteholder's Report
(i) the Invested Amount and the Stated Amount of each Class of Notes;
(ii) the Interest Payments and principal distributions on each Class of
Notes;
(iii) the Available Income;
(iv) the Total Available Funds;
(v) the aggregate of all Redraws made during that Collection Period;
(vi) the Redraw Shortfall;
(vii) the Subordinated Percentage;
(viii) the Initial Subordinated Percentage;
(ix) the Payment Shortfall (if any);
(x) the Principal Draw (if any) for that Collection Period, together with
all Principal Draws made before the start of that Collection Period and
not repaid;
(xi) the Gross Principal Collections;
(xii) the Principal Collections;
(xiii) the Liquidity Shortfall (if any);
(xiv) the Remaining Liquidity Shortfall (if any);
(xv) the Principal Charge Off (if any);
(xvi) the Class A Percentage and the Class B Percentage;
(xvii) the Class A Bond Factor, the Class B Bond Factor, the RFS Class A Bond
Factor and the RFS Bond Factor for each RFS Series (The "Bond Factor"
with respect to a Class of Notes is the Initial Invested Amount of such
Class less all principal payments on such Class divided by the Initial
Invested Amount of such Class);
(xxviii) the Class A Charge Offs, the Class B Charge Offs, the RFS Class A
Charge Offs, the RFS Charge Offs and the Redraw Charge Offs (if any);
(xix) all Carryover Charge Offs (if any);
(xx) if required, the Threshold Rate at that Collection Determination Date;
(xxi) the Quarterly Percentage;
(xxii) LIBOR, as at the first day of the related Interest Period ending
immediately after that Collection Determination Date as calculated by
the Agent Bank;
(xxiii) scheduled and unscheduled payments of principal on the Housing Loans;
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<PAGE>
(xxiv) aggregate Balances Outstanding of Fixed Rate Housing Loans and
aggregate Balances Outstanding of Variable Rate Housing Loans; and
(xxv) delinquency statistics with respect to the Housing Loans.
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<PAGE>
(Multicurrency--Cross Border) [LOGO]
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of __________ 1998
Westpac Banking Corporation Westpac Securities Administration Limited
(ARBN 007 457 141) (ACN 000 049 472) in its capacity as
- ------------------------------ and ---------------------------------------------
trustee of the Series 1998-1G WST Trust
and other parties shown on page 18 of this
agreement
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows: --
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise specified in
the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing,
(2) the condition precedent that no Early Termination Date in respect of
the relevant Transaction has occurred or been effectively designated and
(3) each other applicable condition precedent specified in this Agreement.
<PAGE>
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable: --
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment or any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will: --
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving notice that
such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Identifiable Tax, pay to Y, in addition to the
payment to which Y is otherwise entitled under this Agreement, such
additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full amount Y would
have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to
the extent that it would not be required to be paid but for: --
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure would
not have occurred but for (I) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on
or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (II) a Change in Tax
Law.
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(ii) Liability. if: --
(1) X is required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, to make any
deduction or withholding in respect of which X would not be required
to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgement) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that: --
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organsiation or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform
its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all necessary
action to authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision of
its constitutional documents, any order or judgement of any court or other
agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in full
force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid
and binding obligations, enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding
in equity or at law)).
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(b) Absence of Certain Events. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) Absence of Litigation. There is not pending, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party: --
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs: --
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to allow
such other party or its Credit Support Provider to make a payment under
this Agreement or any applicable Credit Support Document without any
deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of such
demand), with any such form or document to be accurate and completed in a
manner reasonably satisfactory to such other party and to be executed and
to be delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,
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organised, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other part or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party: --
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
in accordance with this Agreement if such failure is not remedied on or
before the thirtieth day after notice of such failure is given to the
party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction
of all obligations of such party under each Transaction to which
such Credit Support Document relates without the written consent of
the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the
validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due
on the last payment delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act
on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however
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described) in respect of such party, any Credit Support Provider of such
party or any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of
them (individually or collectively) in an aggregate amount of not less
than the applicable Threshold Amount (as specified in the Schedule) which
has resulted in such Specified Indebtedness becoming, or becoming capable
at such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on
the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party: --
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a
judgement of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (A)
results in a judgement of insolvency or bankruptcy or the entry of
an order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant
to a consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;
(7) has a secured party take possession of all or substantially all
its assets or has a distress, execution, attachment, sequestration
or other legal process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed
or restrained, in each case within 30 days thereafter; (8) causes or
is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect to any
of the events specified in clauses (1) to (7) (inclusive); or (9)
takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at
the time of such consolidation, amalgamation, merger or transfer: --
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event
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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below: --
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party): --
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is
required to be paid in respect of such Tax under Section 2(d)(i)(4) (other
than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which
the other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event" is
specified in the Schedule or any Confirmation as applying, the occurrence
of such event (and, in such event, the Affected Party or Affected Parties
shall be as specified for such Additional Termination Event in the
Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
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6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying the
nature of that Termination Event and each Affected Transaction and will
also give such other information about that Termination Event as the other
party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and obligations
under this Agreement in respect of the Affected Transactions to another of
its Offices or Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a
Tax Event occurs and there are two Affected Parties, each party will use
all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that Termination
Event.
(iv) Right to Terminate. If: --
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to
all Affected Transactions within 30 days after an Affected Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a
Credit Event Upon Merger or an Additional Termination Event if there is
only one Affected Party may, by not more than 20 days notice to the other
party and provided that the relevant Termination Event is then
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continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence of effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount,
if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of
such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in
the Termination Currency, from (and including) the relevant Early
Termination Date to (but excluding) the date such amount is paid, at the
Applicable Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an Event
of Default: --
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the
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Non-defaulting Party) in respect of the Terminated Transactions and
the Termination Currency Equivalent of the Unpaid Amounts owing to
the Non-defaulting Party less (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party. If
that amount is a positive number, the Defaulting Party will pay it
to the Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that amount to
the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
(iii) Termination Events. If the Early Termination Date results from a
Termination Event: --
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and
to the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in
respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties: --
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions,
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to X less (II) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with the
lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if
it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the period from
the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate of
loss and not a penalty. Such amount is payable for the loss of bargain and
the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
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7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
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9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable
and may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding supplement to
this Agreement. The parties will specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of Transaction without prior written
consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document
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<PAGE>
to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated: --
(i) if in writing and delivered in person or by courier, on the date it is
delivered;
(ii) if sent by telex, on the date the recipient's answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered
or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified an the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably: --
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan an New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any
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<PAGE>
reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.
(d) Waiver of immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement: --
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means: --
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
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"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have
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been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group or Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: --
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
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"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market
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value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
Westpac Securities Administration
Limited
Westpac Banking Corporation (ACN 000 049 472) in its capacity as
ARBN 007 457 141 trustee of the Series 1998-1G WST Trust
- ----------------------------- -----------------------------------------
(Name of Party) (Name of Party)
By: By:
------------------------- -------------------------
Name: Name:
Title: Title:
Date: Date:
Westpac Securitisation Morgan Guaranty Trust
Management Pty Limited Company of New York,
(ACN 081 709 211) London branch
- ----------------------------- -----------------------------
(Name of Party) (Name of Party)
By: By:
------------------------- ------------------
Name: Name:
Title: Title:
Date: Date:
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<PAGE>
SCHEDULE
to the
Master Agreement
dated as of [ June] 1998
between Westpac Banking Corporation (ARBN 007 457 141) ("Party A") and Westpac
Securities Administration Limited (ACN 000 049 472) in its capacity as trustee
of the Series 1998-1G WST Trust ("Party B") and Westpac Securitisation
Management Pty Limited (ACN 081 709 211) (the "Trust Manager") and Morgan
Guaranty Trust Company of New York, London Office (the "Credit Support
Provider")
Part 1: Termination Provision
(a) "Specified Entity" in relation to:
(i) Party A, is not applicable; and
(ii) Party B, is not applicable.
(b) (i) The following provisions of Section 5 will not apply to Party A:
Section 5(a)(ii) Section 5(a)(v) Section 5(b)(iv)
Section 5(a)(iii) Section 5(a)(vi)
Section 5(a)(iv) Section 5(b)(iii)
(ii) The following provisions of Section 5 will not apply to Party B:
Section 5(a)(ii) Section 5(a)(v) Section 5(b)(iii)
Section 5(a)(iii) Section 5(a)(vi) Section 5(b)(iv)
Section 5(a)(iv) Section 5(a)(viii)
(iii) Replace Section 5(a)(i) and insert:
"(i) Failure to Pay or Deliver. Failure by the party to make, when
due, any payment under this Agreement or delivery under
Section 2(a)(i) or 2(e) required to be made by it if such
failure is not remedied at or before 10.00 am on the tenth
Local Business Day after notice of such failure is given to
the party";
(iv) Section 5(b)(ii) will not apply to Party A as the Affected Party
(subject to Part 5(4)(ii) of this Schedule).
(v) The "Bankruptcy" provisions of Section 5(a)(vii) are replaced by "An
Insolvency Event (as defined in the Master Trust Deed) has occurred
in respect of the party. In relation to Party A, the events
described in the definition of Insolvency Event shall apply to it as
if Party A were a relevant corporation referred to in that
definition. The occurrence of an Insolvency Event in respect of
Party B in its personal capacity will not constitute an Event of
Default provided that within thirty days of that occurrence, Party B
procures the novation of this Agreement and all Transactions to a
third party in respect of which the Designated Rating Agencies
confirm that the novation will not cause a reduction or withdrawal
of the rating of
<PAGE>
2
the Notes and Party A agrees that it will execute such a novation
agreement in standard ISDA form".
(vi) The application of Section 5(b)(i) will be restricted as set out in
Part 5(4) of this Schedule.
(c) The "Automatic Early Termination" provisions in Section 6(a) will not
apply to Party A nor Party B.
(d) "Payment on Early Termination". For the purposes of Section 6(e) of this
Agreement:
(i) Market Quotation will apply; and
(ii) the Second Method will apply.
(e) "Termination Currency" means US Dollars.
(f) "Additional Termination Event" means the occurrence of any of the
following:
(i) Party B is entitled to issue a notice to redeem all of the Notes (in
accordance with the Conditions of the Notes) for reasons of
taxation, in which case Party A shall be the Affected Party; or
(ii) an Event of Default (as defined in the Security Trust Deed) occurs
and an Extraordinary Resolution of the Voting Mortgagees (as defined
in the Security Trust Deed) is passed directing the Security Trustee
to exercise rights under clause [8] of the Security Trust Deed, in
which case Party B shall be the Affected Party.
<PAGE>
3
Part 2: Tax Representations
(a) Payer Tax Representations. For the purpose of Section 3(e) of this
Agreement, Party A and Party B each make the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant government revenue authority, of any Relevant Jurisdiction to
make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on:
(i) the accuracy of any representation made by the other party pursuant
to Section 3(f) of this Agreement;
(ii) the satisfaction of the agreement contained in Section 4(a)(i) or
4(a)(iii) of this Agreement and the accuracy and effectiveness of
any document provided by the other party pursuant to Section 4(a)(i)
or 4(a)(iii) of this Agreement; and
(iii) the satisfaction of the agreement of the other party contained in
Section 4(d) of this Agreement,
provided that it shall not be a breach of this representation where
reliance is placed on clause (ii) and the other party does not deliver a
form or document under Section 4(a)(iii) by reason of material prejudice
to its legal or commercial position.
(b) Payee Tax Representations. For the purpose of Section 3(f) of this
Agreement:
Party A makes no representations with respect to Transactions for which
Party A is acting through its London Office.
Party B makes the following representation:
It is an Australian resident and does not derive the payments under this
Agreement in part or whole in carrying on business in a country outside
Australia at or through a permanent establishment of itself in that
country.
<PAGE>
4
Part 3: Documents To Be Delivered
For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees
to deliver the following documents as applicable:
(a) Tax Forms, documents or certificates to be delivered are:
<TABLE>
<CAPTION>
Party required to deliver Form/Document/ Date by which document
document Certificate to be delivered
<S> <C> <C>
Party A and Party B Any document or certificate As soon as reasonably
reasonably required or reasonably practicable following the
requested by a party in connection earlier of (a) the relevant
with its obligations to make a party learning that such
payment under this Agreement document or certificate is
which would enable that party to required and (b) a request
make the payment free from any by other party.
deduction or withholding for or on
account of Tax or as would reduce
the rate at which deduction or
withholding for or on account of
Tax is applied to that payment.
</TABLE>
(b) Other documents to be delivered are:
<TABLE>
<CAPTION>
Party required to deliver Form/Document/ Date by which document
document Certificate to be delivered
<S> <C> <C>
Party A and Party B A legal opinion as to the validity [ June] 1998.
and enforceability of that party's
obligations under this Agreement
in form and substance reasonably
acceptable to the other party.
</TABLE>
<PAGE>
5
<TABLE>
<S> <C> <C>
Party B A certified copy of the Security The date of this
Trust Deed, Master Trust Deed, Agreement.
Series Notice and Note Trust Deed
(including Conditions of Class A
and Class B Notes). For the purposes of
this and the following clause a copy of a
document is taken to be certified if a
director or an Authorised Signatory of
Party B, or a person authorised to execute
this Agreement or a Confirmation on behalf
of Party B or a solicitor acting for Party
B has certified it to be a true and
complete copy of the document of which it
purports to be a copy.
Party B (Without limiting any obligation Promptly after any
Party B may have under the terms such document is
of the Security Trust Deed to notify entered into.
Party A of amendments) a certified
copy of any document that amends
in any way the terms of the
Security Trust Deed
</TABLE>
All documents delivered under this Part 3(b) are covered by Section 3(d)
representation.
<PAGE>
6
Part 4: Miscellaneous
(a) Addresses for Notices. For the purpose of Section 12(a) of this Agreement:
Party A:
Address: Westpac Banking Corporation
Level 3
255 Elizabeth Street
Sydney NSW 2000
Attention: Head of Derivative Operations
Telex No: To be advised by Party A
Answerback: to be advised by Party A
Facsimile No: To be advised by Party A
Party B:
Address: Level 10, 130 Pitt Street, Sydney
Attention: The Trustee Securitisation Manager
Facsimile No: 02 9220 5300
And a copy to the Trust Manager to the address provided to Party A.
(b) Process Agent. For the purpose of Section 13(c) of this Agreement:
Party A appoints as its Process Agent: Not applicable.
Party B appoints as its Process Agent: Not applicable.
(c) Offices. The provisions of Section 10(a) will apply to Party A.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
Party A is a Multibranch Party and will act through its Sydney office and
its London Office. Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A (unless otherwise
specified in a Confirmation in relation to the relevant Transaction).
(f) Credit Support Document. Details of any Credit Support Document:
(i) Party A: The 1994 Credit Support Annex attached to this Agreement
and the provisions of Section 20 of this Agreement.
(ii) Party B: The Security Trust Deed.
(g) Credit Support Provider.
(i) In relation to Party A: Morgan Guaranty Trust Company of New York,
London office, unless:
(A) a Transaction becomes effective in accordance with sections
21(b)(i) or 21(b)(ii)(A) and (B) following a Substitution
Notice being given in accordance with section 21 of this
Agreement, in which case, nil; or
(B) an Equivalent-Other Transaction becomes effective under this
Agreement following a Substitution Notice given in accordance
with section 21 of the Other Agreement, in which case the New
Currency Swap Provider shall be designated as the new Credit
Support Provider to Party A, as specified in that Substitution
Notice, and as confirmed by the New Currency Swap Provider
signing, and the other parties to the Transaction
countersigning, the accession to the Equivalent-Other
Transaction.
(ii) In relation to Party B. Nil.
(h) Governing Law. This Agreement will be governed by and construed in
<PAGE>
7
accordance with the laws of the state of New South Wales and section
13(b)(i) is replaced by "submits to the non-exclusive jurisdiction of
the courts of New South Wales and courts of appeal from them".
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement
will apply.
(j) "Affiliate" will have the meaning specified in Section 14 of this
Agreement. The words "or Affiliates" are deleted where they appear in the
first paragraph of Section 6(b)(ii).
<PAGE>
8
Part 5: Other Provisions
(1) Payments: In Section 2:
(i) In Section 2(a)(i) add the following sentence:
"Each payment will be by way of exchange for the corresponding
payment or payments payable by the other party";
(ii) In Section 2(a)(ii) insert immediately after the words "freely
transferable funds" the following words:
", free of any set-off, counterclaim, deduction or withholding
(except as expressly provided in this Agreement),"
(iii) Insert new paragraphs (iv) and (v) in Section 2(a) immediately after
Section 2(a)(iii) as follows:
"(iv) The condition precedent in Section 2(a)(iii)(1) does not
apply to a payment due to be made to a party if it has
satisfied all its payment and delivery obligations under
Section 2(a)(i) and has no future payment or delivery
obligations, whether absolute or contingent under
Section 2(a)(i).
(v) Where:
(1) payments are due pursuant to Section 2(a)(i) by
Party A to Party B (the "Party A Payment") and by
Party B to Party A (the "Party B Payment") on the
same day then Party A's obligation to make the
Party A payment will be subject to the condition
precedent (which will be an "applicable condition
precedent" for the purpose of Section
2(a)(iii)(3)) that Party A first receives either:
(2) the Party B payment; or
(3) confirmation from Party B's bank that it holds
irrevocable instructions to effect payment of the
Party B payment and that funds are available to
make that payment.";
(iv) add the following new sentence to Section 2(b):
"Each new account so designed must be in the same tax jurisdiction
as the original account".
(v) Delete the word "if" at the beginning of Section 2(d)(i)(4) and
insert the following words instead:
"if and only if X is Party A and";
(vi) In Section 2(d)(ii) insert the words "(if and only if Y is Party A)"
after the word "then" at the beginning of the last paragraph.
(vii) add the following new Section 2(f):
(f) Payment Instructions.
(i) Party B authorises and instructs Party A to make payment of
any amount due from Party A to Party B hereunder by paying
that amount direct to the Principal Paying Agent to the
account specified in writing by the Principal Paying Agent to
Party A and to Party B.
(ii) Party A authorises and instructs Party B to make payment of
any amount denominated in Australian dollars due from Party B
to Party A to such account in Sydney as is specified by Party
A from time to time.
(2) Additional Representations: In Section 3 add the following immediately
after paragraph (f):
"(g) Non Assignment. It has not assigned (whether absolutely, in equity
or
<PAGE>
9
otherwise) or declared any trust over (other than, in respect of
Party B, the trusts created under the Master Trust Deed and the
Series Notice) or given any charge over any of its rights under this
Agreement or any Transaction (except in respect of Party B, for the
security interest created under the Security Trust Deed).
(h) Contracting as Principal. Each existing Transaction has been entered
into by Party A as principal and not otherwise and each existing
Transaction has been entered into by Party B in its capacity as
trustee of the Trust and not otherwise."
(i) Absent a written agreement between the parties that expressly
imposes affirmative obligations to the contrary for that
Transaction:
(A) Non-Reliance. It is acting for its own account, and it has
made its own independent decisions to enter into that
Transaction and as to whether that Transaction is appropriate
or proper for it based upon its own judgment and upon advice
from the Trust Manager and such advisors as it has deemed
necessary. It is not relying on any communication (written or
oral) of the other party as investment advice or as a
recommendation to enter into that Transaction; it being
understood that information and explanations related to the
terms and conditions of a Transaction shall not be considered
investment advice or a recommendation to enter into that
Transaction. It has not received from the other party any
assurance or guarantee as to the expected results of that
Transaction;
(B) Evaluation and Understanding. It is capable of evaluating and
understanding (on its own behalf or through independent
professional advice including the Trust Manager), and
understands and accepts the terms, conditions and risks of
that Transaction. It is also capable of assuming, and assumes,
the financial and other risks of that Transaction;
(C) Status of Parties. The other party is not acting as a
fiduciary or an advisor for it in respect of that Transaction;
(j) Party B represents and warrants:
(A) Trust Validly Created. The Trust has been validly created and
is in existence at the date of this Agreement.
(B) Sole Trustee. It has been validly appointed as trustee of the
Trust and is presently the sole trustee of the Trust.
(C) No Proceedings to Remove. No notice has been given to it and
to its knowledge no resolution has been passed, and no
direction or notice has been given, removing it as trustee of
the Trust.
(D) Power. It has power to enter into this Agreement and the
Credit Support Document in its capacity as trustee of the
Trust.
(E) Good Title. It is the owner in equity of the assets of the
Trust and has power to mortgage or charge them in the manner
provided in the Credit Support Document, and, subject only to
the Credit Support Document and any Security Interest
permitted under the Credit Support Document, those
<PAGE>
10
assets are free of all other Security Interests.
(3) Additional Covenant: In Section 4 add a new paragraph as follows:
"(f) Contracting as principal. Party A will enter into all Transactions
as principal and not otherwise and Party B will enter into all
Transactions in its capacity as trustee of the Trust and not
otherwise".
(4) Amendment to Section 6. In section 6 make the following amendments:
(i) Section 6(a) is amended by deleting the words "all outstanding
Transactions" where they appear and inserting instead the words "the
Relevant Swap Transaction".
(ii) Add a new section 6(aa):
"(aa) Restricted Termination Rights.
(i) Termination by Party B: Party B must not designate an Early
Termination Date without the prior written consent of the Note
Trustee.
(ii) Consultation with Party A: Each Party may only designate an
Early Termination Date following prior consultation with the
other Party as to the timing of the Early Termination Date.
Subject to its duties under the Master Trust Deed and the
Series Notice, Party B may exercise any rights in its capacity
as holder of the Purchased Receivables only on the
instructions of the Note Trustee and only after consultation
between Party A and Note Trustee. Party B may only designate
an Early Termination Date at the direction of the Trust
Manager.
(iii) Party A's limited rights in relation to Tax Event:
Notwithstanding Part 1(b)(iv) of this Schedule, Party A may
designate an Early Termination Date if it is an Affected Party
following a Tax Event but only if the Note Trustee is
satisfied that the Noteholders and Couponholders will be paid
in full all principal and interest outstanding on the Notes.
(iv) Illegality: The parties agree that [unless this Section
6(aa)(iv) is specified not to apply in the Relevant
Confirmation,] imposition by any Agency of an Australian
jurisdiction of any exchange controls, restrictions or
prohibitions will not constitute an Illegality for the
purposes of Section 5(b)(i) and Party A will not be entitled
to designate an Early Termination Date, and in those
circumstances, payment by Party B in accordance with section
2(f) will continue to be proper performance of its payment
obligation and Party A's obligations will be unaffected, to
the extent of Party B's payments under section 2(f).
(v) Transfer where Party B does not gross-up: If any payment by
Party B to Party A under this Agreement is, or is likely to
be, made subject to any deduction or withholding on account of
Tax, Party B will endeavour to procure the substitution as
principal obligor under this Agreement in respect of each
affected Transaction of a Party B incorporated in another
jurisdiction approved by Party A and the Note Trustee and in
respect of which the Designated Rating Agencies confirm that
the substitution will not cause a reduction or withdrawal of
the rating of the Notes.
(iii) In section 6(b)(ii), add the words "so long as the transfer in
respect of that Transaction would not lead to a rating downgrade of
any rated debt of Party B that is secured under the Security Trust
Deed" after the words "ceases to exist" at the
<PAGE>
11
end of the first paragraph.
(iv) In section 6(e), delete the sentence "The amount, if any, payable in
respect of an Early Termination Date and determined pursuant to this
Section will be subject to any Set-off." at the end of the first
paragraph.
(5) In section 9, add the following new paragraphs:
"(h) Further Assurances. Each party shall, upon request by the other
party (the "requesting party") at the expense of the requesting
party, perform all such acts and execute all such agreements,
assurances and other documents and instruments as the requesting
party reasonably requires and which are within the powers of that
party to assure and confirm the rights and powers afforded, created
or intended to be afforded or created, under or in relation to this
Agreement and each Transaction or other dealing which occurs under
or is contemplated by it.
(i) Recorded Conversation. Each party:
(A) consents to the recording of the telephone conversations of
trading and marketing personnel of that party and its
Affiliates in connection with this Agreement or any potential
Transaction; and
(B) agrees to obtain any necessary consent of, and give notice of
such recording to, such personnel of it and its Affiliates.
(j) ISDA Definitions: This Agreement, each Confirmation and each
Transaction are subject to the 1991 ISDA Definitions (as published
by the International Swap Dealers Association, Inc.) (the "ISDA
Definitions"), and will be governed in all respects by any
provisions set forth in the ISDA Definitions, without regard to any
amendments to the ISDA Definitions made after the date of this
Agreement. The ISDA Definitions are incorporated by reference in,
and shall be deemed to be part of, this Agreement and each
Confirmation.
(k) Inconsistency: In the event of any inconsistency between any two or
more of the following documents, they shall take precedence over
each other in the following descending order:
(i) any Confirmation;
(ii) the Schedule to the Master Agreement;
(iii) the other provisions of the Master Agreement;
(iv) the ISDA Definitions."
(6) Facsimile Transmissions: Replace Section 12(a)(iii) with:
"(iii) if sent by facsimile, on production of a transmission report by the
machine from which the facsimile was sent which indicates that the
facsimile was sent in its entirety to the facsimile number of the
recipient notified for the purpose of this Section unless the
recipient notifies the sender within 24 hours of the facsimile being
sent that the facsimile was not received in its entirety in legible
form;"
(7) Definitions: In section 14:
(i) add a new paragraph:
"Unless otherwise defined in this Agreement, terms defined in the
Security
<PAGE>
12
Trust Deed (either expressly or by incorporation by reference) have
the same meaning where used in this Agreement."
(ii) Insert the following definitions in its appropriate alphabetical
places in Section 14:
"'Relevant Swap Transaction' means, in relation to Class A Notes,
each Transaction which is a Currency Swap for Class A Notes only,
and in relation to Class B Notes, each Transaction which is a
Currency Swap for Class B Notes only."
"'Security Trust Deed' means the Series 1998-1G WST Trust Security
Trust Deed dated on or about the date of this Agreement between
Party B as chargor, Perpetual Trustee Company Limited as security
trustee, the Trust Manager and Party A as note trustee."
(iii) Swap Transaction. Any reference to a:
(a) "Swap Transaction" in the 1991 ISDA Definitions is deemed to
be a reference to a "Transaction" for the purpose of
interpreting this Agreement or any Confirmation; and
(b) "Transaction" in this Agreement or any Confirmation is deemed
to be a reference to a "Swap Transaction" for the purpose of
interpreting the 1991 ISDA Definitions.
(iv) In the definition of "Market Quotation", on line 1 on page 16 of
this Agreement, replace the words "been required after that date."
with: "been required after that date and, in respect of each
Terminated Transaction which is a Relevant Swap Transaction, on the
basis that the Housing Loan Principal as defined in Series Notice
referred to in the Terminated Transaction will thereafter have an
amortisation schedule based on a constant prepayment rate per annum
("CPR") equal to:
(a) [XX%], if the Replacement Transaction is calculated within one
year of the Effective Date of the Terminated Transaction; or
(b) if the Replacement Transaction is calculated later than one
year after the Effective Date of the Terminated Transaction,
the arithmetic mean of four CPRs most recently published prior
to the relevant quotation on Bloomberg monitor service in
respect of the Class of Notes applicable to the Terminated
Transaction (based on data provided to Bloomberg by the Trust
Manager)."
(8) Other Provisions, including Credit Support:
Insert the following Sections 15, 16, 17, 18, 19, 20 and 21 after Section 14:
"15. Segregation:
The liability of Party B under this Agreement is several and is
separate in respect of each Relevant Swap Transaction. The failure
of Party B to perform its obligations in respect of any Relevant
Swap Transaction shall not release Party B from its obligations
under this Agreement or under any other Relevant Swap Transaction in
respect of any other Notes issued by Party B. Nothing in this
Agreement affects the respective priority rankings of claims against
the Mortgaged Property of Party B under the Security Trust Deed.
Without limiting the generality of the foregoing, the provisions of
this Agreement shall have effect separately and severally in respect
of each Relevant Swap Transaction and shall be enforceable by or
against Party B as though a separate agreement applied between Party
A and Party B for
<PAGE>
13
each Relevant Swap Transaction, so that (among other things):
(i) this Agreement together with each Confirmation relating to a
Relevant Swap Transaction will form a single separate
agreement between Party A and Party B and references to the
respective obligations (including references to payment
obligations generally and in the context of provisions for the
netting of payments and the calculation of amounts due on
early termination) of Party A and Party B shall be construed
accordingly as a several reference to each mutual set of
obligations arising under each such separate agreement between
Party A and Party B;
(ii) representations made and agreements entered into by the
parties under this Agreement are made and entered separately
and severally by Party B in respect of each Relevant Swap
Transaction and may be enforced by Party B against Party A
separately and severally in respect of each Relevant Swap
Transaction;
(iii) rights of termination, and obligations and entitlements
consequent upon termination, only accrue to Party A against
Party B separately and severally in respect of each Relevant
Swap Transaction, and only accrue to Party B against Party A
separately and severally in respect of each Relevant Swap
Transaction; and
(iv) the occurrence of an Event of Default or Termination Event in
respect of a Relevant Swap Transaction does not in itself
constitute an Event of Default or Termination Event in respect
of any other Relevant Swap Transaction."
16. Recourse
Party B enters into this Agreement in its capacity as Trustee of the
Trust, and Clause 3.3(b) of the Series Notice applies to this
Agreement as if set out in full. Clause 16 of the Security Trust
Deed shall apply to govern Party A's priority to moneys received
from the sale of Assets or other enforcement of the Charge under the
Security Trust Deed. This Section 16:
(i) applies even though any other provision of this Agreement is
not made subject to it; and
ii) overrides any other provision of this Agreement which is
inconsistent with it.
17. The Manager
Party A acknowledges that the Manager will, at the request of Party
B, perform the day to day management of the Trust on the terms and
conditions of the Master Trust Deed and Series Notice. Unless
expressly advised to the contrary in writing by Party B from time to
time, any rights or obligations of Party B under this Agreement may
be exercised or satisfied (as the case may be) by the Manager on
behalf of Party B and Party A is not obliged to enquire as to the
authority of the
<PAGE>
14
Manager to take such action on behalf of Party B. Except where the
context otherwise requires, references in this Agreement to a
"party" to this Agreement are to Party A or Party B.
18. Trust Deed
The parties acknowledge and agree that, for the purposes of the
Master Trust Deed and the Trust Documents, this Agreement is a
"Hedge Agreement" and Party A is a "Swap Provider" and "Support
Facility Provider"."
19. Replacement Currency Swap
(a) If this Agreement is terminated, Party B may, at the direction
of the Trust Manager, enter into one or more currency swaps
which replace the Transactions under this Agreement
(collectively a "Replacement Currency Swap") but only on the
condition that the Settlement Amount payable (if any) by Party
B to Party A upon termination of this Agreement will be paid
in full when due in accordance with the Series Notice and this
Agreement.
(b) If the condition in section 19(a) is satisfied, Party B may
enter into the Replacement Currency Swap and if it does so it
must direct the Replacement Currency Swap to pay any upfront
premium to enter into the Replacement Currency Swap due to
Party B directly to Party A in satisfaction of and to the
extent of Party B's obligation to pay the Settlement Amount to
Party A as referred to in section 19(a), and to the extent
that such premium is not greater than or equal to the
Settlement Amount, the balance may be satisfied by Party B as
a Trust Expense (as defined in the Series Notice).
(c) The obligations of Party B (and the rights of Party A) under
this section 19 constitute separate and independent
obligations of Party B (and rights of Party A) and shall
survive the termination of this Agreement.
20. Credit Support
(a) In consideration of Party B entering into an agreement on the
same material terms as this Agreement with the Credit Support
Provider (the "Other Agreement") and Transactions under that
Agreement on the same material terms as Transactions under
this Agreement, the Credit Support Provider hereby
unconditionally guarantees to Party B the payment by Party A
of moneys which are payable by Party A under a Relevant Swap
Transaction (on terms set out in this Agreement and in the
Confirmation for that Relevant Swap Transaction) (the "Payable
Moneys") to Party B in the event that Party A defaults in the
payment of those Payable Moneys.
(b) If Party B has not been, or Party A reasonably expects that
Party B is not going to be, paid all or any part of the
presently payable Payable Moneys by Party A, then Party A or
Party B may by notice to the Credit Support Provider demand
payment of the Payable Moneys in respect of which demand is
being made. The Credit Support Provider's obligations to pay
the presently payable Payable Moneys which have not been paid
by Party A shall not, however, be conditional upon the Credit
Support Provider receiving such notice of demand.
(c) The Credit Support Provider agrees that it will not, unless
and until all the present and prospective Payable Moneys have
been paid, exercise
<PAGE>
15
any rights of subrogation which it may acquire due to its
payment of Payable Moneys under section 20(a).
(d) All payments by the Credit Support Provider shall be made in
the currency in which the Payable Moneys are denominated.
(e) Party B agrees that, without affecting its rights under clause
21, to the extent that the Credit Support Provider pays the
Payable Moneys and thereby avoids or remedies a default by
Party A, Party B shall not be entitled to designate an Early
Termination Date in respect of that default by Party A, and
such a payment by the Credit Support Provider shall be deemed
to be an "actual payment" as referred to in line 6 of section
2(e) of this Agreement.
(f) The provisions of this section 20 shall constitute irrevocable
obligations of the Credit Support Provider until a notice of
revocation is served by the Credit Support Provider on Party
B, but such a notice cannot and shall not be served without
the prior written consent of Party A, the Note Trustee and the
Trust Manager in consultation with the Designated Rating
Agencies.
21. Credit Support Provider Transactions
(a) The Credit Support Provider may give a Substitution Notice to
Party B specifying a Transaction which shall be substituted
under this Section 21 (a "Replaced Transaction"), but only on
the condition that a Credit Event has occurred in respect of
Party A.
(b) If the Credit Support Provider gives a Substitution Notice
under paragraph 21(a), then either:
(i) a Substitute Transaction shall become effective and the
Effective Date shall be the date specified in the
Substitution Notice; or
(ii) both:
(A) Party B, the Credit Support Provider and the Trust
Manager must enter into an Equivalent Transaction
with a suitably rated counterparty procured by the
Credit Support Provider and accepted by Party B,
the Trust Manager and the Note Trustee (the "New
Currency Swap Provider") and the Effective Date
shall be the date specified in the Substitution
Notice as the Effective Date for the
Equivalent-Other Transaction; and
(B) an Equivalent-Other Transaction shall become
effective and the Effective Date shall be the date
specified in the Substitution Notice. The New
Currency Swap Provider must sign, and Party B, the
Credit Support Provider and the Trust Manager must
countersign, an accession as provided
<PAGE>
16
for in the Confirmation for the Equivalent-Other
Transaction.
For the avoidance of doubt, a Substitution Notice may specify
that a Substitution Transaction will become effective in
accordance with paragraph (b)(i) or that an Equivalent
Transaction and an Equivalent Other Transaction will become
effective in accordance with paragraphs (b)(ii)(A) and (B), or
that either a Transaction under paragraph (b)(i) or
Transactions under paragraphs (b)(ii)(A) and (B) shall become
effective as alternatives. If the Substitution Notice
specifies that, as alternatives, the Transaction or
Transactions under paragraphs (b)(i) or (b)(ii)(A) and (B)
shall become effective, and if a suitably rated counterparty
is not procured by the Credit Support Provider under paragraph
(b)(ii)(A), the Substitute Transaction must become effective
in accordance with paragraph (b)(i).
(c) On the date on which the Transactions become effective in
accordance with a Substitution Notice under either paragraph
(b)(i) or (b)(ii):
(i) the Replaced Transaction shall terminate; and
(ii) the Other Transaction shall terminate.
(d) No Settlement Amount or other amount under section 6 or
section 11 shall be payable by, or to, Party B (as the case
may be) upon the termination of the Transactions under
paragraphs (c)(i) and (ii), because the Transactions specified
in paragraphs (b)(i), or (b)(ii)(A) and (B), as the case may
be, shall have the effect of preserving for Party B the
economic equivalent of the payments under the Transactions
which are being terminated.
(e) Definitions. For the purposes of this Section 21:
"Credit Event" means, in relation to Party A, the occurrence
at any time of any of the following events with respect to
Party A:
(i)(A) Failure by Party A to make, when due, any payment
under the Replaced Transaction required to be made by
it if such failure is not remedied on or before the
tenth local Business Day after notice of such failure
is given to Party A; and
(B) On any day on which a failure by Party A under paragraph
(e)(i)(A) is subsisting:
(I) the Market Value of a floating rate Reference
Obligation is below the Initial Price of such by
more than the Price Decline Requirement; or
(II) the sum of the Market Value of a fixed rate
Reference Obligation and the Interest Rate
Adjustment Amount of such is below the Initial
Price of such by more than the Price Decline
Requirement. For the purposes of this paragraph
(e)(i)(B), "Market Value", "Reference Obligation",
"Initial Price", "Price Decline Requirement" and
"Interest Rate Adjustment Amount" shall have the
meanings given in the Confirmation for the
relevant Transaction; or
(ii) the occurrence of (A) a default, event of default or
other similar
<PAGE>
17
condition or event (however described) in respect of
Party A under one or more agreements or instruments
relating to Specified Indebtedness of Party A in an
aggregate amount of not less than the applicable
Threshold Amount which has resulted in the Specified
Indebtedness becoming due and payable under such
agreements or instruments before it would otherwise have
been due and payable, or (B) a default by Party A in
making one or more payments on the due date thereof in
an aggregate amount of not less than the applicable
Threshold Amount under such agreements or instruments
(after giving effect to any applicable notice
requirement or grace period).
For the purposes of this paragraph (e)(ii), "Specified
Indebtedness" and "Threshold Amount" shall have the
meanings given in the Confirmation for the relevant
Transaction; or
(iii) the occurrence with respect to Party A of an event
specified in Section 5(a)(vi)(1) to (9) inclusive; or
(iv) the occurrence with respect to Party A of an event
specified in Section 5(b)(i)(1); or
(v) the occurrence with respect to Party A (and not the
Credit Support Provider) of an event specified in
Section 5(a)(viii);
"Equivalent Transaction" means a Transaction governed by a new
agreement on the same material terms as this Agreement and on
the same material economic terms as the Replaced Transaction,
and with the same Trade Date as the Replaced Transaction,
except that:
(i) the New Currency Swap Provider is designated as "Party
A";
(ii) the Credit Support Provider is designated as the new
"Credit Support Provider" to Party A;
(iii) the "Effective Date" is as specified in the relevant
Confirmation for that Transaction, being the same date
as that specified in the Substitution Notice as the
Effective Date for the Equivalent-Other Transaction; and
(iv) no Initial Exchanges are payable under the Transaction.
"Equivalent-Other Transaction" means a Transaction governed by
the Other Agreement and on the same material economic terms as
the Other Transaction and with the same Trade Date as the
Replaced Transaction, except that:
(i) the New Currency Swap Provider is designated as the new
"Credit Support Provider" to Party A;
(ii) the New Currency Swap Provider is designated as the new
"Credit Support Provider" to Party A;
(iii) the "Effective Date" is as specified in the relevant
Substitution
<PAGE>
18
Notice; and
(iv) no Initial Exchanges are payable under the Transaction.
"New Currency Swap Provider" has the meaning given in
paragraph (b)(ii)(A);
"Other Agreement" has the meaning given in section 20;
"Other Transaction" means the Transaction governed by the
Other Agreement and on the same economic terms as the Replaced
Transaction and with the same Trade Date as the Replaced
Transaction, and as specified as such in the relevant
Substitution Notice;
"Replaced Transaction" means the Transaction specified as such
in the relevant Substitution Notice, as referred to in section
21(a);
"Substitute Transaction" means a Transaction governed by the
Other Agreement, and on the same economic terms as the Other
Transaction and with the same Trade Date as the Replaced
Transaction, except that:
(i) no party is designated as a "Credit Support Provider";
(ii) the Effective Date is as specified in the relevant
Substitution Notice;
(iii) the Notional Amounts applicable to the Floating Amounts
payable by the respective parties under the Transaction
are the same as the Notional Amounts applicable to the
Floating Amounts payable by the respective parties under
the Replaced Transaction except that the references in
the Replaced Transaction to "fifty (50) percent" are
substituted by references to "one hundred (100)
percent";
(iv) no Initial Exchanges are payable; and
(v) no "Credit Support Provider Provisions" apply.
"Substitution Notice" means an irrevocable notice in writing
from the Credit Support Provider to Party B and the Trust
Manager, which may be delivered between 9.00 am and 4.00 pm in
Sydney on a Business Day in accordance with section 12, and
which:
(i) describes the occurrence of a Credit Event;
(ii) specifies the Effective Date for an Equivalent-Other
Transaction or for a Substitute Transaction, and
specifies the proposed New Currency Swap Provider and
the terms of the Equivalent-Other Transaction by
attaching a proposed Confirmation for thhe
Equivalent-Other Transaction, if required; and
(iii) confirms that the Termination Date for the Replaced
Transaction and the Other Transaction shall be the
Effective Date for the Transactions in either paragraphs
(b)(i), or (b)(ii)(A) and (B), as the case may be.
(f) Section 21 and any related provision in a Confirmation (the
"Substitution Provisions") shall not amend, or affect the
operation of, any other provision in this Agreement, except to
the extent, if any, expressly provided by the Substitution
Provisions. For the avoidance of doubt and without limitation,
the Substitution Provisions shall not amend, or affect the
operation of, the provisions of the Credit Support Annex,
sections 15 to 20 inclusive, and provisions in this Agreement
which specify certain events as Events of Default or
Termination Events.
<PAGE>
13. Elections and Variables
(a) Security Interest for "Obligations"
The term "Obligations" as used in this Annex does not include any
additional obligations. For the avoidance of doubt, in respect of
the Obligations which are specified in the Relevant Swap
Transactions, any assumptions made for the purposes of calculating
the Peak Exposure in Paragraph 13(b)(i) or the Benefit Exposure in
Paragraph 13(b)(iv)(A) must not be applied or otherwise taken into
account for the purpose of calculating the Obligations, since those
assumptions are theoretical only and do not accurately reflect any
actual Obligations.
(b) Credit Support Obligations
(i) Delivery Amount, Return Amount and Credit Support Amount
"Delivery Amount" and "Return Amount" each has the meaning
specified in Paragraph 3.
"Credit Support Amount" means, for any Valuation Date:
(A) (I) with respect to Party A as the Secured Party,
Party A's Exposure for that Valuation Date; or
(II) with respect to Party B as the Secured Party,
Party B's Peak Exposure for that Valuation Date;
plus
(B) the aggregate of all Independent Amounts applicable to
the Pledgor, if any; minus
(C) all Independent Amounts applicable to the Secured Party,
if any; minus
(D) the Pledgor's Threshold,
provided, however, that the Credit Support Amount will be
deemed to be zero whenever the calculation of Credit Support
Amount yields a number less than zero.
"Peak Exposure" means the amount equal to Party B's maximum
credit exposure in respect of a Replacement Transaction
entered into on a date three months after the Valuation Date,
calculated by the Valuation Agent using its swap credit
exposure methodology to a 99% confidence interval, as that
methodology is updated to reflect, without limitation, the
levels of volatility current as at the Valuation Time for the
differential between USD-LIBOR-BBA and AUD-BBR-BBSW (each rate
with a Designated Maturity of three months) and the A$-US$
forward exchange rates, and assuming that from that Valuation
Date:
(I) the remaining term of the Relevant Swap
Transaction is calculated on the basis that the
Termination Date is a date, no later than 31 years
after the Effective Date of the first Transaction
in respect of the Notes, calculated by applying
the assumptions specified in subparagraph (II)
below;
(II) the Floating Rate Payer Amounts and Exchange
Amounts are calculated on the basis that the
Housing Loan Principal has an amortisation
schedule based on a constant prepayment rate of 5%
per annum thereafter,
1
<PAGE>
as each of those terms are defined for the
Swap or in the Series Notice applicable to the
Relevant Swap Transaction
(ii) Eligible Collateral. The following items will qualify as
"Eligible Collateral" for Party A:
Valuation
Percentage
(A) negotiable debt obligations issued by the U.S. Treasury
Department having a remaining maturity of not more than
one year ("Treasury Bills") 98%
(B) negotiable debt obligations issued by the U.S. Treasury
Department having a remaining maturity of more than one
year but not more than five years ("Treasury Notes") 95%
(C) negotiable debt obligations issued by the U.S. Treasury
Department having a remaining maturity of more than five
years but not more than ten years ("Treasury Notes") 93%
(D) negotiable debt obligations issued by the U.S. Treasury
Department having a remaining maturity of more than ten
years ("Treasury Bonds") 90%
(E) Other: Agency Securities having a remaining maturity of
not more than one year 97%
Agency Securities having a remaining maturity of more than one
year but not more than five years
94%
Agency Securities having a remaining maturity of more than
five years but not more than ten
2
<PAGE>
years
92%
Agency Securities having a remaining maturity of more than ten
years.
89%
"Agency Securities" means negotiable debt obligations which
are fully guaranteed as to both principal and interest by the
Federal National Mortgage Association, the Government National
Mortgage Corporation or the Federal Home Loan Mortgage
Corporation, but exclude: (i) interest only and principal only
securities; and (ii) Collateralized Mortgage Obligations, Real
Estate Mortgage Investment Conduits and similar derivative
securities.
(iii) Other Eligible Support
Not applicable.
(iv) Thresholds
(A) "Independent Amount" means with respect to Party A, the
Additional Spread. "Additional Spread" means the amount
equal to the excess of Party B's Benefit Exposure less
Party B's Exposure, as each is calculated on the same
Valuation Date.
"Benefit Exposure" means the amount equal to Party B's
Exposure, except calculated on the basis that:
(I) the underlying swap rate for the Replacement
Transaction is equal to the underlying swap rate
for the Replacement Transaction as quoted by the
Reference Market-makers plus 0.25% additional
spread on the A$ side of the swap; and
(II) the remaining term and the Floating Rate Payer
Amounts and Exchange Amounts for the Replacement
Transaction are calculated by applying the
assumptions specified in subparagraphs (I) and
(II) of the definition of Peak Exposure in
paragraph 13(b)(i) above.
For the avoidance of doubt, the Additional Spread is
intended to represent a maximum additional bid/offer
spread of 25 swap points running payable if the
bid/offer swap rates quoted to the Secured Party were
adjusted from market rates to the benefit of the
Reference Market-makers.
"Independent Amount" means with respect to Party B:
Zero.
(B) "Threshold"
With respect to Party A:
(I) if the highest possible jointly supported credit
rating that can be assigned to senior long term
debt jointly supported by Party A and the Credit
Support Provider by Moody's Investors Service Inc
("Moody's") in accordance with Moody's approach to
jointly supported obligations, and
3
<PAGE>
after taking into consideration the nature of the
Relevant Swap Transaction(s), is lower than A2,
(or, in the case of no Credit Support Provider
providing any credit support obligations, if the
credit rating assigned to Party A's senior long
term debt by Moody's is lower than A2) and any
Notes rated Aaa by Moody's are outstanding at that
Valuation Date, then zero; or
(II) if the highest possible jointly supported credit
rating that can be assigned to senior long term
debt jointly supported by Party A and the Credit
Support Provider by Moody's in accordance with
Moody's approach to jointly supported obligations,
and after taking into consideration the nature of
the Relevant Swap Transactions is A2 or higher,
(or, in the case of no Credit Support Provider
providing any credit support obligations, if the
credit rating assigned to Party A's senior long
term debt is A2 or higher) then infinity.
With respect to Party B: infinity.
"Minimum Transfer Amount" means with respect to both
Party A and Party B: US$100,000.
(D) Rounding. The Delivery Amount and the Return Amount will
be rounded to the nearest integral multiple of US$
10,000.
(c) Valuation and Timing
(i) "Valuation Agent" means Party A.
(ii) "Valuation Date" means:
(A) each Reset Date in respect of the Notes; and
(B) in each month in which a Reset Date does not
occur, each date which is on the same day of the
month as the Reset Dates.
The Modified Following Business Day Convention shall
apply to each date specified in subparagraphs (A) and
(B).
(iii) "Valuation Time" means the close of business on the
Local Business Day before the Valuation Date; provided
that the calculations of Value and Exposure will be made
as of approximately the same time on the same date.
(iv) "Notification Time" means 11:00 am on a Local Business
Day.
(d) Conditions Precedent and Secured Party's Rights and Remedies
There are no "Specified Conditions" applicable to Party A and
Party B.
(e) Substitution
(i) "Substitution Date" has the meaning specified in
paragraph 4(d)(ii).
(ii) Consent. Not applicable.
(f) Dispute Resolution
(i) "Resolution Time"" means 11:00 am on the Local Business
Day following the date on which the notice is given that
gives rise to a dispute under paragraph 5.
(ii) "Value". Not applicable.
4
<PAGE>
(iii) "Alternative". The provisions of Paragraph 5 will apply.
(g) Holding and Using Posted Collateral
(i) Eligibility to Hold Posted Collateral; Custodians.
Party A: Not Applicable.
Party B is not entitled to hold Posted Collateral; it
must appoint a Custodian to hold Posted Collateral on
its behalf, pursuant to paragraph 6(b); provided that
the following conditions applicable to Party B are
satisfied:
(A) Party B is not a Defaulting Party;
(B) Party B's Custodian will always be the Principal
Paying Agent of the Notes (in respect of the
Relevant Swap Transaction), unless that party is
Party A; and
(C) if the Principal Paying Agent of the Notes (in
respect of the Relevant Swap Transaction) is Party
A, then Party B must appoint a Custodian which is
a Bank (as defined in the Federal Deposit
Insurance Act, as amended) outside Australia,
whose rating (with respect to its long term
unsecured, unsubordinated indebtedness) is at all
times at least Aa2 by Moody's, and Party B must
notify Party A in writing of this appointment and
of the relevant account for Paragraph 13(l).
(ii) Use of Posted Collateral. The provisions of paragraph
6(c) will not apply to Party B and its Custodian. Party
B's Custodian will permit Party B to secure Party B's
obligations under the relevant Notes by granting to the
Security Trustee (as defined in the Schedule to this
Agreement) a mortgage or other security over Party B's
rights in relation to the Posted Collateral, but subject
to Paragraph 11(m)(viii) of this Annex.
(h) Distributions and Interest Amount
"Interest Rate", Transfer of Interest Amount, and Alternative
to Interest Amount are not applicable.
(i) Additional Representation(s). None.
(j) Other Eligible Support and Other Posted Support
"Value" and "Transfer" with respect to Other Eligible Support
and Other Posted Support means: not applicable.
(k) Demands and Notices
All demands, specifications and notices under this Annex will
be made pursuant to the Notices Section of this Agreement;
provided, that any such demand, specification or notice may be
made by telephone ("Telephone Notice") between duly authorised
employees of each party if such Telephone Notice is confirmed
by a subsequent written instruction (which may be delivered
via facsimile) by the close of business of the same day that
such Telephone Notice is given.
(l) Addresses for Transfers
Party A: Party A to specify account for returns of collateral,
subject to paragraph 13(x) below.
Party B: Party B must notify Party A of its Custodian's
account.
(m) Other Provisions
5
<PAGE>
(i) Paragraph 4(b) of the Annex is replaced by the
following: "(b) Transfer Timing. Subject to Paragraph
4(a) and 5 and unless otherwise specified, if a demand
for the Transfer of Eligible Credit Support or Posted
Credit Support is made by the Notification Time, then
the relevant Transfer will be made within one Local
Business Day of receipt of the demand; if a demand is
made after the Notification Time, then the relevant
Transfer will be made within two Local Business Days of
receipt of the demand.
(ii) Local Business Day
Unless otherwise specified in the Schedule, the place is
New York.
(iii) Party B's exposure
In calculating the amounts of Party B's Exposure, Peak
Exposure and Benefit Exposure under Paragraphs 12, and
13(b)(i) and 13(b)(iv)(A) respectively, the Valuation
Agent must:
(A) include all Transactions (or any cashflows under
any Transaction) which correspond with amounts
payable on the Relevant Reset Date by Party B's
Principal Paying Agent in respect of Class A Notes
which are then rated by Moody's with a higher
rating than the then rating of Party A's senior
long term debt; and
(B) must exclude all Transactions (or any cashflows
under any Transaction) which do not correspond
with amounts payable on the Relevant Reset Date by
Party B's Principal Paying Agent in respect of:
(I) Class A Notes which are then rated by
Moody's withthe same or lower rating than
the then rating of Party A's senior long
term debt; and
(II) Class B Notes.
For the purposes of this Paragraph (m)(iii), "Relevant
Reset Date" means:
(C) if a Reset Date occurs on the relevant Valuation
Date, then that Valuation Date; or
(D) if a Reset Date does not occur on the relevant
Valuation Date, then the next Reset Date.
(iv) Event of Default, not Potential Event of Default or
Specified Condition
Paragraph 4(a)(i) and 4(a)(ii) of the Annex are amended
by deleting the words "Potential Event of Default or
Specified Condition" and "or Specified Condition"
respectively.
Paragraph 6(c) of the Annex is amended by deleting the
words "or an Affected Party with respect to a Specified
Condition" on lines 3 and 4 and "or Specified Condition"
on lines 5 and 6.
Paragraph 8(a)(1) and 8(a)(2) of the Annex are amended
by deleting the words "or Specified Condition".
(v) Party B's expenses
Party A acknowledges that, pursuant to Section 17 of the
Agreement, Party
6
<PAGE>
B will pay its own costs and expenses under Paragraph
10(a) from proceeds distributed as Trustee's expenses,
in accordance with instructions from the Trustee.
(vi) Governing Law notwithstanding
This Annex shall be governed by and construed in
accordance with the laws of the state of New York
without giving effect to choice of law doctrine and
parties hereto agree that proceedings relating to any
dispute arising out of or in connection with this Annex
shall be subject to the non-exclusive jurisdiction of
the federal or state courts of competent jurisdiction in
the Borough of Manhattan in New York City, State of New
York.
(vii) No trial by jury
Each party waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury
in respect of any suit, action or proceeding relating to
this Annex.
(viii) No pooling of Collateral with other Security Trust
security
Notwithstanding any provision in any [Trust Document]
(as defined in the Security Trust Deed), but without
prejudice to Party B's rights under Paragraph 8(a) of
this Annex, Party B shall not be entitled to deal with
the Posted Collateral in any manner inconsistent with
the right of Party A under Paragraph 8(b)(iii) of this
Annex to receive all Posted Collateral and the Interest
Amount upon payment in full of Party A's obligations
under this Agreement and no other person shall gain any
rights in relation to the Posted Collateral or the
Interest Amount that are inconsistent with that right of
Party A.
(ix) Credit Support Provider
For valuable consideration which is hereby acknowledged
by the Credit Support Provider as having been received,
the Credit Support Provider hereby unconditionally
guarantees the obligations of Party A under this Annex,
on the following terms:
(A) If Party A shall in any respect fail to perform
its obligations as Pledgor under this Annex and
the breach is not remedied within any applicable
grace period set out in paragraph 7 of this Annex,
the Credit Support Provider shall perform the
obligations of Party A as Pledgor under and in
accordance with this Annex as if references to
"Party A" were references to the "Credit Support
Provider";
(B) The Credit Support Provider shall be the "Pledgor"
in respect of all Posted Collateral which the
Credit Support Provider transfers pursuant to
paragraph 13(m)(ix)(A), notwithstanding that any
such Posted Collateral is transferred to secure
the Obligations of Party A;
(C) The provisions of this paragraph 13(m)(ix) shall
constitute irrevocable obligations of the Credit
Support Provider until a notice of revocation is
served by the Credit Support Provider on Party B.
Such a notice shall not be served without the
prior written consent of Party A and the Manager
in consultation with the Designated Rating
7
<PAGE>
Agencies; and
(D) The Credit Support Provider shall not be
discharged or released from its obligations under
this Annex and this Agreement (including, without
limitation, the obligations under Section 20) by
any agreement, conduct, omission, breach or
repudiation by Party A or Party B, or any other
act, event or circumstance which but for this
clause would or might operate as a matter of law
to discharge, impair or otherwise affect any of
the obligations of the Credit Support Provider
under this Annex or this Agreement.
(x) Party A's Collateral and the Credit Support Provider
(A) If Party A transfers Eligible Collateral to Party
B under this Annex (the "Party A Posted
Collateral") and then a Substitution Notice is
given by the Credit Support Provider and the
Replaced Transaction is terminated in accordance
with section 21 of the Agreement, then Party B
will transfer the Party A Posted Collateral to a
Custodian as specified by Party A in accordance
with paragraph (x)(B) below.
(B) Party A shall, if a Substitution Notice is given
to it by the Credit Support Provider in accordance
with section 21 of the Agreement, demand that
Party B transfer the Party A Posted Collateral (if
any) to a Custodian specified by the Credit
Support Provider as if that Custodian were the
"Pledgor" for the purposes of returning Posted
Collateral under paragraph 3(b), and otherwise in
accordance with paragraph 3(b). Party B must
transfer the Party A Posted Collateral on or by
the Effective Date of the Substitute Transaction
or the Equivalent-Other Transaction (as specified
under section 21 of the Agreement).
(C) Party A shall direct the Custodian referred to in
paragraph (x)(B) to hold the Party A Posted
Collateral on trust for the Credit Support
Provider and shall direct the Custodian to
Transfer to the Credit Support Provider the Party
A Posted Collateral under in accordance with the
Credit Support Annex to the Master Agreement
between Party A and the Credit Support Provider
and/or otherwise as security for, or in
satisfaction (in part of in full) of amounts then
owing by Party A to the Credit Support Provider in
connection with the Replaced Transaction or the
Other Transaction, or any mark to market amounts
payable in respect thereof. The Custodian must
hold the Party A Posted Collateral, and must
transfer the Party A Posted Collateral, as
required by this paragraph (x)(C).
(D) The Transfer of the Party A Posted Collateral by
Party B to the Custodian in accordance with
paragraph (x)(B) shall constitute performance by
Party B of its obligations under paragraph 3(b) in
respect of the Party A Posted Collateral.
8
<PAGE>
WESTPAC BANKING CORPORATION
Westpac Securities Administration Limited
in its capacity as trustee of the Series 1998-1G WST Trust
Level 10, 130 Pitt Street
Sydney
cc: Westpac Securitisation Management Pty Limited
Level 6, 60 Martin Place
Sydney
Morgan Guaranty Trust Company of New York
PO Box 161
60 Victoria Embankment
London EC4Y OJP
Dear Sir
Currency Swap Transactions - Series 1998-1G WST Trust
Class A Mortgage Backed Floating Rate Notes
The purpose of this letter is to confirm the terms and conditions of the swap
transactions entered into between us on the Trade Dates specified below (the
"Transactions"). This letter constitutes a "Confirmation" as referred to in the
Master Agreement specified below.
1. This Confirmation supplements, forms part of, and is subject to, the
Master Agreement dated [ June] 1998, as amended and
supplemented from time to time (the "Agreement") between you and us. All
provisions contained in the Agreement govern this Confirmation except as
expressly modified below. Without limitation, Section 21 of the Agreement
shall apply to this Confirmation and the Transactions under it, as further
specified below.
2. Terms defined in the Conditions dated [ June] 1998 in respect
of the issue of US$xxx,xxx,xxx in Class A Mortgage-Backed Floating Rate
Notes due [2032] have the same meanings when used in this Confirmation.
3. The terms of the particular Transaction to which this Confirmation relate
are as specified in the Annexure to this Confirmation.
4. For the purposes of this Confirmation, Westpac Banking Corporation is
known as "Westpac", Westpac Securities Administration Limited in its
capacity as trustee of the Series 1998-1G WST Trust is known as "Trustee",
Westpac Securitisation Management Pty Limited is known as "Manager" and
Morgan Guaranty Trust Company of New York, London Office, is known as
"Credit Support Provider".
5. Account Details
Payments to Westpac: to be advised
Payments to Trustee: to be advised
Page 1
<PAGE>
WESTPAC BANKING CORPORATION
6. Offices
(a) The Office of Westpac for the Swap Transactions is LONDON; and
(b) The Office of the Trustee for the Swap Transactions is SYDNEY.
Yours sincerely,
WESTPAC BANKING CORPORATION (ARBN
007 457 141)
By:
Name:
Title:
Confirmed as of the
date above first written:
WESTPAC SECURITIES ADMINISTRATION LIMITED(ACN 000 049 472)
in its capacity as trustee of the Series 1998-1G WST Trust
By:
------------------------------
Name:
Title:
WESTPAC SECURITISATION MANAGEMENT PTY LIMITED (ACN 081 709 211)
in its capacity as Trust Manager
By:
------------------------------
Name:
Title:
Page 2
<PAGE>
WESTPAC BANKING CORPORATION
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
in its capacity as Credit Support Provider to Westpac
By:
------------------------------
Name:
Title:
Page 3
<PAGE>
WESTPAC BANKING CORPORATION
Annexure 1 - Class A Notes
Westpac Deal Number [ ]
Trade Date: [ June] 1998
Effective Date: Closing Date
Termination Date: Final Maturity Date (adjusted in accordance
with the Modified Following Business Day
Convention)
Floating Interest Amounts
Floating Amounts Payable by Westpac:
These Floating Amounts are payable by Westpac unless there is, on any Floating
Rate Payer Payment Date, any reduction in Class A Interest resulting from a
reduction in A$ Class A Interest Amount pursuant to clause [6.17(a)(ii)(A)] of
the Series Notice (as specified in a notice to Westpac by the Determination
Time), in which case the Floating Amount shall be reduced by the same proportion
as the reduction in the A$ Class A Interest Amount.
Floating Rate Payer: Westpac
Notional Amount: An amount equal to fifty (50) percent of the
total Invested Amount of all Class A Notes
as at the first day of the Interest Period
ending on but excluding the relevant
Floating Rate Payer Payment Date
Page 4
<PAGE>
WESTPAC BANKING CORPORATION
Floating Rate Payer Payment Dates: Each Payment Date up to, and including the
last Payment Date prior to Maturity Date,
and the Termination Date
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: Three months
Spread: Plus [ ] percent
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
Page 5
<PAGE>
WESTPAC BANKING CORPORATION
Floating Amounts Payable by the Trustee:
These Floating Amounts are payable by the Trustee unless there is, on any
Floating Rate Payer Payment Date, any reduction in A$ Class A Interest Amount
pursuant to clause [6.17(a)(ii)(A)] of the Series Notice (as specified in a
notice by the Trustee or Trust Manager to Westpac by the Determination Time), in
which case instead of the Floating Amount Trustee shall pay an amount equal to
the lesser A$ amount specified in that notice on that Floating Rate Payer
Payment Date.
Floating Rate Payer: Trustee
Notional Amount: An amount equal to fifty (50) percent of the
A$ Equivalent (applying USD 0.6[ ]) of the
total Invested Amount of all Class_A Notes
as at the first day of the Interest Period
ending on but excluding the relevant
Floating Rate Payer Payment Date
Floating Rate Payer Payment Dates: Each Payment Date up to and including the
last Payment Date prior to Maturity Date,
and the Termination Date
Floating Rate Option: AUD-BBR-BBSW
Designated Maturity: 90 days
Spread: Plus 0.[ ] percent
Floating Rate Day Count Fraction: Actual/365 (Fixed)
Page 6
<PAGE>
WESTPAC BANKING CORPORATION
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
Page 7
<PAGE>
WESTPAC BANKING CORPORATION
Exchanges
Initial Exchange:
Initial Exchange Date: Closing Date
Westpac Pays Initial Exchange: An amount equal to fifty (50) percent of the
total Class A Initial Invested Amount of all
Class A Notes on the Closing Date divided by
the exchange rate of USD 0.6[ ] being
(AUD [ ])
Trustee Pays Initial Exchange: An amount equal to fifty (50) percent of the
total of the Class A Initial Invested Amount
of all of the Class A Notes on the Closing
Date being USD [ ]
Instalment Exchange
Instalment Exchange Date Each Payment Date (other than a Final
Exchange Date
Westpac Pays Instalment Exchange: An amount equal to fifty (50) percent of the
Class A Principal Payment paid on the
relevant Instalment Exchange Date towards a
reduction of the Principal Amount of Class A
Notes, as calculated by multiplying the
Trustee Instalment Exchange Payment on the
relevant Instalment Exchange Date by the
exchange rate of USD 0.6[ ]
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<PAGE>
WESTPAC BANKING CORPORATION
Trustee Pays Instalment Exchange: An amount equal to fifty (50) percent of the
amount expressed under clause [6.14, 6.15 or
6.16] (as applicable) of the Series Notice
as being payable under a Confirmation
relating to Class A Notes plus any amount
payable under clause [6.11(a)(ii)(C)] of the
Series Notice (together, the "Trustee
Instalment Exchange Payment") as specified
in the notice issued by the Trustee (or
Trust Manager to Westpac by the
Determination Time in respect of that
Instalment Exchange Date
Page 9
<PAGE>
WESTPAC BANKING CORPORATION
Final Exchange:
Final Exchange Date: The earlier of the Termination Date and the
Date of the [10% Clean Up under clause
8.9(d)] of the Master Trust Deed as amended
by the Series Notice and the date of
redemption of all the Class A Notes for
taxation or other reasons, adjusted in
accordance with the Modified Following
Business Day Convention
Westpac Pays Final Exchange: An amount equal to fifty (50) percent of the
aggregate Final Exchange payable by the
Trustee under this Confirmation, multiplied
by the exchange rate of USD 0.6[ ]
Trustee Pays Final Exchange: An amount equal to fifty (50) percent of the
aggregate amount expressed under clause
[6.14, 6.15 or 6.16] (as applicable) of the
Series Notice as being payable under a
Confirmation relating to Class A Notes plus
any amount payable under clause
[6.11(a)(ii)(C)] of the Series Notice as
specified in the Notice issued by the
Trustee (or Trust Manager) to Westpac by the
Determination Time in respect of that Final
Exchange Date
Business Day Locations for Trustee: Sydney
Business Day Locations for Westpac: New York, London
Page 10
<PAGE>
WESTPAC BANKING CORPORATION
Payments will be: Gross
Page 11
<PAGE>
WESTPAC BANKING CORPORATION
Glossary
1. Terms defined in the Series Notice:
A$ Equivalent Invested Amount
Class A Initial Invested Amount Maturity Date
Class A Notes Payment Date
Closing Date Principal Payment
Interest Period Trust Manager
2. Terms defined in the Agreement (including 1991 ISDA Definitions) are:
Actual/360
Actual/365 (Fixed)
AUD-BBR-BBSW
Modified Following Business Day Convention
Replaced Transaction
USD-LIBOR-BBA
3. Terms defined in this Confirmation:
Agreement
Trustee
"Determination Time" means 5.00 pm Sydney time 4 Sydney Business Days prior to
the relevant Payment Date or other applicable exchange date.
Westpac
Page 12
<PAGE>
WESTPAC BANKING CORPORATION
Credit Support Provider Provisions
Each Transaction under this Confirmation shall be capable of being specified as
a Replaced Transaction in accordance with the provisions of Section 21 of the
Agreement. Those provisions shall apply as further specified below.
1. Definitions for Credit Events
"Calculation Agent" means the party to the Transaction (or a third party)
designated as such for the Transaction. The Calculation Agent's
calculations and determinations shall be made in good faith, in a
commercially reasonable manner and be binding in the absence of manifest
error [Credit Support Provider];
"Initial Price" means, with respect to any Reference Obligation, the
percentage listed with respect thereto in the definition of Reference
Obligation herein as the Initial Price;
"Interest Rate Adjustment Amount" means, with respect to any Reference
Obligation, the absolute value of the difference between (i) the Mark to
Market Value and (ii) 100% minus the Initial Price;
"Mark to Market Value" means, in the determination of the Calculation
Agent, with respect to any Reference Obligation, on any day, the mark to
market value payable on that day (expressed as a percentage of the
notional amount thereof), of a hypothetical interest rate swap commencing
on the Effective Date between a hypothetical party ("Party X") and a
counterparty with the highest long term senior debt rating of each Rating
Agency, which swap has a notional amount equal to the Floating Rate Payer
Calculation Amount and under which Party X (i) pays the Mark to Market
Rate plus the Initial Spread and (ii) receives a fixed interest amount
equal in amount and timing to the coupons on the Reference Obligation. If,
under such swap, Party X would be due to pay such mark to market value,
Mark to Market Value will be negative and, if Party X would be due to
receive such mark to market value, the Mark to Market Value will be
positive.
"Market Value" means, in accordance with the Quotation Method, the
percentage equal to the arithmetic mean of quotations (exclusive of
accrued but unpaid interest and expressed as a percentage) obtained from
Dealers with respect to a Valuation Date in the manner provided below. In
obtaining such price quotations from Dealers, the Calculation Agent will
request each Dealer to provide firm bid and offer quotations for an
aggregate amount of the Reference Obligation equal to the Quotation Amount
to the extent reasonably practicable as of the Valuation Time on such
Valuation Date. If more than three quotations are provided on such date,
the Market Value shall be the arithmetic mean of such quotations without
regard to the quotations having the highest and lowest values. If exactly
three quotations are provided, the Market Value shall be the quotation
remaining after disregarding the highest and lowest quotations. For this
purpose, if more than one quotation has the same highest value or lowest
value, then one of such quotations shall be disregarded. If exactly two
quotations are provided, the Market Value shall be the arithmetic mean of
such quotations. If fewer than two quotations are provided, then the
Market Value shall be an amount as determined by the Calculation Agent on
the next Business Day on which at least two quotations are provided by
Dealers. If the Calculation Agent is unable to calculate the Market Value
prior to the fifth
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<PAGE>
WESTPAC BANKING CORPORATION
Business Day following the applicable Valuation Date, then the Calculation
Agent shall determine the Market Value for such Valuation Date in its
reasonable discretion;
"Quotation Method":
[Mid-market means that only the arithmetic mean of the bid and offer
quotations provided by Dealers that have provided both bid and offer
quotations shall be used in the calculation of Market Value.];
"Reference Obligation" means the obligation(s) as follows:
Issuer/Borrower: [ ]
Guarantor: [ ]
Maturity: [ ]
Coupon: [ ]
CUSIP/ISIN: [ ]
Original Issue Amount: [ ]
Initial Price: [ ]
Initial Spread: [ ];
"Specified Indebtedness" means any obligation (whether present or future,
contingent or otherwise, as principal or surety or otherwise in respect of
money borrowed or raised or under any finance lease, redeemable preference
share, letter of credit, futures contract, guarantee, indemnity or a
transaction of a type described in the last 6 lines of the definition of
Specified Transaction.
"Threshold Amount" means [US$25,000,000]
"Valuation Time" - [ ]
2. The parties acknowledge that on the Effective Date of the Substitute
Transaction or the Equivalent Transaction, Party A shall pay to the Credit
Support Provider (in the case of the Substitute Transaction) or to the new
Currency Swap Provider (in the case of the Equivalent Transaction) the
amount equal to the amount (if a positive number) that hypothetically
would have been payable by Party A to Party B under Section 6(e)(i)(3) if:
(a) the Transaction had been terminated;
(b) an Early Termination Date had occurred on the Effective Date; and
(c) Section 21 had not applied in respect of the Transaction.
Any such amount shall be payable by Party A to the Credit Support Provider
in accordance with the provisions of the relevant Master Agreement between
Party A and the Credit Support Provider (in the case of the Substitute
Transaction) or to the New Currency Swap Provider in accordance with the
relevant Master Agreement between Party A and the New Currency Swap
Provider (in the case of the Equivalent Transaction).
<PAGE>
WESTPAC BANKING CORPORATION
Annexure 2 - Class A Notes - "Substitute Transaction"
Westpac Deal Number [ ]
Trade Date: [ June] 1998
Effective Date: The Effective Date shall be the date
specified in a Substitution Notice given by
Westpac as Credit Support Provider under the
Other Agreement.
The Effective Date shall not occur if the
conditions in respect of the Substitution
Notice have not been satisfied in full in
accordance with the Other Agreement.
Termination Date: Final Maturity Date (adjusted in accordance
with the Modified Following Business Day
Convention)
Floating Interest Amounts
Floating Amounts Payable by Westpac:
These Floating Amounts are payable by Westpac unless there is, on any Floating
Rate Payer Payment Date, any reduction in Class A Interest resulting from a
reduction in A$ Class A Interest Amount pursuant to clause [6.17(a)(ii)(A)] of
the Series Notice (as specified in a notice to Westpac by the Determination
Time), in which case the Floating Amount shall be reduced by the same proportion
as the reduction in the A$ Class A Interest Amount.
Floating Rate Payer: Westpac
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<PAGE>
WESTPAC BANKING CORPORATION
Notional Amount: An amount equal to the total Invested Amount
of all Class A Notes as at the first day of
the Interest Period ending on but excluding
the relevant Floating Rate Payer Payment
Date
Floating Rate Payer Payment Dates: Each Payment Date on or after the Effective
Date up to, and including the last Payment
Date prior to Maturity Date, and the
Termination Date
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: Three months
Spread: Plus [ ] percent
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
Page 2
<PAGE>
WESTPAC BANKING CORPORATION
Floating Amounts Payable by the Trustee:
These Floating Amounts are payable by the Trustee unless there is, on any
Floating Rate Payer Payment Date, any reduction in A$ Class A Interest Amount
pursuant to clause [6.17(a)(ii)(A)] of the Series Notice (as specified in a
notice by the Trustee or Trust Manager to Westpac by the Determination Time), in
which case instead of the Floating Amount Trustee shall pay an amount equal to
the lesser A$ amount specified in that notice on that Floating Rate Payer
Payment Date.
Floating Rate Payer: Trustee
Notional Amount: An amount equal to the A$ Equivalent
(applying USD 0.6[ ]) of the total Invested
Amount of all Class_A Notes as at the first
day of the Interest Period ending on but
excluding the relevant Floating Rate Payer
Payment Date
Floating Rate Payer Payment Dates: Each Payment Date on or after the Effective
Date up to and including the last Payment
Date prior to Maturity Date, and the
Termination Date
Floating Rate Option: AUD-BBR-BBSW
Designated Maturity: 90 days
Spread: Plus 0.[ ] percent
Page 3
<PAGE>
WESTPAC BANKING CORPORATION
Floating Rate Day Count Fraction: Actual/365 (Fixed)
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
Page 4
<PAGE>
WESTPAC BANKING CORPORATION
Exchanges
Instalment Exchange
Instalment Exchange Date Each Payment Date on or after the Effective
Date (other than a Final Exchange Date)
Westpac Pays Instalment Exchange: An amount equal to the Class A Principal
Payment paid on the relevant Instalment
Exchange Date towards a reduction of the
Principal Amount of Class A Notes, as
calculated by multiplying the Trustee
Instalment Exchange Payment on the relevant
Instalment Exchange Date by the exchange
rate of USD 0.6[ ]
Trustee Pays Instalment Exchange: An amount equal to the amount expressed
under clause [6.14, 6.15 or 6.16] (as
applicable) of the Series Notice as being
payable under a Confirmation relating to
Class A Notes plus any amount payable under
clause [6.11(a)(ii)(C)] of the Series Notice
(together, the "Trustee Instalment Exchange
Payment") as specified in the notice issued
by the Trustee (or Trust Manager to Westpac
by the Determination Time in respect of that
Instalment Exchange Date
Final Exchange
Page 5
<PAGE>
WESTPAC BANKING CORPORATION
Final Exchange Date: The earlier of the Termination Date and the
Date of the [10% Clean Up under clause
8.9(d)] of the Master Trust Deed as amended
by the Series Notice and the date of
redemption of all the Class A Notes for
taxation or other reasons, adjusted in
accordance with the Modified Following
Business Day Convention
Westpac Pays Final Exchange: An amount equal to the aggregate Final
Exchange payable by the Trustee under this
Confirmation, multiplied by the exchange
rate of USD 0.6[ ]
Trustee Pays Final Exchange: An amount equal to the aggregate amount
expressed under clause [6.14, 6.15 or 6.16]
(as applicable) of the Series Notice as
being payable under a Confirmation relating
to Class A Notes plus any amount payable
under clause [6.11(a)(ii)(C)] of the Series
Notice as specified in the Notice issued by
the Trustee (or Trust Manager) to Westpac by
the Determination Time in respect of that
Final Exchange Date
Business Day Locations for Trustee: Sydney
Business Day Locations for Westpac: New York, London
Payments will be: Gross
Page 6
<PAGE>
WESTPAC BANKING CORPORATION
Glossary
1. Terms defined in the Series Notice:
A$ Equivalent Invested Amount
Class A Initial Invested Amount Maturity Date
Class A Notes Payment Date
Closing Date Principal Payment
Interest Period Trust Manager
2. Terms defined in the Agreement (including 1991 ISDA Definitions) are:
Actual/360
Actual/365 (Fixed)
AUD-BBR-BBSW
Modified Following Business Day Convention
Other Agreement. For the avoidance of doubt the Other Agreement is the agreement
between Morgan Guaranty Trust Company of New York, London office as Party A, the
Trustee as Party B, Westpac as the Credit Support Provider to Party A and the
Manager, dated on or about the date of the Agreement.
Substitution Notice
USD-LIBOR-BBA
3. Terms defined in this Confirmation:
Agreement
Trustee
Page 7
<PAGE>
WESTPAC BANKING CORPORATION
"Determination Time" means 5.00 pm Sydney time 4 Sydney Business Days prior to
the relevant Payment Date or other applicable exchange date. Westpac
Page 8
<PAGE>
WESTPAC BANKING CORPORATION
Annexure 3 - Class A Notes -
"Equivalent-Other Transaction"
Westpac Deal Number [ ]
Trade Date: [ June] 1998
Effective Date: The Effective Date shall be the date
specified in a Substitution Notice given by
Westpac as Credit Support Provider under the
Other Agreement.
The Effective Date shall not occur if the
conditions in respect of the Substitution
Notice have not been satisfied in full in
accordance with the Other Agreement.
Termination Date: Final Maturity Date (adjusted in accordance
with the Modified Following Business Day
Convention)
Floating Interest Amounts
Floating Amounts Payable by Westpac:
These Floating Amounts are payable by Westpac unless there is, on any Floating
Rate Payer Payment Date, any reduction in Class A Interest resulting from a
reduction in A$ Class A Interest Amount pursuant to clause [6.17(a)(ii)(A)] of
the Series Notice (as specified in a notice to Westpac by the Determination
Time), in which case the Floating Amount shall be reduced by the same proportion
as the reduction in the A$ Class A Interest Amount.
Floating Rate Payer: Westpac
Notional Amount: An amount equal to fifty (50) percent of the
total Invested Amount for all Class A Notes
as at the first day of the Interest Period
ending on but excluding the relevant
Floating Rate Payer Payment Date
Floating Rate Payer Payment Dates: Each Payment Date on or after the Effective
Date up to, and including the last Payment
Date prior to Maturity Date, and the
Termination Date
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: Three months
Spread: Plus [ ] percent
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
<PAGE>
WESTPAC BANKING CORPORATION
Floating Amounts Payable by the Trustee:
These Floating Amounts are payable by the Trustee unless there is, on any
Floating Rate Payer Payment Date, any reduction in A$ Class A Interest Amount
pursuant to clause [6.17(a)(ii)(A)] of the Series Notice (as specified in a
notice by the Trustee or Trust Manager to Westpac by the Determination Time), in
which case instead of the Floating Amount Trustee shall pay an amount equal to
the lesser A$ amount specified in that notice on that Floating Rate Payer
Payment Date.
Floating Rate Payer: Trustee
Notional Amount: An amount equal to fifty (50) percent of the
A$ Equivalent (applying USD 0.6[ ]) of the
total Invested Amount for all Class A Notes
as at the first day of the Interest Period
ending on but excluding the relevant
Floating Rate Payer Payment Date
Floating Rate Payer Payment Dates: Each Payment Date on or after the Effective
Date up to and including the last Payment
Date prior to Maturity Date, and the
Termination Date
Floating Rate Option: AUD-BBR-BBSW
Designated Maturity: 90 days
Spread: Plus 0.[ ] percent
Floating Rate Day Count Fraction: Actual/365 (Fixed)
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
Page 2
<PAGE>
WESTPAC BANKING CORPORATION
Exchanges
Instalment Exchange
Instalment Exchange Date Each Payment Date on or after the Effective
Date (other than a Final Exchange Date
Westpac Pays Instalment Exchange: An amount equal to fifty (50) percent of the
Class A Principal Payment paid on the
relevant Instalment Exchange Date towards a
reduction of the Principal Amount of Class A
Notes, as calculated by multiplying the
Trustee Instalment Exchange Payment on the
relevant Instalment Exchange Date by the
exchange rate of USD 0.6[ ]
Trustee Pays Instalment Exchange: An amount equal to fifty (50) percent of the
amount expressed under clause [6.14, 6.15 or
6.16] (as applicable) of the Series Notice
as being payable under a Confirmation
relating to Class A Notes plus any amount
payable under clause [6.11(a)(ii)(C)] of the
Series Notice (together, the "Trustee
Instalment Exchange Payment") as specified
in the notice issued by the Trustee (or
Trust Manager to Westpac by the
Determination Time in respect of that
Instalment Exchange Date
Page 3
<PAGE>
WESTPAC BANKING CORPORATION
Final Exchange:
Final Exchange Date: The earlier of the Termination Date and the
Date of the [10% Clean Up under clause
8.9(d)] of the Master Trust Deed as amended
by the Series Notice and the date of
redemption of all the Class A Notes for
taxation or other reasons, adjusted in
accordance with the Modified Following
Business Day Convention
Westpac Pays Final Exchange: An amount equal to fifty (50) percent of the
aggregate Final Exchange payable by the
Trustee under this Confirmation, multiplied
by the exchange rate of USD 0.6[ ]
Trustee Pays Final Exchange: An amount equal to fifty (50) percent of the
aggregate amount expressed under clause
[6.14, 6.15 or 6.16] (as applicable) of the
Series Notice as being payable under a
Confirmation relating to Class A Notes plus
any amount payable under clause
[6.11(a)(ii)(C)] of the Series Notice as
specified in the Notice issued by the
Trustee (or Trust Manager) to Westpac by the
Determination Time in respect of that Final
Exchange Date
Business Day Locations for Trustee: Sydney
Business Day Locations for Westpac: New York, London
Payments will be: Gross
Page 4
<PAGE>
WESTPAC BANKING CORPORATION
Glossary
1. Terms defined in the Series Notice:
A$ Equivalent Invested Amount
Class A Initial Invested Amount Maturity Date
Class A Notes Payment Date
Closing Date Principal Payment
Interest Period Trust Manager
2. Terms defined in the Agreement (including 1991 ISDA Definitions) are:
Actual/360
Actual/365 (Fixed)
AUD-BBR-BBSW
Modified Following Business Day Convention
Other Agreement. For the avoidance of doubt the Other Agreement is the agreement
between Morgan Guaranty Trust Company of New York, London office as Party A, the
Trustee as Party B, Westpac as the Credit Support Provider to Party A and the
Manager, dated on or about the date of the Agreement.
Replaced Transaction
USD-LIBOR-BBA
3. Terms defined in this Confirmation:
Agreement
Trustee
"Determination Time" means 5.00 pm Sydney time 4 Sydney Business Days prior to
the relevant Payment Date or other applicable exchange date. Westpac
Credit Support Provider Provisions
Each Transaction under this Confirmation shall be capable of being specified as
a Replaced Transaction in accordance with the provisions of Section 21 of the
Agreement. Those provisions shall apply as further specified below.
1. Definitions for Credit Events
"Calculation Agent" means the party to the Transaction (or a third party)
designated as such for the Transaction. The Calculation Agent's
calculations and determinations shall be made in good faith, in a
commercially reasonable manner and be binding in the absence of manifest
error [Credit Support Provider];
"Initial Price" means, with respect to any Reference Obligation, the
percentage listed with respect thereto in the definition of Reference
Obligation herein as the Initial Price;
"Interest Rate Adjustment Amount" means, with respect to any Reference
Obligation, the absolute value of the difference between (i) the Mark to
Market Value and (ii) 100% minus the Initial Price;
"Mark to Market Value" means, in the determination of the Calculation
Agent, with respect to any Reference Obligation, on any day, the mark to
market value payable on that day (expressed as a percentage of the
notional amount thereof), of a hypothetical interest rate swap commencing
on the Effective Date between a hypothetical party ("Party X") and a
counterparty with the highest long term senior debt rating of each Rating
Agency, which swap has a notional amount equal to the Floating Rate Payer
Calculation Amount and under which Party X (i) pays the Mark to Market
Rate plus the Initial Spread and (ii) receives a fixed interest amount
equal in
Page 5
<PAGE>
WESTPAC BANKING CORPORATION
amount and timing to the coupons on the Reference Obligation. If, under
such swap, Party X would be due to pay such mark to market value, Mark to
Market Value will be negative and, if Party X would be due to receive such
mark to market value, the Mark to Market Value will be positive.
"Market Value" means, in accordance with the Quotation Method, the
percentage equal to the arithmetic mean of quotations (exclusive of
accrued but unpaid interest and expressed as a percentage) obtained from
Dealers with respect to a Valuation Date in the manner provided below. In
obtaining such price quotations from Dealers, the Calculation Agent will
request each Dealer to provide firm bid and offer quotations for an
aggregate amount of the Reference Obligation equal to the Quotation Amount
to the extent reasonably practicable as of the Valuation Time on such
Valuation Date. If more than three quotations are provided on such date,
the Market Value shall be the arithmetic mean of such quotations without
regard to the quotations having the highest and lowest values. If exactly
three quotations are provided, the Market Value shall be the quotation
remaining after disregarding the highest and lowest quotations. For this
purpose, if more than one quotation has the same highest value or lowest
value, then one of such quotations shall be disregarded. If exactly two
quotations are provided, the Market Value shall be the arithmetic mean of
such quotations. If fewer than two quotations are provided, then the
Market Value shall be an amount as determined by the Calculation Agent on
the next Business Day on which at least two quotations are provided by
Dealers. If the Calculation Agent is unable to calculate the Market Value
prior to the fifth Business Day following the applicable Valuation Date,
then the Calculation Agent shall determine the Market Value for such
Valuation Date in its reasonable discretion;
"Quotation Method":
[Bid means that only the bid quotations provided by Dealers shall be
used in the calculation of Market Value] or
[Offer means that only the offer quotations provided by Dealers
shall be used in the calculation of Market Value.] or
[Mid-market means that only the arithmetic mean of the bid and offer
quotations provided by Dealers that have provided both bid and offer
quotations shall be used in the calculation of Market Value.];
"Reference Obligation" means the obligation(s) as follows:
Issuer/Borrower: [ ]
Guarantor: [ ]
Maturity: [ ]
Coupon: [ ]
CUSIP/ISIN: [ ]
Original Issue Amount: [ ]
Initial Price: [ ]
Initial Spread: [ ];
"Specified Indebtedness" means any obligation (whether present or future,
contingent or otherwise, as principal or surety or otherwise in respect of
money borrowed or raised or under any finance lease, redeemable preference
share, letter of credit, futures contract, guarantee, indemnity or a
transaction of a type described in the last 6 lines of the definition of
Specified Transaction.
"Threshold Amount" means [US$25,000,000]
"Valuation Time" - [ ]
2. The parties acknowledge that on the Effective Date of the Substitute
Transaction or the Equivalent Transaction, Party A shall pay to the Credit
Support Provider (in the case of the Substitute Transaction) or to the new
Currency Swap Provider (in the case of the Equivalent Transaction) the
amount equal to the amount (if a positive number) that hypothetically
would have been payable by Party A to Party B under Section 6(e)(i)(3) if:
(a) the Transaction had been terminated;
(b) an Early Termination Date had occurred on the Effective Date; and
Page 6
<PAGE>
WESTPAC BANKING CORPORATION
(c) Section 21 had not applied in respect of the Transaction.
Any such amount shall be payable by Party A to the Credit Support Provider
in accordance with the provisions of the relevant Master Agreement between
Party A and the Credit Support Provider (in the case of the Substitute
Transaction) or to the New Currency Swap Provider in accordance with the
relevant Master Agreement between Party A and the New Currency Swap
Provider (in the case of the Equivalent Transaction).
Page 7
<PAGE>
WESTPAC BANKING CORPORATION
ACCESSION BY NEW CURRENCY SWAP PROVIDER
As specified in the Substitution Notice given by Westpac under the Other
Agreement, we agree to be the Credit Support Provider to Westpac as governed by
the terms of the Agreement, in respect of the Transaction specified by this
Annexure 3, and we agree that all references in the Agreement and this
Transaction to "Credit Support Provider" shall be to us, and for consideration
which we acknowledge as having been received, we hereby accept the accession to
us of all the rights and obligations as Credit Support Provider as and from the
Effective Date of this Transaction.
Agreed and accepted as the new Credit
Support Provider:
By:
Name:
Title:
Agreed and confirmed as of the Effective Date of the Transaction specified
in this Annexure 3:
WESTPAC SECURITIES ADMINISTRATION LIMITED(ACN 000 049 472)
in its capacity as Party B
By:
------------------------------
Name:
Title:
WESTPAC SECURITISATION MANAGEMENT PTY LIMITED (ACN 081 709 211)
in its capacity as Trust Manager
By:
------------------------------
Name:
Title:
WESTPAC BANKING CORPORATION (ARBN 007 457 141)
in its capacity as Party A
By:
------------------------------
Name:
Title:
Page 8
<PAGE>
WESTPAC BANKING CORPORATION
Westpac Securities Administration Limited
in its capacity as trustee of the
Series 1998-1G WST Trust
Level 10, 130 Pitt Street Sydney
cc: Westpac Securitisation Management Pty Limited
Level 6, 60 Martin Place
Sydney
Morgan Guaranty Trust Company of New York
PO Box 161
60 Victoria Embankment
London EC4Y OJP
Dear Sir
Currency Swap Transactions - Series 1998-1G WST Trust
Class B Mortgage Backed Floating Rate Notes
The purpose of this letter is to confirm the terms and conditions of the swap
transactions entered into between us on the Trade Dates specified below (the
"Transactions"). This letter constitutes a "Confirmation" as referred to in the
Master Agreement specified below.
1. This Confirmation supplements, forms part of, and is subject to, the
Master Agreement dated [ June] 1998, as amended and supplemented from
time to time (the "Agreement") between you and us. All provisions
contained in the Agreement govern this Confirmation except as expressly
modified below. Without limitation, Section 21 of the Agreement shall
apply to this Confirmation and the Transactions under it, as further
specified below.
2. Terms defined in the Conditions dated [ June] 1998 in respect of the
issue of US$xxx,xxx,xxx in Class B Mortgage-Backed Floating Rate Notes due
[2032] have the same meanings when used in this Confirmation.
3. The terms of the particular Transaction to which this Confirmation relate
are as specified in the Annexure to this Confirmation.
4. For the purposes of this Confirmation, Westpac Banking Corporation is
known as "Westpac", Westpac Securities Administration Limited in its
capacity as trustee of the Series 1998-1G WST Trust is known as "Trustee",
Westpac Securitisation Management Pty Limited is known as "Manager" and
Morgan Guaranty Trust Company of New York, London Office, is known as
"Credit Support Provider".
5. Account Details
Payments to Westpac: to be advised
Payments to Trustee: to be advised
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<PAGE>
WESTPAC BANKING CORPORATION
6. Offices
(a) The Office of Westpac for the Swap Transactions is LONDON; and
(b) The Office of the Trustee for the Swap Transactions is SYDNEY.
Yours sincerely,
WESTPAC BANKING CORPORATION (ARBN
007 457 141)K
By:
Name:
Title:
Confirmed as of the date above first written:
WESTPAC SECURITIES ADMINISTRATION LIMITED(ACN 000 049 472)
in its capacity as trustee of the Series 1998-1G WST Trust
By:______________________________
Name:
Title:
WESTPAC SECURITISATION MANAGEMENT PTY LIMITED (ACN 081 709 211)
in its capacity as Trust Manager
By:______________________________
Name:
Title:
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<PAGE>
WESTPAC BANKING CORPORATION
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
in its capacity as Credit Support Provider to Westpac
By:______________________________
Name:
Title:
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<PAGE>
WESTPAC BANKING CORPORATION
Annexure 1 - Class B Notes
Westpac Deal Number [ ]
Trade Date: [ June] 1998
Effective Date: Closing Date
Termination Date: Final Maturity Date (adjusted in
accordance with the Modified
Following Business Day Convention)
Floating Interest Amounts
Floating Amounts Payable by Westpac:
These Floating Amounts are payable by Westpac unless there is, on any Floating
Rate Payer Payment Date, any reduction in Class B Interest resulting from a
reduction in A$ Class B Interest Amount pursuant to clause [6.17(a)(ii)(A)] of
the Series Notice (as specified in a notice to Westpac by the Determination
Time), in which case the Floating Amount shall be reduced by the same proportion
as the reduction in the A$ Class B Interest Amount.
Floating Rate Payer: Westpac
Notional Amount: An amount equal to fifty (50)
percent of the total Invested Amount
of all Class B Notes as at the first
day of the Interest Period ending on
but excluding the relevant Floating
Rate Payer Payment Date
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WESTPAC BANKING CORPORATION
Floating Rate Payer Payment Dates: Each Payment Date up to, and
including the last Payment Date
prior to Maturity Date, and the
Termination Date
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: Three months
Spread: Plus [ ] percent
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Interest
Period
Compounding: Inapplicable
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WESTPAC BANKING CORPORATION
Floating Amounts Payable by the Trustee:
These Floating Amounts are payable by the Trustee unless there is, on any
Floating Rate Payer Payment Date, any reduction in A$ Class B Interest Amount
pursuant to clause [6.17(a)(ii)(A)] of the Series Notice (as specified in a
notice by the Trustee or Trust Manager to Westpac by the Determination Time), in
which case instead of the Floating Amount Trustee shall pay an amount equal to
the lesser A$ amount specified in that notice on that Floating Rate Payer
Payment Date.
Floating Rate Payer: Trustee
Notional Amount: An amount equal to fifty (50)
percent of the A$ Equivalent
(applying USD 0.6[ ]) of the total
Invested Amount of all Class < 0- 95 >A
Notes as at the first day of the
Interest Period ending on but
excluding the relevant Floating Rate
Payer Payment Date
Floating Rate Payer Payment Dates: Each Payment Date up to and
including the last Payment Date
prior to Maturity Date, and the
Termination Date
Floating Rate Option: AUD-BBR-BBSW
Designated Maturity: 90 days
Spread: Plus 0.[ ] percent
Floating Rate Day Count Fraction: Actual/365 (Fixed)
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WESTPAC BANKING CORPORATION
Reset Dates: The first day of each Interest
Period
Compounding: Inapplicable
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<PAGE>
WESTPAC BANKING CORPORATION
Exchanges
Initial Exchange:
Initial Exchange Date: Closing Date
Westpac Pays Initial Exchange: An amount
equal to fifty (50) percent of the
total Class B Initial Invested
Amount of all Class B Notes on the
Closing Date divided by the exchange
rate of USD 0.6[ ] being (AUD [ ])
Trustee Pays Initial Exchange: An amount equal to fifty (50)
percent of the total of the Class B
Initial Invested Amount of all of
the Class B Notes on the Closing
Date being USD [ ]
Instalment Exchange
Instalment Exchange Date Each Payment Date (other than a
Final Exchange Date
Westpac Pays Instalment Exchange: An amount equal to fifty (50)
percent of the Class B Principal
Payment paid on the relevant
Instalment Exchange Date towards a
reduction of the Principal Amount of
Class B Notes, as calculated by
multiplying the Trustee Instalment
Exchange Payment on the relevant
Instalment Exchange Date by the
exchange rate of USD 0.6[ ]
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WESTPAC BANKING CORPORATION
Trustee Pays Instalment Exchange: An amount equal to fifty (50)
percent of the amount expressed
under clause [6.14, 6.15 or 6.16]
(as applicable) of the Series Notice
as being payable under a
Confirmation relating to Class B
Notes plus any amount payable under
clause [6.11(a)(ii)(C)] of the
Series Notice (together, the
"Trustee Instalment Exchange
Payment") as specified in the notice
issued by the Trustee (or Trust
Manager to Westpac by the
Determination Time in respect of
that Instalment Exchange Date
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<PAGE>
WESTPAC BANKING CORPORATION
Final Exchange:
Final Exchange Date: The earlier of the Termination Date
and the Date of the [10% Clean Up
under clause 8.9(d)] of the Master
Trust Deed as amended by the Series
Notice and the date of redemption of
all the Class B Notes for taxation
or other reasons, adjusted in
accordance with the Modified
Following Business Day Convention
Westpac Pays Final Exchange: An amount equal to fifty (50)
percent of the aggregate Final
Exchange payable by the Trustee
under this Confirmation, multiplied
by the exchange rate of USD 0.6[ ]
Trustee Pays Final Exchange: An amount equal to fifty (50)
percent of the aggregate amount
expressed under clause [6.14, 6.15
or 6.16] (as applicable) of the
Series Notice as being payable under
a Confirmation relating to Class B
Notes plus any amount payable under
clause [6.11(a)(ii)(C)] of the
Series Notice as specified in the
Notice issued by the Trustee (or
Trust Manager) to Westpac by the
Determination Time in respect of
that Final Exchange Date
Business Day Locations for Trustee: Sydney
Business Day Locations for Westpac: New York, London
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WESTPAC BANKING CORPORATION
Payments will be: Gross
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<PAGE>
WESTPAC BANKING CORPORATION
Glossary
1. Terms defined in the Series Notice:
A$ Equivalent Invested Amount
Class B Initial Invested Amount Maturity Date
Class B Notes Payment Date
Closing Date Principal Payment
Interest Period Trust Manager
2. Terms defined in the Agreement (including 1991 ISDA Definitions) are:
Actual/360
Actual/365 (Fixed)
AUD-BBR-BBSW
Modified Following Business Day Convention
Replaced Transaction
USD-LIBOR-BBA
3. Terms defined in this Confirmation:
Agreement
Trustee
"Determination Time" means 5.00 pm Sydney time 4 Sydney Business Days prior to
the relevant Payment Date or other applicable exchange date.
Westpac
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<PAGE>
WESTPAC BANKING CORPORATION
Credit Support Provider Provisions
Each Transaction under this Confirmation shall be capable of being specified as
a Replaced Transaction in accordance with the provisions of Section 21 of the
Agreement. Those provisions shall apply as further specified below.
1. Definitions for Credit Events
"Calculation Agent" means the party to the Transaction (or a third party)
designated as such for the Transaction. The Calculation Agent's
calculations and determinations shall be made in good faith, in a
commercially reasonable manner and be binding in the absence of manifest
error [Credit Support Provider];
"Initial Price" means, with respect to any Reference Obligation, the
percentage listed with respect thereto in the definition of Reference
Obligation herein as the Initial Price;
"Interest Rate Adjustment Amount" means, with respect to any Reference
Obligation, the absolute value of the difference between (i) the Mark to
Market Value and (ii) 100% minus the Initial Price;
"Mark to Market Value" means, in the determination of the Calculation
Agent, with respect to any Reference Obligation, on any day, the mark to
market value payable on that day (expressed as a percentage of the
notional amount thereof), of a hypothetical interest rate swap commencing
on the Effective Date between a hypothetical party ("Party X") and a
counterparty with the highest long term senior debt rating of each Rating
Agency, which swap has a notional amount equal to the Floating Rate Payer
Calculation Amount and under which Party X (i) pays the Mark to Market
Rate plus the Initial Spread and (ii) receives a fixed interest amount
equal in amount and timing to the coupons on the Reference Obligation. If,
under such swap, Party X would be due to pay such mark to market value,
Mark to Market Value will be negative and, if Party X would be due to
receive such mark to market value, the Mark to Market Value will be
positive.
"Market Value" means, in accordance with the Quotation Method, the
percentage equal to the arithmetic mean of quotations (exclusive of
accrued but unpaid interest and expressed as a percentage) obtained from
Dealers with respect to a Valuation Date in the manner provided below. In
obtaining such price quotations from Dealers, the Calculation Agent will
request each Dealer to provide firm bid and offer quotations for an
aggregate amount of the Reference Obligation equal to the Quotation Amount
to the extent reasonably practicable as of the Valuation Time on such
Valuation Date. If more than three quotations are provided on such date,
the Market Value shall be the arithmetic mean of such quotations without
regard to the quotations having the highest and lowest values. If exactly
three quotations are provided, the Market Value shall be the quotation
remaining after disregarding the highest and lowest quotations. For this
purpose, if more than one quotation has the same highest value or lowest
value, then one of such quotations shall be disregarded. If exactly two
quotations are provided, the Market Value shall be the arithmetic mean of
such quotations. If fewer than two quotations are provided, then the
Market Value shall be an amount as determined by the Calculation Agent on
the next Business Day on which at least two quotations are provided by
Dealers. If the Calculation Agent is unable to calculate the Market Value
prior to the fifth
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WESTPAC BANKING CORPORATION
Business Day following the applicable Valuation Date, then the Calculation
Agent shall determine the Market Value for such Valuation Date in its
reasonable discretion;
"Quotation Method":
[Mid-market means that only the arithmetic mean of the bid and offer
quotations provided by Dealers that have provided both bid and offer
quotations shall be used in the calculation of Market Value.];
"Reference Obligation" means the obligation(s) as follows:
Issuer/Borrower: [ ]
Guarantor: [ ]
Maturity: [ ]
Coupon: [ ]
CUSIP/ISIN: [ ]
Original Issue Amount: [ ]
Initial Price: [ ]
Initial Spread: [ ];
"Specified Indebtedness" means any obligation (whether present or future,
contingent or otherwise, as principal or surety or otherwise in respect of
money borrowed or raised or under any finance lease, redeemable preference
share, letter of credit, futures contract, guarantee, indemnity or a
transaction of a type described in the last 6 lines of the definition of
Specified Transaction.
"Threshold Amount" means [US$25,000,000]
"Valuation Time" - [ ]
2. The parties acknowledge that on the Effective Date of the Substitute
Transaction or the Equivalent Transaction, Party A shall pay to the Credit
Support Provider (in the case of the Substitute Transaction) or to the new
Currency Swap Provider (in the case of the Equivalent Transaction) the
amount equal to the amount (if a positive number) that hypothetically
would have been payable by Party A to Party B under Section 6(e)(i)(3) if:
(a) the Transaction had been terminated;
(b) an Early Termination Date had occurred on the Effective Date; and
(c) Section 21 had not applied in respect of the Transaction.
Any such amount shall be payable by Party A to the Credit Support Provider
in accordance with the provisions of the relevant Master Agreement between
Party A and the Credit Support Provider (in the case of the Substitute
Transaction) or to the New Currency Swap Provider in accordance with the
relevant Master Agreement between Party A and the New Currency Swap
Provider (in the case of the Equivalent Transaction).
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<PAGE>
WESTPAC BANKING CORPORATION
Annexure 2 - Class B Notes - "Substitute Transaction"
Westpac Deal Number [ ]
Trade Date: [ June] 1998
Effective Date: The Effective Date shall be the date
specified in a Substitution Notice
given by Westpac as Credit Support
Provider under the Other Agreement.
The Effective Date shall not occur
if the conditions in respect of the
Substitution Notice have not been
satisfied in full in accordance with
the Other Agreement.
Termination Date: Final Maturity Date (adjusted in
accordance with the Modified
Following Business Day Convention)
Floating Interest Amounts
Floating Amounts Payable by Westpac:
These Floating Amounts are payable by Westpac unless there is, on any Floating
Rate Payer Payment Date, any reduction in Class A Interest resulting from a
reduction in A$ Class A Interest Amount pursuant to clause [6.17(a)(ii)(A)] of
the Series Notice (as specified in a notice to Westpac by the Determination
Time), in which case the Floating Amount shall be reduced by the same proportion
as the reduction in the A$ Class A Interest Amount.
Floating Rate Payer: Westpac
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<PAGE>
WESTPAC BANKING CORPORATION
Notional Amount: An amount equal to the total
Invested Amount of all Class A Notes
as at the first day of the Interest
Period ending on but excluding the
relevant Floating Rate Payer Payment
Date
Floating Rate Payer Payment Dates: Each Payment Date on or after the
Effective Date up to, and including
the last Payment Date prior to
Maturity Date, and the Termination
Date
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: Three months
Spread: Plus [ ] percent
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Interest
Period
Compounding: Inapplicable
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<PAGE>
WESTPAC BANKING CORPORATION
Floating Amounts Payable by the Trustee:
These Floating Amounts are payable by the Trustee unless there is, on any
Floating Rate Payer Payment Date, any reduction in A$ Class A Interest Amount
pursuant to clause [6.17(a)(ii)(A)] of the Series Notice (as specified in a
notice by the Trustee or Trust Manager to Westpac by the Determination Time), in
which case instead of the Floating Amount Trustee shall pay an amount equal to
the lesser A$ amount specified in that notice on that Floating Rate Payer
Payment Date.
Floating Rate Payer: Trustee
Notional Amount: An amount equal to the A$ Equivalent
(applying USD 0.6[ ]) of the total
Invested Amount of all Class A Notes
as at the first day of the Interest
Period ending on but excluding the
relevant Floating Rate Payer Payment
Date
Floating Rate Payer Payment Dates: Each Payment Date on or after the
Effective Date up to and including
the last Payment Date prior to
Maturity Date, and the Termination
Date
Floating Rate Option: AUD-BBR-BBSW
Designated Maturity: 90 days
Spread: Plus 0.[ ] percent
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<PAGE>
WESTPAC BANKING CORPORATION
Floating Rate Day Count Fraction: Actual/365 (Fixed)
Reset Dates: The first day of each Interest
Period
Compounding: Inapplicable
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<PAGE>
WESTPAC BANKING CORPORATION
Exchanges
Instalment Exchange
Instalment Exchange Date Each Payment Date on or after the
Effective Date (other than a Final
Exchange Date
Westpac Pays Instalment Exchange: An amount equal to the Class A
Principal Payment paid on the
relevant Instalment Exchange Date
towards a reduction of the Principal
Amount of Class A Notes, as
calculated by multiplying the
Trustee Instalment Exchange Payment
on the relevant Instalment Exchange
Date by the exchange rate of USD
0.6[ ]
Trustee Pays Instalment Exchange: An amount equal to the amount
expressed under clause [6.14, 6.15
or 6.16] (as applicable) of the
Series Notice as being payable under
a Confirmation relating to Class A
Notes plus any amount payable under
clause [6.11(a)(ii)(C)] of the
Series Notice (together, the
"Trustee Instalment Exchange
Payment") as specified in the notice
issued by the Trustee (or Trust
Manager to Westpac by the
Determination Time in respect of
that Instalment Exchange Date
Final Exchange:
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<PAGE>
WESTPAC BANKING CORPORATION
Final Exchange Date: The earlier of the Termination Date
and the Date of the [10% Clean Up
under clause 8.9(d)] of the Master
Trust Deed as amended by the Series
Notice and the date of redemption of
all the Class A Notes for taxation
or other reasons, adjusted in
accordance with the Modified
Following Business Day Convention
Westpac Pays Final Exchange: An amount equal to the aggregate
Final Exchange payable by the
Trustee under this Confirmation,
multiplied by the exchange rate of
USD 0.6[ ]
Trustee Pays Final Exchange: An amount equal to the aggregate
amount expressed under clause [6.14,
6.15 or 6.16] (as applicable) of the
Series Notice as being payable under
a Confirmation relating to Class A
Notes plus any amount payable under
clause [6.11(a)(ii)(C)] of the
Series Notice as specified in the
Notice issued by the Trustee (or
Trust Manager) to Westpac by the
Determination Time in respect of
that Final Exchange Date
Business Day Locations for Trustee: Sydney
Business Day Locations for Westpac: New York, London
Payments will be: Gross
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<PAGE>
WESTPAC BANKING CORPORATION
Glossary
1. Terms defined in the Series Notice:
A$ Equivalent Invested Amount
Class A Initial Invested Amount Maturity Date
Class A Notes Payment Date
Closing Date Principal Payment
Interest Period Trust Manager
2. Terms defined in the Agreement (including 1991 ISDA Definitions) are:
Actual/360
Actual/365 (Fixed)
AUD-BBR-BBSW
Modified Following Business Day Convention
Other Agreement. For the avoidance of doubt the Other Agreement is the agreement
between Morgan Guaranty Trust Company of New York, London office as Party A, the
Trustee as Party B, Westpac as the Credit Support Provider to Party A and the
Manager, dated on or about the date of the Agreement.
Substitution Notice
USD-LIBOR-BBA
3. Terms defined in this Confirmation:
Agreement
Trustee
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<PAGE>
WESTPAC BANKING CORPORATION
"Determination Time" means 5.00 pm Sydney time 4 Sydney Business Days prior to
the relevant Payment Date or other applicable exchange date.
Westpac
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<PAGE>
WESTPAC BANKING CORPORATION
Annexure 3 - Class B Notes -
"Equivalent-Other Transaction"
Westpac Deal Number [ ]
Trade Date: [ June] 1998
Effective Date: The Effective Date shall be the date
specified in a Substitution Notice given by
Westpac as Credit Support Provider under the
Other Agreement.
The Effective Date shall not occur if the
conditions in respect of the Substitution
Notice have not been satisfied in full in
accordance with the Other Agreement.
Termination Date: Final Maturity Date (adjusted in accordance
with the Modified Following Business Day
Convention)
Floating Interest Amounts
Floating Amounts Payable by Westpac:
These Floating Amounts are payable by Westpac unless there is, on any Floating
Rate Payer Payment Date, any reduction in Class B Interest resulting from a
reduction in A$ Class B Interest Amount pursuant to clause [6.17(a)(ii)(A)] of
the Series Notice (as specified in a notice to Westpac by the Determination
Time), in which case the Floating Amount shall be reduced by the same proportion
as the reduction in the A$ Class B Interest Amount.
Floating Rate Payer: Westpac
Notional Amount: An amount equal to fifty (50) percent of the
total Invested Amount of all Class B Notes
as at the first day of the Interest Period
ending on but excluding the relevant
Floating Rate Payer Payment Date
Floating Rate Payer Payment Dates: Each Payment Date on or after the Effective
Date up to, and including the last Payment
Date prior to Maturity Date, and the
Termination Date
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: Three months
Spread: Plus [ ] percent
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
<PAGE>
WESTPAC BANKING CORPORATION
Floating Amounts Payable by the Trustee:
These Floating Amounts are payable by the Trustee unless there is, on any
Floating Rate Payer Payment Date, any reduction in A$ Class B Interest Amount
pursuant to clause [6.17(a)(ii)(A)] of the Series Notice (as specified in a
notice by the Trustee or Trust Manager to Westpac by the Determination Time), in
which case instead of the Floating Amount Trustee shall pay an amount equal to
the lesser A$ amount specified in that notice on that Floating Rate Payer
Payment Date.
Floating Rate Payer: Trustee
Notional Amount: An amount equal to fifty (50) percent of the
A$ Equivalent (applying USD 0.6[ ]) of the
total Invested Amount of all Class A Notes
as at the first day of the Interest Period
ending on but excluding the relevant
Floating Rate Payer Payment Date
Floating Rate Payer Payment Dates: Each Payment Date on or after the Effective
Date up to and including the last Payment
Date prior to Maturity Date, and the
Termination Date
Floating Rate Option: AUD-BBR-BBSW
Designated Maturity: 90 days
Spread: Plus 0.[ ] percent
Floating Rate Day Count Fraction: Actual/365 (Fixed)
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
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<PAGE>
WESTPAC BANKING CORPORATION
Exchanges
Instalment Exchange
Instalment Exchange Date Each Payment Date on or after the Effective
Date (other than a Final Exchange Date)
Westpac Pays Instalment Exchange: An amount equal to fifty (50) percent of the
Class B Principal Payment paid on the
relevant Instalment Exchange Date towards a
reduction of the Principal Amount of Class B
Notes, as calculated by multiplying the
Trustee Instalment Exchange Payment on the
relevant Instalment Exchange Date by the
exchange rate of USD 0.6[ ]
Trustee Pays Instalment Exchange: An amount equal to fifty (50) percent of the
amount expressed under clause [6.14, 6.15 or
6.16] (as applicable) of the Series Notice
as being payable under a Confirmation
relating to Class B Notes plus any amount
payable under clause [6.11(a)(ii)(C)] of the
Series Notice (together, the "Trustee
Instalment Exchange Payment") as specified
in the notice issued by the Trustee (or
Trust Manager to Westpac by the
Determination Time in respect of that
Instalment Exchange Date
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<PAGE>
Final Exchange:
Final Exchange Date: The earlier of the Termination Date and the
Date of the [10% Clean Up under clause
8.9(d)] of the Master Trust Deed as amended
by the Series Notice and the date of
redemption of all the Class B Notes for
taxation or other reasons, adjusted in
accordance with the Modified Following
Business Day Convention
Westpac Pays Final Exchange: An amount equal to fifty (50) percent of the
aggregate Final Exchange payable by the
Trustee under this Confirmation, multiplied
by the exchange rate of USD 0.6[ ]
Trustee Pays Final Exchange: An amount equal to fifty (50) percent of the
aggregate amount expressed under clause
[6.14, 6.15 or 6.16] (as applicable) of the
Series Notice as being payable under a
Confirmation relating to Class B Notes plus
any amount payable under clause
[6.11(a)(ii)(C)] of the Series Notice as
specified in the Notice issued by the
Trustee (or Trust Manager) to Westpac by the
Determination Time in respect of that Final
Exchange Date
Business Day Locations for Trustee: Sydney
Business Day Locations for Westpac: New York, London
Payments will be: Gross
Page 4
<PAGE>
WESTPAC BANKING CORPORATION
Glossary
1. Terms defined in the Series Notice:
A$ Equivalent Invested Amount
Class B Initial Invested Amount Maturity Date
Class B Notes Payment Date
Closing Date Principal Payment
Interest Period Trust Manager
2. Terms defined in the Agreement (including 1991 ISDA Definitions) are:
Actual/360
Actual/365 (Fixed)
AUD-BBR-BBSW
Modified Following Business Day Convention
Other Agreement. For the avoidance of doubt the Other Agreement is the
agreement between Morgan Guaranty Trust Company of New York, London office as
Party A, the Trustee as Party B, Westpac as the Credit Support Provider to
Party A and the Manager, dated on or about the date of the Agreement.
Replaced Transaction
USD-LIBOR-BBA
3. Terms defined in this Confirmation:
Agreement
Trustee
"Determination Time" means 5.00 pm Sydney time 4 Sydney Business Days prior to
the relevant Payment Date or other applicable exchange date.
Westpac
Credit Support Provider Provisions
Each Transaction under this Confirmation shall be capable of being specified as
a Replaced Transaction in accordance with the provisions of Section 21 of the
Agreement. Those provisions shall apply as further specified below.
1. Definitions for Credit Events
"Calculation Agent" means the party to the Transaction (or a third party)
designated as such for the Transaction. The Calculation Agent's
calculations and determinations shall be made in good faith, in a
commercially reasonable manner and be binding in the absence of manifest
error [Credit Support Provider];
"Initial Price" means, with respect to any Reference Obligation, the
percentage listed with respect thereto in the definition of Reference
Obligation herein as the Initial Price;
"Interest Rate Adjustment Amount" means, with respect to any Reference
Obligation, the absolute value of the difference between (i) the Mark to
Market Value and (ii) 100% minus the Initial Price;
"Mark to Market Value" means, in the determination of the Calculation
Agent, with respect to any Reference Obligation, on any day, the mark to
market value payable on that day (expressed as a percentage of the
notional amount thereof), of a hypothetical interest rate swap commencing
on the Effective Date between a hypothetical party ("Party X") and a
counterparty with the highest long term senior debt rating of each Rating
Agency, which swap has a notional amount equal to the Floating Rate Payer
Calculation Amount and under which Party X (i) pays the Mark to Market
Rate plus the Initial Spread and (ii) receives a fixed interest amount
equal in
Page 5
<PAGE>
WESTPAC BANKING CORPORATION
amount and timing to the coupons on the Reference Obligation. If, under
such swap, Party X would be due to pay such mark to market value, Mark to
Market Value will be negative and, if Party X would be due to receive such
mark to market value, the Mark to Market Value will be positive.
"Market Value" means, in accordance with the Quotation Method, the
percentage equal to the arithmetic mean of quotations (exclusive of
accrued but unpaid interest and expressed as a percentage) obtained from
Dealers with respect to a Valuation Date in the manner provided below. In
obtaining such price quotations from Dealers, the Calculation Agent will
request each Dealer to provide firm bid and offer quotations for an
aggregate amount of the Reference Obligation equal to the Quotation Amount
to the extent reasonably practicable as of the Valuation Time on such
Valuation Date. If more than three quotations are provided on such date,
the Market Value shall be the arithmetic mean of such quotations without
regard to the quotations having the highest and lowest values. If exactly
three quotations are provided, the Market Value shall be the quotation
remaining after disregarding the highest and lowest quotations. For this
purpose, if more than one quotation has the same highest value or lowest
value, then one of such quotations shall be disregarded. If exactly two
quotations are provided, the Market Value shall be the arithmetic mean of
such quotations. If fewer than two quotations are provided, then the
Market Value shall be an amount as determined by the Calculation Agent on
the next Business Day on which at least two quotations are provided by
Dealers. If the Calculation Agent is unable to calculate the Market Value
prior to the fifth Business Day following the applicable Valuation Date,
then the Calculation Agent shall determine the Market Value for such
Valuation Date in its reasonable discretion;
"Quotation Method":
[Bid means that only the bid quotations provided by Dealers shall be
used in the calculation of Market Value] or
[Offer means that only the offer quotations provided by Dealers
shall be used in the calculation of Market Value.] or
[Mid-market means that only the arithmetic mean of the bid and offer
quotations provided by Dealers that have provided both bid and offer
quotations shall be used in the calculation of Market Value.];
"Reference Obligation" means the obligation(s) as follows:
Issuer/Borrower: [ ]
Guarantor: [ ]
Maturity: [ ]
Coupon: [ ]
CUSIP/ISIN: [ ]
Original Issue Amount: [ ]
Initial Price: [ ]
Initial Spread: [ ];
"Specified Indebtedness" means any obligation (whether present or future,
contingent or otherwise, as principal or surety or otherwise in respect of
money borrowed or raised or under any finance lease, redeemable preference
share, letter of credit, futures contract, guarantee, indemnity or a
transaction of a type described in the last 6 lines of the definition of
Specified Transaction.
"Threshold Amount" means [US$25,000,000]
"Valuation Time" - [ ]
2. The parties acknowledge that on the Effective Date of the Substitute
Transaction or the Equivalent Transaction, Party A shall pay to the Credit
Support Provider (in the case of the Substitute Transaction) or to the new
Currency Swap Provider (in the case of the Equivalent Transaction) the
amount equal to the amount (if a positive number) that hypothetically
would have been payable by Party A to Party B under Section 6(e)(i)(3) if:
(a) the Transaction had been terminated;
(b) an Early Termination Date had occurred on the Effective Date; and
Page 6
<PAGE>
WESTPAC BANKING CORPORATION
(c) Section 21 had not applied in respect of the Transaction.
Any such amount shall be payable by Party A to the Credit Support Provider
in accordance with the provisions of the relevant Master Agreement between
Party A and the Credit Support Provider (in the case of the Substitute
Transaction) or to the New Currency Swap Provider in accordance with the
relevant Master Agreement between Party A and the New Currency Swap
Provider (in the case of the Equivalent Transaction).
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<PAGE>
WESTPAC BANKING CORPORATION
ACCESSION BY NEW CURRENCY SWAP PROVIDER
As specified in the Substitution Notice given by Westpac under the Other
Agreement, we agree to be the Credit Support Provider to Westpac as governed by
the terms of the Agreement, in respect of the Transaction specified by this
Annexure 3, and we agree that all references in the Agreement and this
Transaction to "Credit Support Provider" shall be to us, and for consideration
which we acknowledge as having been received, we hereby accept the accession to
us of all the rights and obligations as Credit Support Provider as and from the
Effective Date of this Transaction.
Agreed and accepted as the new Credit
Support Provider:
By:
Name:
Title:
Agreed and confirmed as of the Effective Date of the Transaction specified
in this Annexure 3:
WESTPAC SECURITIES ADMINISTRATION LIMITED(ACN 000 049 472)
in its capacity as Party B
By:______________________________
Name:
Title:
WESTPAC SECURITISATION MANAGEMENT PTY LIMITED (ACN 081 709 211)
in its capacity as Trust Manager
By:______________________________
Name:
Title:
WESTPAC BANKING CORPORATION (ARBN 007 457 141)
in its capacity as Party A
By:______________________________
Name:
Title:
Page 8
<PAGE>
(Multicurrency--Cross Border) [LOGO]
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of __ June 1997
Morgan Guaranty Trust Company Westpac Securities Administration Limited
of New York, London Office (ACN 000 049 472) in its capacity as
trustee of the Series 1998-1G WST Trust and
the other parties shown on page 18 of this
agreement
- ------------------------------ and ---------------------------------------------
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows: --
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise specified in
the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing,
(2) the condition precedent that no Early Termination Date in respect of
the relevant Transaction has occurred or been effectively designated and
(3) each other applicable condition precedent specified in this Agreement.
<PAGE>
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable: --
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment or any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will: --
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving notice that
such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Identifiable Tax, pay to Y, in addition to the
payment to which Y is otherwise entitled under this Agreement, such
additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full amount Y would
have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to
the extent that it would not be required to be paid but for: --
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure would
not have occurred but for (I) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on
or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (II) a Change in Tax
Law.
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<PAGE>
(ii) Liability. if: --
(1) X is required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, to make any
deduction or withholding in respect of which X would not be required
to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgement) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that: --
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organsiation or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform
its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all necessary
action to authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision of
its constitutional documents, any order or judgement of any court or other
agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in full
force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid
and binding obligations, enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding
in equity or at law)).
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<PAGE>
(b) Absence of Certain Events. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) Absence of Litigation. There is not pending, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party: --
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs: --
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to allow
such other party or its Credit Support Provider to make a payment under
this Agreement or any applicable Credit Support Document without any
deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of such
demand), with any such form or document to be accurate and completed in a
manner reasonably satisfactory to such other party and to be executed and
to be delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,
4
<PAGE>
organised, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other part or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party: --
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
in accordance with this Agreement if such failure is not remedied on or
before the thirtieth day after notice of such failure is given to the
party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction
of all obligations of such party under each Transaction to which
such Credit Support Document relates without the written consent of
the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the
validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due
on the last payment delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act
on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however
5
<PAGE>
described) in respect of such party, any Credit Support Provider of such
party or any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of
them (individually or collectively) in an aggregate amount of not less
than the applicable Threshold Amount (as specified in the Schedule) which
has resulted in such Specified Indebtedness becoming, or becoming capable
at such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on
the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party: --
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a
judgement of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (A)
results in a judgement of insolvency or bankruptcy or the entry of
an order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant
to a consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;
(7) has a secured party take possession of all or substantially all
its assets or has a distress, execution, attachment, sequestration
or other legal process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed
or restrained, in each case within 30 days thereafter; (8) causes or
is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect to any
of the events specified in clauses (1) to (7) (inclusive); or (9)
takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at
the time of such consolidation, amalgamation, merger or transfer: --
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event
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<PAGE>
Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below: --
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party): --
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is
required to be paid in respect of such Tax under Section 2(d)(i)(4) (other
than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which
the other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event" is
specified in the Schedule or any Confirmation as applying, the occurrence
of such event (and, in such event, the Affected Party or Affected Parties
shall be as specified for such Additional Termination Event in the
Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
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<PAGE>
6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying the
nature of that Termination Event and each Affected Transaction and will
also give such other information about that Termination Event as the other
party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and obligations
under this Agreement in respect of the Affected Transactions to another of
its Offices or Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a
Tax Event occurs and there are two Affected Parties, each party will use
all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that Termination
Event.
(iv) Right to Terminate. If: --
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to
all Affected Transactions within 30 days after an Affected Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a
Credit Event Upon Merger or an Additional Termination Event if there is
only one Affected Party may, by not more than 20 days notice to the other
party and provided that the relevant Termination Event is then
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continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence of effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount,
if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of
such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in
the Termination Currency, from (and including) the relevant Early
Termination Date to (but excluding) the date such amount is paid, at the
Applicable Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an Event
of Default: --
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the
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Non-defaulting Party) in respect of the Terminated Transactions and
the Termination Currency Equivalent of the Unpaid Amounts owing to
the Non-defaulting Party less (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party. If
that amount is a positive number, the Defaulting Party will pay it
to the Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that amount to
the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
(iii) Termination Events. If the Early Termination Date results from a
Termination Event: --
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and
to the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in
respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties: --
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions,
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to X less (II) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with the
lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if
it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the period from
the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate of
loss and not a penalty. Such amount is payable for the loss of bargain and
the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
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7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
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9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable
and may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding supplement to
this Agreement. The parties will specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of Transaction without prior written
consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document
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to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated: --
(i) if in writing and delivered in person or by courier, on the date it is
delivered;
(ii) if sent by telex, on the date the recipient's answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered
or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified an the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably: --
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan an New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any
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reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.
(d) Waiver of immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement: --
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means: --
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
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"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have
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been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group or Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: --
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
16
<PAGE>
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market
17
<PAGE>
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
Westpac Securities Administration
Limited
Westpac Banking Corporation (ACN 000 049 472) in its capacity as
ARBN 007 457 141 trustee of the Series 1998-1G Trust
- ----------------------------- -----------------------------------------
(Name of Party) (Name of Party)
By: By:
------------------------- -------------------------
Name: Name:
Title: Title:
Date: Date:
Westpac Securitisation Morgan Guaranty Trust
Management Pty Limited Company of New York,
(ACN 081 709 211) London branch
- ----------------------------- -----------------------------
(Name of Party) (Name of Party)
By: By:
------------------------- -------------------------
Name: Name:
Title: Title:
Date: Date:
18
<PAGE>
SCHEDULE
TO THE
MASTER AGREEMENT
dated as of [ June] 1998
between MORGAN GUARANTY TRUST COMPANY OF NEW YORK, LONDON OFFICE ("PARTY A")
and WESTPAC SECURITIES ADMINISTRATION LIMITED (ACN 000 049 472) IN ITS CAPACITY
AS TRUSTEE OF THE SERIES 1998-1G WST TRUST ("PARTY B")
and WESTPAC SECURITISATION MANAGEMENT PTY LIMITED (ACN 081 709 211)
(the "TRUST MANAGER")
and WESTPAC BANKING CORPORATION (ARBN 007 457 141)
(the "CREDIT SUPPORT PROVIDER")
PART 1: TERMINATION PROVISION
(a) "SPECIFIED ENTITY" in relation to:
(i) Party A, is not applicable; and
(ii) Party B, is not applicable.
(b) (i) The following provisions of Section 5 will not apply to Party A:
Section 5(a)(ii) Section 5(a)(v) Section 5(b)(iv)
Section 5(a)(iii) Section 5(a)(vi)
Section 5(a)(iv) Section 5(b)(iii)
(ii) The following provisions of Section 5 will not apply to Party B:
Section 5(a)(ii) Section 5(a)(v) Section 5(b)(iii)
Section 5(a)(iii) Section 5(a)(vi) Section 5(b)(iv)
Section 5(a)(iv) Section 5(a)(viii)
(iii) Replace Section 5(a)(i) and insert:
"(i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when
due, any payment under this Agreement or delivery under Section
2(a)(i) or 2(e) required to be made by it if such failure is not
remedied at or before 10.00 am on the tenth Local Business Day after
notice of such failure is given to the party";
(iv) Section 5(b)(ii) will not apply to Party A as the Affected Party
(subject to Part 5(4)(ii) of this Schedule).
(v) The "BANKRUPTCY" provisions of Section 5(a)(vii) are replaced by
"An Insolvency Event (as defined in the Master Trust Deed) has
occurred in respect of the party. In relation to Party A, the events
described in the definition of Insolvency Event shall apply to it as
if Party A were a relevant corporation referred to in that definition.
The occurrence of an Insolvency Event in respect of Party B in its
personal capacity will not constitute an Event of Default provided
that within thirty days of that occurrence, Party B procures the
novation of this Agreement and all Transactions to a third party in
respect of which the Designated Rating Agencies confirm that the
novation will not cause a reduction or withdrawal of the rating of the
Notes and Party A agrees that it will execute such a novation
agreement in standard ISDA form".
(vi) The application of Section 5(b)(i) will be restricted as set out
in Part 5(4) of this Schedule.
(c) The "AUTOMATIC EARLY TERMINATION" provisions in Section 6(a) will not
apply to Party A nor Party B.
(d) "PAYMENT ON EARLY TERMINATION". For the purposes of Section 6(e) of
this Agreement:
(i) Market Quotation will apply; and
(ii) the Second Method will apply.
(e) "TERMINATION CURRENCY" means US Dollars.
(f) "ADDITIONAL TERMINATION EVENT" means the occurrence of any of the
following:
(i) Party B is entitled to issue a notice to redeem all of the Notes
(in accordance with the Conditions of the Notes) for reasons of
taxation, in which case Party A shall be the Affected Party; or
(ii) an Event of Default (as defined in the Security Trust Deed)
occurs and an Extraordinary Resolution of the Voting Mortgagees (as
defined in the Security Trust Deed) is passed directing the Security
Trustee to exercise rights under clause [8] of the Security Trust
Deed, in which case Party B shall be the Affected Party.
<PAGE>
PART 2: TAX REPRESENTATIONS
(a) PAYER TAX REPRESENTATIONS. For the purpose of Section 3(e) of
this Agreement, Party A and Party B each make the following
representation:
It is not required by any applicable law, as modified by the practice of
any relevant government revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from
any payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of
this Agreement) to be made by it to the other party under this
Agreement. In making this representation, it may rely on:
(i) the accuracy of any representation made by the other
party pursuant to Section 3(f) of this Agreement;
(ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement; and
(iii) the satisfaction of the agreement of the other party
contained in Section 4(d) of this Agreement,
provided that it shall not be a breach of this representation where
reliance is placed on clause (ii) and the other party does not deliver a
form or document under Section 4(a)(iii) by reason of material prejudice
to its legal or commercial position.
(b) PAYEE TAX REPRESENTATIONS. For the purpose of Section 3(f) of
this Agreement:
Party A makes no representations with respect to Transactions for which
Party A is acting through its London Office.
Party B makes the following representation:
It is an Australian resident and does not derive the payments under this
Agreement in part or whole in carrying on business in a country outside
Australia at or through a permanent establishment of itself in that
country.
<PAGE>
PART 3: DOCUMENTS TO BE DELIVERED
For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees
to deliver the following documents as applicable:
(a) Tax Forms, documents or certificates to be delivered are:
<TABLE>
<CAPTION>
PARTY REQUIRED TO DELIVER FORM/DOCUMENT/CERTIFICATE DATE BY WHICH DOCUMENT
DOCUMENT TO BE DELIVERED
<S> <C> <C>
Party A and Party B Any document or certificate As soon as reasonably
reasonably required or reasonably practicable following the
requested by a party in connection earlier of (a) the relevant
with its obligations to make a party learning that such
payment under this Agreement document or certificate is
which would enable that party to required and (b) a request
make the payment free from any by other party.
deduction or withholding for or on
account of Tax or as would reduce
the rate at which deduction or
withholding for or on account of
Tax is applied to that payment.
(b) Other documents to be delivered are:
<CAPTION>
PARTY REQUIRED TO DELIVER FORM/DOCUMENT/CERTIFICATE DATE BY WHICH DOCUMENT
DOCUMENT TO BE DELIVERED
<S> <C> <C>
Party A and Party B A legal opinion as to the validity [ June] 1998.
and enforceability of that party's
obligations under this Agreement
in form and substance reasonably
acceptable to the other party.
Party B A certified copy of the Security The date of this Agreement.
Trust Deed, Master Trust Deed,
Series Notice and Note Trust Deed
(including Conditions of Class A
and Class B Notes).
For the purposes of this and the
following clause a copy of a
document is taken to be certified if
a director or an Authorised
Signatory of Party B, or a person
authorised to execute this
Agreement or a Confirmation on
behalf of Party B or a solicitor
acting for Party B has certified it
to be a true and complete copy of
the document of which it purports
to be a copy.
Party B (Without limiting any obligation Promptly after any such
Party B may have under the terms document is entered into.
of the Security Trust Deed to notify
Party A of amendments) a certified
copy of any document that amends
in any way the terms of the
Security Trust Deed
</TABLE>
All documents delivered under this Part 3(b) are covered by Section 3(d)
representation.
<PAGE>
PART 4: MISCELLANEOUS
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a) of this
Agreement:
PARTY A:
Address: Morgan Guaranty Trust Company of New York
London Office
PO Box 161
60 Victoria Embankment
London EC4Y OJP
Attention: Global Swaps Group
Telex No: 896 631 Answerback: MGT-G
Facsimile No: 0171 325 3862 or 0171 325 3863
PARTY B:
Address: Level 10, 130 Pitt Street, Sydney
Attention: The Trustee Securitisation Manager
Facsimile No: 02 9220 5300
And a copy to the Trust Manager to the address provided to Party A.
(b) PROCESS AGENT. For the purpose of Section 13(c) of this
Agreement:
Party A appoints as its Process Agent: Not applicable
Party B appoints as its Process Agent: WSAL to provide.
(c) OFFICES. The provisions of Section 10(a) will apply to Party A.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c) of this
Agreement:
Party A is a Multibranch Party but will act only through its London
Office. Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is Party A (unless
otherwise specified in a Confirmation in relation to the relevant
Transaction).
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document:
(i) Party A: The 1994 Credit Support Annex attached to this
Agreement and the provisions of Section 20 of this Agreement.
(ii) Party B: The Security Trust Deed.
(g) CREDIT SUPPORT PROVIDER.
(i) In relation to Party A: Westpac Banking Corporation ARBN
007 457 141, unless:
(A) a Transaction becomes effective in accordance with
sections 21(b)(i) or 21(b)(ii)(A) and (B) following a
Substitution Notice being given in accordance with
section 21 of this Agreement, in which case, nil; or
(B) an Equivalent-Other Transaction becomes effective
under this Agreement following a Substitution Notice
given in accordance with section 21 of the Other
Agreement, in which case the New Currency Swap Provider
shall be designated as the new Credit Support Provider to
Party A, as specified in that Substitution Notice, and as
confirmed by the New Currency Swap Provider signing, and
the other parties to the Transaction countersigning, the
accession to the Equivalent-Other Transaction.
(ii) In relation to Party B. Nil.
(h) GOVERNING LAW. This Agreement will be governed by and construed
in accordance with English law.
(i) NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this
Agreement will apply.
(j) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement. The words "or Affiliates" are deleted where they appear in
the first paragraph of Section 6(b)(ii).
<PAGE>
PART 5: OTHER PROVISIONS
(1) PAYMENTS: In Section 2:
(i) In Section 2(a)(i) add the following sentence:
"Each payment will be by way of exchange for the corresponding
payment or payments payable by the other party";
(ii) In Section 2(a)(ii) insert immediately after the words
"freely transferable funds" the following words:
", free of any set-off, counterclaim, deduction or
withholding (except as expressly provided in this
Agreement),"
(iii) Insert new paragraphs (iv) and (v) in Section 2(a)
immediately after Section 2(a)(iii) as follows:
"(iv ) The condition precedent in Section 2(a)(iii)(1) does not
apply to a payment due to be made to a party if it has satisfied
all its payment and delivery obligations under Section 2(a)(i)
and has no future payment or delivery obligations, whether
absolute or contingent under Section 2(a)(i).
(v) Where:
(1) payments are due pursuant to Section 2(a)(i) by
Party A to Party B (the "PARTY A PAYMENT") and by Party B
to Party A (the "PARTY B PAYMENT") on the same day
then Party A's obligation to make the Party A payment will be
subject to the condition precedent (which will be an "applicable
condition precedent" for the purpose of Section 2(a)(iii)(3))
that Party A first receives either:
(2) the Party B payment; or
(3) confirmation from Party B's bank that it holds
irrevocable instructions to effect payment of the Party B
payment and that funds are available to make that
payment.";
(iv) add the following new sentence to Section 2(b):
"Each new account so designed must be in the same tax
jurisdiction as the original account".
(v) Delete the word "if" at the beginning of Section
2(d)(i)(4) and insert the following words instead:
"if and only if X is Party A and";
(vi) In Section 2(d)(ii) insert the words "(if and only if Y
is Party A)" after the word "then" at the beginning of the last
paragraph.
(vii) add the following new Section 2(f):
(f) PAYMENT INSTRUCTIONS.
(i) Party B authorises and instructs Party A to make payment
of any amount due from Party A to Party B hereunder by paying
that amount direct to the Principal Paying Agent to the account
specified in writing by the Principal Paying Agent to Party A and
to Party B.
(ii) Party A authorises and instructs Party B to make payment
of any amount denominated in Australian dollars due from Party B
to Party A to the following account in Sydney:
Westpac Banking Corporation
Sydney Australia
Account No: MGN 0010979
Name: Morgan Guaranty Trust Company of New York, London
Further credit to the JPM Swaps Group
Account 10004837
(Please send MT100 cover cable to MGT London)
or such other account in Sydney as is specified by Party
A from time to time.
<PAGE>
(2) ADDITIONAL REPRESENTATIONS: In Section 3 add the following
immediately after paragraph (f):
"(g) NON ASSIGNMENT. It has not assigned (whether absolutely,
in equity or otherwise) or declared any trust over (other than,
in respect of Party B, the trusts created under the Master Trust
Deed and the Series Notice) or given any charge over any of its
rights under this Agreement or any Transaction (except in respect
of Party B, for the security interest created under the Security
Trust Deed).
(h) CONTRACTING AS PRINCIPAL. Each existing Transaction has been
entered into by Party A as principal and not otherwise and each existing
Transaction has been entered into by Party B in its capacity as trustee
of the Trust and not otherwise."
(i) Absent a written agreement between the parties that expressly
imposes affirmative obligations to the contrary for that Transaction:
(A) NON-RELIANCE. It is acting for its own account, and it
has made its own independent decisions to enter into that
Transaction and as to whether that Transaction is appropriate or
proper for it based upon its own judgment and upon advice from
the Trust Manager and such advisors as it has deemed necessary.
It is not relying on any communication (written or oral) of the
other party as investment advice or as a recommendation to enter
into that Transaction; it being understood that information and
explanations related to the terms and conditions of a Transaction
shall not be considered investment advice or a recommendation to
enter into that Transaction. It has not received from the other
party any assurance or guarantee as to the expected results of
that Transaction;
(B) EVALUATION AND UNDERSTANDING. It is capable of
evaluating and understanding (on its own behalf or through
independent professional advice including the Trust Manager), and
understands and accepts the terms, conditions and risks of that
Transaction. It is also capable of assuming, and assumes, the
financial and other risks of that Transaction;
(C) STATUS OF PARTIES. The other party is not acting as a
fiduciary or an advisor for it in respect of that Transaction;
(j) Party B represents and warrants:
(A) TRUST VALIDLY CREATED. The Trust has been validly
created and is in existence at the date of this Agreement.
(B) SOLE TRUSTEE. It has been validly appointed as trustee
of the Trust and is presently the sole trustee of the Trust.
(C) NO PROCEEDINGS TO REMOVE. No notice has been given to it
and to its knowledge no resolution has been passed, and no
direction or notice has been given, removing it as trustee of the
Trust.
(D) POWER. It has power to enter into this Agreement and the
Credit Support Document in its capacity as trustee of the Trust.
(E) GOOD TITLE. It is the owner in equity of the assets of
the Trust and has power to mortgage or charge them in the manner
provided in the Credit Support Document, and, subject only to the
Credit Support Document and any Security Interest permitted under
the Credit Support Document, those assets are free of all other
Security Interests.
<PAGE>
(3) ADDITIONAL COVENANT: In Section 4 add a new paragraph as follows:
"(f) CONTRACTING AS PRINCIPAL. Party A will enter into all
Transactions as principal and not otherwise and Party B will
enter into all Transactions in its capacity as trustee of the
Trust and not otherwise".
(4) AMENDMENT TO SECTION 6. In section 6 make the following amendments:
(i) Section 6(a) is amended by deleting the words "all
outstanding Transactions" where they appear and inserting instead
the words "THE RELEVANT SWAP TRANSACTION".
(ii) Add a new section 6(aa):
"(aa) RESTRICTED TERMINATION RIGHTS.
(i) TERMINATION BY PARTY B: Party B must not
designate an Early Termination Date without the prior
written consent of the Note Trustee.
(ii) CONSULTATION WITH PARTY A: Each Party may only
designate an Early Termination Date following prior
consultation with the other Party as to the timing of the
Early Termination Date. Subject to its duties under the
Master Trust Deed and the Series Notice, Party B may
exercise any rights in its capacity as holder of the
Purchased Receivables only on the instructions of the
Note Trustee and only after consultation between Party A
and Note Trustee. Party B may only designate an Early
Termination Date at the direction of the Trust Manager.
(iii) PARTY A'S LIMITED RIGHTS IN RELATION TO TAX EVENT:
Notwithstanding Part 1(b)(iv) of this Schedule, Party A
may designate an Early Termination Date if it is an
Affected Party following a Tax Event but only if the Note
Trustee is satisfied that the Noteholders and
Couponholders will be paid in full all principal and
interest outstanding on the Notes.
(iv) ILLEGALITY: The parties agree that [unless this
Section 6(aa)(iv) is specified not to apply in the
Relevant Confirmation,] imposition by any Agency of an
Australian jurisdiction of any exchange controls,
restrictions or prohibitions will not constitute an
Illegality for the purposes of Section 5(b)(i) and Party
A will not be entitled to designate an Early Termination
Date, and in those circumstances, payment by Party B in
accordance with section 2(f) will continue to be proper
performance of its payment obligation and Party A's
obligations will be unaffected, to the extent of
Party_B's payments under section 2(f).
(v) TRANSFER WHERE PARTY B DOES NOT GROSS-UP: If any
payment by Party B to Party A under this Agreement is, or
is likely to be, made subject to any deduction or
withholding on account of Tax, Party B will endeavour to
procure the substitution as principal obligor under this
Agreement in respect of each affected Transaction of a
Party B incorporated in another jurisdiction approved by
Party A and the Note Trustee and in respect of which the
Designated Rating Agencies confirm that the substitution
will not cause a reduction or withdrawal of the rating of
the Notes.
<PAGE>
(iii) In section 6(b)(ii), add the words "so long as the
transfer in respect of that Transaction would not lead to a
rating downgrade of any rated debt of Party B that is secured
under the Security Trust Deed" after the words "ceases to exist"
at the end of the first paragraph.
(iv) In section 6(e), delete the sentence "The amount, if any,
payable in respect of an Early Termination Date and determined
pursuant to this Section will be subject to any Set-off." at the
end of the first paragraph.
(5) In section 9, add the following new paragraphs:
"(h) FURTHER ASSURANCES. Each party shall, upon request by
the other party (the "REQUESTING PARTY") at the expense of the
requesting party, perform all such acts and execute all such
agreements, assurances and other documents and instruments as the
requesting party reasonably requires and which are within the
powers of that party to assure and confirm the rights and powers
afforded, created or intended to be afforded or created, under or
in relation to this Agreement and each Transaction or other
dealing which occurs under or is contemplated by it.
(i) RECORDED CONVERSATION. Each party:
(A) consents to the recording of the telephone
conversations of trading and marketing personnel of that
party and its Affiliates in connection with this
Agreement or any potential Transaction; and
(B) agrees to obtain any necessary consent of, and
give notice of such recording to, such personnel of it
and its Affiliates.
(j) ISDA DEFINITIONS: This Agreement, each Confirmation and
each Transaction are subject to the 1991 ISDA Definitions (as
published by the International Swap Dealers Association, Inc.)
(the "ISDA DEFINITIONS"), and will be governed in all respects by
any provisions set forth in the ISDA Definitions, without regard
to any amendments to the ISDA Definitions made after the date of
this Agreement. The ISDA Definitions are incorporated by
reference in, and shall be deemed to be part of, this Agreement
and each Confirmation.
(k) INCONSISTENCY: In the event of any inconsistency between
any two or more of the following documents, they shall take
precedence over each other in the following descending order:
(i) any Confirmation;
(ii) the Schedule to the Master Agreement;
(iii) the other provisions of the Master Agreement;
(iv) the ISDA Definitions."
(6) FACSIMILE TRANSMISSIONS: Replace Section 12(a)(iii) with:
"(iii) if sent by facsimile, on production of a transmission
report by the machine from which the facsimile was sent which
indicates that the facsimile was sent in its entirety to the
facsimile number of the recipient notified for the purpose of
this Section unless the recipient notifies the sender within 24
hours of the facsimile being sent that the facsimile was not
received in its entirety in legible form;"
(7) DEFINITIONS: In section 14:
(i) add a new paragraph:
"Unless otherwise defined in this Agreement, terms
defined in the Security Trust Deed (either expressly or by
incorporation by reference) have the same meaning where used in
this Agreement."
(ii) Insert the following definitions in its appropriate
alphabetical places in Section 14:
"'RELEVANT SWAP TRANSACTION' means, in relation to Class
A Notes, each Transaction which is a Currency Swap for Class A
Notes only, and in relation to Class B Notes, each Transaction
which is a Currency Swap for Class B Notes only."
"'SECURITY TRUST DEED' means the Series 1998-1G WST Trust
Security Trust Deed dated on or about the date of this Agreement
between Party B as chargor, Perpetual Trustee Company Limited as
security trustee, the Trust Manager and Party A as note trustee."
<PAGE>
(iii) SWAP TRANSACTION. Any reference to a:
(a) "SWAP TRANSACTION" in the 1991 ISDA Definitions is
deemed to be a reference to a "Transaction" for the
purpose of interpreting this Agreement or any
Confirmation; and
(b) "TRANSACTION" in this Agreement or any
Confirmation is deemed to be a reference to a "Swap
Transaction" for the purpose of interpreting the 1991
ISDA Definitions.
(iv) In the definition of "Market Quotation", on line 1 on page 16 of
this Agreement, replace the words "been required after that
date." with:
"been required after that date and, in respect of each Terminated
Transaction which is a Relevant Swap Transaction, on the basis
that the Housing Loan Principal as defined in Series Notice
referred to in the Terminated Transaction will thereafter have an
amortisation schedule based on a constant prepayment rate per
annum ("CPR") equal to:
(a) [XX%], if the Replacement Transaction is calculated
within one year of the Effective Date of the Terminated
Transaction; or
(b) if the Replacement Transaction is calculated later than
one year after the Effective Date of the Terminated
Transaction, the arithmetic mean of four CPRs most
recently published prior to the relevant quotation on
Bloomberg monitor service in respect of the Class of
Notes applicable to the Terminated Transaction (based on
data provided to Bloomberg by the Trust Manager)."
(8) OTHER PROVISIONS, INCLUDING CREDIT SUPPORT: Insert the following
Sections 15, 16, 17, 18, 19, 20 and 21 after Section 14:
"15. SEGREGATION:
The liability of Party B under this Agreement is several and is
separate in respect of each Relevant Swap Transaction. The
failure of Party B to perform its obligations in respect of any
Relevant Swap Transaction shall not release Party B from its
obligations under this Agreement or under any other Relevant Swap
Transaction in respect of any other Notes issued by Party B.
Nothing in this Agreement affects the respective priority
rankings of claims against the Mortgaged Property of Party B
under the Security Trust Deed. Without limiting the generality
of the foregoing, the provisions of this Agreement shall have
effect separately and severally in respect of each Relevant Swap
Transaction and shall be enforceable by or against Party B as
though a separate agreement applied between Party A and Party B
for each Relevant Swap Transaction, so that (among other things):
(i) this Agreement together with each Confirmation
relating to a Relevant Swap Transaction will form a
single separate agreement between Party A and Party B and
references to the respective obligations (including
references to payment obligations generally and in the
context of provisions for the netting of payments and the
calculation of amounts due on early termination) of Party
A and Party B shall be construed accordingly as a several
reference to each mutual set of obligations arising under
each such separate agreement between Party A and Party B;
(ii) representations made and agreements entered into
by the parties under this Agreement are made and entered
separately and severally by Party B in respect of each
Relevant Swap Transaction and may be enforced by Party B
against Party A separately and severally in respect of
each Relevant Swap Transaction;
(iii) rights of termination, and obligations and
entitlements consequent upon termination, only accrue to
Party A against Party_B separately and severally in
respect of each Relevant Swap Transaction, and only
accrue to Party B against Party A separately and
severally in respect of each Relevant Swap Transaction;
and
(iv) the occurrence of an Event of Default or
Termination Event in respect of a Relevant Swap
Transaction does not in itself constitute an Event of
Default or Termination Event in respect of any other
Relevant Swap Transaction."
<PAGE>
16. RECOURSE
Party B enters into this Agreement in its capacity as Trustee of
the Trust, and Clause 3.3(b) of the Series Notice applies to this
Agreement as if set out in full. Clause 16 of the Security Trust
Deed shall apply to govern Party A's priority to moneys received
from the sale of Assets or other enforcement of the Charge under
the Security Trust Deed.
This Section 16:
(i) applies even though any other provision of this
Agreement is not made subject to it; and
(ii) overrides any other provision of this Agreement
which is inconsistent with it.
17. THE MANAGER
Party A acknowledges that the Manager will, at the request of Party B,
perform the day to day management of the Trust on the terms and
conditions of the Master Trust Deed and Series Notice. Unless expressly
advised to the contrary in writing by Party B from time to time, any
rights or obligations of Party B under this Agreement may be exercised
or satisfied (as the case may be) by the Manager on behalf of Party B
and Party A is not obliged to enquire as to the authority of the Manager
to take such action on behalf of Party B. Except where the context
otherwise requires, references in this Agreement to a "party" to this
Agreement are to Party A or Party B.
18. TRUST DEED
The parties acknowledge and agree that, for the purposes of the Master
Trust Deed and the Trust Documents, this Agreement is a "Hedge
Agreement" and Party A is a "Swap Provider" and "Support Facility
Provider"."
19. REPLACEMENT CURRENCY SWAP
(a) If this Agreement is terminated, Party B may, at the
direction of the Trust Manager, enter into one or more currency
swaps which replace the Transactions under this Agreement
(collectively a "Replacement Currency Swap") but only on the
condition that the Settlement Amount payable (if any) by Party B
to Party A upon termination of this Agreement will be paid in
full when due in accordance with the Series Notice and this
Agreement.
(b) If the condition in section 19(a) is satisfied, Party B
may enter into the Replacement Currency Swap and if it does so it
must direct the Replacement Currency Swap to pay any upfront
premium to enter into the Replacement Currency Swap due to Party
B directly to Party A in satisfaction of and to the extent of
Party B's obligation to pay the Settlement Amount to Party A as
referred to in section 19(a), and to the extent that such premium
is not greater than or equal to the Settlement Amount, the
balance may be satisfied by Party B as a Trust Expense (as
defined in the Series Notice).
(c) The obligations of Party B (and the rights of Party A)
under this section 19 constitute separate and independent
obligations of Party B (and rights of Party A) and shall survive
the termination of this Agreement.
20. CREDIT SUPPORT
(a) In consideration of Party B entering into an agreement on
the same material terms as this Agreement with the Credit Support
Provider (the "Other Agreement") and Transactions under the other
Agreement on the same material terms as Transactions under this
Agreement, the Credit Support Provider hereby unconditionally
guarantees to Party B the payment by Party A of moneys which are
payable by Party A under a Relevant Swap Transaction (on terms
set out in this Agreement and in the Confirmation for that
Relevant Swap Transaction) (the "Payable Moneys") to Party B in
the event that Party A defaults in the payment of those Payable
Moneys.
<PAGE>
(b) If Party B has not been, or Party A reasonably expects
that Party B is not going to be, paid all or any part of the
presently payable Payable Moneys by Party A, then Party A or
Party B may by notice to the Credit Support Provider demand
payment of the Payable Moneys in respect of which demand is being
made. The Credit Support Provider's obligations to pay the
presently payable Payable Moneys which have not been paid by
Party A shall not, however, be conditional upon the Credit
Support Provider receiving such notice of demand.
(c) The Credit Support Provider agrees that it will not,
unless and until all the present and prospective Payable Moneys
have been paid, exercise any rights of subrogation which it may
acquire due to its payment of Payable Moneys under section 20(a).
(d) All payments by the Credit Support Provider shall be made
in the currency in which the Payable Moneys are denominated.
(e) Party B agrees that, without affecting its rights under
clause 21, to the extent that the Credit Support Provider pays
the Payable Moneys and thereby avoids or remedies a default by
Party A, Party B shall not be entitled to designate an Early
Termination Date in respect of that default by Party A, and such
a payment by the Credit Support Provider shall be deemed to be an
"actual payment" as referred to in line 6 of section 2(e) of this
Agreement.
(f) The provisions of this section 20 shall constitute
irrevocable obligations of the Credit Support Provider until a
notice of revocation is served by the Credit Support Provider on
Party B, but such a notice cannot and shall not be served without
the prior written consent of Party A, the Note Trustee and the
Trust Manager in consultation with the Designated Rating
Agencies.
21. CREDIT SUPPORT PROVIDER TRANSACTIONS
(a) The Credit Support Provider may give a Substitution
Notice to Party B specifying a Transaction which shall be
substituted under this Section 21 (a "Replaced Transaction"), but
only on the condition that a Credit Event has occurred in respect
of Party A.
(b) If the Credit Support Provider gives a Substitution
Notice under paragraph 21(a), then either:
(i) a Substitute Transaction shall become effective
and the Effective Date shall be the date specified in the
Substitution Notice; or
(ii) both:
(A) Party B, the Credit Support Provider and the
Trust Manager must enter into an Equivalent
Transaction with a suitably rated counterparty
procured by the Credit Support Provider and
accepted by Party B, the Trust Manager and the
Note Trustee (the "New Currency Swap Provider")
and the Effective Date shall be the date specified
in the Substitution Notice as the Effective Date
for the Equivalent-Other Transaction; and
(B) an Equivalent-Other Transaction shall become
effective and the Effective Date shall be the date
specified in the Substitution Notice. The New
Currency Swap Provider must sign, and Party B, the
Credit Support Provider and the Trust Manager must
countersign, an accession as provided for in the
Confirmation for the Equivalent-Other Transaction.
For the avoidance of doubt, a Substitution Notice may
specify that a Substitution Transaction will become effective in
accordance with paragraph (b)(i) or that an Equivalent
Transaction and an Equivalent Other Transaction will become
effective in accordance with paragraphs (b)(ii)(A) and (B), or
that either a Transaction under paragraph (b)(i) or Transactions
under paragraphs (b)(ii)(A) and (B) shall become effective as
alternatives. If the Substitution Notice specifies that, as
alternatives, the Transaction or Transactions under paragraphs
(b)(i) or (b)(ii)(A) and (B) shall become effective, and if a
suitably rated counterparty is not procured by the Credit Support
Provider under paragraph (b)(ii)(A), the Substitute Transaction
must become effective in accordance with paragraph (b)(i).
(c) On the date on which the Transactions become effective in
accordance with a Substitution Notice under either paragraph
(b)(i) or (b)(ii):
(i) the Replaced Transaction shall terminate; and
(ii) the Other Transaction shall terminate.
(d) No Settlement Amount or other amount under section 6 or section
11 shall be payable by, or to, Party B (as the case may be) upon
the termination of the Transactions under paragraphs (c)(i) and
(ii), because the Transactions specified in paragraphs (b)(i), or
(b)(ii)(A) and (B), as the case may be, shall have the effect of
preserving for Party B the economic equivalent of the payments
under the Transactions which are being terminated.
<PAGE>
(e) Definitions. For the purposes of this Section 21:
"Credit Event" means, in relation to Party A, the occurrence at
any time of any of the following events with respect to Party A:
(i)(A) Failure by Party A to make, when due, any payment under
the Replaced Transaction required to be made by it if
such failure is not remedied on or before the tenth local
Business Day after notice of such failure is given to
Party A; and
(B) On any day on which a failure by Party A under paragraph
(e)(i)(A) is subsisting:
(I) the Market Value of a floating rate Reference
Obligation is below the Initial Price of such by
more than the Price Decline Requirement; or
(II) the sum of the Market Value of a fixed rate
Reference Obligation and the Interest Rate
Adjustment Amount of such is below the Initial
Price of such by more than the Price Decline
Requirement.
For the purposes of this paragraph (e)(i)(B),
"Market Value", "Reference Obligation", "Initial
Price", "Price Decline Requirement" and "Interest
Rate Adjustment Amount" shall have the meanings
given in the Confirmation for the relevant
Transaction; or
(ii) the occurrence of (A) a default, event of default or
other similar condition or event (however described) in
respect of Party A under one or more agreements or
instruments relating to Specified Indebtedness of Party A
in an aggregate amount of not less than the applicable
Threshold Amount which has resulted in the Specified
Indebtedness becoming due and payable under such
agreements or instruments before it would otherwise have
been due and payable, or (B) a default by Party A in
making one or more payments on the due date thereof in an
aggregate amount of not less than the applicable
Threshold Amount under such agreements or instruments
(after giving effect to any applicable notice requirement
or grace period).
For the purposes of this paragraph (e)(ii), "Specified
Indebtedness" and "Threshold Amount" shall have the
meanings given in the Confirmation for the relevant
Transaction; or
(iii) the occurrence with respect to Party A of an event
specified in Section 5(a)(vi)(1) to (9) inclusive; or
(iv) the occurrence with respect to Party A of an event
specified in Section 5(b)(i)(1); or
(v) the occurrence with respect to Party A (and not the
Credit Support Provider) of an event specified in Section
5(a)(viii);
"Equivalent Transaction" means a Transaction governed by a new
agreement on the same material terms as this Agreement and on the
same material economic terms as the Replaced Transaction, and
with the same Trade Date as the Replaced Transaction, except
that:
(i) the New Currency Swap Provider is designated as "Party
A";
(ii) the Credit Support Provider is designated as the new
"Credit Support Provider" to Party A;
(iii) the "Effective Date" is as specified in the relevant
Confirmation for that Transaction, being the same date as
that specified in the Substitution Notice as the
Effective Date for the Equivalent-Other Transaction; and
(iv) no Initial Exchanges are payable under the Transaction.
<PAGE>
"Equivalent-Other Transaction" means a Transaction governed by
the Other Agreement and on the same material economic terms as
the Other Transaction and with the same Trade Date as the
Replaced Transaction, except that:
(i) the New Currency Swap Provider is designated as the new
"Credit Support Provider" to Party A;
(ii) the New Currency Swap Provider is designated as the new
"Credit Support Provider" to Party A;
(iii) the "Effective Date" is as specified in the relevant
Substitution Notice; and
(iv) no Initial Exchanges are payable under the Transaction.
"New Currency Swap Provider" has the meaning given in paragraph
(b)(ii)(A);
"Other Agreement" has the meaning given in section 20;
"Other Transaction" means the Transaction governed by the Other
Agreement and on the same economic terms as the Replaced
Transaction and with the same Trade Date as the Replaced
Transaction, and as specified as such in the relevant
Substitution Notice;
"Replaced Transaction" means the Transaction specified as such in
the relevant Substitution Notice, as referred to in section
21(a);
"Substitute Transaction" means a Transaction governed by the
Other Agreement, and on the same economic terms as the Other
Transaction and with the same Trade Date as the Replaced
Transaction, except that:
(i) no party is designated as a "Credit Support Provider";
(ii) the Effective Date is as specified in the relevant
Substitution Notice;
(iii) the Notional Amounts applicable to the Floating Amounts
payable by the respective parties under the Transaction
are the same as the Notional Amounts applicable to the
Floating Amounts payable by the respective parties under
the Replaced Transaction except that the reference in the
Replaced Transaction to "fifty (50) percent" are
substituted by references to "one hundred (100) percent";
(iv) no Initial Exchanges are payable; and
(v) no "Credit Support Provider Provisions" apply.
"Substitution Notice" means an irrevocable notice in writing from
the Credit Support Provider to Party B and the Trust Manager,
which may be delivered between 9.00 am and 4.00 pm in Sydney on a
Business Day in accordance with section 12, and which:
(i) describes the occurrence of a Credit Event;
(ii) specifies the Effective Date for an Equivalent-Other
Transaction or for a Substitute Transaction, and
specifies the proposed New Currency Swap Provider and the
terms of the Equivalent-Other Transaction by attaching a
proposed Confirmation for thhe Equivalent-Other
Transaction, if required; and
(iii) confirms that the Termination Date for the Replaced
Transaction and the Other Transaction shall be the
Effective Date for the Transactions in either paragraphs
(b)(i), or (b)(ii)(A) and (B), as the case may be.
(f) Section 21 and any related provision in a Confirmation (the
"Substitution Provisions") shall not amend, or affect the
operation of, any other provision in this Agreement, except to
the extent, if any, expressly provided by the Substitution
Provisions. For the avoidance of doubt and without limitation,
the Substitution Provisions shall not amend, or affect the
operation of, the provisions of the Credit Support Annex,
sections 15 to 20 inclusive, and provisions in this Agreement
which specify certain events as Events of Default or Termination
Events.
<PAGE>
13. ELECTIONS AND VARIABLES
(a) SECURITY INTEREST FOR "OBLIGATIONS"
The term "Obligations" as used in this Annex does not include any
additional obligations. For the avoidance of doubt, in respect
of the Obligations which are specified in the Relevant Swap
Transactions, any assumptions made for the purposes of
calculating the Peak Exposure in Paragraph 13(b)(i) or the
Benefit Exposure in Paragraph 13(b)(iv)(A) must not be applied or
otherwise taken into account for the purpose of calculating the
Obligations, since those assumptions are theoretical only and do
not accurately reflect any actual Obligations.
(b) CREDIT SUPPORT OBLIGATIONS
(i) DELIVERY AMOUNT, RETURN AMOUNT AND CREDIT SUPPORT
AMOUNT
"DELIVERY AMOUNT" and "RETURN AMOUNT" each has the
meaning specified in Paragraph 3.
"CREDIT SUPPORT AMOUNT" means, for any Valuation Date:
(A) (I) with respect to Party A as the Secured
Party, Party_A's Exposure for that
Valuation Date; or
(II) with respect to Party B as the Secured
Party, Party B's Peak Exposure for that
Valuation Date; plus
(B) the aggregate of all Independent Amounts
applicable to the Pledgor, if any; minus
(C) all Independent Amounts applicable to the
Secured Party, if any; minus
(D) the Pledgor's Threshold,
provided, however, that the Credit Support Amount will be
deemed to be zero whenever the calculation of Credit
Support Amount yields a number less than zero.
"PEAK EXPOSURE" means the amount equal to Party B's
maximum credit exposure in respect of a Replacement
Transaction entered into on a date three months after the
Valuation Date, calculated by the Valuation Agent using
its swap credit exposure methodology to a 99% confidence
interval, as that methodology is updated to reflect,
without limitation, the levels of volatility current as
at the Valuation Time for the differential between
USD-LIBOR-BBA and AUD-BBR-BBSW (each rate with a
Designated Maturity of three months) and the A$-US$
forward exchange rates, and assuming that from that
Valuation Date:
(I) the remaining term of the Relevant Swap
Transaction is calculated on the basis that
the Termination Date is a date, no later than
31 years after the Effective Date of the
first Transaction in respect of the Notes,
calculated by applying the assumptions
specified in subparagraph (II) below;
(II) the Floating Rate Payer Amounts and
Exchange Amounts are calculated on the basis
that the Housing Loan Principal has an
amortisation schedule based on a constant
prepayment rate of 5% per annum thereafter,
as each of those terms are defined for the
Relevant Swap Transaction or in the Series
Notice applicable to the Relevant Swap
Transaction.
(ii) ELIGIBLE COLLATERAL. The following items
will qualify as "Eligible Collateral" for Party A:
Valuation
Percentage
<PAGE>
(A) negotiable debt obligations issued by the
U.S. Treasury Department having a remaining
maturity of not more than one year ("Treasury
Bills") 98%
(B) negotiable debt obligations issued by the
U.S. Treasury Department having a remaining
maturity of more than one year but not more
than five years ("Treasury Notes") 95%
(C) negotiable debt obligations issued by the
U.S. Treasury Department having a remaining
maturity of more than five years but not more
than ten years ("Treasury Notes") 93%
(D) negotiable debt obligations issued by the
U.S. Treasury Department having a remaining
maturity of more than ten years ("Treasury
Bonds") 90%
(E) Other: Agency Securities having a remaining
maturity of not more than one year 97%
Agency Securities having a remaining maturity of
more than one year but not more than five
years 94%
Agency Securities having a remaining maturity of
more than five years but not more than ten
years 92%
Agency Securities having a remaining maturity of
more than ten years. 89%
"AGENCY SECURITIES" means negotiable debt
obligations which are fully guaranteed as to both
principal and interest by the Federal National
Mortgage Association, the Government National
Mortgage Corporation or the Federal Home Loan
Mortgage Corporation, but exclude: (i) interest
only and principal only securities; and (ii)
Collateralized Mortgage Obligations, Real Estate
Mortgage Investment Conduits and similar
derivative securities.
(iii) OTHER ELIGIBLE SUPPORT
Not applicable.
(iv) THRESHOLDS
(A) "INDEPENDENT AMOUNT" means with respect
to Party A, the Additional Spread.
"ADDITIONAL SPREAD" means the amount equal to
the excess of Party B's Benefit Exposure less
Party B's Exposure, as each is calculated on
the same Valuation Date.
"BENEFIT EXPOSURE" means the amount
equal to Party B's Exposure, except
calculated on the basis that:
<PAGE>
(I) the underlying swap rate for the
Replacement Transaction is equal to the
underlying swap rate for the Replacement
Transaction as quoted by the Reference
Market-makers plus 0.25% additional spread on
the A$ side of the swap; and
(II) the remaining term and the Floating Rate
Payer Amounts and Exchange Amounts for the
Replacement Transaction are calculated by
applying the assumptions specified in
subparagraphs (I) and (II) of the definition
of Peak Exposure in paragraph 13(b)(i) above.
For the avoidance of doubt, the Additional Spread
is intended to represent a maximum additional
bid/offer spread of 25 swap points running payable
if the bid/offer swap rates quoted to the Secured
Party were adjusted from market rates to the
benefit of the Reference Market-makers.
"INDEPENDENT AMOUNT" means with respect to Party
B: Zero.
(B) "THRESHOLD"
With respect to Party A:
(I) if the highest possible jointly
supported credit rating that can be assigned
to senior long term debt jointly supported by
Party A and the Credit Support Provider by
Moody's Investors Service Inc ("MOODY'S") in
accordance with Moody's approach to jointly
supported obligations, and after taking into
consideration the nature of the Relevant Swap
Transaction(s), is lower than A2, (or, in the
case of no Credit Support Provider providing
any credit support obligations, if the credit
rating assigned to Party A's senior long term
debt by Moody's is lower than A2) and any
Notes rated Aaa by Moody's are outstanding at
that Valuation Date, then zero; or
(II) if the highest possible jointly
supported credit rating that can be assigned
to senior long term debt jointly supported by
Party A and the Credit Support Provider by
Moody's in accordance with Moody's approach
to jointly supported obligations, and after
taking into consideration the nature of the
Relevant Swap Transactions is A2 or higher,
(or, in the case of no Credit Support
Provider providing any credit support
obligations, if the credit rating assigned to
Party A's senior long term debt is A2 or
higher) then infinity.
With respect to Party B: infinity.
(C) "MINIMUM TRANSFER AMOUNT" means with respect to both
Party A and Party B: US$100,000.
(D) ROUNDING. The Delivery Amount and the Return Amount will
be rounded to the nearest integral multiple of US$10,000.
(c) VALUATION AND TIMING
(i) "VALUATION AGENT" means Party A.
(ii) "VALUATION DATE" means:
(A) each Reset Date in respect of the Notes; and
(B) in each month in which a Reset Date does not
occur, each date which is on the same day of
the month as the Reset Dates.
The Modified Following Business Day Convention
shall apply to each date specified in
subparagraphs (A) and (B).
<PAGE>
(iii) "VALUATION TIME" means the close of business on the Local
Business Day before the Valuation Date; PROVIDED that the
calculations of Value and Exposure will be made as of
approximately the same time on the same date.
(iv) "NOTIFICATION TIME" means 11:00 am on a Local Business
Day.
(d) CONDITIONS PRECEDENT AND SECURED PARTY'S RIGHTS AND
REMEDIES
There are no "SPECIFIED CONDITIONS" applicable to Party A and
Party B.
(e) SUBSTITUTION
(i) "SUBSTITUTION DATE" has the meaning specified in
paragraph_4(d)(ii).
(ii) CONSENT. Not applicable.
(f) DISPUTE RESOLUTION
(i) "RESOLUTION TIME"" means 11:00 am on the Local
Business Day following the date on which the notice is
given that gives rise to a dispute under paragraph_5.
(ii) "VALUE". Not applicable.
(iii) "ALTERNATIVE". The provisions of Paragraph 5 will
apply.
(g) HOLDING AND USING POSTED COLLATERAL
(i) ELIGIBILITY TO HOLD POSTED COLLATERAL; CUSTODIANS.
Party A: Not Applicable.
Party B is not entitled to hold Posted Collateral; it
must appoint a Custodian to hold Posted Collateral on its
behalf, pursuant to paragraph 6(b); PROVIDED that the
following conditions applicable to Party B are satisfied:
(A) Party B is not a Defaulting Party;
(B) Party B's Custodian will always be the
Principal Paying Agent of the Notes (in respect of
the Relevant Swap Transaction), unless that party
is Party A; and
(C) if the Principal Paying Agent of the Notes
(in respect of the Relevant Swap Transaction) is
Party A, then Party B must appoint a Custodian
which is a Bank (as defined in the Federal Deposit
Insurance Act, as amended) outside Australia,
whose rating (with respect to its long term
unsecured, unsubordinated indebtedness) is at all
times at least Aa2 by Moody's, and Party B must
notify Party A in writing of this appointment and
of the relevant account for Paragraph 13(l).
(ii) USE OF POSTED COLLATERAL. The provisions of
paragraph 6(c) will not apply to Party B and its
Custodian. Party B's Custodian will permit Party B to
secure Party B's obligations under the relevant Notes by
granting to the Security Trustee (as defined in the
Schedule to this Agreement) a mortgage or other security
over Party B's rights in relation to the Posted
Collateral, but subject to Paragraph 11(m)(viii) of this
Annex.
<PAGE>
(h) DISTRIBUTIONS AND INTEREST AMOUNT
"INTEREST RATE", TRANSFER OF INTEREST AMOUNT, and ALTERNATIVE TO
INTEREST AMOUNT are not applicable.
(i) ADDITIONAL REPRESENTATION(S). NONE.
(j) OTHER ELIGIBLE SUPPORT AND OTHER POSTED SUPPORT
"VALUE" and "TRANSFER" with respect to Other Eligible Support and
Other Posted Support means: not applicable.
(k) DEMANDS AND NOTICES
All demands, specifications and notices under this Annex will be
made pursuant to the Notices Section of this Agreement; PROVIDED,
that any such demand, specification or notice may be made by
telephone ("TELEPHONE NOTICE") between duly authorised employees
of each party if such Telephone Notice is confirmed by a
subsequent written instruction (which may be delivered via
facsimile) by the close of business of the same day that such
Telephone Notice is given.
(l) ADDRESSES FOR TRANSFERS
Party A: Party A to specify account for returns of
collateral, subject to paragraph 13(x) below.
Party B: Party B must notify Party A of its Custodian's
account.
(m) OTHER PROVISIONS
(i) Paragraph 4(b) of the Annex is replaced by the
following:
"(b) TRANSFER TIMING. Subject to Paragraph 4(a) and 5
and unless otherwise specified, if a demand for the
Transfer of Eligible Credit Support or Posted Credit
Support is made by the Notification Time, then the
relevant Transfer will be made within one Local Business
Day of receipt of the demand; if a demand is made after
the Notification Time, then the relevant Transfer will be
made within two Local Business Days of receipt of the
demand.
(ii) LOCAL BUSINESS DAY
Unless otherwise specified in the Schedule, the place is
New York.
(iii) PARTY B'S EXPOSURE
In calculating the amounts of Party B's Exposure, Peak
Exposure and Benefit Exposure under Paragraphs 12, and
13(b)(i) and 13(b)(iv)(A) respectively, the Valuation
Agent must:
(A) include all Transactions (or any cashflows
under any Transaction) which correspond with
amounts payable on the Relevant Reset Date by
Party B's Principal Paying Agent in respect of
Class A Notes which are then rated by Moody's with
a higher rating than the then rating of Party A's
senior long term debt; and
<PAGE>
(B) must exclude all Transactions (or any
cashflows under any Transaction) which do not
correspond with amounts payable on the Relevant
Reset Date by Party B's Principal Paying Agent in
respect of:
(I) Class A Notes which are then rated by
Moody's with the same or lower rating than
the then rating of Party A's senior long term
debt; and
(II) Class B Notes.
For the purposes of this Paragraph (m)(iii), "Relevant
Reset Date" means:
(C) if a Reset Date occurs on the relevant
Valuation Date, then that Valuation Date; or
(D) if a Reset Date does not occur on the
relevant Valuation Date, then the next Reset Date.
(iv) EVENT OF DEFAULT, NOT POTENTIAL EVENT OF DEFAULT
OR SPECIFIED CONDITION
Paragraph 4(a)(i) and 4(a)(ii) of the Annex are amended
by deleting the words "Potential Event of Default or
Specified Condition" and "or Specified Condition"
respectively.
Paragraph 6(c) of the Annex is amended by deleting the
words "or an Affected Party with respect to a Specified
Condition" on lines 3 and 4 and "or Specified Condition"
on lines 5 and 6.
Paragraph 8(a)(1) and 8(a)(2) of the Annex are amended by
deleting the words "or Specified Condition".
(v) PARTY B'S EXPENSES
Party A acknowledges that, pursuant to Section 17 of the
Agreement, Party B will pay its own costs and expenses
under Paragraph 10(a) from proceeds distributed as
Trustee's expenses, in accordance with instructions from
the Trustee.
(vi) GOVERNING LAW NOTWITHSTANDING
This Annex shall be governed by and construed in
accordance with the laws of the state of New York without
giving effect to choice of law doctrine and parties
hereto agree that proceedings relating to any dispute
arising out of or in connection with this Annex shall be
subject to the non-exclusive jurisdiction of the federal
or state courts of competent jurisdiction in the Borough
of Manhattan in New York City, State of New York.
<PAGE>
(vii) NO TRIAL BY JURY
Each party waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury
in respect of any suit, action or proceeding relating to
this Annex.
(viii) NO POOLING OF COLLATERAL WITH OTHER SECURITY TRUST
SECURITY
Notwithstanding any provision in any [Trust Document] (as
defined in the Security Trust Deed), but without
prejudice to Party_B's rights under Paragraph 8(a) of
this Annex, Party B shall not be entitled to deal with
the Posted Collateral in any manner inconsistent with the
right of Party A under Paragraph 8(b)(iii) of this Annex
to receive all Posted Collateral and the Interest Amount
upon payment in full of Party A's obligations under this
Agreement and no other person shall gain any rights in
relation to the Posted Collateral or the Interest Amount
that are inconsistent with that right of Party A.
(ix) CREDIT SUPPORT PROVIDER
For valuable consideration which is hereby acknowledged
by the Credit Support Provider as having been received,
the Credit Support Provider hereby unconditionally
guarantees the obligations of Party A under this Annex,
on the following terms:
(A) If Party A shall in any respect fail to
perform its obligations as Pledgor under this
Annex and the breach is not remedied within any
applicable grace period set out in paragraph 7 of
this Annex, the Credit Support Provider shall
perform the obligations of Party A as Pledgor
under and in accordance with this Annex as if
references to "Party A" were references to the
"Credit Support Provider";
(B) The Credit Support Provider shall be the
"Pledgor" in respect of all Posted Collateral
which the Credit Support Provider transfers
pursuant to paragraph 13(m)(ix)(A),
notwithstanding that any such Posted Collateral is
transferred to secure the Obligations of Party A;
(C) The provisions of this paragraph 13(m)(ix)
shall constitute irrevocable obligations of the
Credit Support Provider until a notice of
revocation is served by the Credit Support
Provider on Party B. Such a notice shall not be
served without the prior written consent of Party
A and the Manager in consultation with the
Designated Rating Agencies; and
(D) The Credit Support Provider shall not be
discharged or released from its obligations under
this Annex and this Agreement (including, without
limitation, the obligations under Section 20) by
any agreement, conduct, omission, breach or
repudiation by Party A or Party B, or any other
act, event or circumstance which but for this
clause would or might operate as a matter of law
to discharge, impair or otherwise affect any of
the obligations of the Credit Support Provider
under this Annex or this Agreement.
(x) PARTY A'S COLLATERAL AND THE CREDIT SUPPORT
PROVIDER
<PAGE>
(A) If Party A transfers Eligible Collateral to
Party B under this Annex (the "Party A Posted
Collateral") and then a Substitution Notice is
given by the Credit Support Provider and the
Replaced Transaction is terminated in accordance
with section 21 of the Agreement, then Party B
will transfer the Party A Posted Collateral to a
Custodian as specified by Party A in accordance
with paragraph (x)(B) below.
(B) Party A shall, if a Substitution Notice is
given to it by the Credit Support Provider in
accordance with section 21 of the Agreement,
demand that Party B transfer the Party A Posted
Collateral (if any) to a Custodian specified by
the Credit Support Provider as if that Custodian
were the "Pledgor" for the purposes of returning
Posted Collateral under paragraph 3(b), and
otherwise in accordance with paragraph 3(b).
Party B must transfer the Party A Posted
Collateral on or by the Effective Date of the
Substitute Transaction or the Equivalent-Other
Transaction (as specified under section 21 of the
Agreement).
(C) Party A shall direct the Custodian referred
to in paragraph (x)(B) to hold the Party A Posted
Collateral on trust for the Credit Support
Provider and shall direct the Custodian to
transfer to the Credit Support Provider the Party
A Posted Collateral under in accordance with the
Credit Support Annex to the Master Agreement
between Party A and the Credit Support Provider
and/or otherwise as security for, or in
satisfaction (in part of in full) of amounts then
owing by Party A to the Credit Support Provider in
connection with the Replaced Transaction or the
Other Transaction, or any mark to market amounts
payable in respect thereof. The Custodian must
hold the Party A Posted Collateral, and must
transfer the Party A Posted Collateral, as
required by this paragraph (x)(C).
(D) The Transfer of the Party A Posted Collateral
by Party B to the Custodian in accordance with
paragraph (x)(B) shall constitute performance by
Party B of its obligations under paragraph 3(b) in
respect of the Party A Posted Collateral.
<PAGE>
Westpac Securities Administration Limited
in its capacity as trustee of the Series 1998-1G WST Trust
Level 10, 130 Pitt Street
Sydney
cc: Westpac Securitisation Management Pty Limited
Level 6, 60 Martin Place
Sydney
Westpac Banking Corporation
225 Elizabeth Street
Sydney
Dear Sir
CURRENCY SWAP TRANSACTIONS - SERIES 1998-1G WST TRUST
CLASS A MORTGAGE BACKED FLOATING RATE NOTES
The purpose of this letter is to confirm the terms and conditions of the swap
transactions entered into between us on the Trade Dates specified below (the
"TRANSACTIONS"). This letter constitutes a "Confirmation" as referred to in the
Master Agreement specified below.
1. This Confirmation supplements, forms part of, and is subject to, the
Master Agreement dated [ June] 1998, as amended and supplemented from
time to time (the "AGREEMENT") between you and us. All provisions
contained in the Agreement govern this Confirmation except as expressly
modified below. Without limitation, Section 21 of the Agreement shall
apply to this Confirmation and the Transactions under it, as further
specified below.
2. Terms defined in the Conditions dated [ June] 1998 in respect of the
issue of US$xxx,xxx,xxx in Class A Mortgage-Backed Floating Rate Notes
due [2032] have the same meanings when used in this Confirmation.
3. The terms of the particular Transaction to which this Confirmation
relate are as specified in the Annexure to this Confirmation.
4. For the purposes of this Confirmation, Morgan Guaranty Trust Company of
New York, London Office, is known as "MORGAN", Westpac Securities
Administration Limited in its capacity as trustee of the Series 1998-1G
WST Trust is known as "TRUSTEE", Westpac Securitisation Management Pty
Limited is known as "MANAGER" and Westpac Banking Corporation is known
as "CREDIT SUPPORT PROVIDER".
5. Account Details
Payments to Morgan: to be advised
Payments to Trustee: to be advised
<PAGE>
6. Offices
(a) The Office of Morgan for the Swap Transactions is LONDON; and
(b) The Office of the Trustee for the Swap Transactions is SYDNEY.
Yours sincerely,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By:
Name:
Title:
Confirmed as of the
date above first written:
WESTPAC SECURITIES ADMINISTRATION LIMITED(ACN 000 049 472) in its capacity as
trustee of the Series 1998-1G WST Trust
By:
------------------------------
Name:
Title:
WESTPAC SECURITISATION MANAGEMENT PTY LIMITED (ACN 081 709 211)
in its capacity as Trust Manager
By:
------------------------------
Name:
Title:
WESTPAC BANKING CORPORATION (ARBN 007 457 141)
in its capacity as Credit Support Provider to Morgan
By:
------------------------------
Name:
Title:
<PAGE>
ANNEXURE 1 - CLASS A NOTES
--------------------------
Morgan Deal Number [ ]
Trade Date: [ June] 1998
Effective Date: Closing Date
Termination Date: Final Maturity Date (adjusted in accordance with the
Modified Following Business Day Convention)
FLOATING INTEREST AMOUNTS
FLOATING AMOUNTS PAYABLE BY MORGAN:
These Floating Amounts are payable by Morgan unless there is, on any Floating
Rate Payer Payment Date, any reduction in Class A Interest resulting from a
reduction in A$ Class A Interest Amount pursuant to clause [6.17(a)(ii)(A)] of
the Series Notice (as specified in a notice to Morgan by the Determination
Time), in which case the Floating Amount shall be reduced by the same proportion
as the reduction in the A$ Class A Interest Amount.
Floating Rate Payer: Morgan
Notional Amount: An amount equal to fifty (50) percent of the
total Invested Amount of all Class A Notes as
at the first day of the Interest Period
ending on but excluding the relevant Floating
Rate Payer Payment Date
Floating Rate Payer Payment Dates: Each Payment Date up to, and including the
last Payment Date prior to Maturity Date, and
the Termination Date
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: Three months
Spread: Plus [ ] percent
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
<PAGE>
FLOATING AMOUNTS PAYABLE BY THE TRUSTEE:
These Floating Amounts are payable by the Trustee unless there is, on any
Floating Rate Payer Payment Date, any reduction in A$ Class A Interest Amount
pursuant to clause [6.17(a)(ii)(A)] of the Series Notice (as specified in a
notice by the Trustee or Trust Manager to Morgan by the Determination Time), in
which case instead of the Floating Amount Trustee shall pay an amount equal to
the lesser A$ amount specified in that notice on that Floating Rate Payer
Payment Date.
Floating Rate Payer: Trustee
Notional Amount: An amount equal to fifty (50) percent of
the A$ Equivalent (applying USD 0.6[ ])
of the total Invested Amount of all
Class_A Notes as at the first day of the
Interest Period ending on but excluding
the relevant Floating Rate Payer Payment
Date
Floating Rate Payer Payment Dates: Each Payment Date up to and including
the last Payment Date prior to Maturity
Date, and the Termination Date
Floating Rate Option: AUD-BBR-BBSW
Designated Maturity: 90 days
Spread: Plus 0.[ ] percent
Floating Rate Day Count Fraction: Actual/365 (Fixed)
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
<PAGE>
EXCHANGES
INITIAL EXCHANGE:
Initial Exchange Date: Closing Date
Morgan Pays Initial Exchange: An amount equal to fifty (50) percent of
the total Class A Initial Invested
Amount of all Class A Notes on the
Closing Date divided by the exchange
rate of USD 0.6[ ] being (AUD [ ])
Trustee Pays Initial Exchange: An amount equal to fifty (50) percent of
the total of the Class A Initial
Invested Amount of all of the Class A
Notes on the Closing Date being USD [ ]
INSTALMENT EXCHANGE
Instalment Exchange Date Each Payment Date (other than a Final
Exchange Date
Morgan Pays Instalment Exchange: An amount equal to fifty (50) percent of
the Class A Principal Payment paid on
the relevant Instalment Exchange Date
towards a reduction of the Principal
Amount of Class A Notes, as calculated
by multiplying the Trustee Instalment
Exchange Payment on the relevant
Instalment Exchange Date by the exchange
rate of USD 0.6[ ]
Trustee Pays Instalment Exchange: An amount equal to fifty (50) percent of
the amount expressed under clause [6.14,
6.15 or 6.16] (as applicable) of the
Series Notice as being payable under a
Confirmation relating to Class A Notes
plus any amount payable under clause
[6.11(a)(ii)(C)] of the Series Notice
(together, the "TRUSTEE INSTALMENT
EXCHANGE PAYMENT") as specified in the
notice issued by the Trustee (or Trust
Manager to Morgan by the Determination
Time in respect of that Instalment
Exchange Date
<PAGE>
FINAL EXCHANGE:
Final Exchange Date: The earlier of the Termination Date and
the Date of the [10% Clean Up under
clause 8.9(d)] of the Master Trust Deed
as amended by the Series Notice and the
date of redemption of all the Class A
Notes for taxation or other reasons,
adjusted in accordance with the Modified
Following Business Day Convention
Morgan Pays Final Exchange: An amount equal to fifty (50) percent of
the aggregate Final Exchange payable by
the Trustee under this Confirmation,
multiplied by the exchange rate of USD
0.6[ ]
Trustee Pays Final Exchange: An amount equal to fifty (50) percent of
the aggregate amount expressed under
clause [6.14, 6.15 or 6.16] (as
applicable) of the Series Notice as
being payable under a Confirmation
relating to Class A Notes plus any
amount payable under clause
[6.11(a)(ii)(C)] of the Series Notice as
specified in the Notice issued by the
Trustee (or Trust Manager) to Morgan by
the Determination Time in respect of
that Final Exchange Date
Business Day Locations for Trustee: Sydney
Business Day Locations for Morgan: New York, London
Payments will be: Gross
<PAGE>
GLOSSARY
1. Terms defined in the Series Notice:
A$ Equivalent Invested Amount
Class A Initial Invested Amount Maturity Date
Class A Notes Payment Date
Closing Date Principal Payment
Interest Period Trust Manager
2. Terms defined in the Agreement (including 1991 ISDA Definitions) are:
Actual/360Actual/365 (Fixed)
AUD-BBR-BBSW
Modified Following Business Day Convention
Replaced Transaction
USD-LIBOR-BBA
3. Terms defined in this Confirmation:
Agreement
Trustee
"Determination Time" means 5.00 pm Sydney time 4 Sydney Business Days prior to
the relevant Payment Date or other applicable exchange date.
Morgan
CREDIT SUPPORT PROVIDER PROVISIONS
Each Transaction under this Confirmation shall be capable of being specified as
a Replaced Transaction in accordance with the provisions of Section 21 of the
Agreement. Those provisions shall apply as further specified below.
1. Definitions for Credit Events
"CALCULATION AGENT" means the party to the Transaction (or a third
party) designated as such for the Transaction. The Calculation Agent's
calculations and determinations shall be made in good faith, in a
commercially reasonable manner and be binding in the absence of manifest
error [Credit Support Provider];
"INITIAL PRICE" means, with respect to any Reference Obligation, the
percentage listed with respect thereto in the definition of Reference
Obligation herein as the Initial Price;
<PAGE>
"INTEREST RATE ADJUSTMENT AMOUNT" means, with respect to any Reference
Obligation, the absolute value of the difference between (i) the Mark to
Market Value and (ii) 100% minus the Initial Price;
"MARK TO MARKET VALUE" means, in the determination of the Calculation
Agent, with respect to any Reference Obligation, on any day, the mark to
market value payable on that day (expressed as a percentage of the
notional amount thereof), of a hypothetical interest rate swap
commencing on the Effective Date between a hypothetical party ("Party
X") and a counterparty with the highest long term senior debt rating of
each Rating Agency, which swap has a notional amount equal to the
Floating Rate Payer Calculation Amount and under which Party X (i) pays
the Mark to Market Rate plus the Initial Spread and (ii) receives a
fixed interest amount equal in amount and timing to the coupons on the
Reference Obligation. If, under such swap, Party X would be due to pay
such mark to market value, Mark to Market Value will be negative and, if
Party X would be due to receive such mark to market value, the Mark to
Market Value will be positive.
"MARKET VALUE" means, in accordance with the Quotation Method, the
percentage equal to the arithmetic mean of quotations (exclusive of
accrued but unpaid interest and expressed as a percentage) obtained from
Dealers with respect to a Valuation Date in the manner provided below.
In obtaining such price quotations from Dealers, the Calculation Agent
will request each Dealer to provide firm bid and offer quotations for an
aggregate amount of the Reference Obligation equal to the Quotation
Amount to the extent reasonably practicable as of the Valuation Time on
such Valuation Date. If more than three quotations are provided on such
date, the Market Value shall be the arithmetic mean of such quotations
without regard to the quotations having the highest and lowest values.
If exactly three quotations are provided, the Market Value shall be the
quotation remaining after disregarding the highest and lowest
quotations. For this purpose, if more than one quotation has the same
highest value or lowest value, then one of such quotations shall be
disregarded. If exactly two quotations are provided, the Market Value
shall be the arithmetic mean of such quotations. If fewer than two
quotations are provided, then the Market Value shall be an amount as
determined by the Calculation Agent on the next Business Day on which at
least two quotations are provided by Dealers. If the Calculation Agent
is unable to calculate the Market Value prior to the fifth Business Day
following the applicable Valuation Date, then the Calculation Agent
shall determine the Market Value for such Valuation Date in its
reasonable discretion;
"QUOTATION METHOD":
[Mid-market means that only the arithmetic mean of the bid and
offer quotations provided by Dealers that have provided both bid
and offer quotations shall be used in the calculation of Market
Value.];
"REFERENCE OBLIGATION" means the obligation(s) as follows:
Issuer/Borrower: [ ]
Guarantor: [ ]
Maturity: [ ]
Coupon: [ ]
CUSIP/ISIN: [ ]
Original Issue Amount: [ ]
Initial Price: [ ]
Initial Spread: [ ];
"SPECIFIED INDEBTEDNESS" means any obligation (whether present or
future, contingent or otherwise, as principal or surety or otherwise in
respect of money borrowed or raised or under any finance lease,
redeemable preference share, letter of credit, futures contract,
guarantee, indemnity or a transaction of a type described in the last 6
lines of the definition of Specified Transaction.
"THRESHOLD AMOUNT" means [US$25,000,000]
"VALUATION TIME" - [ ]
2. The parties acknowledge that on the Effective Date of the Substitute
Transaction or the Equivalent Transaction, Party A shall pay to the
Credit Support Provider (in the case of the Substitute Transaction) or
to the new Currency Swap Provider (in the case of the Equivalent
Transaction) the amount equal to the amount (if a positive number) that
hypothetically would have been payable by Party A to Party B under
Section 6(e)(i)(3) if:
(a) the Transaction had been terminated;
(b) an Early Termination Date had occurred on the Effective Date; and
(c) Section 21 had not applied in respect of the Transaction.
Any such amount shall be payable by Party A to the Credit Support
Provider in accordance with the provisions of the relevant Master
Agreement between Party A and the Credit Support Provider (in the case
of the Substitute Transaction) or to the New Currency Swap Provider in
accordance with the relevant Master Agreement between Party A and the
New Currency Swap Provider (in the case of the Equivalent Transaction).
<PAGE>
ANNEXURE 2 - CLASS A NOTES - "SUBSTITUTE TRANSACTION"
-----------------------------------------------------
Morgan Deal Number [ ]
Trade Date: [ June] 1998
Effective Date: The Effective Date shall be the date
specified in a Substitution Notice given
by Morgan as Credit Support Provider
under the Other Agreement.The Effective
Date shall not occur if the conditions
in respect of the Substitution Notice
have not been satisfied in full in
accordance with the Other Agreement.
Termination Date: Final Maturity Date (adjusted in
accordance with the Modified Following
Business Day Convention)
FLOATING INTEREST AMOUNTS
FLOATING AMOUNTS PAYABLE BY MORGAN:
These Floating Amounts are payable by Morgan unless there is, on any Floating
Rate Payer Payment Date, any reduction in Class A Interest resulting from a
reduction in A$ Class A Interest Amount pursuant to clause [6.17(a)(ii)(A)] of
the Series Notice (as specified in a notice to Morgan by the Determination
Time), in which case the Floating Amount shall be reduced by the same proportion
as the reduction in the A$ Class A Interest Amount.
Floating Rate Payer: Morgan
Notional Amount: An amount equal to the total Invested
Amount of all Class A Notes as at the
first day of the Interest Period ending
on but excluding the relevant Floating
Rate Payer Payment Date
Floating Rate Payer Payment Dates: Each Payment Date on or after the
Effective Date up to, and including the
last Payment Date prior to Maturity
Date, and the Termination Date
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: Three months
Spread: Plus [ ] percent
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
<PAGE>
FLOATING AMOUNTS PAYABLE BY THE TRUSTEE:
These Floating Amounts are payable by the Trustee unless there is, on any
Floating Rate Payer Payment Date, any reduction in A$ Class A Interest Amount
pursuant to clause [6.17(a)(ii)(A)] of the Series Notice (as specified in a
notice by the Trustee or Trust Manager to Morgan by the Determination Time), in
which case instead of the Floating Amount Trustee shall pay an amount equal to
the lesser A$ amount specified in that notice on that Floating Rate Payer
Payment Date.
Floating Rate Payer: Trustee
Notional Amount: An amount equal to the A$ Equivalent
(applying USD 0.6[ ]) of the total
Invested Amount of all Class_A Notes as
at the first day of the Interest Period
ending on but excluding the relevant
Floating Rate Payer Payment Date
Floating Rate Payer Payment Dates: Each Payment Date on or after the
Effective Date up to and including the
last Payment Date prior to Maturity
Date, and the Termination Date
Floating Rate Option: AUD-BBR-BBSW
Designated Maturity: 90 days
Spread: Plus 0.[ ] percent
Floating Rate Day Count Fraction: Actual/365 (Fixed)
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
<PAGE>
EXCHANGES
INSTALMENT EXCHANGE
Instalment Exchange Date Each Payment Date on or after the
Effective Date (other than a Final
Exchange Date
Morgan Pays Instalment Exchange: An amount equal to the Class A Principal
Payment paid on the relevant Instalment
Exchange Date towards a reduction of the
Principal Amount of Class A Notes, as
calculated by multiplying the Trustee
Instalment Exchange Payment on the
relevant Instalment Exchange Date by the
exchange rate of USD 0.6[ ]
Trustee Pays Instalment Exchange: An amount equal to the amount expressed
under clause [6.14, 6.15 or 6.16] (as
applicable) of the Series Notice as
being payable under a Confirmation
relating to Class A Notes plus any
amount payable under clause
[6.11(a)(ii)(C)] of the Series Notice
(together, the "TRUSTEE INSTALMENT
EXCHANGE PAYMENT") as specified in the
notice issued by the Trustee (or Trust
Manager to Morgan by the Determination
Time in respect of that Instalment
Exchange Date
FINAL EXCHANGE:
Final Exchange Date: The earlier of the Termination Date and
the Date of the [10% Clean Up under
clause 8.9(d)] of the Master Trust Deed
as amended by the Series Notice and the
date of redemption of all the Class A
Notes for taxation or other reasons,
adjusted in accordance with the Modified
Following Business Day Convention
Morgan Pays Final Exchange: An amount equal to the aggregate Final
Exchange payable by the Trustee under
this Confirmation, multiplied by the
exchange rate of USD 0.6[ ]
Trustee Pays Final Exchange: An amount equal to the aggregate amount
expressed under clause [6.14, 6.15 or
6.16] (as applicable) of the Series
Notice as being payable under a
Confirmation relating to Class A Notes
plus any amount payable under clause
[6.11(a)(ii)(C)] of the Series Notice as
specified in the Notice issued by the
Trustee (or Trust Manager) to Morgan by
the Determination Time in respect of
that Final Exchange Date
Business Day Locations for Trustee: Sydney
Business Day Locations for Morgan: New York, London
Payments will be: Gross
<PAGE>
GLOSSARY
1. Terms defined in the Series Notice:
A$ Equivalent Invested Amount
Class A Initial Invested Amount Maturity Date
Class A Notes Payment Date
Closing Date Principal Payment
Interest Period Trust Manager
2. Terms defined in the Agreement (including 1991 ISDA Definitions) are:
Actual/360
Actual/365 (Fixed)
AUD-BBR-BBSW
Modified Following Business Day Convention
Other Agreement. For the avoidance of doubt, the Other Agreement is the
agreement between Westpac Banking Corporation as Party A, the Trustee as Party
B, Morgan as the Credit Support Provider to Party A and the Manager, dated on or
about the date of the Agreement.
Substitution Notice
USD-LIBOR-BBA
3. Terms defined in this Confirmation:
Agreement
Trustee
"Determination Time" means 5.00 pm Sydney time 4 Sydney Business Days prior to
the relevant Payment Date or other applicable exchange date.
Morgan
<PAGE>
ANNEXURE 3 - CLASS A NOTES -
"EQUIVALENT-OTHER TRANSACTION'
-------------------------------
Morgan Deal Number [ ]
Trade Date: [ June] 1998
Effective Date: The Effective Date shall be the date
specified in a Substitution Notice given by
Morgan as Credit Support Provider under the
Other Agreement.
The Effective Date shall not occur if the
conditions in respect of the Substitution
Notice have not been satisfied in full in
accordance with the Other Agreement.
Termination Date: Final Maturity Date (adjusted in accordance
with the Modified Following Business Day
Convention)
FLOATING INTEREST AMOUNTS
FLOATING AMOUNTS PAYABLE BY MORGAN:
These Floating Amounts are payable by Morgan unless there is, on any Floating
Rate Payer Payment Date, any reduction in Class A Interest resulting from a
reduction in A$ Class A Interest Amount pursuant to clause [6.17(a)(ii)(A)] of
the Series Notice (as specified in a notice to Morgan by the Determination
Time), in which case the Floating Amount shall be reduced by the same proportion
as the reduction in the A$ Class A Interest Amount.
Floating Rate Payer: Morgan
Notional Amount: An amount equal to fifty (50) percent of the
total Invested Amount of all Class A Notes as
at the first day of the Interest Period
ending on but excluding the relevant Floating
Rate Payer Payment Date
Floating Rate Payer Payment Dates: Each Payment Date on or after the Effective
Date up to, and including the last Payment
Date prior to Maturity Date, and the
Termination Date
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: Three months
Spread: Plus [ ] percent
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
<PAGE>
FLOATING AMOUNTS PAYABLE BY THE TRUSTEE:
These Floating Amounts are payable by the Trustee unless there is, on any
Floating Rate Payer Payment Date, any reduction in A$ Class A Interest Amount
pursuant to clause [6.17(a)(ii)(A)] of the Series Notice (as specified in a
notice by the Trustee or Trust Manager to Morgan by the Determination Time), in
which case instead of the Floating Amount Trustee shall pay an amount equal to
the lesser A$ amount specified in that notice on that Floating Rate Payer
Payment Date.
Floating Rate Payer: Trustee
Notional Amount: An amount equal to fifty (50) percent of the
A$ Equivalent (applying USD 0.6[ ]) of the
total Invested Amount of all Class_A Notes as
at the first day of the Interest Period
ending on but excluding the relevant Floating
Rate Payer Payment Date
Floating Rate Payer Payment Dates: Each Payment Date on or after the Effective
Date up to and including the last Payment
Date prior to Maturity Date, and the
Termination Date
Floating Rate Option: AUD-BBR-BBSW
Designated Maturity: 90 days
Spread: Plus 0.[ ] percent
Floating Rate Day Count Fraction: Actual/365 (Fixed)
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
<PAGE>
EXCHANGES
INSTALMENT EXCHANGE
Instalment Exchange Date Each Payment Date on or after teh Effective
Date (other than a Final Exchange Date
Morgan Pays Instalment Exchange: An amount equal to fifty (50) percent of the
Class A Principal Payment paid on the
relevant Instalment Exchange Date towards a
reduction of the Principal Amount of Class A
Notes, as calculated by multiplying the
Trustee Instalment Exchange Payment on the
relevant Instalment Exchange Date by the
exchange rate of USD 0.6[ ]
Trustee Pays Instalment Exchange: An amount equal to fifty (50) percent of the
amount expressed under clause [6.14, 6.15 or
6.16] (as applicable) of the Series Notice as
being payable under a Confirmation relating
to Class A Notes plus any amount payable
under clause [6.11(a)(ii)(C)] of the Series
Notice (together, the "TRUSTEE INSTALMENT
EXCHANGE PAYMENT") as specified in the notice
issued by the Trustee (or Trust Manager to
Morgan by the Determination Time in respect
of that Instalment Exchange Date
<PAGE>
FINAL EXCHANGE:
Final Exchange Date: The earlier of the Termination Date and the
Date of the [10% Clean Up under clause
8.9(d)] of the Master Trust Deed as amended
by the Series Notice and the date of
redemption of all the Class A Notes for
taxation or other reasons, adjusted in
accordance with the Modified Following
Business Day Convention
Morgan Pays Final Exchange: An amount equal to fifty (50) percent of the
aggregate Final Exchange payable by the
Trustee under this Confirmation, multiplied
by the exchange rate of USD 0.6[ ]
Trustee Pays Final Exchange: An amount equal to fifty (50) percent of the
aggregate amount expressed under clause
[6.14, 6.15 or 6.16] (as applicable) of the
Series Notice as being payable under a
Confirmation relating to Class A Notes plus
any amount payable under clause
[6.11(a)(ii)(C)] of the Series Notice as
specified in the Notice issued by the Trustee
(or Trust Manager) to Morgan by the
Determination Time in respect of that Final
Exchange Date
Business Day Locations for
Trustee: Sydney
Business Day Locations for Morgan: New York, London
Payments will be: Gross
<PAGE>
GLOSSARY
1. Terms defined in the Series Notice:
A$ Equivalent Invested Amount
Class A Initial Invested Amount Maturity Date
Class A Notes Payment Date
Closing Date Principal Payment
Interest Period Trust Manager
2. Terms defined in the Agreement (including 1991 ISDA Definitions) are:
Actual/360
Actual/365 (Fixed)
AUD-BBR-BBSW
Modified Following Business Day Convention
Other Agreement. For the avoidance of doubt, the Other Agreement is the
agreement between Westpac Banking Corporation as Party A, the Trustee as Party
B, Morgan as the Credit Support Provider to Party A and the Manager, dated on or
about the date of the Agreement.
Replaced Transaction
USD-LIBOR-BBA
3. Terms defined in this Confirmation:
Agreement
Trustee
"Determination Time" means 5.00 pm Sydney time 4 Sydney Business Days prior to
the relevant Payment Date or other applicable exchange date.
Morgan
CREDIT SUPPORT PROVIDER PROVISIONS
Each Transaction under this Confirmation shall be capable of being specified as
a Replaced Transaction in accordance with the provisions of Section 21 of the
Agreement. Those provisions shall apply as further specified below.
1. Definitions for Credit Events
"CALCULATION AGENT" means the party to the Transaction (or a third
party) designated as such for the Transaction. The Calculation Agent's
calculations and determinations shall be made in good faith, in a
commercially reasonable manner and be binding in the absence of manifest
error [Credit Support Provider];
<PAGE>
"INITIAL PRICE" means, with respect to any Reference Obligation, the percentage
listed with respect thereto in the definition of Reference Obligation herein as
the Initial Price;
"INTEREST RATE ADJUSTMENT AMOUNT" means, with respect to any Reference
Obligation, the absolute value of the difference between (i) the Mark to Market
Value and (ii) 100% minus the Initial Price;
"MARK TO MARKET VALUE" means, in the determination of the Calculation Agent,
with respect to any Reference Obligation, on any day, the mark to market value
payable on that day (expressed as a percentage of the notional amount thereof),
of a hypothetical interest rate swap commencing on the Effective Date between a
hypothetical party ("Party X") and a counterparty with the highest long term
senior debt rating of each Rating Agency, which swap has a notional amount equal
to the Floating Rate Payer Calculation Amount and under which Party X (i) pays
the Mark to Market Rate plus the Initial Spread and (ii) receives a fixed
interest amount equal in amount and timing to the coupons on the Reference
Obligation. If, under such swap, Party X would be due to pay such mark to
market value, Mark to Market Value will be negative and, if Party X would be due
to receive such mark to market value, the Mark to Market Value will be positive.
"MARKET VALUE" means, in accordance with the Quotation Method, the percentage
equal to the arithmetic mean of quotations (exclusive of accrued but unpaid
interest and expressed as a percentage) obtained from Dealers with respect to a
Valuation Date in the manner provided below. In obtaining such price quotations
from Dealers, the Calculation Agent will request each Dealer to provide firm bid
and offer quotations for an aggregate amount of the Reference Obligation equal
to the Quotation Amount to the extent reasonably practicable as of the Valuation
Time on such Valuation Date. If more than three quotations are provided on such
date, the Market Value shall be the arithmetic mean of such quotations without
regard to the quotations having the highest and lowest values. If exactly three
quotations are provided, the Market Value shall be the quotation remaining after
disregarding the highest and lowest quotations. For this purpose, if more than
one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If exactly two quotations are provided, the
Market Value shall be the arithmetic mean of such quotations. If fewer than two
quotations are provided, then the Market Value shall be an amount as determined
by the Calculation Agent on the next Business Day on which at least two
quotations are provided by Dealers. If the Calculation Agent is unable to
calculate the Market Value prior to the fifth Business Day following the
applicable Valuation Date, then the Calculation Agent shall determine the Market
Value for such Valuation Date in its reasonable discretion;
"QUOTATION METHOD":
[Bid means that only the bid quotations provided by Dealers shall be
used in the calculation of Market Value] or
[Offer means that only the offer quotations provided by Dealers shall be
used in the calculation of Market Value.] or
[Mid-market means that only the arithmetic mean of the bid and offer
quotations provided by Dealers that have provided both bid and offer
quotations shall be used in the calculation of Market Value.];
<PAGE>
"REFERENCE OBLIGATION" means the obligation(s) as follows:
Issuer/Borrower: [ ]
Guarantor: [ ]
Maturity: [ ]
Coupon: [ ]
CUSIP/ISIN: [ ]
Original Issue Amount: [ ]
Initial Price: [ ]
Initial Spread: [ ];
"SPECIFIED INDEBTEDNESS" means any obligation (whether present or
future, contingent or otherwise, as principal or surety or otherwise in
respect of money borrowed or raised or under any finance lease,
redeemable preference share, letter of credit, futures contract,
guarantee, indemnity or a transaction of a type described in the last 6
lines of the definition of Specified Transaction.
"THRESHOLD AMOUNT" means [US$25,000,000]
"VALUATION TIME" - [ ]
2. The parties acknowledge that on the Effective Date of the Substitute
Transaction or the Equivalent Transaction, Party A shall pay to the
Credit Support Provider (in the case of the Substitute Transaction) or
to the new Currency Swap Provider (in the case of the Equivalent
Transaction) the amount equal to the amount (if a positive number) that
hypothetically would have been payable by Party A to Party B under
Section 6(e)(i)(3) if:
(a) the Transaction had been terminated;
(b) an Early Termination Date had occurred on the Effective Date; and
(c) Section 21 had not applied in respect of the Transaction.
Any such amount shall be payable by Party A to the Credit Support
Provider in accordance with the provisions of the relevant Master
Agreement between Party A and the Credit Support Provider (in the case
of the Substitute Transaction) or to the New Currency Swap Provider in
accordance with the relevant Master Agreement between Party A and the
New Currency Swap Provider (in the case of the Equivalent Transaction).
<PAGE>
ACCESSION BY NEW CURRENCY SWAP PROVIDER
As specified in the Substitution Notice given by Morgan under the Other
Agreement, we agree to be the Credit Support Provider to Morgan as governed by
the terms of the Agreement, in respect of the Transaction specified by this
Annexure 3, and we agree that all references in the Agreement and this
Transaction to "Credit Support Provider" shall be to us, and for consideration
which we acknowledge as having been received, we hereby accept the accession to
us of all the rights and obligations as Credit Support Provider as and from the
Effective Date of this Transaction.
Agreed and accepted as the new Credit
Support Provider:
By:
Name:
Title:
Agreed and confirmed as of the Effective Date of the Transaction
specified in this Annexure 3:
WESTPAC SECURITIES ADMINISTRATION LIMITED(ACN 000 049 472) in its
capacity as Party B
By:______________________________
Name:
Title:
WESTPAC SECURITISATION MANAGEMENT PTY LIMITED (ACN 081 709 211)
in its capacity as Trust Manager
By:______________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
in its capacity as Party A
By:______________________________
Name:
Title:
<PAGE>
Westpac Securities Administration Limited
in its capacity as trustee of the Series 1998-1G WST Trust
Level 10, 130 Pitt Street
Sydney
cc: Westpac Securitisation Management Pty Limited
Level 6, 60 Martin Place
Sydney
Westpac Banking Corporation
225 Elizabeth Street
Sydney
Dear Sir
CURRENCY SWAP TRANSACTIONS - SERIES 1998-1G WST TRUST
CLASS B MORTGAGE BACKED FLOATING RATE NOTES
The purpose of this letter is to confirm the terms and conditions of the swap
transactions entered into between us on the Trade Dates specified below (the
"TRANSACTIONS"). This letter constitutes a "Confirmation" as referred to in the
Master Agreement specified below.
1. This Confirmation supplements, forms part of, and is subject to, the
Master Agreement dated [ June] 1998, as amended and supplemented from
time to time (the "AGREEMENT") between you and us. All provisions
contained in the Agreement govern this Confirmation except as expressly
modified below. Without limitation, Section 21 of the Agreement shall
apply to this Confirmation and the Transactions under it, as further
specified below.
2. Terms defined in the Conditions dated [ June] 1998 in respect of the
issue of US$xxx,xxx,xxx in Class B Mortgage-Backed Floating Rate Notes
due [2032] have the same meanings when used in this Confirmation.
3. The terms of the particular Transaction to which this Confirmation
relate are as specified in the Annexure to this Confirmation.
4. For the purposes of this Confirmation, Morgan Guaranty Trust Company of
New York, London Office, is known as "MORGAN", Westpac Securities
Administration Limited in its capacity as trustee of the Series 1998-1G
WST Trust is known as "TRUSTEE", Westpac Securitisation Management Pty
Limited is known as "MANAGER" and Westpac Banking Corporation is known
as "CREDIT SUPPORT PROVIDER".
5. Account Details
Payments to Morgan: to be advised
Payments to Trustee: to be advised
<PAGE>
6. Offices
(a) The Office of Morgan for the Swap Transactions is LONDON; and
(b) The Office of the Trustee for the Swap Transactions is SYDNEY.
Yours sincerely,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By:
Name:
Title:
Confirmed as of the
date above first written:
WESTPAC SECURITIES ADMINISTRATION LIMITED(ACN 000 049 472) in its capacity as
trustee of the Series 1998-1G WST Trust
By:______________________________
Name:
Title:
WESTPAC SECURITISATION MANAGEMENT PTY LIMITED (ACN 081 709 211)
in its capacity as Trust Manager
By:______________________________
Name:
Title:
WESTPAC BANKING CORPORATION (ARBN 007 457 141)
in its capacity as Credit Support Provider to Morgan
By:______________________________
Name:
Title:
<PAGE>
ANNEXURE 1 - CLASS B NOTES
--------------------------
Morgan Deal Number [ ]
Trade Date: [ June] 1998
Effective Date: Closing Date
Termination Date: Final Maturity Date (adjusted in
accordance with the Modified Following
Business Day Convention)
FLOATING INTEREST AMOUNTS
FLOATING AMOUNTS PAYABLE BY MORGAN:
These Floating Amounts are payable by Morgan unless there is, on any Floating
Rate Payer Payment Date, any reduction in Class B Interest resulting from a
reduction in A$ Class B Interest Amount pursuant to clause [6.17(a)(ii)(A)] of
the Series Notice (as specified in a notice to Morgan by the Determination
Time), in which case the Floating Amount shall be reduced by the same proportion
as the reduction in the A$ Class B Interest Amount.
Floating Rate Payer: Morgan
Notional Amount: An amount equal to fifty (50) percent of
the total Invested Amount of all Class B
Notes as at the first day of the
Interest Period ending on but excluding
the relevant Floating Rate Payer Payment
Date
Floating Rate Payer Payment Dates: Each Payment Date up to, and including
the last Payment Date prior to Maturity
Date, and the Termination Date
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: Three months
Spread: Plus [ ] percent
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
<PAGE>
FLOATING AMOUNTS PAYABLE BY THE TRUSTEE:
These Floating Amounts are payable by the Trustee unless there is, on any
Floating Rate Payer Payment Date, any reduction in A$ Class B Interest Amount
pursuant to clause [6.17(a)(ii)(A)] of the Series Notice (as specified in a
notice by the Trustee or Trust Manager to Morgan by the Determination Time), in
which case instead of the Floating Amount Trustee shall pay an amount equal to
the lesser A$ amount specified in that notice on that Floating Rate Payer
Payment Date.
Floating Rate Payer: Trustee
Notional Amount: An amount equal to fifty (50) percent of
the A$ Equivalent (applying USD 0.6[ ])
of the total Invested Amount of all
Class_A Notes as at the first day of the
Interest Period ending on but excluding
the relevant Floating Rate Payer Payment
Date
Floating Rate Payer Payment Dates: Each Payment Date up to and including
the last Payment Date prior to Maturity
Date, and the Termination Date
Floating Rate Option: AUD-BBR-BBSW
Designated Maturity: 90 days
Spread: Plus 0.[ ] percent
Floating Rate Day Count Fraction: Actual/365 (Fixed)
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
<PAGE>
EXCHANGES
INITIAL EXCHANGE:
Initial Exchange Date: Closing Date
Morgan Pays Initial Exchange: An amount equal to fifty (50) percent of
the total Class B Initial Invested
Amount of all Class B Notes on the
Closing Date divided by the exchange
rate of USD 0.6[ ] being (AUD [ ])
Trustee Pays Initial Exchange: An amount equal to fifty (50) percent of
the total of the Class B Initial
Invested Amount of all of the Class B
Notes on the Closing Date being USD [ ]
INSTALMENT EXCHANGE
Instalment Exchange Date Each Payment Date (other than a Final
Exchange Date
Morgan Pays Instalment Exchange: An amount equal to fifty (50) percent of
the Class B Principal Payment paid on
the relevant Instalment Exchange Date
towards a reduction of the Principal
Amount of Class B Notes, as calculated
by multiplying the Trustee Instalment
Exchange Payment on the relevant
Instalment Exchange Date by the exchange
rate of USD 0.6[ ]
Trustee Pays Instalment Exchange: An amount equal to fifty (50) percent of
the amount expressed under clause [6.14,
6.15 or 6.16] (as applicable) of the
Series Notice as being payable under a
Confirmation relating to Class B Notes
plus any amount payable under clause
[6.11(a)(ii)(C)] of the Series Notice
(together, the "TRUSTEE INSTALMENT
EXCHANGE PAYMENT") as specified in the
notice issued by the Trustee (or Trust
Manager to Morgan by the Determination
Time in respect of that Instalment
Exchange Date
<PAGE>
FINAL EXCHANGE:
Final Exchange Date: The earlier of the Termination Date and
the Date of the [10% Clean Up under
clause 8.9(d)] of the Master Trust Deed
as amended by the Series Notice and the
date of redemption of all the Class B
Notes for taxation or other reasons,
adjusted in accordance with the Modified
Following Business Day Convention
Morgan Pays Final Exchange: An amount equal to fifty (50) percent of
the aggregate Final Exchange payable by
the Trustee under this Confirmation,
multiplied by the exchange rate of USD
0.6[ ]
Trustee Pays Final Exchange: An amount equal to fifty (50) percent of
the aggregate amount expressed under
clause [6.14, 6.15 or 6.16] (as
applicable) of the Series Notice as
being payable under a Confirmation
relating to Class B Notes plus any
amount payable under clause
[6.11(a)(ii)(C)] of the Series Notice as
specified in the Notice issued by the
Trustee (or Trust Manager) to Morgan by
the Determination Time in respect of
that Final Exchange Date
Business Day Locations for Trustee: Sydney
Business Day Locations for Morgan: New York, London
Payments will be: Gross
<PAGE>
GLOSSARY
1. Terms defined in the Series Notice:
A$ Equivalent Invested Amount
Class B Initial Invested Amount Maturity Date
Class B Notes Payment Date
Closing Date Principal Payment
Interest Period Trust Manager
2. Terms defined in the Agreement (including 1991 ISDA Definitions) are:
Actual/360
Actual/365 (Fixed)
AUD-BBR-BBSW
Modified Following Business Day ConventionReplaced TransactionUSD-LIBOR-BBA
3. Terms defined in this Confirmation:
Agreement
Trustee
"Determination Time" means 5.00 pm Sydney time 4 Sydney Business Days prior to
the relevant Payment Date or other applicable exchange date.
Morgan
CREDIT SUPPORT PROVIDER PROVISIONS
Each Transaction under this Confirmation shall be capable of being specified as
a Replaced Transaction in accordance with the provisions of Section 21 of the
Agreement. Those provisions shall apply as further specified below.
1. Definitions for Credit Events
"CALCULATION AGENT" means the party to the Transaction (or a third party)
designated as such for the Transaction. The Calculation Agent's
calculations and determinations shall be made in good faith, in a
commercially reasonable manner and be binding in the absence of manifest
error [Credit Support Provider];
"INITIAL PRICE" means, with respect to any Reference Obligation, the
percentage listed with respect thereto in the definition of Reference
Obligation herein as the Initial Price;
<PAGE>
"INTEREST RATE ADJUSTMENT AMOUNT" means, with respect to any Reference
Obligation, the absolute value of the difference between (i) the Mark to
Market Value and (ii) 100% minus the Initial Price;
"MARK TO MARKET VALUE" means, in the determination of the Calculation
Agent, with respect to any Reference Obligation, on any day, the mark to
market value payable on that day (expressed as a percentage of the notional
amount thereof), of a hypothetical interest rate swap commencing on the
Effective Date between a hypothetical party ("Party X") and a counterparty
with the highest long term senior debt rating of each Rating Agency, which
swap has a notional amount equal to the Floating Rate Payer Calculation
Amount and under which Party X (i) pays the Mark to Market Rate plus the
Initial Spread and (ii) receives a fixed interest amount equal in amount
and timing to the coupons on the Reference Obligation. If, under such
swap, Party X would be due to pay such mark to market value, Mark to Market
Value will be negative and, if Party X would be due to receive such mark to
market value, the Mark to Market Value will be positive.
"MARKET VALUE" means, in accordance with the Quotation Method, the
percentage equal to the arithmetic mean of quotations (exclusive of accrued
but unpaid interest and expressed as a percentage) obtained from Dealers
with respect to a Valuation Date in the manner provided below. In
obtaining such price quotations from Dealers, the Calculation Agent will
request each Dealer to provide firm bid and offer quotations for an
aggregate amount of the Reference Obligation equal to the Quotation Amount
to the extent reasonably practicable as of the Valuation Time on such
Valuation Date. If more than three quotations are provided on such date,
the Market Value shall be the arithmetic mean of such quotations without
regard to the quotations having the highest and lowest values. If exactly
three quotations are provided, the Market Value shall be the quotation
remaining after disregarding the highest and lowest quotations. For this
purpose, if more than one quotation has the same highest value or lowest
value, then one of such quotations shall be disregarded. If exactly two
quotations are provided, the Market Value shall be the arithmetic mean of
such quotations. If fewer than two quotations are provided, then the
Market Value shall be an amount as determined by the Calculation Agent on
the next Business Day on which at least two quotations are provided by
Dealers. If the Calculation Agent is unable to calculate the Market Value
prior to the fifth Business Day following the applicable Valuation Date,
then the Calculation Agent shall determine the Market Value for such
Valuation Date in its reasonable discretion;
"QUOTATION METHOD":
[Mid-market means that only the arithmetic mean of the bid and offer
quotations provided by Dealers that have provided both bid and offer
quotations shall be used in the calculation of Market Value.];
"REFERENCE OBLIGATION" means the obligation(s) as follows:
Issuer/Borrower: [ ]
Guarantor: [ ]
Maturity: [ ]
Coupon: [ ]
CUSIP/ISIN: [ ]
Original Issue Amount: [ ]
Initial Price: [ ]
Initial Spread: [ ];
"SPECIFIED INDEBTEDNESS" means any obligation (whether present or future,
contingent or otherwise, as principal or surety or otherwise in respect of
money borrowed or raised or under any finance lease, redeemable preference
share, letter of credit, futures contract, guarantee, indemnity or a
transaction of a type described in the last 6 lines of the definition of
Specified Transaction.
"THRESHOLD AMOUNT" means [US$25,000,000]
"VALUATION TIME" - [ ]
2. The parties acknowledge that on the Effective Date of the Substitute
Transaction or the Equivalent Transaction, Party A shall pay to the Credit
Support Provider (in the case of the Substitute Transaction) or to the new
Currency Swap Provider (in the case of the Equivalent Transaction) the
amount equal to the amount (if a positive number) that hypothetically would
have been payable by Party A to Party B under Section 6(e)(i)(3) if:
(a) the Transaction had been terminated;
(b) an Early Termination Date had occurred on the Effective Date; and
(c) Section 21 had not applied in respect of the Transaction.
Any such amount shall be payable by Party A to the Credit Support Provider
in accordance with the provisions of the relevant Master Agreement between
Party A and the Credit Support Provider (in the case of the Substitute
Transaction) or to the New Currency Swap Provider in accordance with the
relevant Master Agreement between Party A and the New Currency Swap
Provider (in the case of the Equivalent Transaction).
<PAGE>
ANNEXURE 2 - CLASS B NOTES - SUBSTITUTE TRANSACTION
---------------------------------------------------
Morgan Deal Number [ ]
Trade Date: [ June] 1998
Effective Date: The Effective Date shall be the date
specified in a Substitution Notice given
by Morgan as Credit Support Provider
under the Other Agreement.The Effective
Date shall not occur if the conditions
in respect of the Substitution Notice
have not been satisfied in full in
accordance with the Other Agreement.
Termination Date: Final Maturity Date (adjusted in
accordance with the Modified Following
Business Day Convention)
FLOATING INTEREST AMOUNTS
FLOATING AMOUNTS PAYABLE BY MORGAN:
These Floating Amounts are payable by Morgan unless there is, on any Floating
Rate Payer Payment Date, any reduction in Class B Interest resulting from a
reduction in A$ Class B Interest Amount pursuant to clause [6.17(a)(ii)(A)] of
the Series Notice (as specified in a notice to Morgan by the Determination
Time), in which case the Floating Amount shall be reduced by the same proportion
as the reduction in the A$ Class B Interest Amount.
Floating Rate Payer: Morgan
Notional Amount: An amount equal to the total Invested
Amount of all Class B Notes as at the
first day of the Interest Period ending
on but excluding the relevant Floating
Rate Payer Payment Date
Floating Rate Payer Payment Dates: Each Payment Date on or after the
Effective Date up to, and including the
last Payment Date prior to Maturity
Date, and the Termination Date
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: Three months
Spread: Plus [ ] percent
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
<PAGE>
FLOATING AMOUNTS PAYABLE BY THE TRUSTEE:
These Floating Amounts are payable by the Trustee unless there is, on any
Floating Rate Payer Payment Date, any reduction in A$ Class B Interest Amount
pursuant to clause [6.17(a)(ii)(A)] of the Series Notice (as specified in a
notice by the Trustee or Trust Manager to Morgan by the Determination Time), in
which case instead of the Floating Amount Trustee shall pay an amount equal to
the lesser A$ amount specified in that notice on that Floating Rate Payer
Payment Date.
Floating Rate Payer: Trustee
Notional Amount: An amount equal to the A$ Equivalent
(applying USD 0.6[ ]) of the total
Invested Amount of all Class_A Notes as
at the first day of the Interest Period
ending on but excluding the relevant
Floating Rate Payer Payment Date
Floating Rate Payer Payment Dates: Each Payment Date on or after the
Effective Date up to and including the
last Payment Date prior to Maturity
Date, and the Termination Date
Floating Rate Option: AUD-BBR-BBSW
Designated Maturity: 90 days
Spread: Plus 0.[ ] percent
Floating Rate Day Count Fraction: Actual/365 (Fixed)
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
<PAGE>
EXCHANGES
INSTALMENT EXCHANGE
Instalment Exchange Date Each Payment Date on or after the
Effective Date (other than a Final
Exchange Date
Morgan Pays Instalment Exchange: An amount equal to the Class B Principal
Payment paid on the relevant Instalment
Exchange Date towards a reduction of the
Principal Amount of Class B Notes, as
calculated by multiplying the Trustee
Instalment Exchange Payment on the
relevant Instalment Exchange Date by the
exchange rate of USD 0.6[ ]
Trustee Pays Instalment Exchange: An amount equal to the amount expressed
under clause [6.14, 6.15 or 6.16] (as
applicable) of the Series Notice as
being payable under a Confirmation
relating to Class B Notes plus any
amount payable under clause
[6.11(a)(ii)(C)] of the Series Notice
(together, the "TRUSTEE INSTALMENT
EXCHANGE PAYMENT") as specified in the
notice issued by the Trustee (or Trust
Manager to Morgan by the Determination
Time in respect of that Instalment
Exchange Date
FINAL EXCHANGE:
Final Exchange Date: The earlier of the Termination Date and
the Date of the [10% Clean Up under
clause 8.9(d)] of the Master Trust Deed
as amended by the Series Notice and the
date of redemption of all the Class B
Notes for taxation or other reasons,
adjusted in accordance with the Modified
Following Business Day Convention
Morgan Pays Final Exchange: An amount equal to the aggregate Final
Exchange payable by the Trustee under
this Confirmation, multiplied by the
exchange rate of USD 0.6[ ]
Trustee Pays Final Exchange: An amount equal to the aggregate amount
expressed under clause [6.14, 6.15 or
6.16] (as applicable) of the Series
Notice as being payable under a
Confirmation relating to Class B Notes
plus any amount payable under clause
[6.11(a)(ii)(C)] of the Series Notice as
specified in the Notice issued by the
Trustee (or Trust Manager) to Morgan by
the Determination Time in respect of
that Final Exchange Date
Business Day Locations for Trustee: Sydney
Business Day Locations for Morgan: New York, London
Payments will be: Gross
<PAGE>
GLOSSARY
1. Terms defined in the Series Notice:
A$ Equivalent Invested Amount
Class B Initial Invested Amount Maturity Date
Class B Notes Payment Date
Closing Date Principal Payment
Interest Period Trust Manager
2. Terms defined in the Agreement (including 1991 ISDA Definitions) are:
Actual/360
Actual/365 (Fixed)
AUD-BBR-BBSW
Modified Following Business Day Convention
Other Agreement. For the avoidance of doubt, the Other Agreement is the
agreement between Westpac Banking Corporation as Party A, the Trustee as Party
B, Morgan as the Credit Support Provider to Party A and the Manager, dated on or
about the date of the Agreement.
Substitution Notice
USD-LIBOR-BBA
3. Terms defined in this Confirmation:
Agreement
Trustee
"Determination Time" means 5.00 pm Sydney time 4 Sydney Business Days prior to
the relevant Payment Date or other applicable exchange date.
Morgan
<PAGE>
ANNEXURE 3 - CLASS B NOTES -
"EQUIVALENT-OTHER TRANSACTION"
-------------------------------
Morgan Deal Number [ ]
Trade Date: [ June] 1998
Effective Date: The Effective Date shall be the date
specified in a Substitution Notice given
by Morgan as Credit Support Provider
under the Other Agreement.The Effective
Date shall not occur if the conditions
in respect of the Substitution Notice
have not been satisfied in full in
accordance with the Other Agreement.
Termination Date: Final Maturity Date (adjusted in
accordance with the Modified Following
Business Day Convention)
FLOATING INTEREST AMOUNTS
FLOATING AMOUNTS PAYABLE BY MORGAN:
These Floating Amounts are payable by Morgan unless there is, on any Floating
Rate Payer Payment Date, any reduction in Class B Interest resulting from a
reduction in A$ Class B Interest Amount pursuant to clause [6.17(a)(ii)(A)] of
the Series Notice (as specified in a notice to Morgan by the Determination
Time), in which case the Floating Amount shall be reduced by the same proportion
as the reduction in the A$ Class B Interest Amount.
Floating Rate Payer: Morgan
Notional Amount: An amount equal to fifty (50) percent of
the total Invested Amount of all Class B
Notes as at the first day of the
Interest Period ending on but excluding
the relevant Floating Rate Payer Payment
Date
Floating Rate Payer Payment Dates: Each Payment Date on or after the
Effective Date up to, and including the
last Payment Date prior to Maturity
Date, and the Termination Date
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: Three months
Spread: Plus [ ] percent
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
<PAGE>
FLOATING AMOUNTS PAYABLE BY THE TRUSTEE:
These Floating Amounts are payable by the Trustee unless there is, on any
Floating Rate Payer Payment Date, any reduction in A$ Class B Interest Amount
pursuant to clause [6.17(a)(ii)(A)] of the Series Notice (as specified in a
notice by the Trustee or Trust Manager to Morgan by the Determination Time), in
which case instead of the Floating Amount Trustee shall pay an amount equal to
the lesser A$ amount specified in that notice on that Floating Rate Payer
Payment Date.
Floating Rate Payer: Trustee
Notional Amount: An amount equal to fifty (50) percent of
the A$ Equivalent (applying USD 0.6[ ])
of the total Invested Amount of all
Class_A Notes as at the first day of the
Interest Period ending on but excluding
the relevant Floating Rate Payer Payment
Date
Floating Rate Payer Payment Dates: Each Payment Date on or after the
Effective Date up to and including the
last Payment Date prior to Maturity
Date, and the Termination Date
Floating Rate Option: AUD-BBR-BBSW
Designated Maturity: 90 days
Spread: Plus 0.[ ] percent
Floating Rate Day Count Fraction: Actual/365 (Fixed)
Reset Dates: The first day of each Interest Period
Compounding: Inapplicable
<PAGE>
EXCHANGES
INSTALMENT EXCHANGE
Instalment Exchange Date Each Payment Date on or after the
Effective Date (other than a Final
Exchange Date
Morgan Pays Instalment Exchange: An amount equal to fifty (50) percent of
the Class B Principal Payment paid on
the relevant Instalment Exchange Date
towards a reduction of the Principal
Amount of Class B Notes, as calculated
by multiplying the Trustee Instalment
Exchange Payment on the relevant
Instalment Exchange Date by the exchange
rate of USD 0.6[ ]
Trustee Pays Instalment Exchange: An amount equal to fifty (50) percent of
the amount expressed under clause [6.14,
6.15 or 6.16] (as applicable) of the
Series Notice as being payable under a
Confirmation relating to Class B Notes
plus any amount payable under clause
[6.11(a)(ii)(C)] of the Series Notice
(together, the "TRUSTEE INSTALMENT
EXCHANGE PAYMENT") as specified in the
notice issued by the Trustee (or Trust
Manager to Morgan by the Determination
Time in respect of that Instalment
Exchange Date
<PAGE>
FINAL EXCHANGE:
Final Exchange Date: The earlier of the Termination Date and
the Date of the [10% Clean Up under
clause 8.9(d)] of the Master Trust Deed
as amended by the Series Notice and the
date of redemption of all the Class B
Notes for taxation or other reasons,
adjusted in accordance with the Modified
Following Business Day Convention
Morgan Pays Final Exchange: An amount equal to fifty (50) percent of
the aggregate Final Exchange payable by
the Trustee under this Confirmation,
multiplied by the exchange rate of USD
0.6[ ]
Trustee Pays Final Exchange: An amount equal to fifty (50) percent of
the aggregate amount expressed under
clause [6.14, 6.15 or 6.16] (as
applicable) of the Series Notice as
being payable under a Confirmation
relating to Class B Notes plus any
amount payable under clause
[6.11(a)(ii)(C)] of the Series Notice as
specified in the Notice issued by the
Trustee (or Trust Manager) to Morgan by
the Determination Time in respect of
that Final Exchange Date
Business Day Locations for Trustee: Sydney
Business Day Locations for Morgan: New York, London
Payments will be: Gross
<PAGE>
GLOSSARY
1. Terms defined in the Series Notice:
A$ Equivalent Invested Amount
Class B Initial Invested Amount Maturity Date
Class B Notes Payment Date
Closing Date Principal Payment
Interest Period Trust Manager
2. Terms defined in the Agreement (including 1991 ISDA Definitions) are:
Actual/360
Actual/365 (Fixed)
AUD-BBR-BBSW
Modified Following Business Day ConventionOther Agreement. For the avoidance of
doubt, the Other Agreement is the agreement between Westpac Banking Corporation
as Party A, the Trustee as Party B, Morgan as the Credit Support Provider to
Party A and the Manager, dated on or about the date of the Agreement.
Replaced TransactionUSD-LIBOR-BBA
3. Terms defined in this Confirmation:
Agreement
Trustee
"Determination Time" means 5.00 pm Sydney time 4 Sydney Business Days prior to
the relevant Payment Date or other applicable exchange date.
Morgan
4. Terms defined in this Annexure 3:
"Credit Support Provider" shall mean the party specified as the "New Currency
Swap Provider" in the Substitution Notice given by Morgan under the Other
Agreement, as confirmed by the New Currency Swap Provider signing and the other
parties to this Transaction countersigning the accession agreement below.
CREDIT SUPPORT PROVIDER PROVISIONS
Each Transaction under this Confirmation shall be capable of being specified as
a Replaced Transaction in accordance with the provisions of Section 21 of the
Agreement. Those provisions shall apply as further specified below.
<PAGE>
1. Definitions for Credit Events
"CALCULATION AGENT" means the party to the Transaction (or a third party)
designated as such for the Transaction. The Calculation Agent's
calculations and determinations shall be made in good faith, in a
commercially reasonable manner and be binding in the absence of manifest
error [Credit Support Provider];
"INITIAL PRICE" means, with respect to any Reference Obligation, the
percentage listed with respect thereto in the definition of Reference
Obligation herein as the Initial Price;
"INTEREST RATE ADJUSTMENT AMOUNT" means, with respect to any Reference
Obligation, the absolute value of the difference between (i) the Mark to
Market Value and (ii) 100% minus the Initial Price;
"MARK TO MARKET VALUE" means, in the determination of the Calculation
Agent, with respect to any Reference Obligation, on any day, the mark to
market value payable on that day (expressed as a percentage of the notional
amount thereof), of a hypothetical interest rate swap commencing on the
Effective Date between a hypothetical party ("Party X") and a counterparty
with the highest long term senior debt rating of each Rating Agency, which
swap has a notional amount equal to the Floating Rate Payer Calculation
Amount and under which Party X (i) pays the Mark to Market Rate plus the
Initial Spread and (ii) receives a fixed interest amount equal in amount
and timing to the coupons on the Reference Obligation. If, under such
swap, Party X would be due to pay such mark to market value, Mark to Market
Value will be negative and, if Party X would be due to receive such mark to
market value, the Mark to Market Value will be positive.
"MARKET VALUE" means, in accordance with the Quotation Method, the
percentage equal to the arithmetic mean of quotations (exclusive of accrued
but unpaid interest and expressed as a percentage) obtained from Dealers
with respect to a Valuation Date in the manner provided below. In
obtaining such price quotations from Dealers, the Calculation Agent will
request each Dealer to provide firm bid and offer quotations for an
aggregate amount of the Reference Obligation equal to the Quotation Amount
to the extent reasonably practicable as of the Valuation Time on such
Valuation Date. If more than three quotations are provided on such date,
the Market Value shall be the arithmetic mean of such quotations without
regard to the quotations having the highest and lowest values. If exactly
three quotations are provided, the Market Value shall be the quotation
remaining after disregarding the highest and lowest quotations. For this
purpose, if more than one quotation has the same highest value or lowest
value, then one of such quotations shall be disregarded. If exactly two
quotations are provided, the Market Value shall be the arithmetic mean of
such quotations. If fewer than two quotations are provided, then the
Market Value shall be an amount as determined by the Calculation Agent on
the next Business Day on which at least two quotations are provided by
Dealers. If the Calculation Agent is unable to calculate the Market Value
prior to the fifth Business Day following the applicable Valuation Date,
then the Calculation Agent shall determine the Market Value for such
Valuation Date in its reasonable discretion;
"QUOTATION METHOD":
[Bid means that only the bid quotations provided by Dealers shall be
used in the calculation of Market Value] or
[Offer means that only the offer quotations provided by Dealers shall
be used in the calculation of Market Value.] or
[Mid-market means that only the arithmetic mean of the bid and offer
quotations provided by Dealers that have provided both bid and offer
quotations shall be used in the calculation of Market Value.];
"REFERENCE OBLIGATION" means the obligation(s) as follows:
Issuer/Borrower: [ ]
Guarantor: [ ]
Maturity: [ ]
Coupon: [ ]
CUSIP/ISIN: [ ]
Original Issue Amount: [ ]
Initial Price: [ ]
Initial Spread: [ ];
<PAGE>
"SPECIFIED INDEBTEDNESS" means any obligation (whether present or future,
contingent or otherwise, as principal or surety or otherwise in respect of
money borrowed or raised or under any finance lease, redeemable preference
share, letter of credit, futures contract, guarantee, indemnity or a
transaction of a type described in the last 6 lines of the definition of
Specified Transaction.
"THRESHOLD AMOUNT" means [US$25,000,000]
"VALUATION TIME" - [ ]
2. The parties acknowledge that on the Effective Date of the Substitute
Transaction or the Equivalent Transaction, Party A shall pay to the Credit
Support Provider (in the case of the Substitute Transaction) or to the new
Currency Swap Provider (in the case of the Equivalent Transaction) the
amount equal to the amount (if a positive number) that hypothetically would
have been payable by Party A to Party B under Section 6(e)(i)(3) if:
(a) the Transaction had been terminated;
(b) an Early Termination Date had occurred on the Effective Date; and
(c) Section 21 had not applied in respect of the Transaction.
Any such amount shall be payable by Party A to the Credit Support Provider
in accordance with the provisions of the relevant Master Agreement between
Party A and the Credit Support Provider (in the case of the Substitute
Transaction) or to the New Currency Swap Provider in accordance with the
relevant Master Agreement between Party A and the New Currency Swap
Provider (in the case of the Equivalent Transaction).
<PAGE>
ACCESSION BY NEW CURRENCY SWAP PROVIDER
As specified in the Substitution Notice given by Morgan under the Other
Agreement, we agree to be the Credit Support Provider to Morgan as governed by
the terms of the Agreement, in respect of the Transaction specified by this
Annexure 3, and we agree that all references in the Agreement and this
Transaction to "Credit Support Provider" shall be to us, and for consideration
which we acknowledge as having been received, we hereby accept the accession to
us of all the rights and obligations as Credit Support Provider as and from the
Effective Date of this Transaction.
Agreed and accepted as the new Credit
Support Provider:
By:
Name:
Title:
Agreed and Confirmed as of the Effective Date of the Transaction specified
in this Annexure 3:
WESTPAC SECURITIES ADMINISTRATION LIMITED(ACN 000 049 472)
in its capacity as Party B
By:______________________________
Name:
Title:
WESTPAC SECURITISATION MANAGEMENT PTY LIMITED (ACN 081 709 211)
in its capacity as Trust Manager
By:______________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
in its capacity as Party A
By:______________________________
Name:
Title:
<PAGE>
(Multicurrency--Cross Border) [LOGO]
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of ____________ 1998
Westpac Banking Corporation Westpac Securities Administration Limited
(ARBN 007 457 141) (ACN 000 049 472) in its capacity as
- ----------------------------- and ---------------------------------------------
trustee of the Series 1998-1G WST Trust and
Westpac Securitisation Management Pty Limited
(ACN 081 709 211)
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows: --
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise specified in
the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing,
(2) the condition precedent that no Early Termination Date in respect of
the relevant Transaction has occurred or been effectively designated and
(3) each other applicable condition precedent specified in this Agreement.
<PAGE>
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable: --
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment or any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will: --
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving notice that
such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Identifiable Tax, pay to Y, in addition to the
payment to which Y is otherwise entitled under this Agreement, such
additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full amount Y would
have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to
the extent that it would not be required to be paid but for: --
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure would
not have occurred but for (I) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on
or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (II) a Change in Tax
Law.
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<PAGE>
(ii) Liability. if: --
(1) X is required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, to make any
deduction or withholding in respect of which X would not be required
to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgement) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that: --
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organsiation or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform
its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all necessary
action to authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision of
its constitutional documents, any order or judgement of any court or other
agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in full
force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid
and binding obligations, enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding
in equity or at law)).
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<PAGE>
(b) Absence of Certain Events. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) Absence of Litigation. There is not pending, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party: --
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs: --
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to allow
such other party or its Credit Support Provider to make a payment under
this Agreement or any applicable Credit Support Document without any
deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of such
demand), with any such form or document to be accurate and completed in a
manner reasonably satisfactory to such other party and to be executed and
to be delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,
4
<PAGE>
organised, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other part or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party: --
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
in accordance with this Agreement if such failure is not remedied on or
before the thirtieth day after notice of such failure is given to the
party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction
of all obligations of such party under each Transaction to which
such Credit Support Document relates without the written consent of
the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the
validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due
on the last payment delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act
on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however
5
<PAGE>
described) in respect of such party, any Credit Support Provider of such
party or any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of
them (individually or collectively) in an aggregate amount of not less
than the applicable Threshold Amount (as specified in the Schedule) which
has resulted in such Specified Indebtedness becoming, or becoming capable
at such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on
the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party: --
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a
judgement of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (A)
results in a judgement of insolvency or bankruptcy or the entry of
an order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant
to a consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;
(7) has a secured party take possession of all or substantially all
its assets or has a distress, execution, attachment, sequestration
or other legal process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed
or restrained, in each case within 30 days thereafter; (8) causes or
is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect to any
of the events specified in clauses (1) to (7) (inclusive); or (9)
takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at
the time of such consolidation, amalgamation, merger or transfer: --
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event
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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below: --
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party): --
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is
required to be paid in respect of such Tax under Section 2(d)(i)(4) (other
than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which
the other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event" is
specified in the Schedule or any Confirmation as applying, the occurrence
of such event (and, in such event, the Affected Party or Affected Parties
shall be as specified for such Additional Termination Event in the
Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
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6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying the
nature of that Termination Event and each Affected Transaction and will
also give such other information about that Termination Event as the other
party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and obligations
under this Agreement in respect of the Affected Transactions to another of
its Offices or Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a
Tax Event occurs and there are two Affected Parties, each party will use
all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that Termination
Event.
(iv) Right to Terminate. If: --
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to
all Affected Transactions within 30 days after an Affected Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a
Credit Event Upon Merger or an Additional Termination Event if there is
only one Affected Party may, by not more than 20 days notice to the other
party and provided that the relevant Termination Event is then
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continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence of effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount,
if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of
such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in
the Termination Currency, from (and including) the relevant Early
Termination Date to (but excluding) the date such amount is paid, at the
Applicable Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an Event
of Default: --
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the
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Non-defaulting Party) in respect of the Terminated Transactions and
the Termination Currency Equivalent of the Unpaid Amounts owing to
the Non-defaulting Party less (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party. If
that amount is a positive number, the Defaulting Party will pay it
to the Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that amount to
the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
(iii) Termination Events. If the Early Termination Date results from a
Termination Event: --
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and
to the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in
respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties: --
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions,
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to X less (II) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with the
lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if
it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the period from
the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate of
loss and not a penalty. Such amount is payable for the loss of bargain and
the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
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7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
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9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable
and may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding supplement to
this Agreement. The parties will specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of Transaction without prior written
consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document
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to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated: --
(i) if in writing and delivered in person or by courier, on the date it is
delivered;
(ii) if sent by telex, on the date the recipient's answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered
or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified an the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably: --
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan an New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any
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reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.
(d) Waiver of immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement: --
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means: --
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
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"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have
15
<PAGE>
been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group or Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: --
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
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<PAGE>
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market
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<PAGE>
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
Westpac Securities Administration Limited
Westpac Banking Corporation (ACN 000 049 472) in its capacity as
(ARBN 007 457 141) trustee of the Series 1998-1G WST Trust
- ----------------------------- -----------------------------------------
(Name of Party) (Name of Party)
By: By:
------------------------- -------------------------
Name: Name:
Title: Title:
Date: Date:
Westpac Securitisation Management
Pty Limited (ACN 081 709 211)
- ---------------------------------
(Name of Party)
By:
-------------------------
Name:
Title:
Date:
18
<PAGE>
SCHEDULE
to the
ISDA Master Agreement
dated as of
between WESTPAC BANKING CORPORATION ("Party A")
WESTPAC SECURITIES ADMINISTRATION LIMITED
as trustee of WST Series 1998-1G ("Party B")
and
WESTPAC SECURITISATION MANAGEMENT PTY LIMITED ("Trust Manager")
Part 1
Termination Provisions
In this Agreement:-
(a) "Specified Entity" is not applicable in relation to Party A and Party B.
(b) The "Breach of Agreement", Credit Support Default" and "Misrepresentation"
provisions of Section 5(a)(ii), (iii) and (iv) will not apply to Party A
and Party B.
(c) The "Default under Specified Transaction" and "Cross Default" provisions
of Section 5(a)(v) and (vi) will not apply to Party A and Party B.
(d) "Termination Currency" means Australian Dollars.
(e) The "'Bankruptcy" provisions of Section 5(a)(vii) are replaced by "An
Insolvency Event has occurred in respect of the party". The occurrence of
an Insolvency Event in respect of Party B in its personal capacity will
not constitute an Event of Default provided that within thirty Business
Days of that occurrence, Party A and Party B are able to procure the
novation of this Agreement and all Transactions to a third party in
respect of which the Designated Rating Agencies confirm that the novation
will not cause a reduction or withdrawal of the rating of the Notes.
(f) Section 5(a)(i) is amended to replace "third" with "tenth".
(g) The "Merger Without Assumption" provisions of Section 5(a)(viii) will not
apply to Party A and Party B. The provisions of Sections 5(b)(ii)("Tax
Event") and 5(b)(iii)("Tax Event Upon Merger") will not apply to Party A
and Party B. The "Credit Event Upon Merger" provisions of Section 5(b)(iv)
will not apply to Party A and Party B.
(h) An "Additional Termination Event" , set out in Part 5(i)(a) and (d) of
this Schedule, will apply.
(i) The "Automatic Early Termination" provision of Section 6(a) will not apply
to Party A and Party B. Any event which, upon its occurrence, constitutes
an Event of Default, is deemed not to be an essential term of the
Transaction so that the occurrence of any Event of Default shall not be
implied to constitute a repudiation of the Agreement. This does not in any
way restrict or limit the right of a Non-Defaulting Party under section
6(a) to terminate following an Event of Default.
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<PAGE>
(j) In the "Transfer to Avoid Termination Event" provision of Section
6(b)(ii), after the words "another of its Offices or Affiliates" on the
seventh line add "(in respect of which the Designated Rating Agencies
confirm that the transfer will not cause a reduction or withdrawal of the
rating of the Notes)".
(k) Payments on Early Termination For the purpose of Section 6(e) of this
Agreement:-
(i) Subject to paragraphs a) and b) below, Loss will apply
(ii) The Second Method will apply
a) In respect of any Transaction that is described in its Confirmation
as a "Variable Rate Basis Swap", the Loss of each party entitled to
make a determination of its Loss under Section 6(e) will be deemed
to be zero; and
b) In respect of any Transaction that is, described in its Confirmation
as a "Fixed Rate Basis Swap", the Loss of each party entitled to
make a determination of its Loss under Section 6(e) will be deemed
to be that amount that would result from the application of the
"Market Quotation" payment measure to the Transaction.
(l) In the "Transfer" provision of Section 7, add at the end of paragraph (a)
after the closing parenthesis following the word "Agreement";
"provided, in respect of Party A, that such other entity is an
entity in respect of which the Designated Rating Agencies confirm
that the transfer will not cause a reduction or withdrawal of the
rating of the Notes";
and add a new paragraph (c);
"(c) Party B may transfer to a Successor Trustee (as defined below) or to
avoid an Illegality as specified in Section 5(b)(i)".
(m) Add a new paragraph to Section 7, immediately below paragraph (c):
In the event that a trustee is appointed as a successor to Party B under
the Trust Deed ("Successor Trustee"), Party A undertakes that it shall
(unless, at the time the Successor Trustee is so appointed, Party A is
entitled to terminate the Transaction under Section 6, in which case it
may) novate to the Successor Trustee the Transaction on the same terms or
on other terms to be agreed between Party A, Party B and the Successor
Trustee, and give written notice to the Designated Rating Agencies of such
novation.
(n) Add a new Section 2(f) Trustee Provisions:
Party B enters into this Agreement in its capacity as Trustee of the
Trust. Clause 33.16 of the Trust Deed applies to this Agreement as if set
out in full. Clause 15 of the Security Trust Deed shall apply to govern
Party A's priority to moneys received from the sale of Assets or other
enforcement of the Charge under the Security Trust Deed (each as defined
in the Security Trust Deed).
(o) In the "Amendment" provision of Section 9(b) add at the end", and notified
in writing to the Designated Rating Agencies".
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<PAGE>
Part 2
Tax Representations
(a) Deduction or Withholding for Tax. Section 2(d) is replaced with the
following section:
"All payments under this Agreement will be made subject to deduction or
withholding for or on account of any Tax. If a party is so required to
deduct or withhold, then that party ("X") will:
(i) promptly notify the other party ("Y") of such requirement;
(ii) pay to the relevant authorities the full amount required to be
deducted or withheld promptly upon the earlier of determining that
such deduction or withholding is required or receiving notice that
such amount has been assessed against Y;
(iii) promptly forward to Y an official (or a certified copy), or other
documentation reasonably acceptable to Y, evidencing such payment to
such authorities;
(iv) pay to Y the amount Y would have received had no deduction or
withholding been required less the amount of the deduction or
withholding paid by X under Section 2(d)(ii).
(b) Payer Tax Representation. For the purpose of Section 3(e), Party A and
Party B make the following representation:-
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on:-
(i) the accuracy of any representations made by the other party pursuant
to Section 3(f);
(ii) the satisfaction of the agreement of the other party contained in
Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by the other party pursuant
to Section 4(a)(i) or 4(a)(iii); and
(iii) the satisfaction of the agreement of the other party contained in
Section 4(d),
provided that it shall not be a breach of this representation where
reliance is placed on clause (ii) and the other party does not deliver a
form or document under Section 4(a)(iii) by reason of material prejudice
to its legal or commercial position.
(c) Payee Tax Representation. For the purpose of Section 3(f), Party A and
Party B make the representation specified below:-
"It is an Australian resident and does not derive the payments under this
Agreement in part or whole in carrying on business in a country outside
Australia at or through a permanent establishment of itself in that
country".
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<PAGE>
Part 3
Documents to be delivered
For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees
to deliver to the other as soon as reasonably practicable following a request by
the other party, any document or certificate reasonably required by a party in
connection with its obligations to make a payment under this Agreement which
would enable that party to make the payment free from any deduction or
withholding for or on account of Tax or as would reduce the rate at which the
deduction or withholding for or on account of Tax is applied to that payment.
Part 4
Miscellaneous
(a) Address for Notices. For the purpose of Section 12(a):-
Address for notices or communications to Party A to each of the following
for all purposes::-
Address : Financial Markets Operations
Level 3, 255 Elizabeth Street
Sydney, NSW 2000
Attention : Manager, National Derivative Operations
Telex No : AA178147 Answerback : WBCTRS
Fax No : (02) 9283 1724
Address for notices or communications to the Trust Manager:-
Address : Group Securitisation
Level 6, 60 Martin Place
Sydney, NSW 2000
Attention : Lucy Beretin
Fax No : (02) 9226 1732
Address for notices or communications to Party B:-
Address : Westpac Securities Administration Limited
10th Floor, 130 Pitt Street
Attention : Bob Hamilton
Fax No : (02) 9220 5058
For all purposes
(b) Process Agent. Party A and Party B do not appoint any Process Agents.
4
<PAGE>
(c) Offices. The provisions of Section 10(a) will not apply to this Agreement.
(d) Multibranch Party. Party A is not a Multibranch Party and Party B is not a
Multibranch Party.
(e) Calculation Agent. The Calculation Agent is the Trust Manager, unless
specified in a relevant Confirmation.
(f) Credit Support Document. - Details of any Credit Support Document:-
In relation to Party A: Nil
In relation to Party B: Security Trust Deed
(g) Credit Support Provider. - Nil.
(h) Governing Law. This Agreement is governed by and construed in accordance
with the laws of the State of New South Wales, and Section 13(b)(i) is
deleted and replaced with the following: "submits to the non-exclusive
jurisdiction of the courts of New South Wales and courts of appeal from
them."
(i) Netting of Payments. Section 2(c)(ii) of this Agreement will apply to net
Transactions specified in the same Confirmation, and will not apply to net
Transactions specified in different Confirmations.
(j) "Affiliate" will have the meaning specified in Section 14. For the purpose
of Section 3(c), Party A is deemed not to have any Affiliates.
Part 5
Other Provisions
(a) The following definitions are incorporated into this Master Agreement and
any Confirmation:
- the 1991 ISDA Definitions (as published by the International Swaps
and Derivatives Association, Inc.) (as amended and supplemented from
time to time)
(known as the "ISDA Definitions").
(b) In the event of any inconsistency between any two or more of the following
documents, they shall take precedence over each other in the following
descending order:
(i) any Confirmation;
(ii) the Schedule to the Master Agreement;
(iii) the other provisions of the Master Agreement;
(iv) the ISDA Definitions.
(c) The parties acknowledge that telephone conversations between them may be
recorded and each party consents to such recordings being used as evidence
in court proceedings.
(d) In Section 2(a)(i) add the following sentence:
"Each payment will be by way of exchange for the corresponding
payment or payments payable by the other party".
(e) A new Section 2(a)(iv) is inserted as follows:
"(iv) The condition precedent in Section 2(a)(iii)(1) does not apply to a
payment due to be made to a party if it has satisfied all its
payment and delivery obligations under
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<PAGE>
Section 2(a)(i) and has no future payment or delivery obligations,
whether absolute or contingent under Section 2(a)(i)."
(f) The parties hereto agree that, for the purpose of Section 2(b) of the
Agreement, "Change of Account", any new account so designated shall be in
the same tax jurisdiction as the original account.
(g) Additional Representations: In Section 3 add the following immediately
after paragraph (f):
"(g) Non Assignment. It has not assigned (whether absolutely, in equity
or otherwise) or declared any trust over any of its rights under any
Transaction (other than, in respect of Party B, the trusts created
pursuant to the Trust Deed) and has not given any charge over its
assets, in the case of Party A, or the assets of the Trust (other
than as provided in the Security Trust Deed), in the case of Party
B.
(h) Contracting as principal. Each existing Transaction has been entered
into by Party A as principal and not otherwise and each existing
Transaction has been entered into by Party B in its capacity as
trustee of the Trust and not otherwise.
Party B also represents to Party A (which representations will be deemed
to be repeated by Party B on each date on which a Transaction is entered
into) that:
(i) Trust Validly Created. The Trust has been validly created and is in
existence at the date of this Agreement.
(ii) Sole Trustee. Party B has been validly appointed as trustee of the
Trust and is presently the sole trustee of the Trust.
(iii) No Proceedings to remove. No notice has been given to Party B and to
Party B's knowledge no resolution has been passed, or direction or
notice has been given, removing Party B as trustee of the Trust.
(iv) Power. Party B has power under the Trust Deed to enter into this
Agreement and the Security Trust Deed in its capacity as trustee of
the Trust.
(v) Good Title. Party B is the owner of the assets of the Trust and has
power under the Trust Deed to mortgage or charge them in the manner
provided in the Security Trust Deed, and, subject only to the Trust
Deed, the Security Trust Deed and any Security Interest (as defined
in the Security Trust Deed) permitted under the Security Trust Deed,
those assets are free from all other Security Interests."
(h) Additional Covenant: In Section 4 add a new paragraph as follows:
"(f) Contracting as Principal. Party A will enter into all Transactions
as principal and not otherwise and Party B will enter into
Transaction in its capacity as trustee of the Trust and not
otherwise."
(i) (a) In respect of any Transaction that is described in its
Confirmation as a "Variable Rate Basis Swap", if at any time Party
A's short-term credit rating is downgraded below A-1+ in the case of
Standard & Poor's or A2 in the case of Moody's Investors Service
Inc., it must, within 3 days of such downgrading (at its cost alone)
either;
i) establish such collateralisation arrangements in support of
its obligations as are sufficient to allow the Designated
Rating Agencies to confirm that the downgrade will not cause a
reduction or withdrawal of the rating of the Notes; or
ii) procure the novation of this Agreement to a replacement Swap
Provider
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<PAGE>
acceptable to the Designated Rating Agencies.
The failure by Party A to establish the collateral arrangements
described in i) above, or to procure the novation of this Agreement
as described in ii) above will constitute an Additional Termination
Event. For the purposes of this Additional Termination Event, Party
A will be the Affected Party.
(b) In respect of any Transaction that is described in its Confirmation
as a "Fixed Rate Basis Swap", if at any time Party A's short-term
credit rating is downgraded below A-1+ in the case of Standard &
Poor's or A2 in the case of Moody's Investors Service Inc., Party A
must, within 3 days of such downgrading, pay to Party B the Swap
Collateral Amount (determined from time to time in accordance with
paragraph c) below), which amount Party B must lodge in Authorised
Investments. For this purpose "Authorised Investments" are cash,
bank accepted bills of exchange rated A1 by Standard & Poor's and P1
by Moody's Investors Service Inc., or other forms of securities
acceptable to the Designated Rating Agencies. Following the initial
payment of a Swap Collateral Amount within 3 days of its downgrade,
Party A will be obliged to pay any subsequent Swap Collateral Amount
by each Payment Date in respect of which, on the relevant
Determination Date, a Swap Collateral Amount is calculated as being
payable in accordance with paragraph (c) below.
If Party B determines that it will lodge the Swap Collateral Amount
in a cash account, Party B must as soon as is practicable establish
and maintain in the name of Party B an account with a Bank having a
short-term credit rating of A-1+ from Standard & Poor's and P-1 from
Moody's or which otherwise satisfies the requirements of those
Designated Rating Agencies (the "Swap Collateral Account").
Party B may only make withdrawals from the Swap Collateral Account
or liquidate the Authorised Investments if directed to do so by the
Trust Manager and then only for the purpose of:
i) entering into a substitute swap;
ii) refunding to Party A the amount of any reduction in the Swap
Collateral Amount as required to be held under the calculation
in paragraph (c) below;
iii) withdrawing any amount which has been incorrectly deposited
into the Collateral Account;
iv) paying financial institutions duty, bank accounts debit tax or
their equivalent payable in respect of the Collateral Account;
or
v) funding the amount of any payment due to be made by Party A
under this Agreement following the failure by Party A to make
that payment.
(c) For any Business Day, the "Swap Collateral Amount" in respect of a
Transaction will be either (1) the amount calculated by Party A in
accordance with sub-paragraphs i) - vi) below, or (2) such other
higher amount as is required by Standard & Poor's to affirm the
rating on the Notes.
For the purposes of alternative (1) above, the Swap Collateral
Amount will be calculated as follows:
i) A repricing profile of the loans to which the Transaction
relates will be run as at the close of business on the
previous Business Day.
ii) The repricing duration (weighted average repricing term) of
the profile will be calculated using a 5% constant prepayment
rate and the spot mid-market zero coupon yield curve, which is
derived from the average of the four major banks' mid-market
inter-bank swap curves.
7
<PAGE>
iii) The implied volatility for the term derived in ii) above will
be calculated using the Sydney Futures Exchange futures strip.
iv) The forward one month mid-market zero curve plus 5 basis
points will be derived.
v) A 99% degree of confidence will be applied to the zero curve
derived in iv) above (i.e 2.33 x volatility).
vi) The profile run under i) above will be marked-to-market using
the curve described in v) above.
The difference between the market value of the outcome of step vi)
and the Notional Value of the Transaction will represent the Swap
Collateral Amount. Step vi) will be repeated on a monthly basis (on
each Determination Date for the Transaction) following the first
determination of the Swap Collateral Amount.
(d) The failure by Party A to establish the collateral arrangements
described in b) above will, at the discretion of Party B, constitute
an Additional Termination Event. For the purposes of this Additional
Termination Event, Party A will be the Affected Party.
(e) If Party A has paid a Swap Collateral Amount to Party B in
accordance with paragraph (b) above and an Early Termination Date is
designated in respect of the Transaction to which that Swap
Collateral Amount relates, then notwithstanding any other provision
of this Agreement Party B will, as soon as is practicable, repay
that Swap Collateral Amount to Party A.
(j) Confirmations. Notwithstanding the provisions of Section 9(e)(ii), each
Confirmation in respect of a Swap Transaction which is confirmed by
electronic messaging system, an exchange of telexes or an exchange of
facsimiles will be further evidenced by an original Confirmation signed by
the parties, however any failure to sign an original Confirmation will not
affect the validity or enforceability of any Swap Transaction.
(k) Section 12 is amended as follows:-
(i) In Section 12(a), insert "and settlement instructions requiring
payment to an entity other than the original counterparty" after
"Section 5 or 6" in line 2.
(ii) Section 12(a)(iii) is replaced with:
"(iii)if sent by facsimile transmission, on the date a transmission
report is produced by the machine from which the facsimile was
sent which indicates that the facsimile was sent in its
entirety to the facsimile number of the recipient notified for
the purpose of this Section, unless the recipient notifies the
sender within one Local Business Day of the facsimile being
sent that the facsimile was not received in its entirety and
in legible form."
(l) In Section 14, the definition of "Market Quotation" is replaced with:
""Market Quotation" means, with respect to one or more Terminated
Transactions and a party making the determination, an amount
determined on the basis of quotations from Reference Market-makers.
Each quotation will take into account any existing Credit Support
Document with respect to the obligations of such party.
Each quotation will be determined as the amount, if any, that would
be paid to such party (expressed as a negative number) or by such
party (expressed as a positive number) in consideration of an
agreement between such party and the quoting Reference Market-maker
to enter into a transaction (the "Replacement Transaction")
8
<PAGE>
that would have the effect of preserving for such party the economic
equivalent of the Future Obligations of both parties.
The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith,
agree. The party making the determination (or its agent) will
request each Reference Market-maker to provide its quotation to the
extent reasonably practicable as of the same day and time (without
regard to different time zones) on or as soon as reasonably
practicable after the relevant Early Termination Date. The day and
time as of which the quotation or quotations are to be obtained will
be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged,
after consultation with the other.
If more than three quotations are provided, the Market Quotation
will be the arithmetic mean of the quotations, without regard to the
quotations having the highest and lowest values. If exactly three
such quotations are provided, the Market Quotation will be the
quotation remaining after disregarding the highest and lowest
quotations. For this purpose, if more than one quotation has the
same highest value or lowest value, then one of such quotations
shall be disregarded. If fewer than three quotations are provided,
it will be deemed that the Market Quotation in respect of such
Terminated Transaction or group of Terminated Transactions cannot be
determined."
(m) In Section 14, add new definitions:
""Future Obligations" means in respect of a Terminated Transaction,
all payment or delivery obligations (whether the underlying
obligation was absolute or contingent and assuming the satisfaction
of each applicable condition precedent) of a party under Section
2(a)(i) in respect of a Terminated Transaction or group of
Terminated Transactions, that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date.
(For this purpose, Unpaid Amounts in respect of the Terminated
Transaction or group of Terminated Transactions are to be excluded
but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming
satisfaction of each applicable condition precedent) after that
Early Termination Date is to be included)."
""Trust Deed" means the Master Trust Deed dated 14 February 1997 and the
WST Series 1997- 3 Notice dated 25 June 1997 between Party B, Party A and
the Trust Manager, and each of the following expressions shall have the
meanings given to them in the Trust Deed:
"Designated Rating Agency"
"Insolvency Event"
"Note"
"Security Trust Deed"
"Swap Provider"
"Trust"
(n) Any reference to a:
(i) "Swap Transaction" in the 1991 ISDA Definitions is deemed to be a
reference to a "Transaction" for the purpose of interpreting this
Agreement or any Confirmation; and
(ii) "Transaction" in this Agreement or any Confirmation is deemed to be
a reference to a "Swap Transaction" for the purpose of interpreting
the 1991 ISDA Definitions.
(o) The "September 1992 Australian Addendum No. 10 - (as amended in March
1994) Netting of Schedule to Master Agreement of International Swaps and
Derivatives Association, Inc." is
9
<PAGE>
deemed to be incorporated in this Agreement, except that in the event of
any inconsistency between that addendum and this Schedule or any
Confirmation, the Confirmation or this Schedule shall take precedence.
(p) Trust Deed: The Parties acknowledge and agree that for the purposes of the
Trust Deed, this Agreement is a "Hedge Agreement" and Party A is a "Swap
Provider" and "Support Facility Provider".
(q) Restricted Remedies
Party A shall not, in connection with this Agreement:
(a) (judgment) obtain a judgement for the payment of money or daParty B;
(b) (statutory demand) issue any demand under s459E(1) of the
Corporations Law (or any analogous provision under any other law)
against Party B;
(c) (winding up) apply for the winding up or dissolution of Party B;
(d) (execution) levy or enforce any distress or other execution to, on,
or against any assets of Party B;
(e) (court appointed receiver) apply for the appointment by a court of a
receiver to any of the assets of Party B;
(f) (set-off or counterclaim) exercise or seek to exercise any set-off
or counterclaim against Party B;
(g) (administrator) appoint, or agree to the appointment, of any
administrator to Party B;
or take proceedings for any of the above and Party A waives its
right to make those application and take those proceedings.
10
<PAGE>
SWAP CONFIRMATION
1. The Agreement, 1991 Definitions and Servicing Agreement
This letter is a confirmation evidencing a complete and binding agreement
between Westpac Banking Corporation ("Party A") and Westpac Securities
Administration Limited ("Party B") as trustee of WST Series.
2. The Variable Rate Basis Swap
The terms of the Variable Rate Basis Swap are as follows:
2.1 Amounts Payable
A. Party A agrees to pay Party B (the "Party A Swap Payment") quarterly in
arrears on each Payment Date in respect of the most recently completed
Collection Period, an amount equal to (1) x (2) x [(3)/365], being
(1) the Variable Rate Home Loan Amount calculated on each Determination
Date,
(2) the Variable Rate Basis Swap Rate calculated on each Determination
Date,
(3) the number of days in the most recently completed Collection Period,
as each term is defined below.
B. Party B agrees to pay Party A (the "Party B Swap Payment") quarterly in
arrears on each Payment Date in respect of the most recently completed
Collection Period, an amount equal to [(1) x (2)] x [(3)/365], being
(1) the Variable Rate Home Loan Amount calculated on each Determination
Date,
(2) the Weighted Average Variable Housing Rate on each Determination Date,
(3) the number of days in the most recently completed Collection Period,
as each term is defined below.
The Party A Swap Payment and the Party B Swap Payment are netted as specified in
the Schedule.
1
<PAGE>
2.2 Terms of the Variable Rate Basis Swap
A. Definitions used for Party A payments
Variable Rate Basis Swap Rate
BBR + [120] bp
where BBR* = Bank Bill Rate as at the Payment Date occurring in the
Collection Period to which that swap payment relates
[120] bp = The margin fixed for the full term of the Variable
Rate Basis Swap.
*except for the initial Variable Rate Basis Swap rate calculated on the first
Determination Date, when
BBR = Bank Bill Rate on the Closing Date.
Bank Bill Rate
has the meaning given in the Series Notice
B. Definitions used for PARTY B payments
Weighted Average Variable Housing Rate
means E^n (VOLi x VHRi)
-----------------
E^n (AVOL)
where E = the sum of
VOLi = the Housing Loan Principal balance of each Variable Rate
Home Loan on each day (n) during the Collection Period
ending immediately prior to that Determination Date
VHRi = the interest rate applied to each Variable Rate Home
Loan as at each day (n) during the Collection Period
ending immediately prior to that Determination Date
AVOL = the aggregate Variable Rate Home Loan balance as at each
day (n) during the Collection Period ending immediately
prior to that Determination Date
n = each day in the Collection Period.
2
<PAGE>
C. Definitions used generally
Variable Rate Home Loan Amount
is equal to the aggregate Housing Loan Principal balance of all Variable Rate
Home Loans as at the first day of the Collection Period ending immediately prior
to that Determination Date.
Variable Rate Home Loan
A home loan which is, on the first day of that Collection Period, a Home Loan
subject to a variable rate of interest or is otherwise subject to a concessional
introductory fixed rate of interest for 12 months or less set at the discretion
of Party A.
Termination Date means the earlier of:
(a) the date which is one month after the Notes have been redeemed in full in
accordance with the Series Notice; or
(b) the date on which Party B enters into a swap transaction, as previously
notified to the Designated Ratings Agency, and which the Designated
Ratings Agency has confirmed will not cause a reduction in or withdrawal
of the rating of the Notes, to replace this Swap Transaction.
Collection Period
The Collection Period is the same as in the Series Notice, except for the First
Collection Period which commences on and includes the Closing Date.
2.3 Trustee Provisions
(a) Subject to paragraph 2.3(b), but despite any other provision of this
Agreement, the liability of Party B to Party A under or in connection with
any Party B Swap Payment or any other unpaid amount of any previous Party
B Swap Payment is limited to the total amount available for distribution
to the Party A under clause 6 of the Series Notice.
(b) (i) Nothing in paragraph 2.3(a) limits the liability of Party B for any
loss, cost or expense suffered or incurred by Party A arising from
Party B's fraud or gross negligence under or in connection with this
Agreement.
(ii) Failure by Party B to make all or any part of any Party B Swap
Payment does not of itself constitute fraud or gross negligence on
its part.
3
<PAGE>
2.4 Other
Payments to Party B: Electronic Transfer/ Bank Cheque
Payments to Party A: Electronic Transfer/ Bank Cheque
Bank Charges and Other Costs
Please note that all proceeds payable by either party during the term of this
Swap Transaction shall be free and clear of all bank charges and other costs in
the hand of the recipient.
Please confirm your acceptance of this Swap Transaction by signing and returning
this Confirmation to us by facsimile.
Executed documents will follow by mail.
Yours sincerely
Authorised signatory for Authorised signatory for
Westpac Banking Corporation Westpac Securities Administration
Limited
4
<PAGE>
SWAP CONFIRMATION
1. The Agreement, 1991 Definitions and Servicing Agreement
This letter is a confirmation evidencing a complete and binding agreement
between Westpac Banking Corporation ("Party A") and Westpac Securities
Administration Limited ("Party B") as trustee of WST Series 1998-1G Trust to the
terms of the New Business Fixed Rate Basis Swap below.
This Confirmation supplements, forms part of, and is subject to a Master
Agreement in the form published by ISDA between Party A and Party B dated [
June] 1998(the "Agreement") as modified by the Schedule of the same date (the
"Schedule") and this Confirmation.
All other terms used and not defined in this Confirmation have the meaning given
in the Master Trust Deed ("Trust Deed") between Party B, Party A and The
Mortgage Company Pty Limited or WST Series 1998-1G Trust Series Notice ("Series
Notice") between Party B, Party A and Westpac Securitisation Management Pty
Limited.
2. The New Business Fixed Rate Basis Swap
The terms of the New Business Fixed Rate Basis Swap are as follows:
2.1 Amounts Payable
A. Party A agrees to pay Party B (the "Party A Swap Payment") quarterly in
arrears on each Payment Date in respect of the most recently completed
Collection Period, an amount equal to [(1) x (2) x [(3)/365]], being
(1) New Business Fixed Home Loan Amount calculated on each Determination
Date,
(2) New Business Fixed Rate Basis Swap Rate calculated on each
Determination Date,
(3) the number of days in the most recently completed Collection Period,
as each term is defined below.
B. Party B agrees to pay Party A (the "Party B Swap Payment") quarterly in
arrears on each Payment Date in respect of the most recently completed
Collection Period, an amount equal to [(1) x (2) x [(3)/365]], being
(1) New Business Fixed Home Loan Amount calculated on each
1
<PAGE>
Determination Date,
(2) the Weighted Average Customer Rate on each Determination Date,
(3) the number of days in the most recently completed Collection Period,
as each term is defined below.
The Party A Swap Payment and the Party B Swap Payment are netted as specified in
the Schedule.
2.2 Terms of the New Business Fixed Rate Basis Swaps
A. Definitions used for Party A payments
New Business Fixed Rate Basis Swap Rate
BBR+120 bp
where BBR* = Bank Bill Rate as at the Payment Date occurring in the
Collection Period to which that swap payment relates
120 bp = The margin fixed for the full term of the New Business
Fixed Rate Basis Swap
*except for the initial New Business Fixed Rate Basis Swap rate calculated on
the first Determination Date, when
BBR = Bank Bill Rate on the Closing Date.
Bank Bill Rate
has the meaning given in the Series Notice
B. Definitions used for PARTY B payments
Weighted Average Customer Rate
means E^n (VOLi x CRi)
----------------
E^n (AVOL)
where E = the sum of
VOLi = the Housing Loan Principal balance of each New Business
Fixed Rate Home Loan on each day of the Collection
Period ending immediately prior to that Determination
Date
CRi = the interest rate applied to each New Business Fixed
Rate Home Loan on each day (n) during the Collection
Period ending immediately prior to that Determination
2
<PAGE>
Date
AVOL = the aggregate New Business Fixed Rate Home Loan balance
as at each day (n) during the Collection Period ending
immediately prior to that Determination Date.
3
<PAGE>
C. Definitions used generally
New Business Fixed Home Loan Amount
is equal to the aggregate Housing Loan Principal balance of all New Business
Fixed Rate Home Loans as at the first day of the Collection Period ending
immediately prior to that Determination Date with
New Business Fixed Rate Home Loan
A Home Loan which was earning a variable rate of interest or a concessionary
fixed rate of interest for 12 months or less as at Cut Off Date and is, on the
first day of that Collection Period, a Home Loan subject to a fixed rate of
interest (other than a loan subject to a concessional introductory fixed rate of
interest for 12 months or less) with a fixed rate period commencing after the
Cut Off Date.
Termination Date means the earlier of:
(a) the date which is one month after the Notes have been redeemed in full in
accordance with the Series Notice; or
(b) the date on which Party B enters into a swap transaction, as previously
notified to the Designated Ratings Agency, and which the Designated
Ratings Agency has confirmed will not cause a reduction in or withdrawal
of the rating of the Notes, to replace this Swap Transaction.
Collection Period
The Collection Period is the same as in the Series Notice, except for the First
Collection Period which commences on and includes the Closing Date.
2.3 Trustee Provisions
(a) Subject to paragraph 2.3(b), but despite any other provision of this
Agreement, the liability of Party B to Party A under or in connection with
any Party B Swap Payment or any other unpaid amount of any previous Party
B Swap Payment is limited to the total amount available for distribution
to the Party A under clause 6 of the Series Notice.
(b) (i) Nothing in paragraph 2.3(a) limits the liability of Party B for any
loss, cost or expense suffered or incurred by Party A arising from
Party B's fraud or gross negligence under or in connection with this
Agreement.
(ii) Failure by Party B to make all or any part of any Party B Swap
Payment does not of itself constitute fraud or gross negligence on
its part.
2.4 Other
Payments to Party B: Electronic Transfer/ Bank Cheque
Payments to Party A: Electronic Transfer/ Bank Cheque
4
<PAGE>
Bank Charges and Other Costs
Please note that all proceeds payable by either party during the term of this
Swap Transaction shall be free and clear of all bank charges and other costs in
the hand of the recipient.
Please confirm your acceptance of this Swap Transaction by signing and returning
this Confirmation to us by facsimile.
Executed documents will follow by mail.
Yours sincerely
Authorised signatory for Authorised signatory for
Westpac Banking Corporation Westpac Securities Administration
Limited
5
<PAGE>
SWAP CONFIRMATION
1. The Agreement, 1991 Definitions and Servicing Agreement
This letter is a confirmation evidencing a complete and binding agreement
between Westpac Banking Corporation ("Party A") and Westpac Securities
Administration Limited ("Party B") as trustee of WST Series 1998-1G Trust to the
terms of the Existing Business Fixed Rate Basis Swap below.
This Confirmation supplements, forms part of, and is subject to a Master
Agreement in the form published by ISDA between Party A and Party B dated [June]
1998 (the "Agreement") as modified by the Schedule of the same date (the
"Schedule") and this Confirmation.
All other terms used and not defined in this Confirmation have the meaning given
in the Master Trust Deed ("Trust Deed") between Party B, Party A and The
Mortgage Company Pty Limited or WST Series 1998-1G Trust Series Notice ("Series
Notice") between Party B, Party A and Westpac Securitisation Management Pty
Limited.
2. The Existing Business Fixed Rate Basis Swap
The terms of the Existing Business Fixed Rate Basis Swap are as follows:
2.1 Amounts Payable
A. Party A agrees to pay Party B (the "Party A Swap Payment") quarterly in
arrears on each Payment Date in respect of the most recently completed
Collection Period, an amount equal to [(1) x (2) x [(3)/365]], being
(1) Existing Business Fixed Home Loan Amount calculated on each
Determination Date,
(2) Existing Business Fixed Rate Basis Swap Rate calculated on each
Determination Date,
(3) the number of days in the most recently completed Collection Period,
as each term is defined below.
B. Party B agrees to pay Party A (the "Party B Swap Payment") quarterly in
arrears on each Payment Date in respect of the most recently completed
Collection Period, an amount equal to [(1) x (2) x [(3)/365]], being
(1) Existing Business Fixed Home Loan Amount calculated on each
Determination Date,
1
<PAGE>
(2) the Weighted Average Customer Rate on each Determination Date,
(3) the number of days in the most recently completed Collection Period
as each term is defined below.
The Party A Swap Payment and the Party B Swap Payment are netted as specified in
the Schedule.
2.2 Terms of the Existing Business Fixed Rate Basis Swaps
A. Definitions used for Party A payments
Existing Business Fixed Rate Basis Swap Rate
BBR+133 bp
where BBR* = Bank Bill Rate as at the Payment Date occurring
in the Collection Period to which that swap payment
relates
133 bp = The margin fixed for the full term of the Existing
Business Fixed Rate Basis Swap
*except for the initial Existing Business Fixed Rate Basis Swap rate calculated
on the first Determination Date, when
BBR = Bank Bill Rate on the Closing Date.
Bank Bill Rate
has the meaning given in the Series Notice
B. Definitions used for PARTY B payments
Weighted Average Customer Rate
means E^n (VOLi x CRi)
----------------
E^n (AVOL)
where E = the sum of
VOLi = the Housing Loan Principal balance of each Existing
Business Fixed Rate Home Loan on each day of the
Collection Period ending immediately prior to that
Determination Date
CRi = the interest rate applied to each Existing Business
Fixed Rate Home Loan on each day (n) during the
Collection Period ending immediately prior to that
Determination Date
AVOL = the aggregate Existing Business Fixed Rate Home Loan
2
<PAGE>
balance as at each day (n) during the Collection Period
ending immediately prior to that Determination Date
C. Definitions used generally
Existing Business Fixed Home Loan Amount
is equal to the aggregate Housing Loan Principal balance of all Existing
Business Fixed Rate Home Loans as at the first day of the Collection Period
ending immediately prior to that Determination Date.
Existing Business Fixed Rate Home Loan
A Home Loan which was earning a fixed rate of interest (excluding a
concessionary fixed rate of interest for 12 month or less) as at Cut Off Date
and is, on the first day of that Collection Period, a Home Loan subject to a
fixed rate of interest (other than a loan subject to a concessional introductory
fixed rate of interest for 12 months or less) with a fixed rate period
commencing on or prior to Cut Off Date.
Termination Date means the earlier of:
(a) the date which is one month after the Notes have been redeemed in full in
accordance with the Series Notice; or
(b) the date on which Party B enters into a swap transaction, as previously
notified to the Designated Ratings Agency, and which the Designated
Ratings Agency has confirmed will not cause a reduction in or withdrawal
of the rating of the Notes, to replace this Swap Transaction.
Collection Period
The Collection Period is the same as in the Series Notice, except for the First
Collection Period which commences on and includes the Closing Date.
2.3 Trustee Provisions
(a) Subject to paragraph 2.3(b), but despite any other provision of this
Agreement, the liability of Party B to Party A under or in connection with
any Party B Swap Payment or any other unpaid amount of any previous Party
B Swap Payment is limited to the total amount available for distribution
to the Party A under clause 6 of the Series Notice.
(b) (i) Nothing in paragraph 2.3(a) limits the liability of Party B for any
loss, cost or expense suffered or incurred by Party A arising from
Party B's fraud or gross negligence under or in connection with this
Agreement.
(ii) Failure by Party B to make all or any part of any Party B Swap
3
<PAGE>
Payment does not of itself constitute fraud or gross negligence on
its part.
2.4 Other
Payments to Party B: Electronic Transfer/ Bank Cheque
Payments to Party A: Electronic Transfer/ Bank Cheque
Bank Charges and Other Costs
Please note that all proceeds payable by either party during the term of this
Swap Transaction shall be free and clear of all bank charges and other costs in
the hand of the recipient.
Please confirm your acceptance of this Swap Transaction by signing and returning
this Confirmation to us by facsimile.
Executed documents will follow by mail.
Yours sincerely
Authorised signatory for Authorised signatory for
Westpac Banking Corporation Westpac Securities Administration
Limited
4
